Document:

EXHIBIT
10.25

 

INDEMNIFICATION
AGREEMENT

 

THIS
INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of December 8, 2014, between Quest
Patent Research Corporation, a Delaware corporation (the “Company”), and Dr. William Ryall Carrroll (“Indemnitee”).

 

WITNESSETH:

 

WHEREAS,
highly competent persons have become more reluctant to serve corporations as directors, officers or in other capacities unless
they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf of the corporation;

 

WHEREAS,
the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified
individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons
serving the Company and its subsidiaries from certain liabilities to the extent that such insurance can be obtained at reasonable
cost to the Company;

 

WHEREAS,
although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations
and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available
to the Company only at high premiums and with exclusions, while directors, officers, and other persons in service to corporations
or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things,
matters that traditionally would have been brought only against the Company or business enterprise itself;

 

WHEREAS,
The Bylaws of the Company and the General Corporation Law of the State of Delaware (“DGCL”) provide for indemnification
of the officers and directors of the Company and that the indemnification provisions set forth therein are not exclusive, and
thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons
with respect to indemnification;

 

WHEREAS,
the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining
such persons;

 

WHEREAS,
the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests
of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty
of such protection in the future;

 

WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses
on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified;

 

WHEREAS,
this Agreement is a supplement to and in furtherance of the Bylaws of the Company and any resolutions adopted pursuant thereto,
and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

 

WHEREAS,
Indemnitee may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee
to serve in such capacity, and Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf
of the Company on the condition that he be so indemnified; and

 

    

     

    

 

NOW,
THEREFORE, in consideration of Indemnitee’s agreement to continue to serve as a director and officer from and after
the date hereof, the parties hereto agree as follows:

 

1.            Indemnity
of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law,
as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality
thereof.

 

(a)          Proceedings
Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided
in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened
to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of
the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with
such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable
cause to believe the Indemnitee’s conduct was unlawful.

 

(b)          Proceedings
by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section
1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding
brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if
the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests
of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect
of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless
and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

 

(c)          Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against
all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful
in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters
in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation,
the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to
be a successful result as to such claim, issue or matter.

 

2.            Additional
Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this
Agreement, but subject to the laws of Delaware, the Company shall and hereby does indemnify and hold harmless Indemnitee against
all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf
if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including
a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or
active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant
to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined
(under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.

 

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3.            Contribution.

 

(a)          Whether
or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed
action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit
or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action,
suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any
right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding
in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such
settlement provides for a full and final release of all claims asserted against Indemnitee.

 

(b)          Without
diminishing or impairing the obligations of the Company set forth in Section 3(a), if, for any reason, Indemnitee shall elect
or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding),
the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably
incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors
or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action,
suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such action,
suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may,
to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers,
directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events
that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable
law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other
than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one
hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions
were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and
the degree to which their conduct is active or passive.

 

(c)          The
Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by
officers, directors, or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

 

(d)          To
the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee
for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection
with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding and/or (ii) the relative fault of
the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

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4.            Indemnification
for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection
therewith.

 

5.            Advancement
of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or
on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30)
days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time
to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of
Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified
against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest
free.

 

6.            Procedures
and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee
rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware and federal
law and public policy, subject only to limitations expressly provided in this Agreement. Accordingly, the parties agree that the
following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification
under this Agreement:

 

(a)          To
obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and
to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a
request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing,
any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not
relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and
materially prejudices the interests of the Company.

 

(b)          Upon
written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with
respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which
shall be at the election of the Board (1) by a majority vote of the Disinterested Directors, even though less than a quorum, (2)
by a committee of Disinterested Directors designated by a majority vote of the disinterested directors, even though less than
a quorum, (3) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so directed by the Board, by the
stockholders of the Company. For purposes hereof, disinterested directors are those members of the Board who are not parties to
the action, suit or proceeding in respect of which indemnification is sought by Indemnitee. In the event of a Change of Control,
the determination of indemnification shall be made by Independent Counsel. 

 

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(c)          If
the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the
Independent Counsel shall be selected as provided in this Section 6(c). The Independent Counsel shall be selected by the Board.
Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written
objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement,
and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection,
the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel
selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such
objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification
pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee
may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection
which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment
as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person
with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section
6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent
Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses
incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.

 

(d)          In
making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination
shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption
shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company
(including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant
to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct,
nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met
such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the
applicable standard of conduct.

 

(e)          Indemnitee
shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise
(as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise
in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports
made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable
care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee
has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and
convincing evidence.

 

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(f)          If
the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law; provided, however, that such sixty (60) day period may be extended for a reasonable time, not to exceed
an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification
in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided
further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification
is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt
by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit
such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy five (75)
days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen
(15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty
(60) days after having been so called and such determination is made thereat.

 

(g)          Indemnitee
shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information
which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably
and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement.
Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(h)          The
Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to
avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee
is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement
of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee
has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption
shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(i)          The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

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7.            Remedies
of Indemnitee.

 

(a)          In
the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination
of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by
the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within
ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within
ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed
to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court
of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification.
Indemnitee shall commence such proceeding seeking an adjudication within one hundred eighty (180) days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The Company shall not oppose Indemnitee’s
right to seek any such adjudication.

 

(b)          In
the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled
to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo
trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).

 

(c)          If
a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement
not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification
under applicable law.

 

(d)          In
the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages
for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained
by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition
of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless
of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

 

(e)          The
Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company
is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to
the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’
and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined
to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

 

(f)          Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be
required to be made prior to the final disposition of the Proceeding.

 

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8.            Non-Exclusivity;
Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.

 

(a)          The
rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Certificate of Incorporation, the By-laws, any agreement, a vote of stockholders,
a resolution of directors of the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision
hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such
Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether
by statute or judicial decision, permits greater indemnification than would be afforded currently under the Certificate of Incorporation,
By-laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits
so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other right or remedy.

 

(b)          To
the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees,
or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent
or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof,
the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company
shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts
payable as a result of such proceeding in accordance with the terms of such policies.

 

(c)          In
the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(d)          The
Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

 

(e)          The
Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the
Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of
expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

 

9.            Exception
to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made against Indemnitee:

 

(a)          for
which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except
with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

 

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(b)          for
an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within
the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law; or

 

(c)          in
connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless
(i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, or (ii) the Company provides
the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; or

 

(d)          for
conduct that is determined to be in violation of federal or state insider trading laws; or

 

(e)          conduct
that is determined to be knowingly fraudulent or deliberately dishonest or to constitute willful misconduct.

 

10.           Duration
of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is
an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as
Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate
Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which
indemnification can be provided under this Agreement, and until the expiration of all applicable statutes of limitation.

 

11.           Security.
To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security
to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of
the Indemnitee.

 

12.           Enforcement.

 

(a)          The
Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby
in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee
is relying upon this Agreement in serving as an officer or director of the Company.

