SUPERVALU INC (Form: 10-K, Received: 04/25/2003 13:25:02)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended February 22, 2003

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-5418

SUPERVALU INC.

(Exact name of registrant as specified in its charter)

Delaware		41-0617000
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11840 Valley View Road Eden Prairie, Minnesota (Address of principal executive offices)		55344 (Zip Code)

Registrant’s telephone number, including area code: (952) 828-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
Common Stock, par value $1.00 per share		New York Stock Exchange
Preferred Share Purchase Rights		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨

The aggregate market value of the voting stock held by non-affiliates of the Registrant as of September 7, 2002 was approximately $2,818,177,041 (based upon the closing price of Registrant’s Common Stock on the New York Stock Exchange on September 7, 2002).

Number of shares of $1.00 par value Common Stock outstanding as of April 15, 2003: 133,783,038

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant’s definitive Proxy Statement filed for the Registrant’s 2003 Annual Meeting of Stockholders are incorporated by reference into Part III, as specifically set forth in Part III.

PART I

ITEM 1. BUSINESS

General Development

SUPERVALU is one of the largest companies in the United States grocery channel. SUPERVALU conducts its retail operations under three principal store formats: extreme value stores under the retail banners Save-A-Lot and Deal$ – Nothing Over A Dollar (Deals) general merchandise stores; regional price superstores, under such regional retail banners as Cub Foods, Shop ’n Save, Shoppers Food Warehouse, Metro and bigg’s; and regional supermarkets, under such regional retail banners as Farm Fresh, Scott’s and Hornbacher’s. SUPERVALU also provides food distribution and related logistics support services across the United States retail grocery channel. As of the close of the fiscal year, the company conducted its retail operations through 1,417 retail stores, including 783 licensed extreme value stores. In addition, as of the close of the fiscal year, the company was affiliated with 3,960 retail food stores in 48 states as the primary supplier of approximately 2,460 stores and a secondary supplier of approximately 1,500 stores.

SUPERVALU’s plans include focused retail growth through targeted new store development, licensee growth and acquisitions. During fiscal 2003, the company added 157 net new stores through new store development and acquisitions, including the acquisition of 50 Deals stores. The company’s plans also include growing its distribution operations by providing logistic and service solutions through an efficient supply chain, which will allow it to affiliate new customers, participate in the consolidation of the food distribution industry and become a logistics provider to third parties.

SUPERVALU INC., a Delaware corporation, was organized in 1925 as the successor to two wholesale grocery firms established in the 1870’s. The company’s principal executive offices are located at 11840 Valley View Road, Eden Prairie, Minnesota 55344 (Telephone: 952-828-4000). Unless the discussion in this Annual Report on Form 10-K indicates otherwise, all references to the “company,” “SUPERVALU” or “Registrant” relate to SUPERVALU INC. and its majority-owned subsidiaries.

The company makes available free of charge at its internet website ( www.supervalu.com ) its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission. Information on the company’s website is not deemed to be incorporated by reference into this Annual Report on Form 10-K.

The company will also provide its SEC filings free of charge upon written request to the Corporate Secretary, SUPERVALU INC., P.O. Box 990, Minneapolis, MN 55440.

Additional description of the company’s business is found in Part II, Item 7 of this report.

Financial Information About Reportable Segments

The company’s business is classified by management into two reportable segments: Retail food and food distribution. Retail food operations include three retail formats: extreme value stores, regional price superstores and regional supermarkets. The retail formats include results of food stores owned and results of sales to extreme value stores licensed by the company. Food distribution operations include results of sales to affiliated food stores, mass merchants and other customers, and other logistics arrangements. Management utilizes more than one measurement and multiple views of data to assess segment performance and to allocate resources to the segments. However, the dominant measurements are consistent with the consolidated financial statements. The financial information concerning the company’s operations by reportable segment for the years ended February 22, 2003, February 23, 2002 and February 24, 2001 is contained on page F-5.

Retail Food Operations

Overview . At February 22, 2003, the company conducted its retail operations through a total of 1,417 retail stores, including 783 licensed extreme value stores. Its principal retail formats include extreme value stores, regional price superstores and regional supermarkets. These diverse formats enable the company to operate in a variety of markets under widely differing competitive circumstances. In fiscal 2004, the company anticipates opening approximately 75 to 100 new extreme value stores and 8 to 12 regional banner stores and to continue its store remodeling program, including the conversion of the Baltimore-based Metro grocery store network to the Shoppers Food Warehouse banner.

Extreme Value Stores . The company operates extreme value stores under the banners of Save-A-Lot and Deals. Through the Save-A-Lot banner, the company holds the number one market position in the extreme value grocery retailing sector. In May 2002, the company acquired Deals, an extreme value general merchandise retailer. After the acquisition of Deals, Save-A-Lot introduced new combination stores that include both food and general merchandise product. During the year, the company converted or opened 35 full combination stores. Save-A-Lot food stores typically are approximately 14,000 square feet in size, and stock approximately 1,250 high volume items that focus on a single size for each product sold and 200 popular general merchandise items. At a Save-A-Lot store, the majority of the products offered for sale are custom branded products. The specifications for the Save-A-Lot custom branded product emphasize quality and characteristics that the company believes are comparable to national brands. The company’s attention to the packaging of Save-A-Lot products has resulted in the company registering a number of its custom labels.

At fiscal year end, there were 1,150 extreme value stores located in 36 states, of which 783 were licensed Save-A-Lot’s and 93 were Deals general merchandise stores, which are supplied from 15 dedicated distribution centers.

Price Superstores . The company’s price superstores hold the number one, two or three market position in most of their markets. The price superstore focus is on providing every day low prices and product selection across all departments. Most of the company’s price superstores offer traditional dry grocery departments, along with strong perishable departments. In-store pharmacies are also operated in 204 locations. Price superstores carry over 30,000 items and generally range in size from 45,000 to 100,000 square feet with an average size of approximately 63,000 square feet.

At fiscal year end, the company owned and operated 208 price superstores under the Cub Foods, Shop ’n Save, Shoppers Food Warehouse, Metro and bigg’s banners in 13 states; an additional 29 stores were franchised to independent retailers.

Supermarkets . The company’s traditional supermarket format combines a grocery store that has a variety of specialty departments that may include floral, seafood, expanded health and beauty care, video rental, cosmetics, photo finishing, delicatessen, bakery, in-store bank and a traditional drug store that includes a pharmacy. The supermarket format offers traditional dry grocery departments along with strong fresh food departments. A typical supermarket carries approximately 40,000 items and generally ranges in size from 30,000 to 65,000 square feet with an average size of approximately 50,000 square feet.

At fiscal year end, the company operated 59 supermarkets under the Farm Fresh, Scott’s and Hornbacher’s banners.

Food Distribution Operations

Overview . SUPERVALU provides logistics and service solutions to retailers for food and non-food product. At February 22, 2003, the company was affiliated with approximately 2,460 stores as their primary supplier and approximately 1,500 additional stores as a secondary supplier. SUPERVALU’s customers include

single and multiple grocery store independent operators, regional and national chains, mass merchants and the military. Such customers are located in 48 states, and range in size from small convenience stores to 200,000 square foot supercenters. During fiscal 2003, no customer accounted for more than two percent of the company’s business. The company’s supply agreement with Kmart Corporation (Kmart) terminated June 30, 2001.

Products Supplied . The company offers and supplies its distribution customers with a wide variety and selection of food and non-food products, including groceries, meats, dairy products, frozen foods, bakery, fresh fruits and vegetables, health and beauty aids, general merchandise, seasonal items and tobacco products. Such products include national and regional brands and the company’s own lines of private label products. The company has no significant long-term purchase obligations and considers that it has adequate and alternative sources of supply for most of its purchased products.

SUPERVALU offers two tiers of private label products to its customers: first quality product under such private labels as CUB, FLAVORITE, HOME BEST, IGA, RICHFOOD and VALU CHOICE; and economy product under such private labels as SHOPPERS VALUE and BI-RITE. SUPERVALU supplies private label merchandise over a broad range of products in the majority of departments in the store. These products are produced to the company’s specifications by many suppliers.

