Exhibit 10.17

CHANGE OF CONTROL SEVERANCE AGREEMENT, AS AMENDED

[TIERS I, II & III]

This Agreement (“Agreement”) is dated as of                     , 200  , by and
between SUPERVALU INC., a Delaware corporation (the “Company”), and
                     (the “Executive”).

WHEREAS, the Company’s Board of Directors (the “Board”) considers the continued
services of key executives of the Company to be in the best interests of the
Company and its stockholders; and

WHEREAS, the Board desires to assure, and has determined that it is appropriate
and in the best interests of the Company and its stockholders to reinforce and
encourage the continued attention and dedication of key executives of the
Company to their duties of employment without personal distraction or conflict
of interest in circumstances arising from the possibility or occurrence of a
change of control of the Company; and

WHEREAS, the Board has authorized the Company to enter into continuity
agreements with those key executives of the Company who are designated by the
Executive Personnel and Compensation Committee of the Board of Directors (the
“Committee”), such agreements to set forth the severance compensation which the
Company agrees under certain circumstances to pay such executives; and

WHEREAS, the Executive is a key executive of the Company and has been designated
by the Committee as an executive to be offered such a continuity compensation
agreement with the Company.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Executive agree as follows:

1. General Principles. This Agreement is effective on the date that it is signed
by the Company and the Executive. For the purpose of this Agreement, the date on
which a Change of Control occurs is the “COC Date.” If Executive ceases to be
employed prior to a Change of Control by reason of an Anticipatory Separation
(as defined in Section 3(c)), then Executive shall receive the severance
benefits provided herein as if the COC Date for the Executive were the date
immediately preceding the occurrence of that Anticipatory Separation. If
Executive ceases to be employed prior to

 

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a Change of Control for any reason other than an Anticipatory Separation, this
Agreement shall terminate and have no effect and Executive shall receive such
severance payments, if any, as are provided in any existing agreement between
the Executive and the Company.

If a Change of Control occurs, the Executive’s employment shall be continued
hereunder for the period (the “Employment Period”) commencing on the COC Date
and ending on the second anniversary of the COC Date, subject to the Executive’s
Separation from Service as described hereinafter. Any existing employment
agreement between the Executive and the Company shall continue to be effective
following the Change of Control, but severance amounts under this Agreement
shall be reduced by amounts payable under any such employment agreement.

For purposes of this Agreement, a “Change of Control” shall be deemed to have
occurred upon any of the following events:

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

(ii) the consummation of any merger or other business combination of the
Company, sale or lease of all or substantially all of the Company’s assets or
combination of the foregoing transactions (the “Transactions”) other than a
Transaction immediately following which the shareholders of the Company and any
trustee or fiduciary of any Company employee benefit plan immediately prior to
the Transaction own at least 60% of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other business combination;
(B) the purchaser or lessee of the Company’s assets; or (C) both the surviving
corporation and the purchaser or lessee in the event of any combination of
Transactions; or

(iii) within any 24-month period, the persons who were directors immediately
before the beginning of such period (the “Incumbent Directors”) shall cease (for
any reason other than death) to constitute at least a majority of the Board or
the board of directors of a successor to the Company. For this

 

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purpose, any director who was not a director at the beginning of such period
shall be deemed to be an Incumbent Director if such director was elected to the
Board by, or on the recommendation of or with the approval of, at least
three-fourths of the directors who then qualified as Incumbent Directors (so
long as such director was not nominated by a person who has expressed an intent
to effect a Change of Control or engage in a proxy or other control contest); or

(iv) such other event or transaction as the Board shall determine constitutes a
Change of Control.