 

(b)          This
Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter
hereof.

 

(c)          The
Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting
the Indemnitee’s rights to receive advancement of expenses under this Agreement.

 

    9

     

    

 

13.           Definitions.
For purposes of this Agreement:

 

(a)          “Beneficial
Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial
Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a
merger of the Company with another entity.

 

(b)          “Change
in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following
events:

 

(i)          Acquisition
of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly,
of securities of the Company representing thirty five percent (35%) or more of the combined voting power of the Company’s
then outstanding securities;

 

(ii)         Change
in Board. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by
a person who has entered into an agreement with the Company to effect a transaction described in Sections 13(b)(i), 13(b)(iii)
or 13(b)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote
of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any reason to constitute a least a majority of the members
of the Board;

 

(iii)        Corporate
Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation
which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than
fifty one percent (51%) of the combined voting power of the voting securities of the surviving entity outstanding immediately
after such merger or consolidation and with the power to elect at least a majority of the Board or other governing body of such
surviving entity;

 

(iv)        Liquidation.
The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company’s assets; and

 

(v)         Other
Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether
or not the Company is then subject to such reporting requirement.

 

(c)          “Corporate
Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company
or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is
or was serving at the request of the Company.

 

(d)          “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

 

(e)          “Enterprise”
shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise
that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.

 

(f)          “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission thereunder.

 

    10

     

    

 

(g)          “Expenses”
shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating,
participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide
discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding
and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede
as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee
or the amount of judgments or fines against Indemnitee.

 

(h)          “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent (i) the Company or Indemnitee in any matter material
to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have or could reasonably be deemed to have a conflict of interest in
representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company
agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any
and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(i)          “Person,”
as used in Section 13(a) and Section 13(b), shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act;
provided, however, that the term “Person” shall exclude (i) the Company, (ii) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company and (iii) any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock of the Company.

 

(j)          “Proceeding”
includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of
the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be
involved as a party or otherwise, by reason of his or her Corporate Status, by reason of any action taken by him or of any inaction
on his part while acting in his or her Corporate Status; in each case whether or not he is acting or serving in any such capacity
at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one
pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement
to enforce his rights under this Agreement.

 

14.           Severability.
The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other
provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification
rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law,
such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

 

    11

     

    

 

15.           Entire
Agreement. This Agreement constitutes the entire agreement of the parties as to the subject matter hereof, superseding all
prior or contemporaneous written or oral understandings or agreements, all of which are hereby terminated, with respect to the
indemnification by the Company of Indemnitee. This Agreement may not be modified or amended, nor may any right be waived, except
by a writing which expressly refers to this Agreement, states that it is intended to be a modification, amendment or waiver and
is signed by both parties in the case of a modification or amendment or by the party granting the waiver. No course of conduct
or dealing between the parties and no custom or trade usage shall be relied upon to vary the terms of this Agreement. The failure
of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. No delay
or omission to exercise any right, power or remedy accruing to either party hereto shall impair any such right, power or remedy
or shall be construed to be a waiver of or an acquiescence to any breach hereof. No waiver of any breach hereof shall be deemed
to be a waiver of any other breach hereof theretofore or thereafter occurring. Any waiver of any provision hereof shall be effective
only to the extent specifically set forth in an applicable writing. All remedies afforded to either party under this Agreement,
by law or otherwise, shall be cumulative and not alternative and shall not preclude assertion by such party of any other rights
or the seeking of any other rights or remedies against any other party.

 

16.           Notice
By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any
summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may
be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation
which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially
prejudices the Company.

 

17.           Notices.
All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively
given (a) upon personal delivery to the party to be notified, (b) when sent by electronic mail or facsimile upon confirmation
of receipt by the recipient, (c) five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier which provides evidence
of delivery, specifying next business day delivery, with written verification of receipt. All communications shall be sent to
the Company and Indemnitee at their respective addresses, telecopier numbers or emails set forth on the signature page of this
Agreement or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as
the case may be.

 

18.           No
Assignment. The Agreement and all obligations under this Agreement are personal to the Company and Indemnitee and may not
be transferred or delegated by such party at any time, except as contemplated by Section 19.

 

19.           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

 

20.           Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same the same instrument. Counterparts may be delivered via facsimile,
electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g.,
www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed
to have been duly and validly delivered and be valid and effective for all purposes. 

 

    12

     

    

 

21.           Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part
of this Agreement or to affect the construction thereof.

 

22.           Interpretation.
In this Agreement, unless the context indicates otherwise:

 

(a)          Any
pronoun shall include the corresponding masculine, feminine or neuter forms, and the singular for shall include the plural and
vice versa.

 

(b)          “Including”
(and with correlative meaning “include”) means including without limiting the generality of any description preceding
or succeeding such term and shall be deemed in each case to be followed by the words “without limitation.”

 

(c)          The
words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement
shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this
Agreement.

 

(d)          The
term “or” means “and/or.”

 

23.           Counterpart;
Facsimile. This Agreement may be executed and delivered by facsimile signature or by email in portable document format (PDF)
in two or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the
same Agreement.

 

24.           Governing
Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Company
and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection
with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”),
and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection
with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court,
and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court
has been brought in an improper or inconvenient forum.

 

Signature
Page Follows

 

    13

     

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

 

	Address,
    Telecopier and Email	Signature
	 	 
	
        
	QUEST
                                         PATENT RESEARCH CORPORATION

	 	 	 
	411
    Theodore Fremd Ave, Suite 206S	 	 
	Rye,
    New York 10580	 	 
	Attention:	By:	/s/
    Timothy J. Scahill 
	Telecopier:	 	Timothy
    J. Scahill, director
	Email:	 	 
	 	By:	/s/ Jon C. Scahill
	 	 	Jon
    C. Scahill, chief executive officer, director
	[Address]

         

        Telecopier:

        

        
	 	

        

        

	Email:
    ryallcarroll@gmail.com	/s/ William Ryall Carroll
	 	Dr. William Ryall Carroll 

 

 

14Exhibit

EXECUTION VERSION

Exhibit 10.1
	
			
	 
	SUPERVALU INC.