Logistics Network . The company has established a network of strategically located distribution centers utilizing a multi-tiered logistics system. The network includes facilities that carry slow turn or fast turn groceries, perishables, general merchandise and health and beauty care products. The network comprises 27 distribution facilities. The company believes that its multi-tiered distribution network increases buying scale, improves operating efficiencies and lowers cost of operations. The company is continuing to work on business initiatives that will deliver lower cost of operations. Deliveries to retail stores are made from the company’s distribution centers by company-owned trucks, third party independent trucking companies or customer-owned trucks. In addition, many types of meats, dairy products, bakery and other products purchased from the company are delivered directly by suppliers to retail stores under programs established by the company.

Trademarks

The company offers some customers the opportunity to franchise a concept or license a servicemark. This program helps the customer compete by providing, as part of the franchise or license program, a complete business concept, group advertising, private label products and other benefits. The company is the franchisor or licensor of certain servicemarks such as CUB FOODS ^® , SAVE-A-LOT ^® , COUNTY MARKET ^® , SHOP ’N SAVE ^® , NEWMARKET ^® , SUPERVALU ^® , IGA ^™ , FOODLAND ^® , SUPERVALU ^® and SUPERVALU Pharmacies ^™ . The company registers a substantial number of its trademarks/servicemarks in the United States Patent and Trademark Office, including many of its private label product trademarks and servicemarks. See “Retail Food Operations—Extreme Value Stores” and “Food Distribution Operations—Products Supplied” for further information. The company considers certain of its trademarks and servicemarks to be of material importance to its business and actively defends and enforces such trademarks and servicemarks.

Competition

The company’s retail food and food distribution businesses are highly competitive and are characterized by low profit margins. The company believes that the success of its retail food and food distribution businesses are dependent upon the ability of the company’s retail food operations, and the retail food stores with whom it is affiliated as a supplier, to compete successfully with other retail food stores in a consolidating market. Principal competition comes from local, regional and national chains operating under a variety of formats (i.e. supercenters, supermarkets, extreme value stores, membership warehouse clubs, convenience stores, various formats selling prepared foods, and specialty and discount retailers), as well as from independent food stores. The company believes that the principal competitive factors that face its owned stores, as well as the stores owned by retailers it supplies, include the location and image of the store, the price, quality and variety of products, and the quality and consistency of service.

The food distribution business competes directly with a number of food wholesalers. The company believes it competes in this supply chain on the basis of product price, quality and assortment, schedule and reliability of deliveries, the range and quality of services provided, service fees, and the location of distribution facilities.

Employees

At February 22, 2003, the company had approximately 57,400 employees. Approximately 23,300 employees are covered by collective bargaining agreements. During fiscal 2003, 10 collective bargaining agreements covering 4,100 employees were re-negotiated without any work stoppage. In fiscal 2004, 15 collective bargaining agreements covering approximately 6,650 employees will expire. The company believes that it has generally good relations with its employees.

ITEM 2. PROPERTIES

Retail Food Operations

The following table is a summary of the corporate retail stores operated by the company under its principal retail formats as of February 22, 2003:

Retail Format	Banner	Location and Number of Corporate Stores	Square Footage Owned (Approximate)	Square Footage Leased (Approximate)
ExtremeValue Stores	Save-A-Lot ¹	Alabama (2), Arizona (2), Arkansas (1), California (19), Connecticut (5), Delaware (6), Florida (72), Georgia (14), Illinois (17), Louisiana (8), Maryland (12), Massachusetts (10), Mississippi (5), Missouri (8), New Jersey (11), New York (5), Ohio (31), Pennsylvania (26), Rhode Island (3), South Carolina (3), Tennessee (5), Vermont (1), Virginia (7), Wisconsin (1)	450,000	3,860,000

	Save-A-Lot ²	California (1), Florida (1), Georgia (1), Indiana (1), Kentucky (1), Louisiana (1), Maryland (1), Michigan (1), Missouri (1), New York (1), Ohio (1), Tennessee (1), Texas (1) Wisconsin (1)	2,495,000	1,169,000

	Deals	Alabama (1), Arkansas (1), Illinois (13), Indiana (7), Iowa (3), Kansas (6), Kentucky (8), Missouri (25), Ohio (20), Oklahoma (3), Tennessee (5), West Virginia (1)	—	865,000

	Deals ³	Illinois (1)	—	510,000

Price Superstores	Cub Foods ⁴	Colorado (9), Illinois (29), Iowa (3), Minnesota (31), Wisconsin (11)	2,864,000	2,960,000

	Shop ’n Save	Illinois (14), Missouri (21), Pennsylvania (19)	471,000	2,362,000

	Shoppers Food Warehouse	Maryland (24), Virginia (19)	—	2,287,000

	Metro	Delaware (1), Maryland (16)	—	937,000

	bigg’s	Indiana (1), Kentucky (1),Ohio (9)	158,000	1,154,000

Supermarkets	Farm Fresh	Virginia (36)	30,000	1,694,000

	Hornbacher’s	Minnesota (1), North Dakota (4)	95,000	113,000

	Scott’s	Indiana (18)	293,000	680,000

Excludes 783 Save-A-Lot stores that are licensed by independent retailers.

Represents Save-A-Lot distribution centers, as Save-A-Lot is a self-distributing network.

Represents Deals distribution centers, as Deals is a self-distributing network.

⁴

Excludes 29 Cub Foods stores that are franchised by independent retailers.

The extreme value stores that are leased by the company generally have terms of 5 to 10 years plus renewal options. The price superstores and supermarkets that are leased by the company generally have terms of 15 to 25 years plus renewal options.

Food Distribution Operations

The following table is a summary of the company’s principal distribution centers and office space utilized in the company’s food distribution operations as of February 22, 2003:

Region	Location and Number of Distribution Centers	Square Footage Owned (Approximate)	Square Footage Leased (Approximate)
Central Region	Indiana (1), Ohio (1), Pennsylvania (2), West Virginia (1)	2,572,000	438,000

Midwest Region	Illinois (2), Missouri (1), Wisconsin (2)	2,420,000	1,086,000

Northern Region	Minnesota (1), North Dakota (2)	2,685,000	160,000

New England Region	Maine (1), Massachusetts (1), Rhode Island (1)	844,000	—

Northwest Region	Colorado (1), Montana (1), Washington (2)	2,449,000	124,000

Southeast Region	Alabama (2), Florida (1), Mississippi (1)	1,718,000	497,000

Eastern Region	Pennsylvania (1), Virginia (1), Maryland (1)	1,257,000	1,078,000

Additional Property

The company’s principal executive offices are located in a 180,000 square foot corporate headquarters facility located in Eden Prairie, Minnesota, a western suburb of Minneapolis, Minnesota. This headquarters facility is located on a site of 140 acres owned by the company.

Additional information on the company’s properties can be found on pages F-24 through F-26 in the Note captioned “Leases” of the company’s Notes to Consolidated Financial Statements. Management of the company believes its physical facilities and equipment are adequate for the company’s present needs and businesses.

ITEM 3. LEGAL PROCEEDINGS

In July and August 2002, several class action lawsuits were filed against the company and certain of its officers and directors in the United States District Court for the District of Minnesota on behalf of purchasers of the company’s securities between July 11, 1999 and June 26, 2002. The lawsuits have been consolidated into a single action, in which it is alleged that the company and certain of its officers and directors violated Federal securities laws by issuing materially false and misleading statements relating to its financial performance. The company believes that the lawsuit is without merit and intends to vigorously defend the action. No damages have been specified. The company is unable to evaluate the likelihood of prevailing in the case at this stage of the proceedings.

