Document:

2000 Nonstatutory Equity Incentive Plan, as amended.

 
EXHIBIT 10.11

 
NVIDIA Corporation 
2000 Nonstatutory Equity Incentive Plan 
 
Adopted August 1, 2000 
Amended December 22, 2000 
Amended January 2, 2001 
Amended January 28, 2001 
Adjusted for 2-for-1 Stock Split on September 17, 2001 
Amended November 6, 2001 
Amended August 16, 2002 
Amended November 7, 2002 
Shareholder Approval Not Required 
Termination Date: None 
 

	1.    PURPOSES.	 	

 
(a)    The purpose of the Plan is to provide a means by which eligible Employees and Consultants to the Company
and its Affiliates may be given an opportunity to benefit from increases in value of the stock of the Company through the granting of (i) Nonstatutory Stock Options, (ii) stock bonuses, and (iii) rights to purchase restricted stock. 
 
(b)    The Company, by means of the
Plan, seeks to retain the services of persons who are now Employees or Consultants to the Company or its Affiliates, to secure and retain the services of new Employees and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates. 
 
(c)    The Company intends that the Stock Awards issued under the Plan shall, in the discretion of the Board be either (i) Options granted pursuant to Section 6 hereof, or (ii) stock bonuses or rights to
purchase restricted stock granted pursuant to Section 7 hereof. All Options shall be designated Nonstatutory Stock Options at the time of grant, and in such form as issued pursuant to Section 6. 
 

	2.    DEFINITIONS.	 	

 
(a)    Affiliate means any parent corporation or subsidiary corporation, whether now or hereafter
existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. 
 
(b)    Board means the Board of Directors of the Company. 
 
(c)    Code means the Internal Revenue Code of 1986, as amended. 
 
(d)    Common Stock means
the common stock of the Company. 
 
(e)    Committee means a committee appointed by the Board in accordance with subsection 3(c) of the Plan. 
 
(f)    Company means NVIDIA Corporation. 
 
(g)    Consultant means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for such services, provided that the term “Consultant” shall not 
 

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include Directors who are paid
only a director’s fee by the Company or who are not compensated by the Company for their services as Directors. The term “Consultant” shall include members of the Board of Directors of an Affiliate. 
 
(h)    Continuous Service
means that the Participant’s service with the Company or an Affiliate, whether as an Employee or Consultant, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee or Consultant or a change in the entity for which the Participant renders such service, provided that there is no interruption or
termination of the Participant’s Continuous Service. For example, a change in status from an Employee of the Company to a Consultant or a director of an Affiliate will not constitute an interruption of Continuous Service as an Employee. The
Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of: (i) any leave of absence approved by the Board or the chief executive
officer of the Company, including sick leave, military leave, or any other personal leave; or (ii) transfers between the Company, its Affiliates or their successors. 
 
(i)    Diluted Shares Outstanding means, as of any date, (i) the number of
outstanding shares of Common Stock of the Company on such Calculation Date (as defined in Section 4(a) herein), plus (ii) the number of shares of Common Stock issuable upon such Calculation Date assuming the conversion of all outstanding Preferred
Stock and convertible notes, plus (iii) the additional number of dilutive Common Stock equivalent shares outstanding as the result of any options or warrants outstanding during the fiscal year, calculated using the treasury stock method.

 
(j)    Director means a member of the Board. 
 
(k)    Disability means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code. 
 
(l)    Employee means any
person, including an Officer or Director, employed by the Company or any Affiliate. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

 
(m)    Exchange
Act means the Securities Exchange Act of 1934, as amended. 
 
(n)    Fair Market Value means, as of any date, the value of the Common Stock determined as follows: 
 
(i)    If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such system or exchange
(or the exchange with the greatest volume of trading in Common Stock) on the last market trading day prior to the day of determination, as reported in the Wall Street Journal or such other source as the Board deems reliable; 
 
(ii)    If the
Common Stock is quoted on the Nasdaq Small-Cap Market or is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the bid and asked prices
for the Common Stock on the last market trading day prior to the day of determination, as reported in the Wall Street Journal or such other source as the Board deems reliable; 
 
(iii)    In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the Board. 
 

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(o)    Listing Date means the first date upon which any security of the Company is listed (or approved for listing) upon notice of issuance on any securities exchange, or designated (or approved for
designation) upon notice of issuance as a national market security on an interdealer quotation system if such securities exchange or interdealer quotation system has been certified in accordance with the provisions of Section 25100(o) of the
California Corporate Securities Law of 1968. 
 
(p)    Incentive Stock Option means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
 
(q)    Nonstatutory Stock
Option means an Option not intended to qualify as an Incentive Stock Option. 
 
(r)    Officer means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder. Officer also means a person who possesses the authority of an “officer” as that term is used in Rule 4460(i)(1)(A) of the Rules of the National Association of Securities Dealers, Inc. For purposes of the Plan, a person
in the position of “Vice President” or higher shall be classified as an “Officer” unless the Board expressly finds that such person does not possess the authority of an “officer” as that term is used in Rule
4460(i)(1)(A) of the Rules of the National Association of Securities Dealers, Inc. 
 