	 
	 

	
		
	 
	P.O. Box 990
Minneapolis, MN 55440
952 828 4623

February 2, 2016
Mark Gross

Dear Mark:
We are pleased to set forth in this letter agreement (the “Letter Agreement”) the terms of your employment in the position of President and Chief Executive Officer of SUPERVALU INC. (“Supervalu” or the “Employer”), beginning on a date mutually agreed by Supervalu and you, but in no event earlier than February 5, 2016 or later than February 12, 2016 (the “Start Date”).  In that position, you shall have primary responsibility for the business of Supervalu, and report to the Board of Directors of Supervalu (the “Board”).  If you commence employment on the Start Date, you will be appointed to the Board no later than March 1, 2016, subject to your continued employment through the date of such appointment.  
The specific terms of your employment are as follows:
EFFECTIVE DATE:  This Letter Agreement shall become effective upon execution by both you and Supervalu (the “Effective Date”).
ADDITIONAL CONDITIONS OF OFFER:  You agree as a condition of your employment with Supervalu to fully comply with the terms of any agreement(s) you may have with any prior employer or any other third party, including, without limitation, any such terms pertaining to the nondisclosure of confidential information.  To this end, we call your attention to the paragraph below entitled “Certain Representations and Covenants.”
POSITIONS AND DUTIES:  While you are employed with Supervalu, you shall have authority, duties and responsibilities that are commensurate with your position as set forth in the initial paragraph of this Letter Agreement and as are customarily exercised by a person holding such position, including, without limitation, (a) overall responsibility for leading and supervising the businesses and operations of Supervalu, (b) responsibility for developing, refining and implementing the strategic plans of Supervalu, (c) hiring, supervising and firing of your direct reports, and (d) such other duties as the Board may assign to you from time to time (consistent with your title and position) and, in each case, subject to the ultimate authority and direction of the Board.  Your primary place of employment will be in the Minneapolis, Minnesota metropolitan area, at the executive offices of Supervalu, and you shall relocate your primary residence to the Minneapolis metropolitan region as soon as reasonably practicable following the Start Date, but in no event later than July 1, 2016.  Supervalu will reimburse you for reasonable costs you incur for temporary housing for up to eight weeks following the Start Date in accordance with Supervalu’s Relocation Policy – Tier 1 (as described below).  During your employment with Supervalu, you shall not be permitted to participate or invest in or manage any 

for-profit business activity or venture not arising in connection with the performance of your duties pursuant to this Letter Agreement; provided, however, that it shall not be a violation of this Letter Agreement for you to (i) with the prior written approval of the Board, serve on the boards of directors of for-profit companies, (ii) serve on civic or charitable boards or committees, deliver lectures, fulfill speaking engagements, or teach at educational institutions and manage personal investments and (iii) manage, use, allocate or invest any personal or family assets or investments, so long as, in the case of activities described in the preceding clauses (i), (ii) and (iii), such activities do not significantly interfere with the performance of your responsibilities in accordance with this Letter Agreement or otherwise create a conflict of interest or breach of Supervalu company policies or this Letter Agreement.
BASE SALARY:  You will be paid a base salary while you are employed by the Employer at an annualized rate of $1,000,000 (subject to applicable taxes and withholdings) (the “Base Salary”), which will be paid in substantially equal installments in accordance with the Employer’s usual and customary payroll policies.
ANNUAL BONUS:  You will have the opportunity to earn a bonus for each fiscal year of the Employer that you are employed by the Employer commencing with the fiscal year ending in 2017 (the “Annual Bonus”), with a minimum of zero, a target of 100% of your Base Salary (the “Target Bonus”), and a maximum bonus of 200% of your Base Salary, to be paid not later than two and one-half months following the end of such fiscal year (subject to your continued employment through the applicable performance period).  The Annual Bonus shall be based on the attainment of performance goals proposed by Supervalu’s management, and subject to the final approval of, the Leadership Development and Compensation Committee of the Board (the “LDCC”) and the independent members of the Board, as applicable.  
SIGNING BONUS:  As soon as administratively practicable following the Start Date (and in no event more than 15 business days after the Start Date), Supervalu will make a cash payment to you of $300,000 (the “Signing Bonus”).  If, however, you are terminated by the Employer for Cause (as defined in the Supervalu Executive & Officer Severance Pay Plan (the “Supervalu Severance Plan”) as in effect on the Effective Date) or you resign for any reason other than “Good Reason” (as defined below under the paragraph labeled “Severance”) prior to the first anniversary of the Start Date, then you will repay to the Employer the Signing Bonus within ten business days following your termination or resignation of employment.
INDUCEMENT LTI AWARD(S):  Subject to your continued employment through the grant dates described below in this paragraph, you will be granted a Supervalu long-term incentive award having an aggregate grant date value of $6.0 million, computed as described below (the “Inducement LTI Award”).  The Inducement LTI Award represents your annual long-term incentive awards in respect of the fiscal years of Supervalu ending in 2017 and 2018.  It will be comprised of 50% performance shares and 50% stock options.  The first 50% of the Inducement LTI Award (the “Inducement Options”) will be apportioned entirely in stock options and will be granted to you on your Start Date (or, if there is not an open window period in effect on such date, the first date thereafter on which an open window is in effect).  The number of shares subject to the Inducement Options shall be such that the grant value of the Inducement Options is $3 million, calculated consistently with the Black-Scholes assumptions set forth in the Supervalu Form 10-K filed on April 28, 2015, but using the prevailing risk-free interest rate and the closing price of a share of Supervalu common stock on the New York Stock Exchange on the 

2

Start Date.  The Inducement Options shall have a per-share exercise price equal to the closing price of a share of Supervalu common stock on the New York Stock Exchange on the grant date, and will vest ratably on each of the first three anniversaries of the Start Date, subject to your continued employment.  The other 50% of the Inducement LTI Award (the “Inducement Performance Shares”) will be apportioned entirely in performance shares, will have a grant date value of $3 million, and will be granted at the same time that long-term incentive awards in respect of Supervalu’s fiscal year ending in 2017 are granted to senior management generally under the policies and practices of Supervalu, which is currently anticipated to be in April 2016.  The Inducement Performance Shares will have a three-year performance period (fiscal years ending 2017–2019), and will vest at the end of that period based on the attainment of the performance goals and your continued employment, and will have other terms and conditions that are no less favorable to you than the terms and conditions of performance shares granted to senior management at the same time (including with respect to the treatment of such performance shares in connection with the spinoff of the Save-A-Lot business, if any).  Notwithstanding the above, if you are terminated by Supervalu without “cause” (as defined in the Supervalu Severance Plan as in effect on the Effective Date) or you resign with Good Reason, then (i) if any Inducement Options are then unvested, you will immediately vest in a pro rata portion of the Inducement Options scheduled to vest on the anniversary of the Start Date next following such termination, based on the portion of the year ending on such anniversary of the Start Date elapsed through such termination, and (ii) if the performance period for the Inducement Performance Shares has not ended, then a pro rata portion of the Inducement Performance Shares will remain outstanding and available to vest as if your termination had not occurred, based on the portion of the three-year performance period elapsed through such termination and the actual level of attainment of the performance goals over the entire three-year performance period.  Other than as provided herein, the terms and conditions of the Inducement LTI Award will be consistent with those applicable to other senior executives and the terms and conditions of the Inducement Option will be consistent with the form of the stock option agreement attached hereto as Exhibit B.
SPECIAL AND ANNUAL LTI AWARDS:  In respect of the fiscal year of Supervalu ending in 2018, provided that you remain employed with Supervalu through the grant date, you will receive a special, one-time long-term incentive award from Supervalu in the form of stock options with a grant date value (based on valuation method used by Supervalu for financial reporting purposes) of $500,000 (the “2018 Option Grant”).  The grant date for the 2018 Option Grant will not be later than May 15, 2017 (or if Supervalu is in a so-called “blackout” period on May 15, 2017, then on the first date on which Supervalu is no longer subject to any blackout restrictions).  The vesting and other terms with respect to the 2018 Option Grant will be consistent with the terms and conditions applicable to the Inducement Option but in no event less favorable then the terms and conditions applicable to other senior executives of Supervalu who receive grants of stock options at such time.  In respect of each fiscal year of Supervalu ending in 2019 and later, provided that you remain employed with Supervalu through the grant date, you will receive an annual long-term incentive award from Supervalu with an aggregate grant date value of $3.0 million.  The allocation between award types, calculation methodology of the number of shares and/or options, and terms and conditions of the annual awards described in the preceding sentence will be no less favorable than the terms and conditions of long-term incentive awards granted to senior management at the same time.