The company is a party to various other legal proceedings arising from the normal course of business activities, none of which, in management’s opinion, is expected to have a material adverse impact on the company’s consolidated statement of earnings or consolidated financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There was no matter submitted during the fourth quarter of fiscal year 2003 to a vote of the security holders of the Registrant.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table provides certain information concerning the executive officers of the company as of April 15, 2003.

Name	Age	Present Position	Year Elected to Present Position	Other Positions Recently Held With the company
Jeffrey Noddle	56	Chairman of the Board of Directors, Chief Executive Officer and President	2002	Director, Chief Executive Officer and President, 2001-2002; Director, President and Chief Operating Officer, 2000-2001; Executive Vice President; President and Chief Operating Officer, Wholesale Food Companies, 1995-2000

David L. Boehnen	56	Executive Vice President	1997

John H. Hooley	51	Executive Vice President; President and Chief Operating Officer, Retail Foods	2002	Senior Vice President; President and Chief Executive Officer, Cub Foods, 2000-2002; Vice President; President and Chief Executive Officer, Cub Foods, 1992-1999

Michael L. Jackson	49	Executive Vice President; President and Chief Operating Officer, Distribution	2001	Senior Vice President, Retail Food Companies, 1999-2001; President, Northwest Region, 1995-1999

Pamela K. Knous	49	Executive Vice President and Chief Financial Officer	1997

Robert W. Borlik	54	Senior Vice President, Chief Information Officer	1999

J. Andrew Herring	44	Senior Vice President; Executive Vice President, Retail Pharmacies	2002	Senior Vice President, Corporate Development 1999-2002; Vice President, Corporate Development and External Relations, 1998-1999

Gregory C. Heying	54	Senior Vice President, Distribution	1994

Sherry M. Smith	41	Senior Vice President, Finance and Treasurer	2002	Vice President, Corporate Controller, 1998-2002

Ronald C. Tortelli	56	Senior Vice President, Human Resources	1988

Leland J. Dake	46	Vice President, Merchandising, Distribution Food Companies	1998

Stephen P. Kilgriff	61	Vice President, Legal Services	2000	Associate General Counsel, 1996-2000

The term of office of each executive officer is from one annual meeting of the directors until the next annual meeting of directors or until a successor for each is elected. There are no arrangements or understandings between any of the executive officers of the company and any other person pursuant to which any of the executive officers were selected as an officer of the company. There are no family relationships between or among any of the executive officers of the company.

Each of the executive officers of the company has been in the employ of the company or its subsidiaries for more than five consecutive years, except for Robert W. Borlik and John H. Hooley.

Mr. Borlik was elected to his current position in April 1999. From 1995 to March 1999, he was Vice President, Information Services, of Northwest Airlines, Inc., an air transportation company and subsidiary of Northwest Airlines Corporation.

Mr. Hooley was elected to his current position in April 2002. From November 2000 to April 2002, he was Senior Vice President and President and Chief Executive Officer, Cub Foods. From February 2000 to September 2000, he was Executive Vice President of Partner Alliances, 24K.com, a loyalty marketing company and affiliate of the Carlson Companies, Inc. From November 1992 to September 1999, he was President and Chief Executive Officer of Cub Foods.

DIRECTORS OF THE REGISTRANT

The following table provides certain information concerning the directors of the company as of April 15, 2003.

Name	Age	Present Position With the Company and Committees of the Board	Professional Background

Lawrence A. Del Santo	69	Director since 1997 Director Affairs Committee Chairman Executive Personnel and Compensation Committee	Retired Chief Executive Officer of The Vons Companies (a retail grocery company), 1994-1997 Director of PETsMART, Inc.

Susan E. Engel	56	Director since 1999 Audit Committee Executive Personnel and Compensation Committee	Chairwoman of the Board and Chief Executive Officer of Department 56, Inc. (a designer, importer and distributor of fine quality collectibles and other giftware products), 1997-present Director of Wells Fargo & Company

Edwin C. Gage	62	Director since 1986 Director Affairs Committee Executive Personnel and Compensation Committee, Chairman	Chairman and Chief Executive Officer of GAGE Marketing Group, L.L.C. (an integrated marketing services company), 1991–present Director of AHL Services, Inc.

William A. Hodder	71	Director since 1990* Director Affairs Committee Executive Personnel and Compensation Committee	Retired Chief Executive Officer of Donaldson Company, Inc. (a manufacturer of filtration devises), 1982-1996

Garnett L. Keith, Jr.	67	Director since 1984 Audit Committee, Chairman Finance Committee	Chairman and Chief Executive Officer of SeaBridge Investment Advisors, LLC (a registered investment advisor), 1996-present Director of Whitecap Capital LLC, Pan-Holding Societe Anonyme and Phillippe Investment Management

Richard L. Knowlton	70	Director since 1994 Director Affairs Committee Executive Personnel and Compensation Committee	Chairman of the Hormel Foundation (a charitable foundation controlling 46.2% of Hormel Foods Corporation), 1995-present Director of ING America Insurance Holdings, Inc.

Name	Age	Present Position With the Company and Committees of the Board	Professional Background

Charles M. Lillis	61	Director since 1995 Audit Committee Finance Committee, Chairman	General Partner, LoneTree Capital Management (a private equity company), 2000-present Chairman, President and Chief Executive Officer of MediaOne Group, Inc. (a broadband communications company), 1998-2000 Director of Williams Companies, Inc.

Jeffrey Noddle	56	Director since 2000 Chairman of the Board, Chief Executive Officer and President of the Company, 2002-present Finance Committee	See table “Executive Officers of the Registrant” above. Director of Donaldson Company, Inc. and General Cable Corporation

Harriet Perlmutter	71	Director since 1978 Audit Committee Finance Committee	Trustee of the Papermill Playhouse (the State Theatre of New Jersey)

Steven S. Rogers	45	Director since 1998 Audit Committee Finance Committee	Clinical Professor of Finance and Management at J.L. Kellogg Graduate School of Management at Northwestern University, 1995-present Director of DQE, Inc. and S.C. Johnson & Son, Inc.

Irwin Cohen	62	Nominee for Director	Global Managing Partner of the Consumer Products, Retail and Services Practice of Deloitte & Touche (a professional services firm, providing accounting, tax, and consulting services), 1997-present Director of Phoenix House Foundation (the largest drug rehabilitation and education organization in the U.S.)

In accordance with Board policies, Mr. Hodder is retiring from the Board of Directors on May 29, 2003.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED

STOCKHOLDER MATTERS

The company’s common stock is listed on the New York Stock Exchange under the symbol SVU. As of April 15, 2003, there were 133,783,038 shares of common stock outstanding. At that date, there were 7,038 stockholders of record, excluding individual participants in security position listings. The information called for by Item 5 as to the sales price for the company’s common stock on a quarterly basis during the last two fiscal years and dividend information is found under the heading “Common Stock Price” in Part II, Item 7 below.

During the fiscal year ended February 22, 2003, the company issued 13,000 shares of unregistered restricted common stock as stock bonuses to certain employees. The issuance of such shares did not constitute a “sale” within the meaning of Section 2(3) of the Securities Act of 1933, as amended.

ITEM 6. SELECTED FINANCIAL DATA

The information called for by Item 6 is found within the Five Year Financial and Operating Summary on page F-2.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

In fiscal 2003, the company achieved net sales of $19.2 billion compared to $20.3 billion in fiscal 2002. Net earnings for fiscal 2003 were $257.0 million, and diluted earnings per share were $1.91.

In fiscal 2002, the company achieved net sales of $20.3 billion compared to $22.5 billion in fiscal 2001. Net earnings for fiscal 2002 were $198.3 million, and diluted earnings per share were $1.48.