(s)    Option means a stock option granted pursuant to the Plan. 
 
(t)    Option Agreement means a written agreement between the Company and an Optionholder evidencing the
terms and conditions of an individual Option grant. ?Each Option Agreement shall be subject to the terms and conditions of the Plan. 
 
(u)    Optionholder means an Employee or Consultant who holds an outstanding Option. 
 
(v)    Plan means this
NVIDIA Corporation 2000 Nonstatutory Equity Incentive Plan. 
 
(w)    Stock Award means any right granted under the Plan, including any Option, any stock bonus, and any right to purchase restricted stock. 
 
(x)    Stock Award Agreement
means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 
 
(y)    Ten Percent
Shareholder means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.

 

	3.    ADMINISTRATION.	 	

 
(a)    The Plan shall be administered by the Board unless and until the Board delegates administration to a
Committee, as provided in subsection 3(c). 
 
(b)    The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: 
 
(i)    To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; whether a Stock Award will be a Nonstatutory Stock Option, a stock bonus, a right to purchase restricted stock, or a combination of the foregoing;
the 
 

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provisions of
each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive stock pursuant to a Stock Award; and the number of shares with respect to which a Stock Award shall be granted to each
such person. 
 
(ii)    To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. 
 
(iii)    To amend
the Plan or a Stock Award as provided in Section 13. 
 
(iv)    Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the
provisions of the Plan. 
 
(c)    The Board may delegate administration of the Plan to a committee or committees of one or more members of the Board, and the term “Committee” shall apply to any person or persons to whom
such authority has been delegated. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 
 
(d)    All determinations, interpretations and constructions made by the Board in
good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. 
 
4.    SHARES SUBJECT TO THE PLAN. 
 
(a)    Subject to the provisions of Section 12 relating to adjustments upon changes in stock, the stock that
may be issued pursuant to Stock Awards shall not exceed in the aggregate Twenty-One Million Nine Hundred Thirty-Nine Thousand Two Hundred Two (21,939,202) shares1 of the Company’s Common Stock. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the stock not acquired under such
Stock Award shall revert to and again become available for issuance under the Plan. If the Company repurchases unvested shares acquired pursuant to a Stock Award, the shares of Common Stock so repurchased shall revert to and again become available
for issuance under the Plan. 
 
(b)    The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 
 

	5.    ELIGIBILITY.	 	

 
(a)    Eligibility for Stock Awards. Stock Awards may be granted to Employees and Consultants who are
not Officers, Directors or Ten Percent Shareholders at the time of grant. 

	1	 	The initial 2,317,155 shares reserved for issuance were increased by the Board of Directors
on December 22, 2000 and on January 2, 2001 by 3,200,000 shares and 250,000 shares, respectively, so that an aggregate of 5,767,155 shares were reserved for issuance. The shares were increased by the Board of Directors on January 28, 2001 by
2,327,446 shares to a total of 8,094,601 shares were reserved for issuance. This number was adjusted to 16,189,202 shares pursuant to the 2-for-1 stock split on September 11, 2001. On November 6, 2001, the Board of Directors approved an increase of
750,000 shares to a total of 16,939,202 shares. On August 16, 2002, the Compensation Committee approved an increase of 5,000,000 to a total of 21,939,202 shares. 

 

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(b)    Consultants. 
 
(i)    A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act (“Form
S-8”) is not available to register either the offer or the sale of the Company’s securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a
natural person, or as otherwise provided by the rules governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be registered in another manner under the Securities Act (e.g., on a Form S-3 Registration
Statement) or (B) does not require registration under the Securities Act in order to comply with the requirements of the Securities Act, if applicable, and (ii) that such grant complies with the securities laws of all other relevant jurisdictions.

 
(ii)    Form S-8 generally is available to consultants and advisors only if (1) they are natural persons; (2) they provide bona fide services to the issuer, its parents, its majority-owned subsidiaries and
(3) the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the issuer’s securities. 
 
6.    OPTION PROVISIONS. 
 
Each Option shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of
each of the following provisions: 
 
(a)    Term.    The Board shall determine the term of each Option. 
 
(b)    Price.    The Board shall determine the exercise price of each Option.

 
(c)    Consideration. 
 
(i)    The purchase price of stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (1) in cash at the
time the Option is exercised, or (2) at the discretion of the Board (a) by delivery to the Company of other Common Stock, (b) according to a deferred payment or other arrangement (which may include, without limiting the generality of the foregoing,
the use of other Common Stock) with the person to whom the Option is granted or to whom the Option is transferred pursuant to subsection 6(d), or (c) in any other form of legal consideration that may be acceptable to the Board. 
 
(ii)    At any time
that the Company is incorporated in Delaware, then payment of the Common Stock’s “par value,” as defined in the Delaware General Corporation Law, shall not be made by deferred payment. In the case of any deferred payment arrangement,
interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement. 
 
(iii)    Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial
accounting purposes). 
 
