EXHIBIT 10.2

SUPERVALU INC.

2007 STOCK PLAN

STOCK OPTION AGREEMENT

This agreement is made and entered into as of the grant date indicated below
(the “Grant Date”), by and between SUPERVALU INC. (the “Company”) and the
individual whose name appears below (“Optionee”).

The Company has established the 2007 Stock Plan (the “Plan”), under which key
employees of the Company and its Affiliates may be granted Options to purchase
shares of the Company’s common stock. Optionee has been selected by the Company
to receive an Option subject to the provisions of this agreement. Capitalized
terms that are used in this agreement, that are not defined, shall have the
meanings ascribed to them in the Plan.

In consideration of the foregoing, the Company and Optionee hereby agree as
follows:

 

1. Option Grant. The Company hereby grants to Optionee, subject to Optionee’s
acceptance hereof, the right and option to purchase the number of Shares
indicated below at the exercise price per Share indicated below (the “Exercise
Price”), effective as of the Grant Date. The Option has been designated as a
Non-Qualified Stock Option (“NQ”) for tax purposes, the consequences of which
are set forth in the prospectus that describes the Plan.

 

2. Acceptance of Option and Stock Option Terms and Conditions. The Option is
subject to and governed by the Stock Option Terms and Conditions (“Terms and
Conditions”) attached, which are incorporated in the terms and provisions of the
Plan. To accept the Option, Optionee must sign and return a copy of this
agreement to the Company or this agreement must be delivered and accepted
through an electronic medium in accordance with procedures established by the
Company within ninety (90) days after the Grant Date. By so doing, Optionee
acknowledges receipt of the accompanying Terms and Conditions and the Plan, and
represents that Optionee has read and understands the same and agrees to be
bound by the accompanying Terms and Conditions and the terms and provisions of
the Plan. In the event that any provision of this agreement or the accompanying
Terms and Conditions is inconsistent with the terms and provisions of the Plan,
the terms and provisions of the Plan shall govern. Any question of
administration or interpretation arising under this agreement or the
accompanying Terms and Conditions shall be determined by the Committee
administering the Plan, and such determination shall be final, conclusive and
binding upon all parties in interest.

 

3. Vesting, Exercise Rights and Expiration. Except as otherwise provided in the
accompanying Terms and Conditions: (i) twenty percent (20%) of the Option shall
vest on the Grant Date and the remaining portion shall vest in four (4) equal
annual installments commencing on each anniversary of the Grant Date, (ii) the
vested portion of the Option may be exercised in whole or part, and (iii) the
Option will expire on the expiration date indicated below (the “Expiration
Date”).

 

Option    Grant    Number of    Type of    Exercise    Expiration Number    Date
   Shares    Option    Price    Date

 

SUPERVALU INC.     OPTIONEE: By:  

 

   

 

  Burt M. Fealing     Name   Vice President, Corporate Secretary     Address  
and Chief Securities Counsel     City, State, Zip

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SUPERVALU INC.

2007 STOCK PLAN

STOCK OPTION TERMS AND CONDITIONS

(OFFICERS AS ELECTED BY THE BOARD OF DIRECTORS)

These Stock Option Terms and Conditions (“Terms and Conditions”) apply to the
Option granted to you under the 2007 Stock Plan (the “Plan”), pursuant to the
Stock Option Agreement to which this document is attached. Capitalized terms
that are used in this document, but are not defined, shall have the meanings
ascribed to them in the Plan or the accompanying Stock Option Agreement.

1. Vesting and Exercisability. The Option shall vest in cumulative installments
as follows:

 

  a) As of the Grant Date, twenty percent (20%) of the Option shall immediately
vest and twenty percent (20%) of the Shares subject to the Option shall then be
available for purchase, provided you have: (i) signed and returned the
accompanying Stock Option Agreement or (ii) the accompanying Stock Option
Agreement has been delivered and accepted through an electronic medium in
accordance with procedures established by SUPERVALU INC. (the “Company”) within
the time period specified.

