Exhibit 10.9

 

NASH FINCH COMPANY

 

1997 NON-EMPLOYEE DIRECTOR

STOCK COMPENSATION PLAN

(2003 Revision)

 

1.             Description.

 

1.1           NAME.  THE NAME OF THE PLAN IS THE “NASH FINCH COMPANY 1997
NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN (2003 REVISION).”

 

1.2           PURPOSE.  THE PURPOSE OF THE PLAN IS TO PROVIDE QUALIFIED
DIRECTORS WITH THE OPPORTUNITY TO DEFER RECEIPT OF DIRECTOR CASH COMPENSATION
THROUGH CREDITS TO THEIR SHARE OR CASH ACCOUNTS.

 

1.3           TYPE.  THE PLAN IS MAINTAINED PRIMARILY FOR THE PURPOSE OF
PROVIDING DEFERRED COMPENSATION FOR QUALIFIED DIRECTORS AND IS INTENDED TO BE
UNFUNDED FOR TAX PURPOSES. THE PLAN WILL BE CONSTRUED AND ADMINISTERED IN A
MANNER THAT IS CONSISTENT WITH AND GIVES EFFECT TO THE FOREGOING.

 

1.4           BACKGROUND.  AS ORIGINALLY ADOPTED, THE PLAN PROVIDED THAT, AS OF
THE EFFECTIVE TIME, ALL QUALIFIED DIRECTORS (A) WOULD RECEIVE 50 PERCENT OF
THEIR ANNUAL RETAINER IN THE FORM OF EITHER SHARES OR CREDITS TO THEIR SHARE
ACCOUNTS UNDER THIS PLAN, AND (B) WOULD BE ENTITLED TO DEFER RECEIPT OF SOME OR
ALL OF THE BALANCE OF THEIR DIRECTOR COMPENSATION THROUGH CREDITS TO THEIR CASH
OR SHARE ACCOUNTS UNDER THIS PLAN.  AS PART OF CHANGES APPROVED BY THE BOARD AND
THE CORPORATE GOVERNANCE COMMITTEE OF THE BOARD TO THE COMPANY’S OVERALL PROGRAM
FOR COMPENSATING NON-EMPLOYEE DIRECTORS, THE DECISION WAS MADE TO TERMINATE, AS
OF DECEMBER 31, 2003, THE REQUIREMENT IN THIS PLAN THAT QUALIFIED DIRECTORS
RECEIVE 50% OF THEIR ANNUAL RETAINER IN THE FORM OF SHARES OR CREDITS TO THEIR
SHARE ACCOUNTS.

 

2.             Participation.

 

2.1           Eligibility.

 

(A)           EACH INDIVIDUAL WHO IS A QUALIFIED DIRECTOR AT ANY POINT DURING A
CALENDAR QUARTER ENDING ON OR BEFORE DECEMBER 31, 2003 WILL RECEIVE THE PORTION
OF THE ANNUAL RETAINER PAYABLE WITH RESPECT TO SUCH QUARTER IN THE FORM OF
RETAINER SHARES TO THE EXTENT PROVIDED AND IN ACCORDANCE WITH SECTION 3.2.

 

(B)           EACH INDIVIDUAL WHO IS A QUALIFIED DIRECTOR ON THE FIRST DAY OF A
CALENDAR YEAR IS ELIGIBLE TO MAKE DEFERRAL ELECTIONS PURSUANT TO SECTION 3.3
WITH RESPECT TO SUCH CALENDAR YEAR.  AN INDIVIDUAL WHO BECOMES A QUALIFIED
DIRECTOR AFTER THE FIRST DAY OF THE CALENDAR YEAR IS ELIGIBLE TO MAKE DEFERRAL
ELECTIONS PURSUANT TO SECTION 3.3 WITH RESPECT TO THE REMAINDER OF SUCH CALENDAR
YEAR.  A PARTICIPANT WHO RECEIVES A DISTRIBUTION, PURSUANT TO SECTION 4.1(D)(I)
OR (III), IS NOT ELIGIBLE TO ELECT ADDITIONAL DEFERRALS PURSUANT TO SECTION 3.3
UNTIL THE ONE-YEAR ANNIVERSARY OF SUCH DISTRIBUTION.

 

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2.2           Ceasing to be Eligible.  An individual who ceases to be a
Qualified Director is not eligible to (a) receive Retainer Shares pursuant to
Section 3.2 other than such shares relating to the Annual Retainer payable with
respect to calendar quarters ending with the earlier of the calendar quarter
during which the individual ceases to be a director or the calendar quarter
ending on December 31, 2003, or (b) make deferrals and receive deferral credits
pursuant to Section 3.3 after such cessation.