(d)    Transferability.    An Option shall be transferable to the extent provided in the Option Agreement. If the Option does not provide for transferability, then the Option
shall not be transferable except by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the person to whom the Option is granted only by such person. Notwithstanding the foregoing provisions of subsection
6(d), the person to whom the 
 

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Option is granted may, by
delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 
 
(e)    Vesting.    The total number of shares of stock subject to an Option may, but need not, be allotted in periodic installments (which may, but need not, be equal). The Option
Agreement may provide that from time to time during each of such installment periods, the Option may become exercisable (“vest”) with respect to some or all of the shares allotted to that period, and may be exercised with respect to some
or all of the shares allotted to such period and/or any prior period as to which the Option became vested but was not fully exercised. The Option may be subject to such other terms and conditions on the time or times when it may be exercised which
may be based upon performance or other criteria as the Board may deem appropriate. The provisions of this subsection 6(e) are subject to any Option provisions governing the minimum number of shares as to which an Option may be exercised.

 
(f)    Termination
Of Continuous Service.    In the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise it at the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months after the termination of the Optionholder’s Continuous Service (or such longer
or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. 
 
(g)    Disability Of Optionholder.    In the event an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option, (to the extent such Optionholder was entitled to exercise it at the date of termination) but only within such period of time
ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement) or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, at
the date of termination, the Optionholder is not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after
termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan.

 
(h)    Death Of
Optionholder.    In the event of the death of an Optionholder during, or within a period specified in the Option after the termination of, the Optionholder’s Continuous Status as an Employee, Director, or Consultant, the
Option may be exercised (to the extent the Optionholder was entitled to exercise the Option at the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person
designated to exercise the option upon the Optionholder’s death pursuant to subsection 6(d), but only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, at the time of death, the Optionholder was not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under the Plan. 
 
(i)    Early Exercise.    The Option may, but need not, include a provision whereby the Optionholder may elect at any time before the
Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares subject to the Option prior to the full vesting of the Option. Any unvested shares so purchased may be subject to a repurchase right in
favor of the Company or to any other restriction the Board determines to be appropriate. 
 

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(j)    Re-Load Options.    Without in any way limiting the authority of the Board to make or not to make grants of Options hereunder, the Board shall have the authority (but not
an obligation) to include as part of any Option Agreement a provision entitling the Optionholder to a further Option (a “Re-Load Option”) in the event the Optionholder exercises the Option evidenced by the Option agreement, in whole or in
part, by surrendering other shares of Common Stock in accordance with this Plan and the terms and conditions of the Option Agreement. Any such Re-Load Option (i) shall be for a number of shares equal to the number of shares surrendered as part or
all of the exercise price of such Option; (ii) shall have an expiration date which is the same as the expiration date of the Option the exercise of which gave rise to such Re-Load Option; and (iii) shall have an exercise price which is equal to one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Re-Load Option on the date of exercise of the original Option. 
 
7.    TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK. 
 
Each stock bonus or restricted stock purchase agreement shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. The terms and conditions of stock bonus or restricted stock purchase agreements may change from time to time, and the terms and conditions of separate agreements need not be identical, but each
stock bonus or restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions as appropriate: 
 
(a)    Purchase
Price.    The Board shall determine the purchase price under each restricted stock purchase agreement. The Board may determine that eligible participants in the Plan may be awarded stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its benefit. 
 
(b)    Transferability.    Rights to purchase shares under a stock bonus or restricted stock purchase agreement shall be transferable by the
grantee only upon such terms and conditions as are set forth in the applicable Stock Award Agreement, as the Board shall determine in its discretion, so long as stock awarded under such Stock Award Agreement remains subject to the terms of the
agreement. 
 
(c)    Consideration.    The purchase price of stock acquired pursuant to a stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other arrangement with the person to whom the stock is sold; or (iii) in any other form of legal consideration that may be acceptable to the Board in its discretion. Notwithstanding the
foregoing, the Board may award stock pursuant to a stock bonus agreement in consideration for past services actually rendered to the Company or for its benefit. 
 
(d)    Vesting.    Shares of stock sold or awarded
under the Plan may, but need not, be subject to a repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board. 
 
(e)    Termination Of Continuous Service.    In the
event a Participant’s Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of stock held by that person which have not vested as of the date of termination under the terms of the stock bonus
or restricted stock purchase agreement between the Company and such person. 
 
8.    CANCELLATION AND RE-GRANT OF OPTIONS. 
 
The Board or the Committee shall have the authority to effect, at any time and from time to time with the consent of any adversely affected Optionholder, (i) the reduction of the exercise price of any
outstanding Option under the Plan to the then Fair Market Value and/or (ii) the cancellation of any outstanding Options under the Plan in exchange for (A) the grant of a stock bonus; (B) the grant of restricted stock; (C) cash; (D) the grant in
substitution therefor of new Options under the Plan having an exercise price per share not less than as provided for new option grants made under the Plan; or (E) any other valuable consideration (as determined by the Board in its 
 

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sole discretion). The Board
shall determine the exchange ratio (which may be for more or less shares of stock than those then subject to the outstanding Option) in its sole discretion as well as all other terms of the exchange not specifically provided for in this paragraph.