 

  b) On each anniversary of the Grant Date, an additional twenty percent
(20%) of the Option shall vest and an additional twenty percent (20%) of the
Shares subject to the Option shall then be available for purchase.

The vested portion of the Option may be exercised at any time, or from time to
time, to purchase Shares. If in any year the full amount of Shares that may be
purchased pursuant to the vested portion of the Option is not purchased, the
remaining amount of such Shares shall be available for purchase during the
remainder of the term of the Option. The term of the Option shall be for a
period of seven (7) years from the Grant Date, terminating at the close of
business on the Expiration Date or such shorter period as is provided for
herein.

2. Manner of Exercise. Except as provided in Section 8 below, you cannot
exercise the Option unless at the time of exercise you are an employee of the
Company or an Affiliate. Prior to your death, only you may exercise the Option.
You may exercise the Option as follows:

 

  a) By delivering a “Notice of Exercise of Stock Option” to the Company at its
principal office, attention: Corporate Secretary, stating the number of Shares
being purchased and accompanied by payment of the full purchase price for such
Shares (determined by multiplying the Exercise Price by the number of Shares to
be purchased). Note: In the event the Option is exercised by any person other
than you pursuant to any of the provisions of Section 8 below, the Notice must
be accompanied by appropriate proof of such person’s right to exercise the
Option; or

 

  b) By entering an order to exercise the Option using E*TRADE’s website.

3. Method of Payment. The full purchase price for the Shares to be purchased
upon exercise of the Option must be paid as follows:

 

  a) By delivering directly to the Company, cash or its equivalent payable to
the Company;

 

  b) By delivering indirectly to the Company, cash or its equivalent payable to
the Company through E*TRADE’s website; or

 

  c) By delivering directly to the Company Shares having a Fair Market Value as
of the exercise date equal to the purchase price (commonly known as a “Stock
Swap”); or

 

  d) By delivering directly to the Company the full purchase price in a
combination of cash and Shares.

 

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You shall represent and warrant in writing that you are the owner of the Shares
so delivered, free and clear of all liens, encumbrances, security interests and
restrictions. To the extent that you possess Shares in certificated form, you
shall duly endorse in blank all certificates delivered to the Company.

4. Delivery of Shares. You shall not have any of the rights of a stockholder
with respect to any Shares subject to the Option until such Shares are purchased
by you upon exercise of the Option. Such Shares shall then be issued and
delivered to you by the Company as follows:

 

  a) In the form of a stock certificate registered in your name or your name and
the name of another adult person (21 years of age or older) as joint tenants,
and mailed to your address; or

 

  b) In “book entry” form, that is, registered with the Company’s stock transfer
agent, in your name or your name and the name of another adult person (21 years
of age or older) as joint tenants, and sent by electronic delivery to your
brokerage account.

The Company will not deliver any fractional Share but will pay, in lieu thereof,
the Fair Market Value of such fractional Share.

5. Withholding Taxes. You are responsible for the payment of any federal, state,
local or other taxes that are required to be withheld by the Company upon
exercise of the Option and you must promptly remit such taxes to the Company.
You may elect to remit these taxes by:

 

  a) Delivering directly to the Company, cash or its equivalent payable to the
Company;

 

  b) Delivering indirectly to the Company, cash or its equivalent payable to the
Company through E*TRADE’s website;

 

  c) Having the Company withhold a portion of the Shares to be issued upon
exercise of the Option having a Fair Market Value as of the exercise date equal
to the amount of federal and state income tax required to be withheld upon such
exercise (commonly referred to as a “Tax Swap” or “Stock for Tax”); or

 

  d) Delivering directly to the Company, Shares, other than the Shares issuable
upon exercise of the Option, having a Fair Market Value as of the exercise date
equal to such taxes. Note: In addition to delivering Shares to satisfy required
tax withholding obligations, you may also elect to deliver additional Shares to
the Company, other than the Shares issuable upon exercise of the Option, having
a Fair Market Value equal to the amount of any additional federal or state
income taxes imposed on you in connection with the exercise of the Option.