 

2.3           Condition of Participation.  Each Qualified Director, as a
condition of participation in the Plan, is bound by all the terms and conditions
of the Plan and the Plan Rules, including but not limited to the reserved right
of the Company to amend or terminate the Plan, and must furnish to the
Administrator such pertinent information, and execute such election forms and
other instruments, as the Administrator or Plan Rules may require by such dates
as the Administrator or Plan Rules may establish.

 

2.4           Termination of Participation.  A Participant will cease to be such
as of the date on which he or she is not then eligible to make deferrals and his
or her entire Account balance has been distributed.

 

3.             Benefits.

 

3.1           Participant Accounts. For each Participant, the Administrator will
establish and maintain a Cash Account, a Share Account or both to evidence
amounts credited with respect to the Participant pursuant to Sections 3.2, 3.3
and 3.4.

 

3.2           Issuance of Retainer Shares.  As of the first day of each calendar
quarter that immediately follows a calendar quarter whose last day occurs during
the period beginning at the Effective Time and ending on December 31, 2003, each
individual who is a Qualified Director at any time during such immediately
preceding calendar quarter will, unless a deferral election has properly been
made pursuant to Section 3.3(a), be entitled to receive (as soon as reasonably
practical after such immediately preceding calendar quarter) the Retainer Shares
relating to his or her services as a Qualified Director during such immediately
preceding calendar quarter.

 

3.3           Deferral Credits.

 

(a)           With respect to services to be performed during the period
beginning at the Effective Time and ending on December 31, 2003, a Qualified
Director may elect to defer all (but not less than all) of the Retainer Share
Amount relating to his or her services as a Qualified Director during a calendar
year.  Any such election will automatically apply to the Qualified Director’s
Retainer Share Amount for the year as adjusted from time to time.

 

(b)           Commencing with respect to services to be performed after the
Effective Time, a Qualified Director may elect to defer all or any portion of
his or her Director Cash Compensation relating to his or her services as a
Qualified Director during a calendar year.  Any portion so elected will
automatically apply to the Qualified Director’s Director Cash Compensation for
the year as adjusted from time to time.

 

(c)           Elective deferrals of a Qualified Director’s Retainer Share Amount
and Director Cash Compensation will be made in accordance with the following
rules:

 

(i)            An election made pursuant to this Section 3.3 will not be
effective unless it is made on a properly completed election form received by
the

 

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Administrator by the last day of the calendar year immediately preceding the
calendar year to which the election relates or, in the case of an individual who
becomes a Qualified Director after the first day of the calendar year, within 30
days after the date such individual becomes a Qualified Director. 
Notwithstanding the foregoing, with respect to an initial deferral election that
is made in connection with the adoption of the Plan, such election will be
effective if received by the Administrator by April 30, 1997.  Any deferral
elections under this Section 3.3 will apply only to a Qualified Director’s
Retainer Share Amount and Director Cash Compensation relating to services
performed after the effective date of the election.

 

(ii)           A Qualified Director may revoke a deferral election made pursuant
to this Section 3.3 at any time.  Any such revocation will be effective with
respect to any payment of a Qualified Director’s Retainer Share Amount and
Director Cash Compensation that (A) follows by at least 30 days (or such shorter
period as Plan Rules may allow) the Administrator’s receipt of a properly
completed form, and (B) relates to services as a Qualified Director after the
date on which the Administrator receives such notice.  Upon making a revocation,
the Qualified Director will be unable to make further deferrals of his or her
Retainer Share Amount (if then payable) and Director Cash Compensation until the
next calendar year.

 

(iii)          In conjunction with each deferral election made pursuant to
Section 3.3(b), a Qualified Director must elect, in accordance with and subject
to Plan Rules, how the deferral is to be allocated (in increments of five
percent only) among his or her Cash Account and Share Account.  Such an election
is irrevocable after the latest date by which the deferral election to which it
relates must be received by the Administrator to be effective.

 

(iv)          Deferrals of the Retainer Share Amount pursuant to Section 3.3(a)
will be credited to a Qualified Director’s Share Account as of the date on which
the Retainer Shares would have been issued pursuant to Section 3.2 but for his
or her deferral election.  Deferrals of Director Cash Compensation pursuant to
Section 3.3(b) will be credited to a Qualified Director’s Cash Account or Share
Account, as the case may be, as of the date on which such Director Cash
Compensation would have been paid but for his or her deferral election.  Such
credits to the Qualified Director’s Cash Account will be in U.S. dollars in an
amount equal to the amount of the deferral allocated to the Cash Account by the
Qualified Director.  Such credits to a Qualified Director’s Share Account will
be the number of full and fractional Share Units determined by dividing the
amount of Director Cash Compensation to be allocated to the Share Account by the
Market Price on the date as of which the credit is made.