Highlights of results of operations as reported were as follows:

	February 22, 2003 (52 weeks)					February 23, 2002 (52 weeks)					February 24, 2001 (52 weeks)
	(In millions)
Net sales	$	19,160.4		100.0	%	$	20,293.0		100.0	%	$	22,520.4		100.0	%
Cost of sales		16,567.4		86.5			17,704.2		87.2			19,976.4		88.7
Selling and administrative expenses		2,020.2		10.5			2,037.7		10.1			2,042.3		9.1
Restructure and other charges		2.9		—			46.3		0.2			171.3		0.8

Operating earnings		569.9		3.0			504.8		2.5			330.4		1.4
Interest expense		182.5		1.0			194.3		1.0			212.9		0.9
Interest income		(20.6	)	(0.1	)		(21.5	)	(0.1	)		(22.1	)	(0.1	)

Earnings before income taxes		408.0		2.1			332.0		1.6			139.6		0.6
Income tax expense		151.0		0.8			133.7		0.6			66.7		0.3

Net earnings	$	257.0		1.3	%	$	198.3		1.0	%	$	72.9		0.3	%

In fiscal 2003, the company adopted Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”, which required it to cease amortizing goodwill and test annually for impairment. Goodwill amortization of $48.4 million and $49.4 million were included in fiscal 2002 and fiscal 2001, respectively. Commencing with the fourth quarter of fiscal 2003, previously reported net sales and cost of sales for all prior periods have been revised by reclassifying cost of sales against net sales relating to certain facilitative services it provided between its independent retailers and vendors related to products typically known as Direct Store Delivery (DSD) products. For additional information, please see the note on Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements.

Comparison of fifty-two weeks ended February 22, 2003 (2003) with fifty-two weeks ended February 23, 2002 (2002):

Net Sales

Net sales for 2003 were $19.2 billion, a decrease of 5.6 percent from 2002. Retail food sales were 51.4 percent of net sales for 2003 compared with 47.1 percent for 2002. Food distribution sales were 48.6 percent of net sales for 2003 compared with 52.9 percent for 2002.

Retail food sales for 2003 increased 3.1 percent compared to 2002, primarily as a result of new store growth. Same-store retail sales for 2003 were negative 1.1 percent, impacted by approximately 1.2 percent in cannibalization within key expansion markets. Cannibalization is defined as the negative sales impact the opening of a new store has on an existing store in the same market. As the company adds new stores to major existing markets, it experiences cannibalization. Other factors contributing to the decline in same store sales performance include a weakened economy and a more intense promotional environment.

Fiscal 2003 store activity, including licensed units, resulted in 198 new stores opened and acquired, including the May 2002 acquisition of 50 Deals stores, and 41 stores closed or sold for a total of 1,417 stores at year end. Total square footage increased approximately 6.6 percent over the prior year.

Food distribution sales for 2003 decreased 13.3 percent compared to 2002, reflecting lost customer sales including the exit of the Kmart supply contract, which terminated June 30, 2001, the loss of Genuardi’s as a customer and restructure activities, which accounted for approximately eight percent, three percent and one percent, respectively, of the decrease in food distribution sales.

Gross Profit

Gross profit (calculated as net sales less cost of sales), as a percentage of net sales, was 13.5 percent for 2003 compared to 12.8 percent for 2002. The increase in gross profit, as a percentage of net sales, reflects the growing proportion of the company’s retail food business, which operates at a higher gross profit margin as a percentage of net sales than does the food distribution business, including the higher gross profit margin of the recently acquired and opened Deals stores. Gross profit in retail benefited from improved merchandising execution. Gross profit in distribution was negatively impacted by a change in our distribution customer mix.

Selling and Administrative Expenses

Selling and administrative expenses, as a percentage of net sales, were 10.5 percent for 2003 compared to 10.1 percent for 2002. Selling and administrative expenses include $12.5 million in store closing reserves recorded in the fourth quarter 2002. Fiscal 2002 also includes goodwill amortization of $48.4 million. The increase in selling and administrative expenses, as a percentage of net sales, reflects the growing proportion of the company’s retail food business, which operates at a higher selling and administrative expense as a percentage of net sales than does the food distribution business, including the higher selling and administrative expense ratio of the recently acquired and opened Deals stores.

Operating Earnings

The company’s operating earnings were $569.9 million for 2003 compared to $504.8 million for 2002, a 12.9 percent increase. Fiscal 2003 operating earnings include $2.9 million for restructure and other charges. Fiscal 2002 operating earnings include $46.3 million for restructure and other charges and $12.5 million in store closing reserves recorded in the fourth quarter. Retail food 2003 operating earnings increased 20.2 percent to $436.5 million, or 4.4 percent of net sales, from 2002 operating earnings of $363.3 million, or 3.8 percent of net sales. Fiscal 2002 retail food operating earnings include goodwill amortization of $25.3 million. The remaining increase in retail food operating earnings was primarily due to growth of new stores and improved merchandising execution in retail. Food distribution 2003 operating earnings decreased 24.4 percent to $171.6 million, or 1.8 percent of net sales, from 2002 operating earnings of $227.0 million, or 2.1 percent of net sales. Fiscal 2002 food distribution operating earnings included goodwill amortization of $23.1 million. The decrease in food distribution operating earnings primarily reflects the decrease in sales volume and a change in our distribution customer mix.

Net Interest Expense

Interest expense decreased to $182.5 million in 2003 compared with $194.3 million in 2002, reflecting lower borrowing levels and lower average interest rates, largely due to the interest rate swap agreements entered into in the first quarter of fiscal 2003. Interest income decreased to $20.6 million in 2003 compared with $21.5 million in 2002.

Income Taxes

The effective tax rate was 37.0 percent in 2003 compared with 40.3 percent in 2002. The decrease in the effective tax rate was due to the discontinuation of goodwill amortization as of February 24, 2002, which is not deductible for income tax purposes.

Net Earnings

Net earnings were $257.0 million, or $1.91 per diluted share, in 2003 compared with net earnings of $198.3 million, or $1.48 per diluted share in 2002.

Weighted average diluted shares increased to 134.9 million in 2003 compared with 2002 weighted average diluted shares of 134.0 million, reflecting the net impact of stock option activity and shares repurchased under the treasury stock program.

Comparison of fifty-two weeks ended February 23, 2002 (2002) with fifty-two weeks ended February 24, 2001 (2001):

Net Sales

Net sales for 2002 were $20.3 billion, a decrease of 9.9 percent from 2001. Retail food sales were 47.1 percent of net sales for 2002 compared with 41.5 percent for 2001. Food distribution sales were 52.9 percent of net sales for 2002 compared with 58.5 percent for 2001.

Retail food sales for 2002 increased 2.1 percent compared to 2001, primarily as a result of new store growth. Same-store sales for 2002 were positive 0.2 percent reflecting the soft economy, competitor activities and cannibalization in certain markets. Cannibalization is defined as the negative sales impact the opening of a new store has on an existing store in the same market. As the company adds new stores to major existing markets, it experiences cannibalization.

Fiscal 2002 store activity, including licensed units, resulted in 115 new stores opened and 49 stores closed or sold for a total of 1,260 stores at year end. Total square footage increased approximately 6.7 percent over the prior year.

Food distribution sales for 2002 decreased 18.4 percent compared to 2001, reflecting lost customer sales, including the exit of the Kmart supply contract, which terminated June 30, 2001. The exit of the Kmart supply contract accounted for approximately 68 percent of the decrease and restructure activities accounted for approximately 13 percent of the decrease.

Gross Profit

Gross profit (calculated as net sales less cost of sales), as a percentage of net sales, was 12.8 percent for 2002 compared to 11.3 percent for 2001. The increase in gross profit, as a percentage of net sales, was primarily due to the growing proportion of the company’s retail food business, which operates at a higher gross profit margin as a percentage of net sales than does the food distribution business and improved merchandising execution in retail. In 2001, gross profit includes $17.1 million in cost of sales for inventory markdowns related to restructure activities.

Selling and Administrative Expenses

Selling and administrative expenses, as a percentage of net sales, were 10.1 percent for 2002 compared to 9.1 percent for 2001. Selling and administrative expenses include $12.5 million in store closing reserves recorded in the fourth quarter 2002 and $51.7 million primarily for store closing reserves and provisions for certain uncollectible receivables recorded in 2001. The company acquired Richfood Holdings, Inc. (Richfood) in fiscal 2000. During fiscal 2001, the financial condition of two of Richfood’s larger customers deteriorated and exposed the company to increased potential for loss. Therefore, the company established additional provisions for losses on receivables as the deterioration occurred.