You shall represent and warrant in writing that you are the owner of the Shares
so delivered, free and clear of all liens, encumbrances, security interests and
restrictions. To the extent that you possess Shares in certificated form, you
shall duly endorse in blank all certificates delivered to the Company.

6. Change of Control. In the event of the occurrence of a Change of Control of
the Company, the unvested portion of the Option shall immediately vest and the
Option shall become immediately exercisable in full. The term “Change of
Control” means any of the following events:

 

  a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of either
(A) the then outstanding shares of common stock 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 (a), the following share 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

 

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

 

  c) Within any 24-month period, the persons who were directors immediately
before the beginning of such period (the “Incumbent Directors”) shall cease (for
any reason other than death) to constitute at least a majority of the Board of
Directors of the Company or the board of directors of a successor to the
Company. For this purpose, any director who was not a director at the beginning
of such period shall be deemed to be an Incumbent Director if such director was
elected to the Board of Directors of the Company by, or on the recommendation of
or with the approval of, at least three-fourths of the directors who then
qualified as Incumbent Directors (so long as such director was not nominated by
a person who has expressed an intent to effect a Change of Control or engage in
a proxy or other control contest); or

 

  d) Such other event or transaction as the Board of Directors of the Company
shall determine constitutes a Change of Control.

7. Transferability. Unless otherwise determined by the Committee, the Option
shall not be transferable other than by will or the laws of descent and
distribution. More particularly, the Option may not be assigned, transferred,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to these provisions, or the levy of an execution, attachment
or similar process upon the Option, shall be void.

You may designate a beneficiary or beneficiaries to exercise your rights with
respect to the Option upon your death. In the absence of any such designation,
benefits remaining unpaid at your death shall be paid to your estate.

8. Effect of Termination of Employment. Following the termination of your
employment with the Company or an Affiliate for any of the reasons set forth
below, your right to exercise the Option, as well as that of your beneficiary or
beneficiaries, shall be as follows:

 

  a) Voluntary or Involuntary. If your employment is terminated voluntarily or
involuntarily for any reason other than retirement, death or permanent
disability, you may exercise the Option prior to its Expiration Date, at any
time within a period of up to two (2) years after such termination of
employment, to the full extent of the number of Shares you were entitled to
purchase under that portion of the Option which was vested as of the date of
termination of your employment. However, the Committee may, in its sole and
absolute discretion, except in the case of the termination of your employment
following the occurrence of a Change of Control, during a period of seventy-five
(75) days after such termination of employment and following ten (10) days’
written notice to you, reduce the period of time during which the Option may be
exercised to any period of time designated by the Committee, provided such
period is not less than ninety (90) days following termination of your
employment.

 

  b) Retirement. You shall be deemed to have retired, solely for purposes of the
Stock Option Agreement, in the event that your employment terminates for any
reason other than death or disability and you are at least 55 years of age.

 

  (i) If you retire and you have completed ten (10) or more years of service
with the Company or an Affiliate, the unvested portion of the Option shall
immediately vest in full. Thereafter, you may exercise the Option at any time
prior to its Expiration Date, to the full extent of the Shares covered by the
Option that were not previously purchased.

 

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  (ii) If you retire and you have completed less than ten (10) years of service
with the Company or an Affiliate, you may exercise the Option prior to its
Expiration Date, at any time within a period of up to two (2) years after the
date of your retirement, to the full extent of the number of Shares you were
entitled to purchase under that portion of the Option which was vested as of the
date of your retirement.

 

  c) Death Prior to Age 55. If your death occurs before you attain the age of
fifty-five (55), while you are employed by the Company or an Affiliate, or
within three (3) months after the termination of your employment, the unvested
portion of the Option shall immediately vest in full. Thereafter, the Option may
be exercised prior to its Expiration Date, by your beneficiary(ies), or a
legatee(s) under your last will, or your personal representative(s) or the
distributee(s) of your estate, to the full extent of the Shares covered by the
Option that were not previously purchased:

 

  (i) At any time within a period of up to two (2) years after your death if
such occurs while you are employed, or

 

  (ii) At any time within a period of up to two (2) years following the
termination of your employment if your death occurs within three (3) months of
your termination of employment.