 

3.4           Earnings Credits.

 

(a)           Cash Account.  As of the first day of each calendar quarter, a
Participant’s Cash Account will be credited with interest, calculated on the
basis of the balance in the Participant’s Cash Account as of the last day of the
immediately preceding calendar quarter, in an amount equal to the “applicable
percentage” of the average daily balance of the Account for such immediately
preceding calendar quarter.  The applicable percentage for a given calendar
quarter is the quarterly equivalent of the average of the annual yield set forth
for each month during such calendar quarter in the Moody’s Bond Record,
published by Moody’s Investor’s Service, Inc. (or any successor thereto) under
the heading of “Moody’s

 

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Corporate Bond Yield Averages — Av. Corp.” or, if such yield is no longer
available, a substantially similar average selected by the Administrator.

 

(b)           Share Account.

 

(i)            As of the first day of the calendar quarter first following the
date on which dividends are paid on Shares, a Participant’s Share Account will
be credited with that number of full and fractional Share Units determined by
dividing (A) the dollar amount of the dividends that would have been payable to
the Participant if the number of Share Units credited to the Participant’s Share
Account on the record date for such dividend payment had then been Shares
registered in the name of such Participant by (B) the Market Price on the date
as of which the credit is made.

 

(ii)           In the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, rights offering or
any other change in the Company’s corporate structure or Shares, the
Administrator will make such adjustment, if any, as the Administrator may deem
appropriate in the number and kind of Share Units credited to Share Accounts.

 

3.5           Vesting.  Each Participant always has a fully vested
nonforfeitable interest in his or her Account.

 

4.             Distribution.

 

4.1           Distribution to Participant.

 

(a)           Form.  Distribution to a Participant will be made in the form of a
lump sum payment unless (i) the Participant elects, on a properly completed
form, to receive his or her distribution in the form of annual installment
payments for a period of not more than 10 years and (ii) other than cessation
resulting from Disability, the date on which he or she ceases to be a member of
the Board follows by more than one year the date on which a properly completed
election form is received by the Administrator.  Any election made pursuant to
this Section 4.1(a) may be changed from time to time upon the Administrator’s
receipt of a properly completed form, provided that, other than cessation
resulting from Disability, such change will not be valid and will not have any
effect unless it is made on a properly completed form received by the
Administrator more than one year prior to a Participant’s cessation of service
as a member of the Board.  Any election made pursuant to this Section 4.1(a)
will apply to the entire balance of the Participant’s Account attributable to
deferral credits with respect to the period through the date on which he or she
ceases to be a member of the Board.  Any distribution from a Participant’s Cash
Account will be made in cash only.  Any distribution from a Participant’s Share
Account will be made in full Shares only and cash in lieu of any fractional
Share.

 

(b)           Time.  Distribution to a Participant will be made or commence on
or as soon as administratively practicable after the first day of the calendar
quarter that follows the date on which the Participant ceases to be a member of
the Board.

 

(c)           Amount.

 

(i)            Cash Account.

 

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(A)          Lump Sum.  The amount of a lump sum payment from a Participant’s
Cash Account will be equal to the balance of the Account as of the first day of
the calendar month coinciding with or immediately preceding the date on which
the payment is made.

 

(B)           Installments.  The amount of an installment payment from a
Participant’s Cash Account will be determined by dividing the balance of the
Account as of the first day of the calendar month coinciding with or immediately
preceding the date on which the payment is made by the total number of remaining
payments (including the current payment).

 

(ii)           Share Account.

 

(A)          Lump Sum.  A lump sum distribution from a Participant’s Share
Account will consist of the number of Shares equal to the number of full Share
Units credited to the Account as of the first day of the calendar month
coinciding with or immediately preceding the date on which the distribution is
made plus cash in lieu of any fractional Share Unit then credited to the Account
in an amount based on the Market Price on that date.

 

(B)           Installments.  Installment distributions from a Participant’s
Share Account, other than the final distribution, will consist of the number of
Shares determined by dividing the number of full Share Units credited to the
Account as of the first day of the calendar month coinciding with or immediately
preceding the date on which the distribution is made by the total number of
remaining Share distributions (including the current payment) and rounding the
quotient to the next higher full Share.  The amount of the final payment will be
determined in accordance with clause (A).

 

(d)           Special Rules.  The provisions of this Section 4.1(d) will apply
notwithstanding Section 4.1(a), (b) or (c) or any election by a Participant to
the contrary.