2. Employment following Change of Control. Executive shall have at least the
same titles and responsibilities as those in effect immediately prior to the
Change of Control. Executive shall receive an annual base salary which is not
less than the highest base salary in effect for Executive at any time in the 12
months preceding the Change of Control, and the Company shall review the salary
annually with a view to increasing it; provided any such increase shall be in
the sole discretion of the Board. Once increased, base salary cannot be
decreased. If Executive has not been terminated, for the year of the Change of
Control and for each year thereafter during which Executive is employed, the
Executive shall be paid an annual bonus which shall be no less than the higher
of (i) the bonus which the Executive would have received under the Company’s
bonus plans as they were in effect prior to the Change of Control (based upon
actual performance in the year up to the Change of Control), (ii) the average of
the annual bonuses paid or payable in respect of the three years prior to the
Change of Control, or (iii) the Executive’s target bonus immediately prior to
the Change of Control (the highest of (i), (ii) and (iii) being the “Bonus”). In
addition, the Executive shall be provided with incentive compensation, pension,
general insurance, vacation, fringe benefits, perquisites (including an
automobile allowance, if any), the use of an office and support staff that are
commensurate with the benefits, vacation, expense reimbursement, fringe
benefits, perquisites, office and support staff provided to Executive
immediately prior to the Change of Control or, if more favorable to Executive,
at the level made available to other similarly situated executive officers of
the Company after the Change of Control. In addition, the Executive’s place of
employment following a Change of Control shall be no farther than 45 miles from
the Executive’s place of employment prior to the Change of Control.

3. Separation from Service Following Change of Control.

(a) The Executive shall be entitled to the severance benefits provided in
Section 4 hereof if the Executive’s Separation from Service occurs (A) within
two years following a Change of Control (i) by the Company without Cause, or
(ii) by Executive for Good Reason, or (B) prior to a Change of Control, as a
result of an Anticipatory Separation.

 

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Notwithstanding the foregoing, Executive shall not be entitled to severance
benefits under this Agreement if Executive’s Separation from Service is on
account of Executive’s death or Disability. Executive’s death or Disability
subsequent to a Separation from Service which would otherwise give rise to
severance benefits under this Agreement will not disqualify Executive from
receiving the severance benefits. For purposes of this Agreement:

(i) “Disability” shall have the same meaning as in the Company’s long-term
disability plan.

(ii) “Retirement” shall mean a termination of employment by Executive pursuant
to late, normal or early retirement under a pension plan sponsored by the
Company, as defined in such plan.

(ii) “Separation from Service” shall mean a severance of the Executive’s
employment under circumstances that would qualify as a separation from service
as that term is used and defined under Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”).

(b) Cause. For purposes of this Agreement, “Cause” shall mean:

(i) the willful and continued failure of Executive to perform substantially
Executive’s duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to Executive by the Board or an officer of
the Company which specifically identifies the manner in which the Board or the
officer believes that Executive has not substantially performed Executive’s
duties;

(ii) (A) the conviction of, or plea of guilty or nolo contendere to, a felony or
(B) the willful engaging by Executive in gross misconduct which is materially
and demonstrably injurious to the Company; or

(iii) Executive’s commission of an act or acts of personal dishonesty intended
to result in substantial personal enrichment of the Executive at the expense of
the Company;

provided, however, that in no event shall Cause exist by virtue of any action
taken by the Executive (A) in compliance with express written directions of the
Board, [the Company’s Chief Executive Officer or the officer to whom the
Executive reports,]1

 

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1 Not to be included in CEO's Agreement, and, for those Executives reporting
directly to the CEO, "the officer to whom the Executive reports" shall not be
included.

 

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or (B) in reliance upon the express written consent of the Company’s counsel. In
each case above, for a Separation from Service to be for Cause: (a) the
Executive must be provided with a Notice of Termination (as described in
Section 3(d)) within six (6) months after the Company has actual knowledge of
the act or omission constituting Cause; (b) the Executive must be provided with
an opportunity to be heard by the Board no earlier than 30 days following the
Notice of Termination (during which notice period Executive has failed to cure
or resolve the behavior in question); and (c) there must be a good faith
determination of Cause by at least 2/3rds of the non-employee outside directors
of the Company.

(c) Good Reason and Anticipatory Separation. For purposes of this Agreement,
“Good Reason” shall mean:

(i) Executive’s annual base salary is reduced below the higher of (A) the amount
in effect on the COC Date, or (B) the highest amount in effect at any time
thereafter;

(ii) Executive’s annual bonus is reduced below the Bonus;

(iii) Executive’s duties and responsibilities or the program of incentive
compensation (including, without limitation, long term incentive plans and
equity incentive programs), vacation, fringe benefits, perquisites, retirement
and general insurance benefits offered to Executive are materially and adversely
diminished in comparison to the duties and responsibilities or the program of
such benefits enjoyed by Executive on the COC Date;

(iv) Executive is required to be based at a location more than 45 miles from the
location where Executive was based and performed services on the COC Date or
Executive’s business travel obligations are significantly increased over those
in effect immediately prior to the COC Date; [or]2

(v) failure to provide for the assumption of this Agreement by any successor
entity; [or

(vi) Executive’s termination of employment for any reason during the seventh
month following the Change of Control;]3

provided, however, that any diminution of duties or responsibilities that occurs
solely as a result of the fact that the Company ceases to be a public company
shall not, in and of itself, constitute Good Reason.