 

  d) Death After Age 55. If your death occurs after you attain the age of
fifty-five (55), while you are employed by the Company or an Affiliate, the
unvested portion of the Option shall immediately vest in full. Thereafter, the
Option may be exercised prior to its Expiration Date, by your beneficiary(ies),
or a legatee(s) under your last will, or your personal representative(s) or the
distributee(s) of your estate, to the full extent of the Shares covered by the
Option that were not previously purchased:

 

  (i) At any time, if you have completed ten (10) or more years of service with
the Company or an Affiliate; or

 

  (ii) If you have completed less than ten (10) years of service with the
Company or an Affiliate, then at any time within a period of up to two (2) years
after the date of your death if such occurs while you are employed, or within a
period of up to two (2) years after the date of termination of your employment.

 

  e) Disability Prior to Age 55. If your employment terminates before you attain
the age of fifty-five (55), as a result of a permanent disability, the unvested
portion of the Option shall immediately vest in full. Thereafter, the Option may
be exercised prior to its Expiration Date, by you or by your personal
representative(s), at any time within a period of up to two (2) years after your
employment terminates due to such permanent disability, to the full extent of
the Shares covered by the Option that were not previously purchased.

You shall be considered permanently disabled if you suffer from a medically
determinable physical or mental impairment that renders you incapable of
performing any substantial gainful employment, and is evidenced by a
certification to such effect by a doctor of medicine approved by the Company. In
lieu of such certification, the Company shall accept, as proof of permanent
disability, your eligibility for long-term disability payments under the
applicable Long-Term Disability Plan of the Company.

 

  f) Disability After Age 55. If your employment terminates as a result of a
permanent disability after you attain the age of fifty-five (55), the unvested
portion of the Option shall immediately vest in full. Thereafter, the Option may
be exercised prior to its Expiration Date, by you or by your personal
representative(s), to the full extent of the Shares covered by the Option that
were not previously purchased:

 

  (i) At any time, if you have completed ten (10) or more years of service with
the Company or an Affiliate; or

 

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  (ii) If you have completed less than ten (10) years of service with the
Company or an Affiliate, then at any time within a period of two (2) years after
your employment terminates due to such permanent disability.

You shall be considered permanently disabled if you suffer from a medically
determinable physical or mental impairment that renders you incapable of
performing any substantial gainful employment, and is evidenced by a
certification to such effect by a doctor of medicine approved by the Company. In
lieu of such certification, the Company shall accept, as proof of permanent
disability, your eligibility for long-term disability payments under the
applicable Long-Term Disability Plan of the Company.

 

  g) Change in Duties/Leave of Absence. The Option shall not be affected by any
change of your duties or position or by a temporary leave of absence approved by
the Company, so long as you continue to be an employee of the Company or of an
Affiliate.

9. Repurchase Rights. If you exercise the Option within six (6) months prior to
or three (3) months after the date your employment with the Company or an
Affiliate is terminated for cause, or if you breach any of the covenants
contained in Section 10 below, the Company shall have the right and option to
repurchase from you, that number of Shares which is equal to the number you
purchased upon such exercise(s) within such time periods, and you agree to sell
such Shares to the Company.

The Company may exercise its repurchase rights by depositing in the United
States mail a written notice addressed to you at the latest mailing address for
you on the records of the Company (i) within thirty (30) days following the
termination of your employment for the repurchase of Shares purchased prior to
such termination, or (ii) within thirty (30) days after any exercise of the
Option for the repurchase of Shares purchased after your termination of
employment. Within thirty (30) days after the mailing of such notice, you shall
deliver to the Company the number of Shares the Company has elected to
repurchase and the Company shall pay to you in cash, as the repurchase price for
such Shares upon their delivery, an amount which shall be equal to the purchase
price paid by you for the Shares. If you have disposed of the Shares, then in
lieu of delivering an equivalent number of Shares to the Company, you must pay
to the Company the amount of gain realized by you from the disposition of the
Shares exclusive of any taxes due and payable or commissions or fees arising
from such disposition.