 

(i)            Withdrawals Due to Unforeseeable Emergency.  A distribution will
be made to a Participant from his or her Share or Cash Account if the
Participant submits a written distribution request to the Administrator and the
Administrator determines that the Participant has experienced an Unforeseeable
Emergency.  The amount of the distribution may not exceed the lesser of (a) the
amount necessary to satisfy the emergency, as determined by the Administrator,
or (b) the balance of the Participant’s Account as of the date of the
distribution determined in accordance with Section 4.1(c).  Payments made on
account of an Unforeseeable Emergency will not be made to the extent that such
Unforeseeable Emergency is or may be relieved through reimbursement or
compensation by insurance or otherwise, by liquidation of the Participant’s
assets (to the extent that such liquidation would not itself cause severe
financial hardship) or by cessation of deferrals under Section 3.3.  Any
distribution pursuant to this Section 4.1(d)(i) will be made in the form of a
lump sum payment (in cash from the Cash Account and in Shares from the Share
Account) as soon as administratively practicable after the Administrator’s
determination that the Participant has experienced an Unforeseeable Emergency
and will be made first from the Participant’s Cash Account and then from the
Participant’s Share Account, with the amount distributed from the Share Account
determined based upon the

 

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Market Price as of the first day immediately preceding the date on which the
distribution is made.

 

(ii)           Small Benefits.  If the balance of the Cash Account of a
Participant who has ceased to be a member of the Board is less than $5,000 as of
the first day of a calendar month, such balance will be distributed to the
Participant in the form of a lump sum cash payment as soon as administratively
practicable thereafter.

 

(iii)          Accelerated Distribution.  A Participant may, at any time, elect
an immediate distribution of his or her Account in an amount equal to 90 percent
of the balance of the Account as of the date of the distribution determined in
accordance with Section 4.1(c), in which case the remaining balance of the
Account will be forfeited.  The distribution will be made in the form of a lump
sum payment as soon as administratively practicable after the Administrator’s
receipt of a written application on a form furnished by the Administrator.  Any
distribution from a Participant’s Cash Account will be made in cash only.  Any
distribution from a Participant’s Share Account will be made in full Shares only
and cash in lieu of any fractional Share.

 

(e)           Reduction of Account Balance.  The balance of the Account from
which a distribution is made will be reduced by the amount of the distribution
as of the date of the distribution.

 

4.2           Distribution to Beneficiary.

 

(a)           Form.  In the event of a Participant’s death, the balance of the
Participant’s Account will be distributed to the Participant’s Beneficiary in a
lump sum payment whether or not payments had commenced to the Participant in the
form of installments prior to his or her death.  Any distribution from a
Participant’s Cash Account will be made in cash and any distribution from a
Participant’s Share Account will be made in full Shares and cash in lieu of any
fractional Share.

 

(b)           Time.  Distribution to a Beneficiary will be made as soon as
administratively practicable after the date on which the Administrator receives
notice of the Participant’s death.

 

(c)           Amount.  The amount of the payment will be determined in
accordance with Section 4.1(c).

 

(d)           Reduction of Account Balance.  The balance of the Account from
which a distribution is made will be reduced by the amount of the distribution
as of the date of the distribution.

 

(e)           Beneficiary Designation.

 

(i)            Each Participant may designate, on a form furnished by the
Administrator, one or more primary Beneficiaries or alternative Beneficiaries to
receive all or a specified part of his or her Account after his or her death,
and the Participant may change or revoke any such designation from time to
time.  No such designation, change or revocation is effective unless executed by
the Participant and received by the Administrator during the Participant’s
lifetime.

 

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(ii)           If, for all or any portion of his or her Account, a Participant
fails to designate a Beneficiary, revokes a Beneficiary designation without
naming another Beneficiary or designates one or more Beneficiaries, none of whom
survives the Participant or exists at the time in question, such Account or
portion will be paid to the Participant’s surviving spouse or, if the
Participant is not survived by a spouse, to the representative of the
Participant’s estate.

 

(iii)          The automatic Beneficiaries specified above and, unless the
designation otherwise specifies, the Beneficiaries designated by the
Participant, become fixed as of the Participant’s death so that, if a
Beneficiary survives the Participant but dies before the receipt of the payment
due such Beneficiary, the payment will be made to the representative of such
Beneficiary’s estate.  Any designation of a Beneficiary by name that is
accompanied by a description of relationship or only by statement of
relationship to the Participant is effective only to designate the person or
persons standing in such relationship to the Participant at the Participant’s
death.

 

4.3           Limitations on Share Distributions.  Notwithstanding any other
provision of the Plan to the contrary, neither the Company nor the Trustee is
required to issue or distribute any Shares under this Plan, and a distributee
may not sell, assign, transfer or otherwise dispose of Shares issued or
distributed pursuant to the Plan, unless (a) there is in effect with respect to
such Shares a registration statement under the Securities Act and any applicable
state securities laws or an exemption from such registration under the
Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Company deems necessary or advisable. The Company or the Trustee may
condition such issuance, distribution, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing Shares, as may be deemed necessary or
advisable by the Company in order to comply with such securities laws or other
restrictions.