 

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2 Not to be included in CEO’s agreement.

3 For CEO only.

 

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Any event or condition described in clauses (i) through (iv) or a Separation
from Service without Cause, either of which occurs prior to a Change of Control
but which Executive reasonably demonstrates (A) was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a Change of Control (a “Third Party”), or (B) otherwise arose in
connection with, or in anticipation of a Change of Control, shall constitute
Good Reason for purposes of this Agreement, notwithstanding that it occurred
prior to a Change of Control (“Anticipatory Separation”).

Executive shall give the Company written notice of any event which Executive
claims is the basis for Good Reason [(other than a Separation from Service
pursuant to Section 3(c)(vi))]4, within 6 months of such event, and the Company
shall have 30 days from its receipt of such notice within which to cure or
resolve the behavior in question before Executive can terminate for Good Reason.

(d) Notice of Termination. Any purported termination of the Executive’s
employment with the Company [(other than a Separation from Service pursuant to
Section 3(c)(vi))]5 shall be communicated by a Notice of Termination to the
Executive, if such termination is by the Company, or to the Company, if such
termination is by the Executive. For purposes of this Agreement, “Notice of
Termination” shall mean a written notice which shall indicate the specific
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provisions so indicated. For purposes of this
Agreement, no purported termination of Executive’s employment with the Company
shall be effective without such a Notice of Termination having been given.

(e) Dispute Resolution. Disputes arising from the operation of this Agreement,
including, but not necessarily being limited to, the manner of giving the Notice
of Termination, the reasons or cause for the Executive’s termination or the
amount of severance compensation due to the Executive subsequent to the
Executive’s termination, shall be resolved by arbitration; provided, however,
that disputes arising under Section 11 of this Agreement shall not be resolved
under this Section 3(e). In the event that any dispute which shall be resolved
by arbitration is not able to be resolved by mutual agreement of the parties
within sixty calendar (60) days of the giving of such notice, the Executive and
the Company hereby agree to promptly submit such a dispute to binding
arbitration in Minnesota in accordance with Delaware law and the rules and
procedures of the American Arbitration Association. During any period in which a
dispute is pending, the Executive shall continue to receive Executive’s salary
(including any Bonus) and benefits as if Executive’s employment with the Company
had continued through the date of the arbiters’ determination, and any such
payments or benefits shall not be offset against any severance, either under
this Agreement or otherwise, to which Executive may be entitled.

 

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4 For CEO only.

5 For CEO only.

 

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4. Compensation Upon Separation from Service After a Change of Control.

If within two (2) years after the COC Date, the Executive has a Separation from
Service, the Executive shall be entitled to the following payments and benefits:

(a) Severance. On the 10th business day following such Separation from Service
(or at such later time as may be provided under Section 4(g)), the Company shall
pay or cause to be paid to the Executive a lump sum cash amount equal to [three
(3) times][two (2) times]6 the sum of (i) the Executive’s annual base salary on
the COC Date (the “Base Salary”), (ii) the Bonus, and (iii) the value of the
perquisites (e.g., car allowance, club dues, etc., including any ordinary tax
gross-ups for perquisites) provided to Executive in respect of the year prior to
the Change of Control. In addition, at the time of the above payment, the
Executive shall be entitled to an additional lump sum cash payment equal to the
sum of (A) Executive’s earned but unpaid salary through the date of Separation
from Service, (B) a pro rata portion of the Bonus (calculated through the date
of Separation from Service), and (C) an amount, if any, of accrued vacation pay,
in each case, in full satisfaction of Executive’s rights thereto.