 
9.    COVENANTS OF THE COMPANY.

 
(a)    During
the terms of the Stock Awards, the Company shall keep available at all times the number of shares of stock required to satisfy such Stock Awards. 
 
(b)    The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the
Plan such authority as may be required to issue and sell shares of stock upon exercise of the Stock Award; provided, however, that this undertaking shall not require the Company to register under the Securities Act either the Plan, any Stock
Award or any stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such Stock Awards unless and until such authority is obtained. 
 
10.    USE OF PROCEEDS FROM STOCK. 
 
Proceeds from the sale of stock pursuant to Stock Awards
shall constitute general funds of the Company. 
 
11.    MISCELLANEOUS. 
 
(a)    The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest in accordance with
the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest. 
 
(b)    Neither an Employee or Consultant nor any person to whom a Stock Award is transferred under subsection
6(d) or 7(b) shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such Stock Award unless and until such person has satisfied all requirements for exercise of the Stock Award pursuant
to its terms. 
 
(c)    Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Employee, Consultant or other holder of Stock Awards any right to continue in the employ
of the Company or any Affiliate (or to continue acting as a Consultant) or shall affect the right of the Company or any Affiliate to terminate the employment or relationship as a Consultant of any Employee, Consultant or other holder of Stock Awards
with or without cause. 
 
(d)    The Company may require any person to whom a Stock Award is granted, or any person to whom a Stock Award is transferred pursuant to subsection 6(d) or 7(b), as a condition of exercising or acquiring
stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to such person’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters, and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give
written assurances satisfactory to the Company stating that such person is acquiring the stock subject to the Stock Award for such person’s own account and not with any present intention of selling or otherwise distributing the stock. The
foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (1) the issuance of the shares upon the exercise or acquisition of stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (2) as to any particular requirement, a determination is made by counsel for the Company that such requirement 
 

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need not be met in the
circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting the transfer of the stock. 
 
(e)    To the extent provided by the terms of a Stock Award Agreement, the person to whom a Stock Award is
granted may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of stock under a Stock Award by any of the following means or by a combination of such means: (1) tendering a cash payment; (2)
authorizing the Company to withhold shares from the shares of the Common Stock otherwise issuable to the participant as a result of the exercise or acquisition of stock under the Stock Award, provided, however, that no shares of Common Stock are
withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (3) delivering to the Company owned and unencumbered shares of Common Stock. 
 
(i) The terms of any repurchase option shall be specified in the Stock Award and may be either at fair
market value or at not less than the original purchase price. 
 
12.    ADJUSTMENTS UPON CHANGES IN STOCK. 
 
(a)    If any change is made in the stock subject to the Plan, or subject to any Stock Award (through merger, consolidation, reorganization, recapitalization, stock dividend,
dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or otherwise), the Plan will be appropriately adjusted in the class(es) and maximum number of shares
subject to the Plan pursuant to subsection 4(a) and the outstanding Stock Awards will be appropriately adjusted in class(es) and number of shares and price per share of stock subject to such outstanding Stock Awards. 
 
(b)    In the event of a
dissolution or liquidation of the Company, then, upon advance written notice by the Company of at least ten (10) business days to the holders of any Stock Awards outstanding under the Plan, such Stock Awards shall be terminated if not exercised (if
applicable) prior to such event. 
 
(c)    In the event of (1) a sale of substantially all of the assets of the Company, (2) a merger or consolidation in which the Company is not the surviving corporation or (3) a reverse merger in which the
Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then any surviving
corporation or acquiring corporation shall assume any Stock Awards outstanding under the Plan or shall substitute similar stock awards (including an award to acquire the same consideration paid to the shareholders in the transaction described in
this subsection for those outstanding under the Plan. In the event any surviving corporation or acquiring corporation refuses to assume such Stock Awards or to substitute similar stock awards for those outstanding under the Plan, then with respect
to Stock Awards held by persons whose Continuous Service has not terminated, the vesting of such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be accelerated upon prior written notice by the
Company to the holders of such Stock Awards at least five (5) business days prior to such event and the Stock Awards shall terminate if not exercised (if applicable) at or prior to such event. With respect to any other Stock Awards outstanding under
the Plan, upon advance written notice by the Company of at least five (5) business days to the holders of such Stock Awards, such Stock Awards shall terminate if not exercised (if applicable) prior to such event. 
 

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13.    AMENDMENT OF THE PLAN AND STOCK AWARDS. 
 
(a)    The Board at any time, and from time to time, may amend the Plan. 
 
(b)    Rights and obligations under any Stock Award granted before amendment of the Plan shall not be impaired
by any amendment of the Plan unless (i) the Company requests the consent of the person to whom the Stock Award was granted and (ii) such person consents in writing. 
 
(c)    The Board at any time, and from time to time, may amend the terms of any
one or more Stock Award; provided, however that the rights and obligations under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the person to whom the Stock Award was granted and
(ii) such person consents in writing. 
 