 

4.4           Payment In Event of Incapacity.  If any individual entitled to
receive any payment under the Plan is, in the judgment of the Administrator,
physically, mentally or legally incapable of receiving or acknowledging receipt
of the payment, and no legal representative has been appointed for the
individual, the Administrator may (but is not required to) cause the payment to
be made to any one or more of the following as may be chosen by the
Administrator: the Beneficiary (in the case of the incapacity of a Participant);
the institution maintaining the individual; a custodian for the individual under
the Uniform Transfers to Minors Act of any state; or the individual’s spouse,
children, parents, or other relatives by blood or marriage. The Administrator is
not required to see to the proper application of any such payment, and the
payment completely discharges all claims under the Plan against the Company, the
Plan and the Trust to the extent of the payment.

 

5.             Source Of Payments; Nature Of Interest.

 

5.1           Establishment of Trust.

 

(a)           The Company may establish a Trust with an independent corporate
trustee.  The Trust must be a grantor trust with respect to which the Company is
treated as grantor for purposes of Code section 677 and must provide that, upon
the insolvency of the Company, Trust assets will be used to satisfy claims of
the Company’s general creditors.  The Company will pay all taxes of any and all
kinds whatsoever payable in respect of the Trust assets or

 

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any transaction with respect to the Trust assets.  The Company may from time to
time transfer to the Trust cash, marketable securities or other property
acceptable to the Trustee in accordance with the terms of the Trust.

 

(b)           Notwithstanding subsection (a), not later than the effective date
of a Change in Control, the Company must transfer to the Trust an amount not
less than the amount by which (i) 125 percent of the aggregate balance of all
Participants’ Accounts as of the last day of the month immediately preceding the
effective date of the Change in Control exceeds (ii) the value of the Trust
assets attributable to amounts previously contributed by the Company as of the
most recent date as of which such value was determined.

 

5.2           Source of Payments.

 

(a)           The Company will pay, from its general assets, the benefits
pursuant to Section 4 attributable to a Participant’s Account, and all costs,
charges and expenses relating thereto.

 

(b)           The Trustee will make distributions to Participants and
Beneficiaries from the Trust in satisfaction of the Company’s obligations under
the Plan in accordance with the terms of the Trust.  The Company is responsible
for paying any benefits attributable to a Participant’s Account that are not
paid by the Trust.

 

5.3           Status of Plan.  Nothing contained in the Plan or Trust is to be
construed as providing for assets to be held for the benefit of any Participant
or any other person or persons to whom benefits are to be paid pursuant to the
terms of the Plan, the Participant’s or other person’s only interest under the
Plan being the right to receive the benefits set forth herein. The Trust is
established only for the convenience of the Company and the Participants, and no
Participant has any interest in the assets of the Trust prior to distribution of
such assets pursuant to the Plan.  Until such time as Shares are distributed to
a Participant, Beneficiary of a deceased Participant or other person, he or she
has no rights as a shareholder with respect to any Shares Units credited to a
Share Account pursuant to the Plan.  To the extent that the Participant or any
other person acquires a right to receive benefits under the Plan or the Trust,
such right is no greater than the right of any unsecured general creditor of the
Company.

 

5.4           Non-Assignability of Benefits.  The benefits payable under the
Plan and the right to receive future benefits under the Plan may not be
anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or
subjected to any charge or legal process.

 

6.             Amendment and Termination.

 

6.1           Amendment.

 

(a)           The Company reserves the right to amend the Plan at any time to
any extent that it may deem advisable.  To be effective, an amendment must be
stated in a written instrument approved in advance or ratified by the Board and
executed in the name of the Company by its Chief Executive Officer, President or
a Vice President and attested by the Secretary or an Assistant Secretary.

 

(b)           An amendment adopted in accordance with Section 6.1(a) is binding
on all interested parties as of the effective date stated in the amendment;
provided, however, that no amendment will have any retroactive effect so as to
deprive any Participant, or the

 

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Beneficiary of a deceased Participant, of any benefit to which he or she is
entitled under the terms of the Plan in effect immediately prior to the
effective date of the amendment, determined as if such Participant had
terminated service as a director immediately prior to the effective date of the
amendment.

 

(c)           Without limiting Section 6.1(a), the Company reserves the right to
amend this Plan to change the method of determining the earnings credited to
Participants’ Accounts pursuant to Section 3.4 and to apply such new method not
only with respect to the portion of the Accounts attributable to credits made
after the date on which such amendment is adopted but also with respect to the
portion of the Accounts attributable to credits made prior to the date on which
such amendment is adopted and regardless of whether such new method would result
in materially lower earnings credits than the old method.

 

(d)           The provisions of the Plan in effect at the termination of a
Participant’s service as a director will, except as otherwise expressly provided
by a subsequent amendment, continue to apply to such Participant.