3

BENEFITS:  In addition to your compensation described in the preceding paragraphs, you will be entitled to participate in Supervalu’s benefits programs including, without limitation, all programs available to senior executives of Supervalu, subject to the eligibility requirements thereof.  These programs as in effect on the Start Date are summarized in a document that you have received from Supervalu.  In addition, Supervalu shall enter into an aircraft time share agreement with you upon or promptly following the Start Date, which will provide you with reasonable personal use of Supervalu corporate aircraft for calendar year 2016 and each subsequent calendar year in which you remain employed, in each case, as approved by the Board and subject to (i) your reimbursement to Supervalu of the entire incremental or variable cost to Supervalu of such aircraft use, as allowable (to be determined under such time share agreement), (ii) any business use of such aircraft taking precedence over any personal use by you, and (iii) Supervalu continuing to own its own corporate aircraft.
REIMBURSEMENT OF EXPENSES:  Supervalu will pay or reimburse you for all reasonable travel and other business related expenses incurred by you in performing your duties for Supervalu in accordance with Supervalu’s policies and procedures as in effect from time to time.  You will be entitled to relocation benefits in accordance with Supervalu’s Relocation Policy – Tier 1, a copy of which you have received from Supervalu. 
PAID TIME OFF:  Supervalu has a Paid Time Off (PTO) policy that provides paid time off for needs such as vacation, personal illness, family needs, etc.  You will be eligible for 27 days of PTO annually, which will be prorated during your first calendar year of employment based on the Start Date.
SEVERANCE:  You will participate in the Supervalu Severance Plan at a “Tier I” level; provided, however, that (a) termination by you for Good Reason (as defined below) will be deemed to be a termination by Supervalu without Cause for purposes of the Supervalu Severance Plan and (b) in no event shall your severance benefits be less favorable than the severance benefits in effect under the Supervalu Severance Plan on the Effective Date and as modified herein (i.e., you will be entitled to such benefits upon the terms and subject to the conditions set forth in the Supervalu Severance Plan as of the Effective Date and as modified herein even if the Supervalu Severance Plan is thereafter eliminated or modified to include less favorable benefits).  For purposes of this Letter Agreement, you will have the right to terminate your employment for “Good Reason” if you are removed from the position of Chief Executive Officer, or there occurs a material reduction in your duties, responsibilities, Base Salary or Target Bonus.  For this purpose, a reduction in the size of Supervalu, including, without limitation, on account of the anticipated separation or disposition of the Save-A-Lot business by spinoff or otherwise, shall not constitute a material reduction in your duties or responsibilities.  You may only terminate your employment for Good Reason if you first deliver to Supervalu by a written notice within 30 days of the occurrence of such event and Supervalu fails to cure such event within 30 days following the receipt of your written notice; provided that no resignation will be for Good Reason unless you actually resign from employment effective as of a date within 75 days after the end of Supervalu’s 30-day cure period.
CERTAIN REPRESENTATIONS AND COVENANTS:  You represent and warrant as of the Effective Date that your entry into this Letter Agreement and your performance of your obligations hereunder as of the Start Date and thereafter will not result in any breach, violation, or contravention of any law of governmental entity applicable to you or violate any contractual, 

4

common law or statutory obligations to any parties, and you are not a party to any agreement or arrangement containing or otherwise subject to a noncompetition provision or other restriction with respect to, in each case, (a) the nature of any services that you are entitled or obligated to perform or conduct for Supervalu or any of its affiliates under this Letter Agreement, or (b) the disclosure or use of any confidential information that directly or indirectly relates to the nature of the business of Supervalu or any of its affiliates, or the services that you are entitled or obligated to perform under this Letter Agreement (except, in the case of clause (b), any such confidentiality agreement that relates to information that you will not need to use in your performance of your obligations hereunder, which you agree not to use or disclose).  In addition, you represent and warrant that (i) you are a lawful permanent resident of the United States, (ii) you are authorized to work in the United States, and (iii) you will not require employer sponsorship in order to maintain such status and work authorization.  You agree to complete Form I-9 in accordance with Supervalu procedures upon commencement of employment and to maintain such status and work authorization throughout your employment with Supervalu.  You agree that, no later than the Start Date, (A) you and Surry Investment Advisors LLC and any related business shall have ceased providing consulting or other services to any business, entity or person whose business activities overlap or are in any way competitive with those of Supervalu and its affiliates, provided that continued financial management and operation of Gross family investments through Surry Investment Advisors LLC shall not constitute a breach of this agreement to the extent that such activities do not (1) violate Supervalu policies (including but not limited to the Supervalu Conflicts of Interest Policy) and (2) do not materially interfere with the performance of your duties under this Letter Agreement, (B) you shall have resigned or otherwise been removed from the Official Committee of Unsecured Creditors in the Haggen Holdings LLC bankruptcy, and (C) you shall be in compliance with the Supervalu Conflicts of Interest Policy, a copy of which you have received from Supervalu, including without limitation having terminated and fulfilled any obligations under the agreement dated March 17, 2014 previously supplied to Supervalu .  You represent that you have supplied Supervalu or its advisors of copies of any written agreements pursuant to which you are or have been subject to restrictive covenants or other obligations of any sort that could continue to apply on and following the Start Date, other than such agreements (x) that could not affect your performance of your duties hereunder or (y) that Supervalu has requested for review but that you have not provided to Supervalu or its advisors based on your good faith determination that providing such agreements would result in your violation of confidentiality covenants contained therein (it being understood that you have orally disclosed to Supervalu the essential substance of any such restrictive covenants or obligations contained in the agreements you have not provided).  You acknowledge and agree that any breach of the foregoing representations, covenants or obligations shall constitute a basis to terminate you for “cause” (or such similar term) for purposes of this Letter Agreement and all equity awards granted to you by Supervalu and all Supervalu severance arrangements for which you may otherwise be eligible (including, without limitation, the Supervalu Severance Plan), resulting in, without limitation, a forfeiture of all unvested Supervalu equity awards held by you at the time of such termination, and your ineligibility for severance payments or benefits of any kind under the Supervalu Severance Plan or any other severance plan, policy, agreement, or arrangement of Supervalu.  Supervalu represents and warrants that it has the power and authority to execute and deliver this Letter Agreement and to perform its obligations hereunder.