Except as specifically provided in this Agreement, nothing in this Agreement
shall be interpreted or relied upon as a basis to amend, modify, accelerate or
defer, or otherwise change any contributions to or payments that may be due from
any other deferred compensation plan subject to Section 409A of the Code.

(b) Welfare Benefits. The Executive shall be entitled to continued medical,
dental and life insurance coverage for the Executive and the Executive’s
eligible dependents on the same basis as in effect prior to the Change of
Control or the Executive’s Separation from Service, whichever is deemed to
provide for more substantial benefits, until the earlier of (A) [thirty-six
(36)][twenty-four (24)][twelve (12)]7 months (the “Separation Period”) after the
Executive’s Separation from Service or (B) the commencement of comparable
coverage with a subsequent employer; provided, however, that such continued
coverage shall not count against any continued coverage required by law;
provided, further, that if the Company is not able to provide the coverage
required above under the general terms and provisions of the Company’s plans,
then the Company shall reimburse Executive for the cost of obtaining
substantially similar benefits (the “Benefit Payment”) and shall pay Executive
an additional amount, such that after payment of all applicable federal, state
and local income and payroll taxes imposed upon Executive as a result of the
Benefit Payment, the Executive retains an amount equal to the amount of the
Benefit Payment.

 

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6 Three times for Tier I (CEO & EVPs); Two times for Tier II (SVPs); and one
time for Tier III (remaining participants).

7 Thirty-six months for Tier I; twenty-four months for Tier II; twelve months
for Tier III.

 

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(c) Pension Benefits. The Executive shall also receive additional credit for
service and age (including, benefit accrual and vesting credit) for the
Separation Period under any Company pension plan in which Executive participates
based on the Executive’s Base Salary and Bonus in effect at the of termination
of employment; provided, however, that in the case of a qualified pension plan,
the Executive shall be paid on the 30th day after Executive’s last day of
employment (or at such later time as may be provided under Section 4(g)) a cash
lump sum equal to the present value of the additional benefits Executive would
have accrued if Executive had been credited for all purposes with the additional
years of service and age under such plan. In addition, at the time of the above
payment, the Executive shall receive an additional payment (the “401(k)
Payment”) equal to the product of (i) [three (3)] [two (2)][one (1)]8,
(ii) 0.0225, and (iii) the sum of the Base Salary and the Bonus.

(d) Outplacement. If so requested by the Executive, outplacement services shall
be provided by a professional outplacement provider at a cost to the Company of
not more than 10% of the Executive’s Base Salary. Such services may be provided
either by direct payment to the outplacement provider or by reimbursement to
Executive. However, services shall be paid or reimbursed only if the services
are provided during the period beginning with the Separation from Service and
ending on the December 31 of the second calendar year following the calendar
year in which the Separation from Service occurred.

(e) Indemnification; Liability Insurance. The Company shall maintain, for a
period not less than 6 years following Executive’s termination of employment,
indemnification policies and liability insurance coverage for Executive’s
benefit comparable to those indemnification policies and liability insurance
coverage provided by the Company for Executive’s benefit prior to the Change of
Control.

(f) Withholding. Payments and benefits provided pursuant to this Section 4 or
any other provision of this Agreement shall be subject to any applicable payroll
and other taxes required to be withheld.

(g) Limitations on Payment of Deferred Compensation. To the extent that any
payments or benefits to be provided to the Executive under this Agreement would
be considered deferred compensation under Section 409A of the Code and the
Executive is a “Key Employee” as defined in Section 416(i) of the Code, then any
such payments that would otherwise be due and payable during the first six
months following and on account of a Separation from Service shall instead be
paid to the Executive

 

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8 Three for Tier I; two for Tier II; and one for Tier III.

 

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upon the earlier of (i) six months and one day after the date the Executive’s
Separation from Service or (ii) any other date permitted under
Section 409A(a)(2) and Section 409A(a)(3). To the extent that any payments or
benefits to be provided to the Executive under this Agreement would be
considered deferred compensation under Section 409A of the Code, the provisions
of this Agreement pertaining thereto shall be construed and administered to
comply with Section 409A. Neither the Company nor any of its officers,
directors, agents or affiliates shall be obligated, directly or indirectly, to
any Participant or any other person for any taxes, penalties, interest or like
amounts that may be imposed on the Participant or other person on account of any
amounts paid or payable under this Plan or on account of any failure to comply
with Section 409A.