14. TERMINATION OR
SUSPENSION OF THE PLAN. 
 
(a)    The Board may suspend or terminate the Plan at any time. 
 
(b)    Rights and obligations under any Stock Award granted while the Plan is in effect shall not be altered or
impaired by suspension or termination of the Plan, except with the consent of the person to whom the Stock Award was granted. 
 
15.    EFFECTIVE DATE OF PLAN. 
 
The Plan shall become effective on the date adopted by the Board. 
 
16.    CHOICE OF LAW. 
 
The law of the State of Delaware shall govern all questions concerning the construction, validity and
interpretation of this Plan, without regard to such state’s conflict of laws rules. 
 

10<PAGE>
                                                                    EXHIBIT 10.2

                                 SUPERVALU INC.
                                 1997 STOCK PLAN

Section 1. Purpose.
-------------------

         The purpose of the Plan is to promote the interests of the Company and
its stockholders by aiding the Company in attracting and retaining employees, to
offer such employees incentives to put forth maximum efforts for the success of
the Company's business and to afford such employee an opportunity to acquire a
proprietary interest in the Company.

Section 2. Definitions.
-----------------------

         As used in the Plan, the following terms shall have the meanings set
forth below:

                  (a) "Affiliate" shall mean (i) any entity that, directly or
indirectly through one or more intermediaries, is controlled by the Company and
(ii) any entity in which the Company has a significant equity interest, in each
case as determined by the Committee.

                  (b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award, or Other Stock-Based
Award granted under the Plan.

                  (c) "Award Agreement" shall mean any written agreement,
contract or other instrument or document evidencing any Award granted under the
Plan.

                  (d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated thereunder.

                  (e) "Committee" shall mean a committee of the Company
designated by the Board of Directors of the Company to administer the Plan,
which shall consist of members appointed from time to time by the Board of
Directors.

                  (f) "Company" shall mean SUPERVALU INC., a Delaware
corporation, and any successor corporation.

                  (g) "Eligible Person" shall mean any employee, consultant or
independent contractor providing services to the Company or any Affiliate who
the Committee determines to be an Eligible Person. An officer or director of the
Company or any Affiliate that is subject to Section 16 of the Securities
Exchange Act of 1934, as amended, or any successor rule or regulation, shall not
be an Eligible Person.

                  (h) "Fair Market Value" shall mean, with respect to any
property (including, without limitation, any Shares or other securities), the
fair market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee. Notwithstanding the
foregoing, unless otherwise determined by the Committee, the Fair Market Value
of Shares on a given date for purposes of the Plan shall be the average of the
opening and closing sale price of the Shares as reported on the New York Stock
Exchange on such date or, if such Exchange is not open for trading on such date,
on the day closest to such date when such Exchange is open for trading.

                  (i) "Option" shall mean an option granted under Section 6(a)
of the Plan that shall not be an incentive stock option within the meaning of
Section 422 of the Code or any successor provision and shall include Restoration
Options.

<PAGE>

                  (j) "Other Stock-Based Award" shall mean any right granted
under Section 6(f) of the Plan.

                  (k) "Participant" shall mean an Eligible Person designated to
be granted an Award under the Plan.

                  (l) "Performance Award" shall mean any right granted under
Section 6(e) of the Plan.

                  (m) "Person" shall mean any individual, corporation,
partnership, association or trust.

                  (n) "Plan" shall mean this 1997 Stock Plan, as amended from
time to time.

                  (o) "Restoration Option" shall mean any Option granted under
Section 6(b) of the Plan.

                  (p) "Restricted Stock" shall mean any Share granted under
Section 6(d) of the Plan.

                  (q) "Restricted Stock Unit" shall mean any unit granted under
Section 6(d) of the Plan evidencing the right to receive a Share (or a cash
payment equal to the Fair Market Value of a Share) at some future date.

                  (r) "Shares" shall mean shares of Common Stock, $1.00 par
value, of the Company or such other securities or property as may become subject
to Awards pursuant to an adjustment made under Section 4(c) of the Plan.

                  (s) "Stock Appreciation Right" shall mean any right granted
under Section 6(c) of the Plan.

                                       2

<PAGE>

Section 3. Administration.
--------------------------

                  (a) Power and Authority of the Committee. The Plan shall be
administered by the Committee. Subject to the express provisions of the Plan and
to applicable law, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to each Participant under the Plan; (iii) determine the number of Shares to be
covered by (or with respect to which payments, rights or other matters are to be
calculated in connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and conditions
of any Award or Award Agreement and accelerate the exercisability of Options or
the lapse of restrictions relating to Restricted Stock, Restricted Stock Units
or other Awards; (vi) determine whether, to what extent and under what
circumstances Awards may be exercised in cash, Shares, other securities, other
Awards or other property, or canceled, forfeited or suspended; (vii) determine
whether, to what extent and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award under the Plan shall be deferred either automatically or at the
election of the holder thereof or the Committee; (viii) interpret and administer
the Plan and any instrument or agreement relating to, or Award made under, the
Plan; (ix) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (x) make any other determination and take any other action that
the Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding upon any
Participant, any holder or beneficiary of any Award and any employee of the
Company or any Affiliate.