The increase in selling and administrative expenses, as a percentage of net sales, is primarily due to the growing proportion of the company’s retail food business, which operates at a higher selling and administrative expense as a percentage of net sales than does the food distribution business and increases in closed property reserves substantially offset by gains on sales of disposed properties.

Operating Earnings

The company’s operating earnings were $504.8 million for fiscal 2002 compared to $330.4 million for 2001, a 52.8 percent increase. Fiscal 2002 operating earnings include $46.3 million for restructure and other charges and $12.5 million in store closing reserves recorded in the fourth quarter. Fiscal 2001 operating earnings include $171.3 million for restructure and other charges and $68.8 million primarily for store closing reserves and provisions for certain uncollectible receivables. Retail food 2002 operating earnings increased 26.8 percent to $363.3 million, or 3.8 percent of net sales, from 2001 operating earnings of $286.5 million, or 3.1 percent of net sales primarily due to growth of new stores and improved merchandising execution in retail. Food distribution 2002 operating earnings decreased 9.6 percent to $227.0 million, or 2.1 percent of net sales, from 2001 operating earnings of $251.0 million, or 1.9 percent of sales, reflecting a decrease in sales volume, primarily due to the exit of the Kmart supply contract.

Net Interest Expense

Interest expense decreased to $194.3 million in 2002, compared with $212.9 million in 2001, reflecting lower borrowing levels and lower average interest rates. Interest income decreased to $21.5 million in 2002 compared with $22.1 million in 2001.

Income Taxes

The effective tax rate was 40.3 percent in 2002 compared with 47.8 percent in 2001. The 2001 effective tax rate includes the impact of restructure and other charges.

Net Earnings

Net earnings were $198.3 million, or $1.48 per diluted share, in 2002 compared with net earnings of $72.9 million, or $0.55 per diluted share in 2001.

Weighted average diluted shares increased to 134.0 million in 2002 compared with 2001 weighted average diluted shares of 132.8 million, reflecting the net impact of stock option activity and shares repurchased under the treasury stock program.

RESTRUCTURE AND OTHER CHARGES

In the fourth quarter of fiscal 2003, the company recognized pre-tax restructure and other charges of $2.9 million reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings primarily due to continued softening of real estate in certain markets. The charges represent the net adjustment for changes in estimates related to prior years’ restructure reserves and asset impairment charges, including a decrease of $3.6 million to restructure 2002, a net increase of $8.1 million to restructure 2001 and a net decrease of $1.6 million to restructure 2000.

Restructure 2002

In the fourth quarter of fiscal 2002, the company identified additional efforts that would allow it to extend its distribution efficiency program that began early in fiscal 2001. The additional distribution efficiency initiatives identified resulted in pre-tax restructure charges of $16.3 million, primarily related to personnel reductions in administrative and transportation functions. Management began the initiatives in fiscal 2003 and the majority of these actions were completed by the end of fiscal 2003.

In the fourth quarter of fiscal 2003, the fiscal 2002 restructure charges were decreased by $3.6 million, including a decrease of $1.4 million due to lower than anticipated lease related costs in transportation efficiency initiatives and a decrease of $2.2 million in employee related costs due to lower than anticipated severance costs.

Remaining reserves for the fiscal 2002 restructure plan represent future lease payments as well as unpaid severance and employee related costs. Details of the fiscal 2002 restructure activity for fiscal 2003 are as follows:

	Balance February 23, 2002		Fiscal 2003 Usage			Fiscal 2003 Adjustment			Balance February 22, 2003
	(In thousands)
Lease related costs:
Transportation efficiency initiatives	$	3,235	$	(757	)	$	(1,424	)	$	1,054

		3,235		(757	)		(1,424	)		1,054
Employee related costs:
Administrative realignment		8,000		(4,186	)		(1,424	)		2,390
Transportation efficiency initiatives		5,065		(4,294	)		(771	)		—

		13,065		(8,480	)		(2,195	)		2,390


Total restructure and other charges	$	16,300	$	(9,237	)	$	(3,619	)	$	3,444

Details of the fiscal 2002 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Prior Year	Balance February 23, 2002	Employees Terminated in Fiscal 2003		Balance February 22, 2003

Employees	800	—	800	(650	)	150

Restructure 2001

In the fourth quarter of fiscal 2001, the company completed a strategic review that identified certain assets that did not meet return objectives, provide long-term strategic opportunities or justify additional capital investments. This review process culminated in the company recording pre-tax restructure and other charges of $181.6 million, including $89.7 million for asset impairment charges, $52.1 million for lease subsidies, lease cancellation fees, future payments on exited real estate and guarantee obligations and $39.8 million for severance and employee related costs.

In the fourth quarter of fiscal 2002, the fiscal 2001 restructure and other charges were increased by $17.8 million as a result of changes in estimates primarily due to the softening real estate market, including $19.1 million for increased lease liabilities in exiting the non-core retail markets and the disposal of non-core assets, offset by a net decrease of $1.3 million in restructure reserves for the consolidation of distribution centers.

In the fourth quarter of fiscal 2003, the fiscal 2001 restructure and other charges were increased by $8.1 million, including an $11.7 million increase to the restructure reserves offset by a decrease in asset impairment charges of $3.6 million. The reserve increase of $11.7 million was a result of changes in estimates on exited real estate primarily due to the continued softening of real estate marketed for sublease in certain markets, including approximately $5 million relating to the consolidation of distribution centers and approximately $6 million relating to the exit of non-core retail markets and $1.2 million in higher than anticipated employee related costs primarily in the exit of non-core retail markets.

Included in the asset impairment charges in fiscal 2001 of $89.7 million were $57.4 million of charges related to retail food properties and $32.3 million of charges related to food distribution properties. Writedowns for property, plant and equipment, goodwill and other intangibles, and other assets were $58.4 million, $21.8 million and $9.5 million, respectively, and were reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings for fiscal 2001. In the fourth quarter of fiscal 2003, the fiscal 2001 asset impairment charges for property, plant and equipment were decreased by $3.6 million primarily due to changes

in estimates on exited real estate in certain markets and includes a decrease of $8.2 million in estimates related to certain food distribution properties offset by an increase of $4.6 million in estimates related to certain retail food properties. The impairment charges reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

All activity for the fiscal 2001 restructure plan has been completed. Remaining reserves represent future payments on exited real estate and unpaid employee benefits. Details of the fiscal 2001 restructure activity for fiscal 2003 are as follows:

	Balance February 23, 2002		Fiscal 2003 Usage			Fiscal 2003 Adjustment			Balance February 22, 2003
	(In thousands)

Lease related costs:

Consolidation of distribution centers	$	8,080	$	(6,852	)	$	5,245		$	6,473

Exit of non-core retail markets		15,969		(13,485	)		6,360			8,844

Disposal of non-core assets and other administrative reductions		7,194		(1,783	)		(1,112	)		4,299


		31,243		(22,120	)		10,493			19,616

Employee related costs:

Consolidation of distribution centers		17,982		(7,917	)		(461	)		9,604

Exit of non-core retail markets		6,172		(4,615	)		1,423			2,980

Disposal of non-core assets and other administrative reductions		554		(779	)		225			—


		24,708		(13,311	)		1,187			12,584


Total restructure and other charges	$	55,951	$	(35,431	)	$	11,680		$	32,200


	Previously Recorded					Fiscal 2003 Adjustment			February 22, 2003

Impairment charges	$	89,742				$	(3,573	)	$	86,169

The number of actual employees terminated under the fiscal 2001 restructure plan was adjusted to a lower number than originally expected primarily due to higher than anticipated voluntary attrition. Details of the fiscal 2001 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Prior Years		Adjustments in Prior Years		Balance February 23, 2002	Employees Terminated in Fiscal 2003		Adjustment		Balance February 22, 2003

Employees	4,500	(3,200	)	(550	)	750	(567	)	(183	)	—

Restructure 2000

In fiscal 2000, the company recorded pre-tax restructure and other charges of $103.6 million as a result of an extensive review to reduce costs and enhance efficiencies. Included in this total was $17.4 million for asset impairment costs. The restructure and other charges include costs for facility consolidation, non-core store disposal, and rationalization of redundant and certain decentralized administrative functions. The original reserve amount was reduced by $10.3 million in fiscal 2001, primarily as a result of a change in estimate for the closure of a remaining facility. The reserve amount was subsequently increased $12.2 million in fiscal 2002, due to a change in estimate on a remaining facility primarily due to the softening real estate market.

charges of $4.5 million. The reserve increase of $2.9 million was a result of changes in estimates on exited real estate primarily due to the continued softening of real estate marketed for sublease in certain markets and higher than anticipated employee related costs.