5

MISCELLANEOUS:  Your employment with Supervalu will be “at-will.”  “At-will” means that either you or Supervalu are free to terminate the employment relationship at any time, for any reason.  This Letter Agreement does not change the nature of your “at-will” employment and does not guarantee employment for any specific period of time.  You will be provided with a Supervalu Tier II Change of Control Severance Agreement (the “Supervalu COC Agreement”), with terms consistent with other Supervalu Tier II COC Agreements of other senior executives of Supervalu, which will become effective on the Start Date.  In the event that you become entitled to severance payments or benefits under this Letter Agreement, the Supervalu Severance Plan or the Supervalu COC Agreement, such payments and benefits will be your sole and exclusive severance payments and benefits and you will not be entitled to any other severance payments or benefits from Supervalu.  Supervalu and you shall enter into Supervalu’s standard form of indemnification agreement for executive officers.  You shall be provided with director’s and officer’s liability insurance coverage to the same extent as other Supervalu executive officers and as provided in such policies for Supervalu executive officers serving as directors.  Such coverage shall continue after your service with Supervalu ceases while you have continuing liability with regard to your actions or inactions on behalf of Supervalu on the same basis as coverage for other former Supervalu officers and directors.
NONCOMPETITION, NONSOLICITATION, CONFIDENTIALITY, AND MANDATORY ARBITRATION:  By accepting this offer, you agree, effective as of the Effective Date, to the confidentiality, noncompetition, and nonsolicitation provisions contained in the “Terms and Conditions of Employment” attached as Exhibit A, and that are incorporated herein by reference.  You also agree that any and all employment disputes occurring during or after your employment with Supervalu are subject to mandatory arbitration as set forth in the “Terms and Conditions of Employment.”  In addition, you acknowledge and agree that this Letter Agreement and the discussions and correspondences that led to this Letter Agreement shall constitute “Confidential Information” for purposes of the Confidentiality Agreement, executed in November 2015, by and between Supervalu and you (unless such information is already publicly available through no fault of your own).
LEGAL FEES:  Upon presentation of appropriate documentation, Supervalu will pay or reimburse you for your reasonable counsel fees and expenses incurred in connection with the negotiation and documentation of this Letter Agreement (at such counsel’s standard hourly rates and expense charges), up to a maximum of $50,000 in the aggregate.
ENTIRE AGREEMENT:  This Letter Agreement is intended to be the entire agreement between Supervalu and you with respect to the matters described herein.  No waiver or modification hereof shall be valid unless made in writing, signed by both you and Supervalu.
SECTION 409A.  Supervalu and you intend that the payments and benefits provided for in this Letter Agreement either be exempt from the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the rules and regulations thereunder, or be provided in a manner that does not result in tax penalties to you under Section 409A of the Code, and any ambiguity herein shall be interpreted so as to be consistent with the intent of this paragraph.  Notwithstanding anything contained herein to the contrary, all payments and benefits paid on account of your termination of employment that constitute nonqualified deferred compensation within the meaning of Section 409A of the Code shall be paid or provided only at the time of a termination of your employment that constitutes a “separation from service” from 

6

Supervalu within the meaning of Section 409A of the Code and the regulations and guidance promulgated thereunder (determined after applying the presumptions set forth in Treas. Reg. Section 1.409A-1(h)(1)).  Further, if at the time of your termination of employment with Supervalu you are a “specified employee” as defined in Section 409A of the Code as determined by Supervalu in accordance with Section 409A of the Code, and Supervalu determines that the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary to prevent any accelerated or additional tax or interest on account of Section 409A of the Code, then Supervalu will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in payments or benefits ultimately paid or provided to you) until the date that is six months following the date of your termination of employment with Supervalu (or, if earlier, the date of your death), whereupon Supervalu will pay you a lump sum amount equal to the cumulative amounts that would have otherwise been previously paid to you under this Letter Agreement during the period in which such payments or benefits were deferred.  For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Letter Agreement shall be treated as a separate payment of compensation for purposes of applying the exclusion under Section 409A of the Code for certain short-term deferral amounts and otherwise.  In no event may you, directly or indirectly, designate the calendar year of any payment under this Letter Agreement.
Notwithstanding anything to the contrary in this Letter Agreement, in-kind benefits and reimbursements provided under this Letter Agreement during any calendar year shall not affect in-kind benefits or reimbursements to be provided in any other calendar year, other than an arrangement providing for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit.  Notwithstanding anything to the contrary in this Letter Agreement, reimbursement requests must be timely submitted by you and, if timely submitted, reimbursement payments shall be promptly made to you following such submission, but in no event later than December 31st of the calendar year following the calendar year in which the expense was incurred.  In no event shall you be entitled to any reimbursement payments after December 31st of the calendar year following the calendar year in which the expense was incurred.  This paragraph shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to you.
CONTROLLING LAW:  This Letter Agreement shall in all respects be interpreted, enforced and governed by the laws of the State of Minnesota without regard to its conflicts of laws principles.
SEVERABILITY:  You agree that the terms of this Letter Agreement (including, without limitation, Exhibit A hereto) are severable, and if any provision of this Letter Agreement (including, without limitation, Exhibit A hereto) is found to be void and unenforceable by a court, that judgment will not affect, impair or invalidate the remainder of this Letter Agreement.
COUNTERPARTS:  This Letter Agreement may be executed in separate counterparts (including by facsimile or other electronic means), each of which shall deemed to be an original but all of which taken together shall constitute one and the same instrument.

7

If the foregoing accurately expresses our mutual understanding, please execute the enclosed copy of this letter in the space provided below, and return to the undersigned.
Sincerely,
SUPERVALU INC.

By: 

	
			
	 
	/s/ Gerald Storch

	 
	Name:  Gerald Storch

	 
	Title:  Non-Executive Chairman of the Board

	 
	 
	 

	 
	Date:
	February 2, 2016

	
			
	 
	/s/ Matthew E. Rubel

	 
	Name:  Matthew E. Rubel

	 
	Title:  Chair, Leadership Development and

	 
	 
	Compensation Committee

	 
	 
	 

	 
	Date:
	February 2, 2016

AGREED AND ACCEPTED:
	
			
	 
	/s/ Mark Gross

	 
	Name:  Mark Gross

	 
	 
	 

	 
	Date:
	February 2, 2016

[Signature Page to Offer Letter]

EXHIBIT A 
TERMS AND CONDITIONS OF EMPLOYMENT
The following are confidentiality, noncompetition, nonsolicitation and mandatory arbitration agreements referenced in the attached offer letter.  By accepting this offer of employment, you agree to these terms and conditions.  As they concern important legal rights, you are urged to read carefully, and consult counsel, if necessary, to ensure you understand these provisions.
As used below, “You” refers to the individual to whom this offer of employment is being extended.  The “Employer” in this Exhibit A refers to SUPERVALU INC. and all of its subsidiaries, affiliates, and related companies.
You affirm, agree and understand that the offer letter, as attached (the “Letter Agreement”), includes the following provisions, and that by accepting the Employer’s offer of employment, You agree to abide by, and be bound by, the following:
		