                  (b) Delegation. The Committee may delegate its powers and
duties under the Plan to one or more officers of the Company or any Affiliate or
a committee of such officers, subject to such terms, conditions and limitations
as the Committee may establish in its sole discretion.

                  (c) Power and Authority of the Board of Directors.
Notwithstanding anything to the contrary contained herein, the Board of
Directors may, at any time and from time to time, without any further action of
the Committee, exercise the powers and duties of the Committee under the Plan.

Section 4. Shares Available for Awards.
---------------------------------------

                  (a) Shares Available. Subject to adjustment as provided in
Section 4(c), the aggregate number of Shares which may be issued under all
Awards under the Plan shall be 10,800,000 (subject to further adjustment upon
certain changes in the Company's capitalization as described below). Shares to
be issued under the Plan shall be Shares reacquired and held in the treasury of
the Company. If any Shares covered by an Award or to which an Award relates are
not purchased or are forfeited, or if an Award otherwise terminates without
delivery of any Shares, then the number of Shares counted against the aggregate
number of Shares available under the Plan with respect to such Award, to the
extent of any such forfeiture or termination, shall again be available for
granting Awards under the Plan.

                  (b) Accounting for Awards. For purposes of this Section 4, if
an Award entitles the holder thereof to receive or purchase Shares, the number
of Shares covered by such Award or to which such Award relates shall be counted
on the date of grant of such Award against the aggregate number of Shares
available for granting Awards under the Plan.

                                       3

<PAGE>

                  (c) Adjustments. In the event that the Committee shall
determine 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 such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or other property) which
thereafter may be made the subject of Awards, (ii) the number and type of Shares
(or other securities or other property) subject to outstanding Awards and (iii)
the purchase or exercise price with respect to any Award; provided, however,
that the number of Shares covered by any Award or to which such Award relates
shall always be a whole number.

Section 5. Eligibility.
-----------------------

         Any Eligible Person shall be eligible to be designated a Participant.
In determining which Eligible Persons shall receive an Award and the terms of
any Award, the Committee may take into account the nature of the services
rendered by the respective Eligible Persons, their present and potential
contributions to the success of the Company or such other factors as the
Committee, in its discretion, shall deem relevant.

Section 6. Awards.
------------------

                  (a) Options. The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:

                           (i) Exercise Price. The purchase price per Share
         purchasable under an Option shall be determined by the Committee;
         provided, however, that such purchase price shall not be less than 100%
         of the Fair Market Value of a Share on the date of grant of such
         Option.

                           (ii) Option Term. The term of each Option shall be
         fixed by the Committee.

                           (iii) Time and Method of Exercise. The Committee
         shall determine the time or times at which an Option may be exercised
         in whole or in part and the method or methods by which, and the form or
         forms (including, without limitation, cash, Shares, promissory notes,
         other securities, other Awards or other property, or any combination
         thereof, having a Fair Market Value on the exercise date equal to the
         relevant exercise price) in which, payment of the exercise price with
         respect thereto may be made or deemed to have been made.

                  (b) Restoration Options. The Committee may grant Restoration
Options, separately or together with an Option, pursuant to which, subject to
the terms and conditions established by the Committee and any applicable law,
the Participant would be granted a new Option when the payment of the exercise
price of the non-qualified stock option to which such Restoration Option relates
is made by the delivery or withholding of Shares pursuant to the relevant
provisions of the plan or agreement relating to such non-qualified stock option.
The new

                                       4

<PAGE>

Option shall give the holder the right to purchase the number of Shares not
exceeding the sum of (A) the number of Shares so provided as consideration upon
the exercise of the previously granted non-qualified stock option to which such
Restoration Option relates and (B) the number of Shares, if any, tendered or
withheld as payment of the amount to be withheld under applicable tax laws in
connection with the exercise of the non-qualified stock option to which such
Restoration Option relates pursuant to the relevant provisions of the plan or
agreement relating to such non-qualified stock option. Restoration Options may
be granted with respect to Options previously granted under the Plan or any
other stock option plan of the Company, and may be granted in connection with
any Option granted under the Plan or any other stock option plan of the Company
at the time of such grant; provided, however, that Restoration Options may only
be granted to Eligible Persons.

                  (c) Stock Appreciation Rights. The Committee is hereby
authorized to grant Stock Appreciation Rights to Participants subject to the
terms of the Plan and any applicable Award Agreement. A Stock Appreciation Right
granted under the Plan shall confer on the holder thereof a right to receive
upon exercise thereof the excess of (i) the Fair Market Value of one Share on
the date of exercise (or, if the Committee shall so determine, at any time
during a specified period before or after the date of exercise) over (ii) the
grant price of the Stock Appreciation Right as specified by the Committee, which
price shall not be less than 100% of the Fair Market Value of one Share on the
date of grant of the Stock Appreciation Right. Subject to the terms of the Plan
and any applicable Award Agreement, the grant price, term, methods of exercise,
dates of exercise, methods of settlement and any other terms and conditions of
any Stock Appreciation Right shall be as determined by the Committee. The
Committee may impose such conditions or restrictions on the exercise of any
Stock Appreciation Right as it may deem appropriate.