If the Company exercises its repurchase option prior to the actual issuance and
delivery to you of any Shares pursuant to the exercise of the Option, no Shares
need be issued or delivered. In lieu thereof, the Company shall return to you
the purchase price you tendered upon the exercise of the Option to the extent
that it was actually received from you by the Company.

Following the occurrence of a Change of Control, the Company shall have no right
to exercise the repurchase rights set forth in this Section.

10. Employee Covenants. In consideration of benefits described elsewhere in
these Terms and Conditions and the accompanying Stock Option Agreement, and in
recognition of the fact that, as a result of your employment with the Company or
any of its Affiliates, you have had or will have access to and gain knowledge of
highly confidential or proprietary information or trade secrets pertaining to
the Company or its Affiliates, as well as the customers, suppliers, joint
ventures, licensors, licensees, distributors, or other persons and entities with
whom the Company or any of its Affiliates does business (“Confidential
Information”), which the Company or its Affiliates have expended time,
resources, and money to obtain or develop and which have significant value to
the Company and its Affiliates, you agree for the benefit of the Company and its
Affiliates, and as a material condition to your receipt of benefits described
elsewhere in these Terms and Conditions and the accompanying Stock Option
Agreement, as follows:

 

  a)

Non-Disclosure of Confidential Information. You acknowledge that you will
receive access or have received access to Confidential Information about the
Company or its Affiliates, that this information was obtained or developed by
the Company or its Affiliates at great expense and is zealously guarded by the
Company and its Affiliates from unauthorized disclosure, and that your
possession of this special knowledge is due solely to your employment with the
Company or one or more of its Affiliates. In recognition of the foregoing, you
will not at any time during employment or following

 

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termination of employment for any reason, disclose, use or otherwise make
available to any third party, any Confidential Information relating to the
Company’s or any Affiliate’s business, products, services, customers, vendors,
or suppliers; trade secrets, data, specifications, developments, inventions, and
research activity; marketing and sales strategies, information, and techniques;
long and short term plans; existing and prospective client, vendor, supplier,
and employee lists, contacts, and information; financial, personnel, and
information system information and applications; and any other information
concerning the business of the Company or its Affiliates which is not disclosed
to the general public or known in the industry, except for disclosure necessary
in the course of your duties or with the express written consent of the Company.
All Confidential Information, including all copies, notes regarding, and
replications of such Confidential Information will remain the sole property of
the Company or its Affiliate, as applicable, and must be returned to the Company
or such Affiliate immediately upon termination of your employment.

 

  b) Return of Property. Upon termination of employment with the Company or any
of its Affiliates, or at any other time at the request of the Company, you shall
deliver to a designated Company representative all records, documents, hardware,
software, and all other property of the Company or its Affiliates and all copies
of such property in your possession. You acknowledge and agree that all such
materials are the sole property of the Company or its Affiliates and that you
will certify in writing to the Company at the time of delivery, whether upon
termination or otherwise, that you have complied with this obligation.

 

  c) Non-Solicitation of Existing or Prospective Customers, Vendors, and
Suppliers. You specifically acknowledge that the Confidential Information
described in Section 10(a) includes confidential data pertaining to existing and
prospective customers, vendors, and suppliers of the Company or its Affiliates;
that such data is a valuable and unique asset of the business of the Company or
its Affiliates; and that the success or failure of the their businesses depends
upon the their ability to establish and maintain close and continuing personal
contacts and working relationships with such existing and prospective customers,
vendors, and suppliers and to develop proposals which are specific to such
existing and prospective customers, vendors, and suppliers. Therefore, during
your employment with the Company or any of its Affiliates and for the twelve
(12) months following termination of employment for any reason, you agree that
you will not, except on behalf of the Company or its Affiliates, or with the
Company’s express written consent, solicit, approach, contact or attempt to
solicit, approach, or contact, either directly or indirectly, on your own behalf
or on behalf of any other person or entity, any existing or prospective
customers, vendors, or suppliers of the Company or its Affiliates with whom you
had contact or about whom you gained Confidential Information during your
employment with the Company or its Affiliates for the purpose of obtaining
business or engaging in any commercial relationship that would be competitive
with the “Business of the Company” (as defined below in Section 10(e)(i)) or
cause such customer, supplier, or vendor to materially change or terminate its
business or commercial relationship with the Company or its Affiliates.