5. Certain Additional Payments by the Company:

(a) Anything in this Agreement to the contrary notwithstanding, if it is
determined (as hereafter provided) that any payment or distribution by the
Company to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a
“Payment”), would be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto) by reason of being “contingent on a
change in ownership or control” of the Company, within the meaning of
Section 280G of the Code (or any successor provision thereto) or to any similar
tax imposed by state or local law, or any interest or penalties with respect to
such excise tax (such tax or taxes, together with any such interest and
penalties, are hereafter collectively referred to as the “Excise Tax”), then the
Executive shall be entitled to receive an additional payment or payments (a
“Gross-Up Payment”) in an amount such that, after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

(b) Subject to the provisions of Section 5(f) hereof, all determinations
required to be made under this Section 5, including whether an Excise Tax is
payable by the Executive and the amount of such Excise Tax and whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by the nationally recognized firm of certified public accountants (the
“Accounting Firm”) used by the Company prior to the Change of Control (or, if
such Accounting Firm declines to serve, the Accounting Firm shall be a
nationally recognized firm of certified public accountants selected by the
Executive). The Accounting Firm shall be directed by the Company or the
Executive to submit its determination and detailed supporting calculations to
both

 

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the Company and the Executive within 15 calendar days after the Separation from
Service, if applicable, and any other such time or times as may be requested by
the Company or the Executive. If the Accounting Firm determines that any Excise
Tax is payable by the Executive, the Company shall pay the required Gross-Up
Payment to the Executive on the fifth business day after receipt of such
determination and calculations. If the Accounting Firm determines that no Excise
Tax is payable by the Executive, it shall, at the same time as it makes such
determination, furnish the Executive with an opinion that Executive has
substantial authority not to report any Excise Tax on Executive’s federal,
state, local income or other tax return. Any determination by the Accounting
Firm as to the amount of the Gross-Up Payment shall be binding upon the Company
and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable state or local tax law
at the time of any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments that will not have been made by the Company
should have been made (an “Underpayment”), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts or fails
to pursue its remedies pursuant to Section 5(f) hereof and the Executive
thereafter is required to make a payment of any Excise Tax, the Executive shall
direct the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations to
both the Company and the Executive as promptly as possible. Any such
Underpayment shall be promptly paid by the Company to, or for the benefit of,
the Executive on the fifth business day after receipt of such determination and
calculations.

(c) The Company and the Executive shall each provide the Accounting Firm access
to and copies of any books, records and documents in the possession of the
Company or the Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
with the preparation and issuance of the determination contemplated by
Section 5(b) hereof.

(d) The federal, state and local income or other tax returns filed by the
Executive and the Company (or any filing made by a consolidated tax group which
includes the Company) shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
the Executive. The Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and
correct copies (with any amendments) of Executive’s federal income tax return as
filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such payment. If
prior to the filing of the Executive’s federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm
determines that the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company the amount of such
reduction.

 

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(e) The fees and expenses of the Accounting Firm for its services in connection
with the determinations and calculations contemplated by Sections 5(b) and
(d) hereof shall be borne by the Company. If such fees and expenses are
initially advanced by the Executive, the Company shall reimburse the Executive
the full amount of such fees and expenses on the fifth business day after
receipt from the Executive of a statement therefore and reasonable evidence of
Executive’s payment thereof.

(f) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the Executive actually
receives notice of such claim and the Executive shall further apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by the Executive). The
Executive shall not pay such claim prior to the earlier of (a) the expiration of
the 30-calendar-day period following the date on which Executive gives such
notice to the Company and (b) the date that any payment of amount with respect
to such claim is due. If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:

(i) provide the Company with any written records or documents in Executive’s
possession relating to such claim reasonably requested by the Company;

(ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including without
limitation accepting legal representation with respect to such claim by an
attorney competent in respect of the subject matter and reasonably selected by
the Company;

(iii) cooperate with the Company in good faith in order to effectively contest
such claim; and

(iv) permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold harmless the Executive, on an after-tax
basis, for and against any Excise Tax or income tax, including interest and
penalties with respect

 

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thereto, imposed as a result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of this Section 5(f), the
Company shall control all proceedings taken in connection with the contest of
any claim contemplated by this Section 5(f) and, at its sole option, may pursue
or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim (provided,
however, that the Executive may participate therein at Executive’s own cost and
expense) and may, at its option, either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay the tax claimed and sue for a refund, the
Company shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax, including interest or penalties with respect
thereto, imposed with respect thereto; and provided further, however, that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which the contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of any such contested claim shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.