                  (d) Restricted Stock and Restricted Stock Units. The Committee
is hereby authorized to grant Awards of Restricted Stock and Restricted Stock
Units to Participants with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:

                           (i) Restrictions. Shares of Restricted Stock and
         Restricted Stock Units shall be subject to such restrictions as the
         Committee may impose (including, without limitation, any limitation on
         the right to vote a Share of Restricted Stock or the right to receive
         any dividend or other right or property with respect thereto), which
         restrictions may lapse separately or in combination at such time or
         times, in such installments or otherwise as the Committee may deem
         appropriate.

                           (ii) Stock Certificates. Any Restricted Stock granted
         under the Plan shall be evidenced by issuance of a stock certificate or
         certificates, which certificate or certificates shall be held by the
         Company. Such certificate or certificates shall be registered in the
         name of the Participant and shall bear an appropriate legend referring
         to the terms, conditions and restrictions applicable to such Restricted
         Stock. In the case of Restricted Stock Units, no Shares shall be issued
         at the time such Awards are granted.

                           (iii) Forfeiture; Delivery of Shares. Except as
         otherwise determined by the Committee, upon termination of employment
         (as determined under criteria established by the Committee) during the
         applicable restriction period, all Shares of Restricted Stock and all
         Restricted Stock Units at such time subject to restriction shall be
         forfeited and reacquired by the Company; provided, however, that the
         Committee may, when it finds that a waiver would be in the best
         interest of the Company, waive in whole or in part any or all remaining
         restrictions with respect to Shares of Restricted Stock or Restricted
         Stock

                                       5

<PAGE>

         Units. Any Share representing Restricted Stock that is no longer
         subject to restrictions shall be delivered to the holder thereof
         promptly after the applicable restrictions lapse or are waived. Upon
         the lapse or waiver of restrictions and the restricted period relating
         to Restricted Stock Units evidencing the right to receive Shares, such
         Shares shall be issued and delivered to the holders of the Restricted
         Stock Units.

                  (e) Performance Awards. The Committee is hereby authorized to
grant Performance Awards to Participants subject to the terms of the Plan and
any applicable Award Agreement. A Performance Award granted under the Plan (i)
may be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards or other property and (ii)
shall confer on the holder thereof the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such performance
periods as the Committee shall establish. Subject to the terms of the Plan and
any applicable Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Award granted, the amount of any payment or transfer to be made
pursuant to any Performance Award and any other terms and conditions of any
Performance Award shall be determined by the Committee.

                  (f) Other Stock-Based Awards. The Committee is hereby
authorized to grant to Participants such other Awards that are denominated or
payable in, valued in whole or in part by reference to, or otherwise based on or
related to, Shares (including, without limitation, securities convertible into
Shares), as are deemed by the Committee to be consistent with the purpose of the
Plan; provided, however, that such grants must comply with applicable law.
Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the terms and conditions of such Awards. Shares or
other securities delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which may be paid by
such method or methods and in such form or forms (including without limitation,
cash, Shares, promissory notes, other securities, other Awards or other property
or any combination thereof), as the Committee shall determine, the value of
which consideration, as established by the Committee, shall not be less than
100% of the Fair Market Value of such Shares or other securities as of the date
such purchase right is granted.

                  (g) General.

                           (i) No Cash Consideration for Awards. Awards shall be
         granted for no cash consideration or for such minimal cash
         consideration as may be required by applicable law.

                            (ii) Awards May Be Granted Separately or Together.
         Awards may, in the discretion of the Committee, be granted either alone
         or in addition to, in tandem with or in substitution for any other
         Award or any award granted under any plan of the Company or any
         Affiliate other than the Plan. Awards granted in addition to or in
         tandem with other Awards or in addition to or in tandem with awards
         granted under any such other plan of the Company or any Affiliate may
         be granted either at the same time as or at a different time from the
         grant of such other Awards or awards.

                           (iii) Forms of Payment under Awards. Subject to the
         terms of the Plan and of any applicable Award Agreement, payments or
         transfers to be made by the Company or an Affiliate upon the grant,
         exercise or payment of an Award may be made in such form or forms as
         the Committee shall determine (including, without limitation, cash,
         Shares, promissory notes, other securities, other Awards or other
         property or any combination thereof), and may be made in a single
         payment or transfer, in installments or

                                       6

<PAGE>

         on a deferred basis, in each case in accordance with rules and
         procedures established by the Committee. Such rules and procedures may
         include, without limitation, provisions for the payment or crediting of
         reasonable interest on installment or deferred payments.