 

  d) Non-Solicitation of Employees. You specifically acknowledge that the
Confidential Information described in Section 10(a) also includes confidential
data pertaining to employees and agents of the Company or its Affiliates, and
you further agree that during your employment with the Company or its Affiliates
and for the twelve (12) months following termination of employment for any
reason, you will not, directly or indirectly, on your own behalf or on behalf of
any other person or entity, solicit, contact, approach, encourage, induce or
attempt to solicit, contact, approach, encourage, or induce any of the employees
or agents of the Company or its Affiliates to terminate their employment or
agency with the Company or any of its Affiliates.

 

  e) Non-Competition. You covenant and agree that during your employment with
the Company or any of its Affiliates and for the twelve (12) months following
termination of employment for any reason, you will not, in any geographic market
in which you worked on behalf of the Company or any of its Affiliates, or for
which you had any sales, marketing, operational, logistical, or other management
or oversight responsibility, engage in or carry on, directly or indirectly, as
an owner, employee, agent, associate, consultant, partner, or in any other
capacity, a business competitive with the Business of the Company. This
Section 10(e) shall not apply in the event of a Change in Control as described
in Section 6 above.

 

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  i) The “Business of the Company” shall mean any business or activity involved
in grocery or general merchandise retailing and supply chain logistics,
including but not limited to grocery distribution, business-to-business portal,
retail support services, and third-party logistics, of the type provided by the
Company or its Affiliates, or presented in concept to you by the Company or its
Affiliates at any time during your employment with the Company or any of its
Affiliates.

 

  ii) To “engage in or carry on” shall mean to have ownership in such business
(excluding ownership of up to 1% of the outstanding shares of a publicly-traded
company) or to consult, work in, direct, or have responsibility for any area of
such business, including but not limited to operations, logistics, sales,
marketing, finance, recruiting, sourcing, purchasing, information technology, or
customer service.

 

  f) No Disparaging Statements. You agree that you will not make any disparaging
statements about the Company, its Affiliates, directors, officers, agents,
employees, products, pricing policies or services.

 

  g) Remedies for Breach of These Covenants. Any breach of the covenants in this
Section 10 likely will cause irreparable harm to the Company or its Affiliates
for which money damages could not reasonably or adequately compensate the
Company or its Affiliates. Accordingly, the Company or any of its Affiliates
shall be entitled to all forms of injunctive relief (whether temporary,
emergency, preliminary, prospective, or permanent) to enforce such covenants, in
addition to damages and other available remedies, and you consent to the
issuance of such an injunction without the necessity of the Company or any such
Affiliate posting a bond or, if a court requires a bond to be posted, with a
bond of no greater than $500 in principal amount. In the event that injunctive
relief or damages are awarded to Company or any of its Affiliates for any breach
by you of this Section 10, you further agree that the Company or such Affiliate
shall be entitled to recover its costs and attorneys’ fees necessary to obtain
such recovery. In addition, you agree that upon your breach of any covenant in
this Section 10, the Option, and any other unexercised options issued under the
Plan or any other stock option plans of the Company will immediately terminate
and the Company shall have the right to exercise any and all of the rights
described above including the provisions articulated in Section 9.

 

  h) Enforceability of These Covenants. It is further agreed and understood by
you and the Company that if any part, term, or provision of these Terms and
Conditions should be held to be unenforceable, invalid, or illegal under any
applicable law or rule, the offending term or provision shall be applied to the
fullest extent enforceable, valid, or lawful under such law or rule, or, if that
is not possible, the offending term or provision shall be struck and the
remaining provisions of these Terms and Conditions shall not be affected or
impaired in any way.