(g) If the Executive receives any refund with respect to such claim, the
Executive shall be entitled to retain same (together with any interest paid or
credited thereon after any taxes applicable thereto).

6. Obligations Absolute; No Mitigation; No Effect On Other Rights.

(a) The obligations of the Company to make the payment to the Executive, and to
make the arrangements, provided for herein are absolute and unconditional and
may not be reduced by any circumstances, including without limitation any
set-off, counterclaim, recoupment, defense or other right which the Company may
have against the Executive or any third party at any time.

(b) The Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, and no
such payment shall be offset or reduced by the amount of any compensation or
benefits provided to the Executive in any subsequent employment.

(c) The provisions of this Agreement, and any payment provided for herein, shall
not supersede or in any way limit the rights, benefits, duties or obligations
which the Executive may now or in the future have under any benefit, incentive
or other plan or arrangement of the Company or any other agreement with the
Company.

 

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7. Not an Employment Agreement. Subject to the terms of this or any other
agreement or arrangement between the Company and the Executive that may then be
in effect, nothing herein shall prevent the Company from terminating the
Executive’s employment.

8. Successors; Binding Agreement, Assignment.

(a) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business of the Company, by agreement to expressly, absolutely and
unconditionally assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession had taken place. Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be a material breach of
this Agreement and shall entitle the Executive to terminate the Executive’s
employment with the Company or such successor for Good Reason immediately prior
to or at any time after such succession. As used in this Agreement, “Company”
shall mean (i) the Company as hereinbefore defined, and (ii) any successor to
all or substantially all of the Company’s business or assets which executes and
delivers an agreement provided for in this Section 8(a) or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law, including any parent or subsidiary of such a successor.

(b) This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would be payable to the Executive hereunder if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive’s estate or designated beneficiary. Neither this Agreement nor any
right arising hereunder may be assigned or pledged by the Executive.

9. Notice. For purpose of this Agreement, notices and all other communications
provided for in this Agreement or contemplated hereby shall be in writing and
shall be deemed to have been duly given when personally delivered or when mailed
United States certified or registered mail, return receipt requested, postage
prepaid, and addressed, in the case of the Company, to the Company at:

P.O. Box 990

Minneapolis, MN 55440

Attention: Corporate Secretary

 

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and in the case of the Executive, to the Executive at the most current address
shown on the Executive’s employment records. Either party may designate a
different address by giving notice of change of address in the manner provided
above, except that notices of change of address shall be effective only upon
receipt.

10. Expenses. In addition to all other amounts payable to the Executive under
this Agreement, the Company shall pay or reimburse the Executive for legal fees
(including without limitation, any and all court costs and attorneys’ fees and
expenses), incurred by the Executive in connection with or as a result of any
claim, action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; unless, (i) in the
case of an action brought by the Executive, it is determined by an arbitrator or
by a court of competent jurisdiction that such action was frivolous and was not
brought in good faith, or (ii) in the case of a claim arising under section 11
hereof, the Company prevails on the merits of such claim.

11. Nondisclosure of Confidential Information; Non-Competition.

(a) Executive shall not, without the prior written consent of the Company, use,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information pertaining to the
business of the Company or any of its affiliates, except (i) while employed by
the Company, in the business of and for the benefit of the Company, or (ii) when
required to do so by a court of competent jurisdiction, by any governmental
agency having supervisory authority over the business of the Company, or by any
administrative body or legislative body (including a committee thereof) with
jurisdiction to order Executive to divulge, disclose or make accessible such
information. For purposes of this Section 11(a), “Confidential Information”
shall mean non-public information concerning the financial data, strategic
business plans, product development (or other proprietary product data),
customer lists, marketing plans and other non-public, proprietary and
confidential information of the Company or its affiliates (the “Restricted
Group”) or customers, that, in any case, is not otherwise available to the
public (other than by Executive’s breach of the terms hereof).