                           (iv) Limits on Transfer of Awards. Unless otherwise
         determined by the Committee: (a) no Award and no right under any such
         Award shall be transferable by a Participant otherwise than by will or
         by the laws of descent and distribution; provided, however, that, if so
         determined by the Committee, a Participant may, in the manner
         established by the Committee, designate a beneficiary or beneficiaries
         to exercise the rights of the Participant and receive any property
         distributable with respect to any Award upon the death of the
         Participant; (b) each Award or right under any Award shall be
         exercisable during the Participant's lifetime only by the Participant
         or, if permissible under applicable law, by the Participant's guardian
         or legal representative; and (c) no Award or right under any such Award
         may be pledged, alienated, attached or otherwise encumbered, and any
         purported pledge, alienation, attachment or encumbrance thereof shall
         be void and unenforceable against the Company or any Affiliate.

                           (v) Term of Awards. The term of each Award shall be
         for such period as may be determined by the Committee.

                           (vi) Restrictions; Securities Exchange Listing. All
         certificates for Shares or other securities delivered under the Plan
         pursuant to any Award or the exercise thereof shall be subject to such
         stop transfer orders and other restrictions as the Committee may deem
         advisable under the Plan or the rules, regulations and other
         requirements of the Securities and Exchange Commission and any
         applicable federal or state securities laws, and the Committee may
         cause a legend or legends to be placed on any such certificates to make
         appropriate reference to such restrictions. If the Shares or other
         securities are traded on a securities exchange, the Company shall not
         be required to deliver any Shares or other securities covered by an
         Award unless and until such Shares or other securities have been
         admitted for trading on such securities exchange.

Section 7. Amendment and Termination; Adjustments.
--------------------------------------------------

         Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:

                  (a) Amendments to the Plan. The Board of Directors of the
Company may amend, alter, suspend, discontinue or terminate the Plan.

                  (b) Amendments to Awards. The Committee may waive any
conditions of or rights of the Company under any outstanding Award,
prospectively or retroactively. The Committee may not amend, alter, suspend,
discontinue or terminate any outstanding Award, prospectively or retroactively,
without the consent of the Participant or holder or beneficiary thereof, except
as otherwise herein provided.

                  (c) Correction of Defects, Omissions and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.

Section 8. Income Tax Withholding.
----------------------------------

                                       7

<PAGE>

         In order to comply with all applicable federal or state income tax laws
or regulations, the Company may take such action as it deems appropriate to
ensure that all applicable federal or state payroll, withholding, income or
other taxes, which are the sole and absolute responsibility of a Participant,
are withheld or collected from such Participant. In order to assist a
Participant in paying all or a portion of the federal and state taxes to be
withheld or collected upon exercise or receipt of (or the lapse of restrictions
relating to) an Award, the Committee, in its discretion and subject to such
additional terms and conditions as it may adopt, may permit the Participant to
satisfy such tax obligation by (i) electing to have the Company withhold a
portion of the Shares otherwise to be delivered upon exercise or receipt of (or
the lapse of restrictions relating to) such Award with a Fair Market Value equal
to the amount of such taxes or (ii) delivering to the Company Shares other than
Shares issuable upon exercise or receipt of (or the lapse of restrictions
relating to) such Award with a Fair Market Value equal to the amount of such
taxes. The election, if any, must be made on or before the date that the amount
of tax to be withheld is determined.

Section 9. General Provisions.
------------------------------

                  (a) No Rights to Awards. No Eligible Person, Participant or
other Person shall have any claim to be granted any Award under the Plan, and
there is no obligation for uniformity of treatment of Eligible Persons,
Participants or holders or beneficiaries of Awards under the Plan. The terms and
conditions of Awards need not be the same with respect to any Participant or
with respect to different Participants.

                  (b) Award Agreements. No Participant will have rights under an
Award granted to such Participant unless and until an Award Agreement shall have
been duly executed on behalf of the Company.

                  (c) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

                  (d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate, nor will it affect in any way the right of the Company
or an Affiliate to terminate such employment at any time, with or without cause.
In addition, the Company or an Affiliate may at any time dismiss a Participant
from employment free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.

                  (e) Governing Law. The validity, construction and effect of
the Plan or any Award, and any rules and regulations relating to the Plan or any
Award, shall be determined in accordance with the laws of the State of
Minnesota.

                  (f) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the purpose
or intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Plan or any such Award shall
remain in full force and effect.

                                       8

<PAGE>

                  (g) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.

                  (h) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash shall be paid in lieu of any fractional Shares or whether
such fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

                  (i) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.

Section 10. Effective Date of the Plan.
---------------------------------------

         The Plan shall be effective as of April 9, 1997.

Section 11. Term of the Plan.
-----------------------------

         Unless the Plan shall have been discontinued or terminated as provided
in Section 7(a), the Plan shall terminate on April 9, 2007. No Award shall be
granted after the termination of the Plan. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award theretofore
granted may extend beyond the termination of the Plan, and the authority of the
Committee provided for hereunder with respect to the Plan and any Awards, and
the authority of the Board of Directors of the Company to amend the Plan, shall
extend beyond the termination of the Plan.

Adopted as of 4/9/97
Amended 8/18/98 (two-for-one stock split)
Amended 3/14/00 (increase in shares available)
Amended 4/10/02 (increase in shares available)

                                       9

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