	1.
	Confidentiality.  You acknowledge that, in the course of your employment with the Employer, You will have access to confidential information that was obtained or developed by the Employer at great expense and that is zealously guarded from unauthorized disclosure.  Your access to and possession of this information will be due solely to your employment with the Employer.  You agree that You will not, at any time during or following termination of employment for any reason, disclose, use, or otherwise make available to any third party, any confidential information relating to the Employer’s business, products, services, customers, vendors, or suppliers; trade secrets, data, specifications, 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 Employer that is not disclosed to the general public or known in the industry, except with the express written consent of the Employer.  All confidential information, including all copies, notes regarding, and replications of such confidential information will remain the sole property of the Employer, as applicable, and must be returned to the Employer immediately upon your termination from the Employer. 

		
	2.
	Nonsolicitation of Customers, Vendors, and Suppliers.  You specifically acknowledge that the confidential information described above includes confidential data pertaining to existing and prospective customers, vendors, and suppliers of the Employer, that such data is a valuable and unique asset of the business of the Employer, 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, You agree that for 12 months following the date of your termination from the Employer, You will not (except on behalf of the Employer, or with the Employer’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 Employer with whom You had contact or about whom You gained confidential information during your employment with the Employer for the purpose of obtaining business or engaging in any commercial 

A-1

relationship that would be competitive with the Business of the Employer (as defined below) or cause such customer, supplier, or vendor to materially change or terminate its business or commercial relationship with the Employer.  This provision is in addition to, and not in lieu of, similar provisions in any other agreement(s) between You and the Employer.
		
	3.
	Nonsolicitation of Employees.  You specifically acknowledge that the confidential information described above also includes confidential data pertaining to employees and agents of the Employer, and You further agree that for 12 months following your termination of employment, 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 Employer to terminate their employment or agency with the Employer.

		
	4.
	Noncompetition.  You covenant and agree that for 12 months following your termination of employment, You will not, in any geographic market in which You worked or had direct or indirect responsibilities on behalf of the Employer, and for any business line or lines for or other functions for which You had direct or indirect responsibility for 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 Employer.

		
	a.
	The “Business of the Employer” 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 Employer, or presented in concept to You by the Employer at any time during your employment with the Employer, for which you had or were proposed to have any business or business line or operational responsibilities.

		
	b.
	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.

		
	5.
	Remedies.  You and the Employer each acknowledges and agrees that the Employer will suffer irreparable harm from a breach by You of any of the covenants or agreements contained in Section 1, 2, 3, or 4 of this Exhibit A.  You further acknowledge that the restrictive covenants set forth in Section 4 of this Exhibit A are of a special, unique, and extraordinary character, the loss of which cannot be adequately compensated by monetary damages.  You agree that the terms and provisions of Sections 1, 2, 3, and 4 of this Exhibit A are fair and reasonable and are reasonably required for the protection of the Employer in whose favor such restrictions operate.  You acknowledge that, but for your agreements to be bound by the restrictive covenants set forth in this Exhibit A, the Employer would not have entered into the Letter Agreement.  In the event of an alleged or threatened breach by You of any of the provisions of Section 1, 2, 3, or 4 of this 

A-2

Exhibit A, the Employer or its successors or assigns may, in addition to all other rights and remedies existing in its or their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other equitable relief in order to enforce or prevent any violations of the provisions hereof.
		
	6.
	Mandatory Arbitration.  You covenant and agree that any controversy or claim arising out of or relating to your employment relationship with the Employer or the termination of that relationship must be submitted for final and binding resolution by a private and impartial arbitration, under the Employment Dispute Resolution rules of the American Arbitration Association.  This includes, but is not limited to, any claim that could be asserted in court or before an administrative agency or claims for which You have an alleged cause of action, including without limitation claims for breach of any contract or covenant (express or implied); tort claims; claims for discrimination, harassment or retaliation under local, state or federal statutes; claims for wrongful discharge; claims for violations of the Family and Medical Leave Act or any other local, state, federal or other governmental law, statute, regulation, and whether based on statute or common law.  This includes claims against the Employer, any of its affiliated or subsidiary entities, or its individual officers, directors, or employees.

This does not include the following claims:
		
	a.
	claims for workers compensation or unemployment benefits;

		
	b.
	claims under the National Labor Relations Act, as amended;

		
	c.
	claims based on current or future employee benefit and/or welfare plans that contain a dispute resolution procedure therein; or

		
	d.
	claims by the Employer for injunctive or other equitable relief based on your alleged breach of covenants under this Exhibit A.

The burden of proof at arbitration shall be on the party seeking relief.  Each party shall bear its own costs and attorneys’ fees.  In reaching a decision, the arbitrator shall apply the governing substantive law applicable to the claims, causes of action and defenses asserted by the parties.  The arbitrator shall have the power to award all remedies (including attorneys’ fees) that could be awarded by a court or administrative agency in accordance with the governing and applicable substantive law.
You also agree that the arbitration procedure described herein does not alter your status as an “at-will” employee, meaning both you and the Employer have the right to terminate employment at any time and for any reason.
		
	7.
	Governing Law.  You agree that the internal law, and not the law of conflicts, of the State of Minnesota, shall govern all questions concerning the validity, construction and effect of this Exhibit A.  The exclusive venue for any arbitration or court proceeding relating to this Agreement shall be a state court or arbitration forum, as required above, within the state of Minnesota unless the parties mutually agree to a different venue.  You consent to personal jurisdiction in Minnesota.

A-3

EXHIBIT B 
FORM OF INDUCEMENT OPTION AGREEMENT
SUPERVALU INC.
2012 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 2012 Stock Plan (the “Plan”), under which directors and 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 hereto, which is incorporated herein and made a part hereof, and the terms and provisions of the Plan.  To accept the Option, this agreement must be delivered and accepted through an electronic medium in accordance with procedures established by the Company or Optionee must sign and return a copy of this agreement to the Company within sixty (60) 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) the Option shall vest according the schedule below, (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 Number:    %%OPTION_NUMBER%-%
Grant Date:        %%OPTION_DATE,’Month DD, YYYY’%-%
Number of Shares:    %%TOTAL_SHARES_GRANTED,’999,999,999’%-%
Exercise Price:        %%OPTION_PRICE,’$999,999,999.99’%-%
Expiration Date:    %%EXPIRE_DATE_PERIOD1,’Month DD, YYYY’%-%
Vesting Schedule:    34%, 33% and 33% on each anniversary of the Grant Date

	
				
	By:
	 
	 
	 

	 
	Michele A. Murphy
	 
	FIRST_NAME_MIDDLE_NAME_LAST_NAME

	 
	Executive Vice President
	 
	EMPLOYEE_IDENTIFIER

	 
	Human Resources & Corporate Communications
	 
	 

SUPERVALU INC.
2012 STOCK PLAN

STOCK OPTION TERMS AND CONDITIONS
(FOR EMPLOYEES)

These Stock Option Terms and Conditions (“Terms and Conditions”) apply to the Option granted to you under the Plan, pursuant to the Stock Option Agreement (the “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 attached Agreement.  See Section 21 for a list of defined terms.

