Stock Plan Form of Performance Stock Unit Terms and Conditions (cash units)



 Exhibit 10.5 
 SUPERVALU INC. 
 FISCAL 2009-2010 LONG-TERM INCENTIVE PROGRAM 
 UNDER THE 2007 STOCK PLAN 
 PERFORMANCE STOCK UNIT AWARD 
 TERMS AND CONDITIONS (CASH-SETTLED UNITS) 
 These Performance Stock Unit Award Terms and Conditions (“Terms and Conditions”) apply to the Award of Performance Stock Units granted pursuant to Fiscal
2009-2010 Long-Term Incentive Program under the 2007 Stock Plan (the “Plan”), pursuant to the Performance Stock Unit Award Agreement to which this document is attached. Capitalized terms that are used in this document, but are not defined,
shall have the meanings ascribed to them in the Plan or the accompanying Performance Stock Unit Award Agreement. 
 1. Award of Performance Stock
Units. SUPERVALU INC. (the “Company”) hereby grants to you an Award of Performance Stock Units for the number of Performance Stock Units set forth in the attached Agreement. The Award is effective as of the Grant Date. Each Performance
Stock Unit represents the right to receive one Cash-Settled Unit, subject to the Terms and Conditions. Each Cash-Settled Unit shall represent the right to receive cash in the amount equal to the Fair Market Value of one share of the Company’s
Common Stock, $1.00 par value (the “Common Stock”). A Cash-Settled Unit will be deemed to be a Restricted Stock Unit under the terms of the Plan. 
 2. Rights with Respect to the Performance Stock Units and the Cash-Settled Units. The Performance Stock Units granted pursuant to the attached Agreement and the Cash-Settled Units described in the Terms and Conditions do not and
shall not give you any of the rights and privileges of a holder of Common Stock. Your rights with respect to the Performance Stock Units shall remain forfeitable at all times prior to the date on which such rights become earned and your rights with
respect to the Cash-Settled Units shall remain forfeitable at all times prior to the date on which such rights vest and the restrictions with respect to the Cash-Settled Units lapse in accordance with Section 3 or Section 4 hereof.

 3. Earning of Performance Stock Units; Vesting of Cash-Settled Units; Change of Control. 
  

	 	a)	The number of the Performance Stock Units that you earn shall be determined in April 2010 by the Committee administering the Plan as more particularly described in
Exhibit A to the attached Agreement or as otherwise expressly provided in the Terms and Conditions. Upon earning the Performance Stock Units, you shall receive the number of Cash-Settled Units equal to the number of Performance Stock
Units that you earn, as more particularly indicated in the books of the Company. 

  

	 	b)	All of the Cash-Settled Units that you receive in accordance with Section 3(a) shall vest in full and the restrictions on such Cash-Settled Units shall lapse on March 2,
2011 if you remain continuously employed by the Company or any of its Affiliates until March 2, 2011, subject to the Terms and Conditions. Any Cash-Settled Units that do not vest on March 2, 2011 shall be immediately and irrevocably
forfeited. The Committee administering the Plan shall have the authority to make any determination regarding questions arising from the application of the provisions of this Section 3(b), which determination shall be final, conclusive and
binding on you and the Company. 

  

	 	c)	Notwithstanding the provisions of this Section 3, but subject to the other Terms and Conditions, upon the occurrence of a Change of Control (as defined below) on or prior to
the last day of the 2010 fiscal year of the Company, you shall immediately and unconditionally earn all of the Performance Stock Units and shall immediately and unconditionally become fully vested in all of the Cash-Settled Units so earned and the
restrictions on such Cash-Settled Units shall lapse if you have been continuously employed by the Company or any of its Affiliates until the date of such Change of Control. If the Change of Control occurs during the 2011 fiscal year of the Company,
you shall immediately and unconditionally become fully vested in all of the Cash-Settled Units that you received and the restrictions on such Cash-Settled Units shall lapse if you have been continuously employed by the Company or any of its
Affiliates until the date of such Change of Control. For purposes of hereof, the term “Change of Control” means any of the following events: 

  

	 	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 twenty percent (20%) or more of either (A) the then outstanding shares of Common Stock or (B) the combined voting power
of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided, however, that for purposes of this subsection (i), the following share acquisitions shall not constitute a Change of
Control: (I) any acquisition directly from the Company or (II) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or










	 	ii)	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 

  

	 	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 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 

  

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

 4. Forfeiture. If you cease to be an employee of the Company or any of its Affiliates prior to the earning of the Performance Stock Units or the vesting of the
Cash-Settled Units pursuant to Section 3 hereof for any reason, then your rights to all of the Performance Stock Units or the Cash-Settled Units, as applicable, shall be immediately and irrevocably forfeited. However, the Committee
administering the Plan may determine to accelerate the earning of the Performance Stock Units or the vesting of the Cash-Settled Units if you cease to be an employee of the Company or any of its Affiliates prior to the earning of the Performance
Stock Units or the vesting of the Cash-Settled Units pursuant to Section 3 hereof for any reason. 
 5. Restrictions on Transfer. Except as may
otherwise be determined by the Committee administering the Plan, none of the Performance Stock Units or the Cash-Settled Units may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered by you, and no attempt to
transfer the Performance Stock Units or the Cash-Settled Units, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in or with respect to the Performance Stock Units or the
Cash-Settled Units. 
  