 

6.2           Termination.  The Company reserves the right to terminate the Plan
at any time. The Plan will terminate as of the date specified by the Company in
a written instrument by its authorized officers to the Administrator, adopted in
the manner of an amendment.  Upon the termination of the Plan, any benefits to
which Participants have become entitled prior to the effective date of the
termination will continue to be paid in accordance with the provisions of
Section 4, provided that a majority of the members of the Board who are not then
Participants may cause the entire interest in the Plan of any or all
Participants, or the Beneficiaries of any or all deceased Participants, to be
distributed in the form of an immediate lump sum payment.

 

7.             Definitions, Construction and Interpretation.  The definitions
and rules of construction and interpretation set forth in this Section 7 apply
in construing the Plan unless the context otherwise indicates.

 

7.1           Account.  “Account” means the bookkeeping account or accounts
maintained with respect to a Participant pursuant to Section 3.1.

 

7.2           Administrator.  The “Administrator” of the Plan is the Corporate
Governance Committee of the Board or such other committee or the person to whom
administrative duties are delegated pursuant to the provisions of Section 8.1,
as the context requires.

 

7.3           Annual Retainer.  “Annual Retainer” means the regular retainer
payable by the Company to a Qualified Director for a 12-month period of service
as a Qualified Director, exclusive of fees specifically paid for attending or
chairing regular or special meetings of the Board and Board committees, fees or
special retainers paid for membership on standing Board committees or for
serving as the chair of the Board or standing Board committees, expense
allowances or reimbursements, insurance premiums and any other payments that are
determined by reference to factors other than holding office as a Qualified
Director.

 

7.4           Beneficiary.  “Beneficiary” with respect to a Participant is the
person designated or otherwise determined under the provisions of Section 4.2(e)
as the distributee of benefits payable after the Participant’s death.  A person
designated or otherwise determined to be a Beneficiary under the terms of the
Plan has no interest in or right under the Plan until the Participant in
question has died.  A Beneficiary will cease to be such on the day on which all
benefits to which he, she or it is entitled under the Plan have been
distributed.

 

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7.5           Board.  “Board” means the board of directors of the Company.

 

7.6           Cash Account.  “Cash Account” means an Account to which amounts
are credited in U.S. dollars.

 

7.7           Change in Control.  “Change in Control” means any of the
following:

 

(a)           the sale, lease, exchange or other transfer, directly or
indirectly, of all or substantially all of the assets of the Company, in one
transaction or in a series of related transactions, to any person;

 

(b)           the approval by the stockholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company;

 

(c)           any person is or becomes after the Effective Time the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of (i) 20 percent or more, but not more than 50 percent, of the combined voting
power of the Company’s outstanding securities ordinarily having the right to
vote at elections of directors, unless the transaction resulting in such
ownership has been approved in advance by the continuity directors, or (ii) more
than 50 percent of the combined voting power of the Company’s outstanding
securities ordinarily having the right to vote at elections of directors
(regardless of any approval by the continuity directors);

 

(d)           a merger or consolidation to which the Company is a party if the
stockholders of the Company immediately prior to the effective date of such
merger or consolidation have beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) immediately following the effective date of such merger
or consolidation of securities of the surviving company representing (a) 50
percent or more, but not more than 80 percent, of the combined voting power of
the surviving corporation’s then outstanding securities ordinarily having the
right to vote at elections of directors, unless such merger or consolidation has
been approved in advance by the continuity directors, or (b) less than 50
percent of the combined voting power of the surviving corporation’s then
outstanding securities ordinarily having the right to vote at elections of
directors (regardless of any approval by the continuity directors);

 

(e)           the continuity directors cease for any reason to constitute at
least a majority of the Company’s board of directors; or

 

(f)            a change in control of the Company of a nature that would be
required to be reported pursuant to section 13 or 15(d) of the Exchange Act,
whether or not the Company is then subject to such reporting requirement.

 

(g)           For purposes of this Section 7.7:

 

(i)            a “continuity director” means any individual who is a member of
the Board as of the Effective Time while he or she is a member of the Board, and
any individual who subsequently becomes a member of the Board whose election or
nomination for election by the Company’s stockholders was approved by a vote of
at least a majority of the directors who are continuity directors (either by a
specific

 

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vote or by approval of the proxy statement of the Company in which such
individual is named as a nominee for director without objection to such
nomination);

 

(ii)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time; and

 

(iii)          “person” means any individual, corporation, partnership, group,
association or other “person,” as such term is defined in section 14(d) of the
Exchange Act, other than (A) the Company; (B) any corporation at least a
majority of whose securities having ordinary voting power for the election of
directors is owned, directly or indirectly, by the Company; (C) any other entity
in which the Company, by virtue of a direct or indirect ownership interest, has
the right to elect a majority of the members of the entity’s governing body; or
(D) any benefit plan sponsored by the Company, a corporation described in clause
(B) or an entity described in clause (C).