Included in the asset impairment charges in fiscal 2000 of $17.4 million were writedowns on food distribution assets of $10.6 million for property, plant and equipment, $5.6 million for goodwill and other intangibles and $1.2 million for other assets that were reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings for fiscal 2000. In the fourth quarter of fiscal 2003, the fiscal 2000 asset impairment charges for property, plant and equipment on food distribution properties were decreased by $4.5 million primarily due to changes in estimates on exited real estate in certain markets. The impairment charges reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

All activity for the fiscal 2000 restructure plan has been completed. Remaining reserves represent future payments on exited real estate. Details of the fiscal 2000 restructure activity for fiscal 2003 are as follows:

	Balance February 23, 2002		Fiscal 2003 Usage			Fiscal 2003 Adjustment			Balance February 22, 2003
	(In thousands)

Lease related costs:

Facility consolidation	$	10,300	$	(3,713	)	$	1,496		$	8,083

Non-core store disposal		4,611		(1,818	)		249			3,042


		14,911		(5,531	)		1,745			11,125

Employee related costs:

Facility consolidation		2,938		(3,866	)		928			—

Infrastructure realignment		142		(363	)		221			—


		3,080		(4,229	)		1,149			—


Total restructure and other charges	$	17,991	$	(9,760	)	$	2,894		$	11,125


	Previously Recorded					Fiscal 2003 Adjustment			February 22, 2003

Impairment charges	$	17,430				$	(4,466	)	$	12,964

The number of actual employees terminated under the fiscal 2000 restructure plan was adjusted to a lower number than originally expected primarily due to higher than anticipated voluntary attrition. There was no activity in fiscal 2003. Details of the fiscal 2000 restructure activity as it relates to employees are as follows:

	Original Estimate	Employees Terminated in Prior Years		Adjustments in Prior Years		Balance February 23, 2002

Employees	2,517	(1,693	)	(824	)	—

Fiscal 2003 net cash outflows relating to all restructure plans was approximately $30 million. The company anticipates approximately $7 million of net cash inflows in fiscal 2004 for all restructure plans. As of fiscal year end 2003, remaining future net cash outflows of all restructure plans is estimated at approximately $16 million. These amounts primarily relate to expected net future payments on exited real estate and employee related costs, net of after-tax proceeds from the sale of owned properties. Cash outflows will be funded by cash from operations. Fiscal 2003 net earnings include $.06 per diluted share of after-tax benefit as a result of the restructure plans.

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant accounting policies are discussed in the Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements. Management believes the following critical accounting policies reflect its more subjective or complex judgments and estimates used in the preparation of the company’s consolidated financial statements.

LIFO and Retail Inventory Method

For a significant portion of the company’s inventory, cost is determined through use of the last-in, first-out (LIFO) method for food distribution or the retail LIFO method, as applicable. Under the retail LIFO method, otherwise referred to as the retail inventory method (RIM), the valuation of inventories are at cost and the resulting gross margins are calculated by applying a calculated cost-to-retail ratio to the retail value of inventories. RIM is an averaging method that has been widely used in the retail industry due to its practicality.

Inherent in the RIM calculations are certain significant management judgments and estimates, including shrinkage, which significantly impact the ending inventory valuation at cost, as well as the resulting gross margins. These judgments and estimates, coupled with the fact that the RIM is an averaging process, can, under certain circumstances, produce results which differ from actual. Management believes that the company’s RIM provides an inventory valuation which reasonably approximates cost and results in carrying inventory at the lower of cost or market.

Allowances for Losses on Receivables

Management makes estimates of the uncollectibility of its accounts and notes receivable portfolios. In determining the adequacy of the allowances, management analyzes the value of the collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. Although risk management practices and methodologies are utilized to determine the adequacy of the allowance, it is possible that the accuracy of the estimation process could be materially impacted by different judgments as to collectibility based on the information considered and further deterioration of accounts.

Reserves for Closed Properties and Asset Impairment

The company maintains reserves for estimated losses on retail stores, distribution warehouses and other properties that are no longer being utilized in current operations. Calculating the estimated losses requires significant judgments and estimates to be made by management. The company’s reserves for closed properties could be materially affected by factors such as the extent of interested buyers, its ability to secure subleases, the creditworthiness of sublessees and the company’s success at negotiating early termination agreements with lessors. These factors are significantly dependent on the general health of the economy and resultant demand for commercial property. While management believes the current estimates of reserves on closed properties are adequate, it is possible that continued weakness in the real estate market could cause changes in the company’s assumptions and may require additional reserves to be recorded.

Impairment charges of long-lived assets are recognized when expected net future cash flows are less than the assets’ carrying value. The company estimates net future cash flows based on its experience and knowledge of the market in which the closed property is located and, when necessary, utilizes local real estate brokers. It is management’s intention to dispose of properties or sublease within one year; however, the expectations on timing of disposition or sublease and the estimated sales price or sublease income are impacted by variable factors such as inflation, the general health of the economy and resultant demand for commercial property and may require additional reserves to be recorded.

Reserves for Self Insurance

The company is primarily self-insured for workers’ compensation and general and automobile liability costs. It is the company’s policy to record its self-insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported, discounted at a risk free interest rate. Any projection of losses concerning workers’ compensation and general and automobile liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns. A 100 basis point change in discount rates, based on changes in market rates would increase the company’s liability by approximately $1.0 million.

Retirement Plans

The company sponsors pension and other retirement plans in various forms covering substantially all employees who meet eligibility requirements. The determination of the company’s obligation and expense for pension and other post retirement benefits is dependent, in part, on management’s selection of certain assumptions used by its actuaries in calculating these amounts. These assumptions include, among other things, the discount rate, the expected long-term rate of return on plan assets and the rates of increase in compensation and health care costs. In accordance with generally accepted accounting principles, actual results that differ from the company’s assumptions are accumulated and amortized over future periods and, therefore, affect its recognized expense and recorded obligation in such future periods. While the company believes that its assumptions are appropriate, significant differences in actual experience or significant changes in assumptions may materially impact pension and other post retirement obligations and future expenses.

In the fourth quarter of fiscal 2003, the company lowered its expected return on plan assets used for fiscal 2003 pension expense by 75 basis points to 9.25 percent and by an additional 25 basis points to 9.0 percent for fiscal 2004 pension expense. The company also lowered its discount rate by 25 basis points to 7.0 percent for fiscal 2004 pension expense. For fiscal 2004, when not considering other changes in assumptions, the impact to pension expense of each 25 basis point reduction in the discount rate is to increase pension expense by approximately $3 million and the impact of each 25 basis point reduction in expected return on plan assets is to increase pension expense by approximately $1 million.