 2 








 6. Payment. No cash payment shall be made to you prior to the date on which the applicable Cash-Settled Units
vest, in accordance with the terms and conditions of the attached Agreement and the Terms and Conditions. Furthermore, in no event shall any cash payment be made to you later than sixty (60) calendar days after the applicable Cash-Settled Units
vested. After the Cash-Settled Units vest pursuant to Section 3 or Section 4 hereof, and following payment of the applicable withholding taxes pursuant to Section 7 hereof, the Company shall promptly cause a cash payment in the amount
equal to (i) the Fair Market Value as of the vesting date of one share of Common Stock for each such vested Cash-Settled Unit (less any amount withheld to pay taxes) and (ii) the sum of each cash dividend or other cash distribution per
share of Common Stock that the Company paid to holders of Common Stock generally during the 2011 fiscal year of the Company, multiplied by the number of such vested Cash-Settled Units (less any amount withheld to pay taxes), to be made to you. The
Company will pay to you the Fair Market Value as of the vesting date of any fractional share Common Stock (less any amount withheld to pay taxes). 
 7.
Taxes. 
  

	 	a)	You acknowledge that you will consult with your personal tax advisor regarding the income tax consequences of the grant of the Performance Stock Units, the earning of the
Performance Stock Units, the vesting of the Cash-Settled Units, the receipt of the cash payment pursuant to Section 6 hereof, and any other matters related to the Terms and Conditions and the attached Agreement. In order to comply with all
applicable federal or state income, social security, payroll, withholding or other tax laws or regulations, the Company may take such action, and may require you to take such action, as it deems appropriate to ensure that all applicable federal or
state income, social security, payroll, withholding or other taxes, which are your sole and absolute responsibility, are withheld or collected from you. 

  

	 	b)	You acknowledge that you are responsible for the payment of any federal, state, local or other taxes that are required to be withheld by the Company upon vesting of the Cash-Settled
Units. In order to satisfy any applicable federal, state, local or other taxes that are required to be withheld, the Company shall withhold a portion of the cash payment to be delivered pursuant to Section 6 hereof in the amount equal to the
federal and state income tax required to be withheld upon such vesting. 

 8. Adjustments. If you earn any Performance Stock Units or if
any Cash-Settled Units vest subsequent to any change in the number or character of the Common Stock through any 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 that affects the Performance Stock Units covered by
this Award of Performance Stock Units or the Cash-Settled Units that you receive pursuant to the Terms and Conditions, you shall then receive upon the vesting of the Cash-Settled Units the number and type of securities or other consideration which
you would have received if such Performance Stock Units had been earned or if such Cash-Settled Units vested prior to the event changing the number or character of the outstanding Common Stock. 
 9. Covenants. In consideration of benefits described elsewhere in the Terms and Conditions and the attached 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 the Terms and Conditions and the attached 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 



  

 3 









	 	 
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 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 Affiliates, as applicable, and must be returned to the Company or such Affiliates 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 9(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 their businesses depends upon 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 9(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 9(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. 

  

 4 









	 	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 9(e) shall not apply in
the event of a Change in Control as described in Section 3 above. 

  

	 	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 one percent (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 9 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 9, 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 9, this Award of Performance Stock Units and all
Cash-Settled Units shall be immediately and irrevocably forfeited. 

  

	 	h)	Enforceability of These Covenants. It is further agreed and understood by you and the Company that if any part, term, or provision of the Terms and Conditions and the
attached Agreement 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 the Terms and Conditions and the attached Agreement shall not be affected or impaired in any way. 

  

 5 








 10. Arbitration. You and the Company agree that any controversy, claim, or dispute arising out of or relating to
the Terms and Conditions and the attached Agreement, 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 covenants set forth in Section 9 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 covenants set forth in Section 9 above, in any court of competent jurisdiction. The agreement to arbitrate shall continue in full force and effect despite the forfeiture of this Award of Performance Stock Units
or the termination of 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 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. 
 11. Severability. In the event that any portion of the Terms and Conditions and the attached Agreement shall be held to be
invalid, the same shall not affect in any respect whatsoever the validity and enforceability of the remainder of the Terms and Conditions and the attached Agreement. 
 12. Interpretations. The Terms and Conditions and the attached Agreement are subject in all respects to the Plan. A copy of the Plan is available upon your request. In the event that any provision of the Terms
and Conditions or the attached Agreement is inconsistent with the terms of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under the Terms and Conditions or the attached Agreement
shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest. 
 13. No Right to Employment. Nothing in the Terms and Conditions, the attached 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 the Terms and Conditions and the attached Agreement, unless otherwise expressly provided in the Terms and Conditions and the attached Agreement. 
 14. Compensation. Any compensation realized from the receipt or payment of (or the lapse of restrictions relating to) this Award of Performance Stock Units shall
constitute a special long-term incentive payment to you and shall not be taken into account as compensation in determining the amount of any benefit under any retirement or other employee benefit plan of the Company or any of its Affiliates.

 15. Headings. Headings are given to the sections and subsections of the Terms and Conditions and the attached 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 the Terms and Conditions and the attached Agreement or any provision hereof. 
 16. 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 the Terms and Conditions and the attached Agreement. 
  

 6 








 17. Notices. You should send all written notices regarding this Award of Performance Stock Units or the Plan to
the Company at the following address: 
  

	
	SUPERVALU INC.
	P.O. Box 990
	Minneapolis, MN 55440
	Attn.: Corporate Secretary
	
	Original Approval: May 27, 2008

  

 7