		
	1.
	Vesting and Exercisability.  The Option shall vest on the date or dates and in the amount or amounts set forth in the attached Agreement, or at such earlier time or times as may be provided in Sections 6 or 8 below. 

The vested portion of the Option may be exercised at any time, or from time to time, during the term of the Option 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 ten (10) 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 6 or 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 or Disability (as set forth in Section 8 below), 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: Vice President, Compensation, 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 7 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 (personal check, bank draft or money order) payable to the Company;

		
	b)
	By delivering indirectly to the Company, cash or its equivalent payable to the Company through E*TRADE under a broker-assisted sale and remittance program approved by the Company;

		
	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”);

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

		
	e)
	By the Company delivering to you a number of Shares having an aggregate Fair Market Value (determined as of the date of exercise) equal to the excess, if positive, of the Fair Market Value (on the date of exercise) of the Shares as to which the Option is being exercised, over the aggregate exercise price for such Shares under the Option (commonly known as a “net exercise”).

If you pay all or a portion of the purchase price by means of a Stock Swap, 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 (twenty-one (21) years of age or older) as joint tenants, and mailed to your address; 

		
	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 (twenty-one (21) years of age or older) as joint tenants, with a notice of issuance provided to you; or 

		
	c)
	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.  Delivery of Shares upon exercise of this Option is subject to the satisfaction of applicable withholding tax obligations and to Section 17 below.

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 taxes required to be withheld upon such exercise; 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 the amount of taxes required to be withheld upon such exercise.  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.

The Company shall be under no obligation to withhold taxes in excess of your minimum required tax withholding rate if you elect to satisfy your obligation to pay withholding taxes by either of the means specified in clauses 5(c) and 5(d) above.
6.    Change of Control. 
		
	a)
	If, within two (2) years after a Change of Control, you experience an involuntary termination of employment initiated by the Company for reasons other than Cause, or a termination of employment for Good Reason, the unvested portion of the Option shall immediately vest and the Option shall become immediately exercisable in full and remain exercisable for one (1) year beginning on the date of your termination of employment.  If the Option is replaced pursuant to subsection (d) below, the protections and rights granted under this subsection (a) shall transfer and apply to such replacement option.

		
	b)
	If, in the event of a Change of Control described in clause (ii) of Section 21(b) below, and to the extent the Option is not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing intrinsic value of the Option at the time of the Change of Control, then the Option shall become fully vested and exercisable for such period of time prior to the effective time of the Change of Control as is deemed fair and equitable by the Committee to provide you with the opportunity to participate as a stockholder in the Change of Control transaction, and shall terminate at the effective time of the Change of Control.  The Company will provide written notice of of the period of accelerated vesting and exercisability to you, and the exercise of this Option pursuant to such accelerated vesting and exercisability shall be conditioned upon the consummation of the Change of Control and shall be effective only immediately before such consummation.

		
	c)
	In the discretion of the Committee and notwithstanding subsection (b) above or any other provision, the Option (whether or not exercisable) may be cancelled at the time of the Change of Control in exchange for cash, property or a combination thereof that is determined by the Committee to be at least equal to the excess (if any) of the value of the consideration that would be received in such Change of Control by a holder of the number of Shares remaining subject to the Option (or the Fair Market Value of such number of Shares immediately prior to the Change of Control if the holders of Company common stock will not receive consideration in such Change of Control), over the aggregate Exercise Price under the Option for that number of Shares.  For purposes of clarification, if application of the formula in the preceding sentence does not result in a positive number, then this Option is subject to cancellation without consideration.  Furthermore, the Committee is under no obligation to treat Options and/or holders of Options uniformly and has the discretionary authority to treat Options and/or holders of Options 

disparately.
		
	d)
	If in the event of a Change of Control and to the extent that this Option is assumed by any successor corporation, affiliate thereof, person or other entity, or is replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing intrinsic value of this Option at the time of the Change of Control and provide for vesting and settlement terms that are at least as favorable to you as the vesting and payout terms applicable to this Option, then the assumed Option or such substitute therefore shall remain outstanding and be governed by its respective terms.

7.  Transferability.  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. 

8.  Effect of Termination of Employment.  Subject to Section 6(a) above, following the termination of your employment with the Company and its Affiliates 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. If you voluntarily terminate your employment, you may exercise the portion of the Option that was vested and exercisable as of the date of termination of your employment at any time until the earlier of (i) ninety (90) days after such termination of employment, or (ii) the Expiration Date. 

		
	b)
	Involuntary. If your employment is terminated involuntarily for any reason other than death, Disability or Cause, you may exercise the portion of the Option that was vested and exercisable as of the date of termination of your employment at any time until the earlier of (i) one (1) year after such termination of employment, or (ii) the Expiration Date.

		
	c)
	Retirement.  Notwithstanding paragraphs (a) and (b) above, if your employment terminates on or after reaching age 60 for any reason other than death or Disability, your termination shall be considered a “retirement” and the following provisions will apply:

		
	(i)
	If at the time of your retirement you have completed at least fifteen (15) years of service with the Company or an Affiliate, you may exercise the portion of the Option that was vested and exercisable as of the date of your retirement at any time until the earlier of (i) five (5) years after the date of your retirement, or (ii) the Expiration Date.

		
	(ii)
	If at the time of your retirement you have completed fewer than fifteen (15) years of service with the Company or an Affiliate, you may exercise the portion of the Option that was vested and exercisable as of the date of your retirement at any time until the earlier of (i) one (1) year after your retirement, or (ii) the Expiration Date.

 
		
	d)
	Death.  

		
	(i)
	Prior to Age 60.  If your employment terminates as a result of your death prior to reaching age 60, the unvested portion of the Option shall immediately vest and become exercisable in full.  Thereafter, the Option may be exercised 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, until the earlier of (i) one (1) year after the date of your death, or (ii) the Expiration Date.

		
	(ii)
	On or After Age 60.  If your employment terminates as a result of your death on or after you have reached age 60, the unvested portion of your Option shall immediately vest and become exercisable in full.  Thereafter, the Option may be exercised 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, until the earlier of (i) five (5) years after the date of your death, or (ii) the Expiration Date.

		
	e)
	Disability.  

		
	(i)
	Prior to Age 60.  If your employment terminates prior to reaching age 60 as a result of your Disability, the unvested portion of the Option shall immediately vest and become exercisable in full.  Thereafter, the Option may be exercised by you or by your personal representative(s), to the full extent of the Shares covered by the Option that were not previously purchased, until the earlier of (i) one (1) year after your employment terminates due to such Disability, or (ii) the Expiration Date.