 

7.8           Code.  “Code” means the Internal Revenue Code of 1986, as
amended.  Any reference to a specific provision of the Code includes a reference
to that provision as it may be amended from time to time and to any successor
provision.

 

7.9           Company.  “Company” means Nash Finch Company.

 

7.10         Cross Reference.  References in the Plan to a particular section
refer to that section within the Plan, references within a section of the Plan
to a particular subsection refer to that subsection within the same section, and
references within a section or subsection to a particular clause refer to that
clause within the same section or subsection, as the case may be.

 

7.11         Director Cash Compensation.  “Director Cash Compensation” means all
amounts payable in cash by the Company to a Qualified Director for his or her
services to the Company as a Qualified Director, (a) including an annual
retainer for Board and Board committee membership, an annual retainer for
chairing the Board or a Board committee, and fees specifically paid for
attending meetings of the Board and Board committees, but (b) excluding
equity-based compensation arrangements such as stock options and performance or
restricted stock units granted under equity-based compensation plans of the
Company, expense allowances or reimbursements and insurance premiums paid to or
on behalf of Qualified Directors, and, for the period beginning at the Effective
Time and ending on December 31, 2003, the Retainer Share Amount.

 

7.12         Disability.  “Disability” means the disability of a Qualified
Director such as would entitle the Qualified Director to receive income benefits
pursuant to the long-term disability plan of the Company then covering the
Qualified Director or, if no such plan exists or is applicable to the Qualified
Director, the permanent and total disability of the Qualified Director within
the meaning of Code section 22(e)(3).

 

7.13         Effective Time.  “Effective Time” means such time as the Plan is
originally approved by the Company’s stockholders.

 

7.14         Governing Law.  All questions pertaining to the construction,
validity, effect and enforcement of the Plan will be determined in accordance
with the internal, substantive laws of the State of Minnesota without regard to
the conflict of laws rules of the State of Minnesota or any other jurisdiction.

 

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7.15         Headings.  The headings of sections are included solely for
convenience of reference; if there exists any conflict between such headings and
the text of the Plan, the text will control.

 

7.16         Market Price.  “Market Price” means the closing sale price for
Shares on a specified date or, if Shares were not then traded, on the most
recent prior date when Shares were traded, all as reported on the Nasdaq
National Market or such other exchange as the Shares may be traded from time to
time.

 

7.17         Number and Gender.  Wherever appropriate, the singular may be read
as the plural, the plural may be read as the singular, and one gender may be
read as the other gender.

 

7.18         Participant.  “Participant” is a current or former Qualified
Director to whose Account amounts have been credited pursuant to Section 3 and
who has not ceased to be a Participant pursuant to Section 2.4.

 

7.19         Plan.  “Plan” means the Nash Finch Company 1997 Non-Employee
Director Stock Compensation Plan, as from time to time amended or restated.

 

7.20         Plan Rules.  “Plan Rules” are rules, policies, practices or
procedures adopted by the Administrator pursuant to Section 8.2.

 

7.21         Qualified Director.  “Qualified Director” means an individual who
is a member of the Board and who is not a current employee of the Company or any
of its subsidiaries.

 

7.22         Retainer Shares.  “Retainer Shares” means the number of full and
fractional Shares determined by dividing the Retainer Share Amount for a
calendar quarter by the Market Price on the first day of the calendar quarter
that first follows the calendar quarter for which such Retainer Share Amount has
been determined.  No Retainer Shares will be issuable hereunder for any calendar
quarter beginning after December 31, 2003.

 

7.23         Retainer Share Amount.  “Retainer Share Amount” means, with respect
to any calendar quarter whose last day occurs during the period beginning at the
Effective Time and ending on December 31, 2003, the amount determined by (i)
taking an amount equal to 50 percent (33-1/3 percent with respect to the
calendar quarters in the 1997 calendar year) of the Annual Retainer payable by
the Company to Qualified Directors for such calendar quarter and (ii)
multiplying such amount by a fraction, the numerator of which is the number of
days during such calendar quarter (or the number of days after the Effective
Time with respect to the calendar quarter in which the Effective Time occurs)
that the individual served as a Qualified Director and the denominator of which
is the total number of days in such calendar quarter.  No Retainer Share Amount
will be calculated hereunder for any calendar quarter beginning after December
31, 2003.

 

7.24         Securities Act.  “Securities Act” means the Securities Act of 1933,
as amended. Any reference to a specific provision of the Securities Act includes
a reference to that provision as it may be amended from time to time and to any
successor provision.

 

7.25         Share Account.  “Share Account” means an Account to which amounts
are credited in Share Units.

 

7.26         Share Units.  “Share Units” means a unit credited to a
Participant’s Share Account pursuant to the Plan, each of which represents the
equivalent of one Share.