11. Arbitration. You and the Company agree that any controversy, claim, or
dispute arising out of or relating to the accompanying Stock Option Agreement or
the breach of any of these Terms and Conditions, or arising out of or relating
to your employment relationship with the Company or any of its Affiliates, or
the termination of such relationship, shall be resolved by binding arbitration
before a neutral arbitrator under rules set forth in the Federal Arbitration
Act, except for claims by the Company relating to your breach of any of the
employee covenants set forth in Section 10 above. By way of example only, claims
subject to the agreement to arbitrate include claims litigated under federal,
state and local statutory or common law, such as the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including
the Civil Rights Act of 1994, the Americans with Disabilities Act, the law of
contract and the law of tort. You and the Company agree that such claims may be
brought in an appropriate administrative forum, but at the point at which you or
the Company seek a judicial forum to resolve the matter, the agreement for
binding arbitration becomes effective, and you and the Company hereby knowingly
and voluntarily waive any right to have any such dispute tried and adjudicated
by a judge or jury. The foregoing not to the contrary, the Company may seek to
enforce the employee covenants set forth in Section 10 above, in any court of
competent jurisdiction. The agreement to arbitrate shall continue in full force
and effect despite the expiration or termination of your Option or your
employment relationship with the Company or any of its Affiliates. You and the
Company agree that any award rendered by the arbitrator shall be final and
binding and that judgment upon the final award may be entered in any court
having jurisdiction thereof. The arbitrator may grant any remedy or relief that
the arbitrator deems just and equitable, including any remedy or relief that
would have been available to you, the Company

 

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or any of its Affiliates had the matter been heard in court. All expenses of the
arbitration, including the required travel and other expenses of the arbitrator
and any witnesses, and the costs relating to any proof produced at the direction
of the arbitrator, shall be borne equally by you and the Company unless
otherwise mutually agreed or unless the arbitrator directs otherwise in the
award. The arbitrator’s compensation shall be borne equally by you and the
Company unless otherwise mutually agreed or unless the law provides otherwise.

12. Adjustments. In the event that any dividend or other distribution (whether
in the form of cash, Shares, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Shares
or other securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company or other similar corporate
transaction or event affects the Shares covered by the Option such that an
adjustment is necessary in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under these Terms
and Conditions and the accompanying Stock Option Agreement, then the Committee
administering the Plan shall, in such manner as it may deem equitable, adjust
any or all of the number and type of Shares (or other securities or other
property) covered by the Option and the Exercise Price of the Option.

13. Severability. In the event that any portion of these Terms and Conditions
shall be held to be invalid, the same shall not affect in any respect whatsoever
the validity and enforceability of the remainder of these Terms and Conditions.

14. No Right to Employment. Nothing in these Terms and Conditions or the
accompanying Stock Option Agreement or the Plan shall be construed as giving you
the right to be retained as an employee of the Company. In addition, the Company
may at any time dismiss you from employment, free from any liability or any
claim under these Terms and Conditions or the accompanying Stock Option
Agreement, unless otherwise expressly provided in these Terms and Conditions or
the accompanying Stock Option Agreement.

15. Reservation of Shares. The Company shall at all times during the term of the
Option reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of these Terms and Conditions and the accompanying
Stock Option Agreement.

16. Securities Matters. The Company shall not be required to deliver any Shares
until the requirements of any federal or state securities or other laws, rules
or regulations (including the rules of any securities exchange) as may be
determined by the Company to be applicable are satisfied.

17. Headings. Headings are given to the sections and subsections of these Terms
and Conditions and the accompanying Stock Option Agreement solely as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of these Terms
and Conditions or the accompanying Stock Option Agreement or any provision
hereof or thereof.

18. Governing Law. The internal law, and not the law of conflicts, of the State
of Delaware will govern all questions concerning the validity, construction and
effect of these Terms and Conditions and the accompanying Stock Option
Agreement.

19. Notices. You should send all written notices regarding the Option or the
Plan to the Company at the following address:

 

  SUPERVALU INC.   P.O. Box 990   Minneapolis, MN 55440   Attn.: Corporate
Secretary

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