[Note: Sections 11(b-d) below shall apply only to those Executives in Tier I
(the CEO, President or any Executive Vice President of the Company ); or Tier II
(Senior Vice Presidents of the Company) who have executed this Agreement in the
form hereof.]

(b) During the period of Executive’s employment hereunder and for one (1) year
thereafter, Executive agrees that, without the prior written consent of the

 

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Company, (A) Executive will not, directly or indirectly, either as principal,
manager, agent, consultant, officer, stockholder, partner, investor, lender or
employee or in any other capacity, carry on, be engaged in or have any financial
interest in, any business which is in competition with the business of the
Restricted Group and (B) Executive shall not, on Executive’s own behalf or on
behalf of any person, firm or company, directly or indirectly, solicit or offer
employment to any person who has been employed by the Restricted Group at any
time during the 12 months immediately preceding such solicitation.

(c) For purposes of this Section 11, a business shall be deemed to be in
competition with the Restricted Group if it or any of its material affiliates is
in the business of selling food (fresh, packaged and/or frozen), retail or
wholesale, within the continental United States. Nothing in this Section 11
shall be construed so as to preclude Executive from investing in any publicly or
privately held company, provided Executive’s beneficial ownership of any class
of such company’s securities does not exceed 1% of the outstanding securities of
such class. Executive shall retain the right to seek the written approval of the
Company’s [successor]9 Chief Executive Officer waiving the requirements of
Section 11(b) with respect to any particular activity in which Executive seeks
to engage.

(d) Executive and the Company agree that this covenant not to compete is a
reasonable covenant under the circumstances, and further agree that if in the
opinion of any court of competent jurisdiction such restraint is not reasonable
in any respect, such court shall have the right, power and authority to excise
or modify such provision or provisions of this covenant as to the court shall
appear not reasonable and to enforce the remainder of the covenant as so
amended.

(e) Executive agrees that any breach of the covenants contained in this
Section 11 would irreparably injure the Company. Accordingly, Executive agrees
that the Company may, in addition to pursuing any other remedies it may have in
law or in equity, cease making any payments otherwise required by this Agreement
and obtain an injunction against Executive from any court having jurisdiction
over the matter restraining any further violation of this Agreement by
Executive; provided, however, that the Company may not cease making any payments
required by this Agreement until a court or arbitrator(s) having jurisdiction
over the matter has made a final non-appealable determination on the merits of
such action in the Company’s favor.

12. Miscellaneous. No provision of this Agreement may be amended, altered,
modified, waived or discharged unless such amendment, alteration, modification,
waiver or discharge is agreed to in writing signed by the Executive and such
officer of the Company as shall be specifically designated by the Committee or
by the Board. No waiver by either party, at any time, of any breach by the other
party of, or of compliance by the other party with, any condition or provision
of this Agreement to be performed or complied with by such other party shall be
deemed a waiver of any

 

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9 For CEO only.

 

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similar or dissimilar provision or condition of this Agreement or any other
breach of or failure to comply with the same condition or provision at the same
time or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Delaware without giving effect to
its conflict of laws rules. Any action brought by the Executive or the Company
shall be brought and maintained in a court of competent jurisdiction in the
State of Minnesota.

13. Severability. If any one or more of the provisions of this Agreement shall
be held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be
affected thereby. To the extent permitted by applicable law, each party hereto
waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.

14. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be an original and all of which shall be deemed to
constitute one and the same instrument.

15. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof, and supersedes all
prior oral or written agreements, commitments or understanding with respect to
the matters provided for herein (except that any other non-disclosure,
non-competition or non-solicitation agreements or provisions the parties hereto
have entered into shall continue to be in effect).

16. Grantor Trust. Immediately prior to a Change of Control, the Company shall
contribute to a grantor trust an amount equal to 125% of the payments Executive
would receive from the Company, pursuant to Section 4 hereof, if Executive were
terminated without Cause by the Company or if Executive were to terminate
Executive’s employment for Good Reason, in either case, immediately following
the Change of Control.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

    SUPERVALU INC.    

 

 

Witnesses:

   

 

   

 

    Name:  

 

    Title:  

 

 

   

 

    Executive

 

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