 

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7.27         Shares.  “Shares” means shares of common stock of the Company,
$1.66-2/3 par value, or such other class or kind of shares or other securities
as may be applicable pursuant to Section 3.3(b)(ii).

 

7.28         Trust.  “Trust” means any trust or trusts established by the
Company pursuant to Section 5.1.

 

7.29         Trustee.  “Trustee” means the independent corporate trustee or
trustees that at the relevant time has or have been appointed to act as Trustee
of the Trust.

 

7.30         Unforeseeable Emergency.  “Unforeseeable Emergency” means an
unanticipated emergency that is caused by an event beyond the Participant’s
control resulting in a severe financial hardship that cannot be satisfied
through other means.  The existence of an unforeseeable emergency will be
determined by the Administrator.

 

8.             Administration.

 

8.1           Administrator.  The general administration of the Plan and the
duty to carry out its provisions will be vested in the Corporate Governance
Committee of the Board or such other Board committee as may be subsequently
designated as Administrator by the Board.  Such committee may delegate such duty
or any portion thereof to a named person and may from time to time revoke such
authority and delegate it to another person.

 

8.2           Plan Rules and Regulations.  The Administrator has the
discretionary power and authority to make such Plan Rules as the Administrator
determines to be consistent with the terms, and necessary or advisable in
connection with the administration, of the Plan and to modify or rescind any
such Plan Rules.

 

8.3           Administrator’s Discretion.  The Administrator has the sole
discretionary power and authority to make all determinations necessary for
administration of the Plan, except those determinations that the Plan requires
others to make, and to construe, interpret, apply and enforce the provisions of
the Plan and Plan Rules whenever necessary to carry out its intent and purpose
and to facilitate its administration, including, without limitation, the
discretionary power and authority to remedy ambiguities, inconsistencies,
omissions and erroneous benefit calculations.  In the exercise of its
discretionary power and authority, the Administrator will treat all similarly
situated persons uniformly.

 

8.4           Specialist’s Assistance.  The Administrator may retain such
actuarial, accounting, legal, clerical and other services as may reasonably be
required in the administration of the Plan, and may pay reasonable compensation
for such services.  All costs of administering the Plan will be paid by the
Company.

 

8.5           Indemnification.  The Company agrees to indemnify and hold
harmless, to the extent permitted by law, each director, officer and employee of
the Company and any subsidiary or affiliate of the Company against any and all
liabilities, losses, costs and expenses (including legal fees) of every kind and
nature that may be imposed on, incurred by, or asserted against such person at
any time by reason of such person’s services in connection with the Plan, but
only if such person did not act dishonestly or in bad faith or in willful
violation of the law or regulations under which such liability, loss, cost or
expense arises.  The Company has the right, but not the obligation, to select

 

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counsel and control the defense and settlement of any action for which a person
may be entitled to indemnification under this provision.

 

9.             Miscellaneous.

 

9.1           Withholding and Offsets.  The Company and the Trustee retain the
right to withhold from any compensation, deferral and/or benefit payment
pursuant to the Plan, any and all tax as the Company or Trustee deems necessary,
and the Company and the Trustee may offset against amounts payable to a
Participant or Beneficiary under the Plan any amounts then owing to the Company
by such Participant or Beneficiary.  The Company or the Trustee, as the case may
be, in its sole discretion, may permit Participants to elect whether to satisfy
their obligations under this Section 9.1 by having such amounts withheld from
any compensation, deferral and/or benefit payment pursuant to the Plan or by
remitting such amounts to the Company or the Trustee, or by a combination of
such methods.

 

9.2           Other Benefits.  Neither amounts deferred nor amounts paid
pursuant to the Plan constitute salary or compensation for the purpose of
computing benefits under any other benefit plan, practice, policy or procedure
of the Company unless otherwise expressly provided thereunder.

 

9.3           No Warranties Regarding Tax Treatment.  The Company makes no
warranties regarding the tax treatment to any person of any deferrals or
payments made pursuant to the Plan, and each Participant will hold the
Administrator and the Company and their officers, directors, employees, agents
and advisors harmless from any liability resulting from any tax position taken
in good faith in connection with the Plan.

 

9.4           No Rights to Continued Service Created.  Neither the establishment
of or participation in the Plan gives any individual the right to continued
service on the Board or limits the right of the Company or its stockholders to
terminate or modify the terms and conditions of service of such individual on
the Board or otherwise deal with any individual without regard to the effect
that such action might have on him or her with respect to the Plan.

 

9.5           Successors.  Except as otherwise expressly provided in the Plan,
all obligations of the Company under the Plan are binding on any successor to
the Company whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation or otherwise of all or substantially
all of the business and/or assets of the Company.

 

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