The assumed health care cost trend rate used in measuring the accumulated post retirement benefit obligation was 9.0 percent in fiscal 2003. The assumed health care cost trend rate will decrease by one percent each year for the next four years until it reaches the ultimate trend rate of 5.0 percent. The health care cost trend rate assumption has a significant impact on the amounts reported. For example, a one percent increase in the trend rate would increase the accumulated postretirement benefit obligation by $6.7 million and the net periodic cost by $0.5 million in fiscal 2003. In contrast, a one percent decrease in the trend rate would decrease the accumulated post retirement benefit obligation by $6.3 million and the net periodic cost by $0.5 million in fiscal 2003. The weighted average discount rates used in determining the benefit obligation were 7.0% and 7.25% for fiscal 2003 and 2002, respectively.

Goodwill

Management assesses the valuation of goodwill for each of the company’s reporting units on an annual basis through the comparison of the fair value of the respective reporting unit with its carrying value. Fair value is determined primarily based on valuation studies performed by the company, which consider the discounted cash flow method consistent with the company’s valuation guidelines. Valuation analysis requires significant judgments and estimates to be made by management. The company’s estimates could be materially impacted by factors such as competitive forces, customer behaviors, changes in growth trends and specific industry conditions.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $573.6 million, $692.5 million and $611.8 million in fiscal 2003, 2002 and 2001, respectively. The decrease in cash from operating activities in fiscal 2003 from fiscal 2002 is primarily related to changes in deferred taxes resulting from the minimum pension liability in fiscal 2003 and restructure activities in fiscal 2002.

Net cash used in investing activities was $320.7 million, $224.7 million and $357.2 million in fiscal 2003, 2002, and 2001, respectively. Fiscal 2003 investing activities primarily reflect capital spending to fund retail store expansion, including the acquisition of Deals stores, distribution maintenance capital and technology enhancements. Fiscal 2002 investing activities primarily reflect retail expansion, distribution maintenance capital and technology enhancements.

Net cash used in financing activities was $235.9 million, $466.1 million and $255.1 million in fiscal 2003, 2002 and 2001, respectively. Fiscal 2003 financing activities include the issuance of the $300.0 million 10 year 7.5% Senior Notes, completed in May 2002, the redemption of $173.0 million of the company’s 9.75% Senior Notes due fiscal 2005 at the redemption price of 102.4375% of the principal amount of the Senior Notes, plus accrued and unpaid interest, and retirement of the $300.0 million 7.8% bonds that matured in November of 2002 using cash on hand and funds available through its existing credit facilities. Fiscal 2002 financing activities include the issuance of zero-coupon convertible debentures with a yield of 4.5 percent. The proceeds from the offering, net of approximately $5.0 million of expenses, were $208.0 million and were initially used to pay down notes payable and were later used to retire a portion of the $300.0 million in debt that matured in November 2002.

Management expects that the company will continue to replenish operating assets with internally generated funds. There can be no assurance, however, that the company’s business will continue to generate cash flow at current levels. The company will continue to obtain short-term financing from its revolving credit agreement with various financial institutions, as well as through its accounts receivable securitization program. Long-term financing will be maintained through existing and new debt issuances. The company’s short-term and long-term financing abilities are believed to be adequate as a supplement to internally generated cash flows to fund its capital expenditures and acquisitions as opportunities arise. Maturities of debt issued will depend on management’s views with respect to the relative attractiveness of interest rates at the time of issuance and other debt maturities.

In April 2002, the company finalized a new three-year, unsecured $650.0 million revolving credit agreement with rates tied to LIBOR plus 0.650 to 1.400 percent, based on the company’s credit ratings. The agreement contains various financial covenants including ratios for fixed charge interest coverage, asset coverage and debt leverage, in addition to a minimum net worth covenant. This credit facility replaced the company’s $300.0 million and $400.0 million credit facilities, which had expiration dates in August and October of 2002, respectively. The company had no outstanding borrowings under this credit facility at February 22, 2003 and February 23, 2002. As of February 22, 2003, letters of credit outstanding under the credit facility were $129.0 million and the unused available credit under the facility was $521.0 million.

In May 2002, the company completed the issuance of the $300.0 million 10-year 7.50% Senior Notes. A portion of the proceeds was used to redeem the company’s 9.75% Senior Notes due fiscal 2005 on June 17, 2002. In November 2002, the company retired its $300.0 million 7.80% note that matured in November 2002.

expenses, were $208.0 million and were initially used to pay down notes payable and were later used to retire a portion of the $300.0 million in debt that matured in November 2002. The debentures mature in 30 years and are callable at the company’s option on or after October 1, 2006. Holders may require the company to purchase all or a portion of their debentures on October 1, 2003, October 1, 2006 or October 1, 2011 at a purchase price equal to the accreted value of the debentures, which includes accrued and unpaid cash interest. If the option is exercised, the company has the choice of paying the holder in cash, common stock or a combination of the two. The debentures will generally be convertible if the closing price of the company’s common stock on the New York Stock Exchange for twenty of the last thirty trading days of any fiscal quarter exceeds certain levels, at $35.07 per share for the quarter ended June 14, 2003, and rising to $113.29 per share at September 6, 2031. In the event of conversion, 9.6434 shares of the company’s common stock will be issued per $1,000 debenture. The debentures have an initial yield to maturity of 4.5%, which is being accreted over the life of the debentures using the effective interest method. The company may pay contingent cash interest for the six-month period commencing November 3, 2006 and for any six-month period thereafter if the average market price of the debentures for a five trading day measurement period preceding the applicable six-month period equals 120% or more of the sum of the issue price and accrued original issue discount for the debentures. The debentures are classified as long-term debt based on the company’s ability and intent to refinance the obligation with long-term debt if the company is required to repurchase the debentures.

The company is party to synthetic leasing programs for two of its major warehouses. The leases expire in April 2003 and September 2004. As of April 2003, the company has refinanced the lease that is expiring in fiscal 2004 with a new synthetic lease expiring in April 2008 including a purchase option of approximately $60 million. The lease that expires in September 2004 may be renewed with the lessor’s consent through September 2006, and has a purchase option of approximately $25 million.

During fiscal 2003, the company repurchased 1.5 million shares of common stock at an average cost of $27.94 per share as part of the 5.0 million share repurchase program authorized in fiscal 2002.

SFAS No. 87, “Employers’ Accounting for Pension”, requires the balance sheet to reflect a prepaid pension asset or minimum pension liability based on the current market value of plan assets and the accumulated benefit obligation of the plan. Based on both performance of the pension plan assets and planned assumption changes, the company recorded a net after-tax adjustment in the fourth quarter of fiscal 2003 of $72.3 million to reflect a minimum pension liability. This adjustment was a non-cash reduction of equity and did not impact earnings. This adjustment will be revised in future years depending upon market performance and interest rate levels. In the fourth quarter of fiscal 2003, the company lowered its expected return on plan assets used for fiscal 2003 pension expense by 75 basis points to 9.25 percent and by an additional 25 basis points to 9.0 percent for fiscal 2004 pension expense. The company also lowered its discount rate by 25 basis points to 7.0 percent for fiscal 2004 pension expense. For fiscal 2004, when not considering other changes in assumptions or actual return on plan assets, the impact to pension expense of each 25 basis point reduction in the discount rate is to increase pension expenses by approximately $3 million and the impact of each 25 basis point reduction in expected return on plan assets is to increase pension expense by approximately $1 million. The company made additional contributions of approximately $20 million to the pension plan in fiscal 2003.

The company’s capital budget for fiscal 2004, which includes capitalized leases, is projected at approximately $425.0 million to $450.0 million, compared with actual spending of $439.4 million in fiscal 2003. The capital budget for 2004 anticipates cash spending of $365.0 million to $390.0 million, in addition to $60.0 million budgeted for capital leases. Approximately $325.0 million of the fiscal 2004 budget has been identified for use in the company’s retail food business and includes approximately 8 to 12 regional banner stores and approximately 75 to 100 new extreme value stores, including extreme value general merchandise stores. The balance of the fiscal 2004 capital budget relates to distribution maintenance capital and information technology related items. In addition, the company will continue to support store development and financing for the company’s independent retailers. Certain retailer financing activities may not require new cash outlays because they involve leases or guarantees. The capital budget does include amounts for projects which are subject to change and for which firm commitments have not been made.