		
	(ii)
	On or After Age 60.  If your employment terminates on or after reaching age 60 as a result of your Disability, the unvested portion of the Option shall immediately vest and become exercisable in full.  Thereafter, the Option may be exercised by you or by your personal representative(s), to the full extent of the Shares covered by the Option that were not previously purchased, until the earlier of (i) five (5) years after your employment terminates due to such Disability, or (ii) the Expiration Date.

You shall be considered subject to a “Disability” 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)
	 Cause.  If your employment is terminated for Cause, or if you are determined to have engaged in conduct during a post-termination exercise period that would constitute Cause or be in violation of Section 10, any unexercised or unvested portion of this Option shall be immediately forfeited without consideration.

		
	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.

		
	h)
	Offer Letter.  Notwithstanding the foregoing provisions of this Section 9, any more favorable vesting provisions with respect to your termination of employment set forth in that certain letter agreement, dated as of [•], 2016 (the “Offer Letter”), by and between the Company and you, shall apply to the Option as though set forth herein.  In addition, your resignation for Good Reason will be treated as an involuntary termination for purposes of this Section 8.

9.  Repurchase Rights.  If your employment with the Company and its Affiliates 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 any Shares purchased by you upon any exercise of this Option that occurred within six (6) months prior to the date on which your employment with the Company and its Affiliates ended, or at any time thereafter, 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 within thirty (30) days following the termination of your employment for the repurchase of Shares purchased prior to such termination, and within thirty (30) days after the Company’s discovery of any breach of the covenants contained in Section 10.  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 difference between the amount realized by you from the disposition of the Shares (or the Fair Market Value of the Shares on the disposition date if greater) and the amount you originally paid for 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.  

10. Employee Covenants.  In consideration of benefits described elsewhere in these 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 these 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 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 (1) 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 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 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 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.  
		
	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 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 the 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 attached 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 final and binding arbitration under the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, or other neutral arbitrator and rules as mutually agreed to by you and the Company, except for claims by the Company relating to your alleged breach of any of the employee covenants set forth in Section 10 above.  This agreement to arbitrate specifically includes, but is not limited to, discrimination claims under Title VII of the Civil Rights Act of 1964 and under state and local laws prohibiting employment discrimination.  Nothing in this Section 11 shall preclude the Company from pursuing a court action to obtain a temporary restraining order or a preliminary injunction relating to the alleged breach of any of the covenants set forth in Section 10.  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 must be in writing and include the findings of fact and conclusions of law upon which it is based, 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 or the Company or any of its Affiliates had the matter been heard in court.  All expenses of 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 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 attached 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.  Interpretations.  These 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 these 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 these 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.

15.  No Right to Employment.  Nothing in these Terms and Conditions or 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 these Terms and Conditions or the attached Agreement, unless otherwise expressly provided in these Terms and Conditions or the attached Agreement.

16.  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 attached Agreement.

17.  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.

18.  Headings.  Headings are given to the sections and subsections of these 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 these Terms and Conditions or the attached Agreement or any provision hereof or thereof.

19.  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 attached Agreement.

20.  Notices.  For purpose of the Agreement and these Terms and Conditions, notices and all other communications provided for in the Agreement, these Terms and Conditions or contemplated by either shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed United States certified or registered mail, return receipt requested, postage prepaid, and addressed, in the case of the Company, to the Company at:
P.O. Box 990
Minneapolis, MN 55440
Attention:  Corporate Secretary

and in the case of you, to you at the most current address shown on your employment records.  Either party may designate a different address by giving notice of change of address in the manner provided above, except that notices of change of address shall be effective only upon receipt. 
		
	a)
	Notice of Termination by Company.  Any purported termination of employment of you by the Company (whether for Cause or without Cause) shall be communicated by a Notice of Termination to you.  No purported termination of employment of you by the Company shall be effective without a Notice of Termination having been given. 

		
	b)
	Good Reason Notice by You.  Any purported termination of employment by you for Good Reason shall be communicated by a Notice of Termination to the Company or successor.  Your termination of employment will not be for Good Reason unless (i) you give the Company written notice of the event or circumstance which you claim is the basis for Good Reason within ninety (90) days of such event or circumstance first occurring, and (ii) the Company is given thirty (30) days from its receipt of such notice within which to cure or resolve the event or circumstance so noticed.  If the circumstance is cured or resolved within said thirty (30) days, your termination of employment will not be for Good Reason.

21.  Definitions.  The following terms, and terms derived from the following terms, shall have the following meanings when used in these Terms and Conditions or the attached Agreement with initial capital letters unless, in the context, it would be unreasonable to do so. 
		
	a)
	Cause shall have the meaning set forth in the Offer Letter.

		
	b)
	Change of Control shall be deemed to have occurred upon any of the following events:

		
	i)
	the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (A) the then outstanding shares of common stock of the Company, or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control:  (A) any acquisition directly from the Company, or (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; 

		
	ii)
	the consummation of any merger or other business combination of the Company, sale or lease of all or substantially all of the Company's assets or combination of the foregoing transactions (the "Transactions") other than a Transaction immediately following which the 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 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 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).

		
	c)
	Change of Control Date shall mean the date on which a Change of Control occurs. 

		
	d)
	Good Reason shall (x) prior to the Change of Control Date, have the meaning set forth in the Offer Letter, and (y) on or following the Change of Control Date, mean any one (1) or more of the following events occurring during the two-year period following the Change of Control Date:

		
	i)
	your annual base salary is reduced below the amount in effect on the Change of Control Date;

		
	ii)
	your Target Bonus is reduced below the Target Bonus as it existed on the Change of Control Date; 

		
	iii)
	your title is reduced from the title that you had on the Change of Control Date, or your duties and responsibilities are materially and adversely diminished in comparison to the duties and responsibilities that you had on the Change of Control Date other than in a general reduction of the number or scope of personnel for which you are responsible for supervising which reduction occurs in connection with a restructuring or recapitalization of the Company or the division of the Company in which you work; 

		
	iv)
	the program of long term incentive compensation is materially and adversely diminished in comparison to the program of long term incentive compensation as it existed for you on the Change of Control Date (for purposes of this clause (iv), a reduction of fifteen percent (15%) or more of the 

target dollar amount of your long term incentive compensation as it existed for you on the Change of Control Date based on your most recent award of long term incentive compensation prior to the Change of Control Date shall be considered to be material and adverse); or

		
	v)
	you are required to be based at a location more than forty-five (45) miles from the location where you were based and performed services on the Change of Control Date; 

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

		
	e)
	Notice of Termination shall mean a written notice which shall indicate the specific provision in these Terms and Conditions relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for your termination of employment under the provisions so indicated.

		
	f)
	Target Bonus shall mean the target amount of bonus established under the annual bonus plan for you for the year in which the termination of employment occurs. When the context requires, it shall also mean the target amount of bonus established for any earlier or later year.

Original Approval

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