Cash dividends declared during fiscal 2003, 2002 and 2001 totaled $0.5675, $0.5575 and $0.5475 per common share, respectively. The company’s dividend policy will continue to emphasize a high level of earnings retention for growth.

COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

The company has guaranteed certain leases, fixture financing loans and other debt obligations of various retailers at February 22, 2003. These guarantees were made to support the business growth of affiliated retailers. The guarantees are generally for the entire term of the lease or other debt obligation. For each guarantee issued, if the affiliated retailer defaults on a payment, the company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees of the affiliated retailer. At February 22, 2003, the maximum amount of undiscounted payments the company would be required to make in the event of default of all guarantees is $305.9 million and represents $200.3 million on a discounted basis. No amount has been accrued for the company’s obligation under its guaranty arrangements. In addition, the company has guaranteed construction loans on warehouses of $26.3 million at February 22, 2003 that the company will purchase upon completion. The company did not enter into any new guarantees or modify existing guarantees after December 31, 2002.

On December 4, 1998, the company entered into an agreement to sell notes receivable to a special purpose entity, which qualifies to be accounted for as an unconsolidated subsidiary. The entity is designed to acquire qualifying notes receivable from the company and sell them to a third party. No notes have been sold since February 29, 2000. Assets and related debt off-balance sheet were $13.4 million at February 22, 2003. At February 22, 2003, the company’s limited recourse with respect to notes sold was $11.0 million.

The following table represents the company’s total commitments and total off-balance sheet arrangements at February 22, 2003:

	Amount of Commitment Expiration Per Period
	Total Amount Committed		Fiscal 2004		Fiscal 2005-2006		Fiscal 2007-2008		Thereafter
	(in thousands)

Commitments:

Notes Payable	$	80,000	$	80,000	$	—	$	—	$	—

Debt		1,506,053		31,124		335,061		78,627		1,061,241

Capital and Direct Financing Leases		575,185		30,456		89,637		86,562		368,530


Total Commitments	$	2,161,238	$	141,580	$	424,698	$	165,189	$	1,429,771


Off-Balance Sheet Arrangements:

Retailer Loan and Lease Guarantees	$	305,946	$	46,758	$	71,691	$	49,186	$	138,311

Construction Loan Commitments		26,300		26,300		—		—		—

Limited Recourse Liability on Notes Receivable		10,969		523		5,123		5,323		—

Purchase Options on Synthetic Leases		85,000		60,000		—		25,000		—

Operating Leases		1,007,170		141,612		235,662		179,335		450,561


Total Off-Balance Sheet Arrangements	$	1,435,385	$	275,193	$	312,476	$	258,844	$	588,872

COMMON STOCK PRICE

SUPERVALU’s common stock is listed on the New York Stock Exchange under the symbol SVU. At fiscal 2003 year end, there were 6,960 shareholders of record compared with 7,155 at the end of fiscal 2002.

	Common Stock Price Range								Dividends Per Share
Fiscal	2003				2002				2003		2002
Fiscal	High		Low		High		Low

First Quarter	$	30.81	$	24.60	$	16.46	$	12.60	$	0.1400	$	0.1375

Second Quarter		28.94		19.18		21.80		15.00		0.1425		0.1400

Third Quarter		21.59		14.75		24.10		18.81		0.1425		0.1400

Fourth Quarter		18.12		14.01		24.96		18.85		0.1425		0.1400

Year	$	30.81	$	14.01	$	24.96	$	12.60	$	0.5675	$	0.5575

Dividend payment dates are on or about the 15th day of March, June, September and December, subject to the Board of Directors approval.

NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

In June 2001, the Financial Accounting Standards Board (FASB) approved SFAS No. 142. SFAS No. 142 requires companies to cease amortizing goodwill and test at least annually for impairment. Amortization of goodwill ceased on February 24, 2002, at which time goodwill was tested for impairment. Each of the company’s

reporting units were tested for impairment by comparing the fair value of the respective reporting unit with its carrying value. Fair value was determined primarily based on valuation studies performed by the company, which considered the discounted cash flow method consistent with the company’s valuation guidelines. The company performed the second annual impairment test as of December 28, 2002 using the same methodology described above. As a result of impairment tests performed, the company recorded no impairment loss.

In August 2001, the FASB issued SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets”. The company adopted the provisions of SFAS No. 144 effective February 24, 2002. SFAS No. 144 did not have a material impact on the company’s consolidated financial statements.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”. SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)”. SFAS No. 146 requires recognition of a liability for the costs associated with an exit or disposal activity when the liability is incurred, as opposed to when the entity commits to an exit plan as required under EITF Issue 94-3. SFAS No. 146 was effective for exit or disposal activities initiated after December 31, 2002. The company did not initiate any new exit or disposal activities subsequent to December 31, 2002. Accordingly SFAS No. 146 did not have a material impact on the company’s consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”. SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure requirements of SFAS No. 123 to require additional disclosure in both annual and interim financial statements on the method of accounting for stock-based employee compensation. The company adopted the disclosure provisions of SFAS No. 148 in the fourth quarter of fiscal 2003.

In November 2002, the FASB issued Interpretation (FIN) No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. FIN No. 45 requires companies to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. Guarantees in existence at December 31, 2002 are grandfathered for the purposes of recognition and would only need to be disclosed. The company adopted the initial recognition and measurement provisions of FIN No. 45 for guarantees issued or modified after December 31, 2002. FIN No. 45 did not have a material impact on the company’s consolidated financial statements.

EITF Issue No. 01-09, “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of a Vendor’s Products)”, which codified EITF Issue No. 00-14, “Accounting for Certain Sales Incentives”; EITF Issue No. 00-22, “Accounting for ‘Points’ and Certain Other Time-Based or Volume-Based Sales and Incentive Offers, and Offers for Free Products or Services to be Delivered in the Future”; and EITF Issue No. 00-25, “Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor’s Products”, became effective for the company on February 24, 2002. These issues address the appropriate accounting for certain vendor contracts and loyalty programs. This EITF did not have a material impact on the company’s consolidated financial statements.

EITF Issue No. 02-13, “Deferred Income Tax Considerations in Applying the Goodwill Impairment Test in FASB Statement No. 142, ‘Goodwill and Other Intangible Assets’ ”, requires that deferred income taxes be included in the carrying amount of a reporting unit for the purposes of the first step of the SFAS No. 142 goodwill impairment test. EITF No. 02-13 is effective for goodwill impairment tests performed after September 12, 2002. The company adopted the provisions of EITF No. 02-13 for the goodwill impairment tests performed in the fourth quarter of fiscal 2003. This EITF did not have a material impact on the company’s consolidated financial statements.

EITF Issue No. 02-16, “Accounting by a Reseller for Cash Consideration Received from a Vendor”, addresses how a reseller of a vendor’s products should account for cash consideration received from a vendor and how to measure that consideration in its income statement. Certain provisions of EITF No. 02-16 were effective November 22, 2002 and other provisions were effective after December 31, 2002. This EITF did not have a material impact on the company’s consolidated financial statements.

EITF Issue No. 02-17, “Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination”, focuses on customer relationship assets. EITF No. 02-17 addresses the contractual or other legal criteria that must be met for determining the fair value of intangible assets apart from goodwill, even if the contract does not exist at the date of the acquisition. EITF No. 02-17 is effective for business combinations consummated and goodwill impairment tests performed after October 25, 2002. This EITF did not have a material impact on the company’s consolidated financial statements.

Statement of Position (SOP) No. 01-06, “Accounting by Certain Entities (Including Entities with Trade Receivables) that Lend to or Finance the Activities of Others”, became effective for the company on February 24, 2002. SOP No. 01-06 addresses the appropriate accounting for a company’s financing and lending activities. SOP No. 01-06 did not have a material impact on the company’s consolidated financial statements.

Recently Issued Accounting Standards

In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations”, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The company plans to adopt the provisions of SFAS No. 143 in the first quarter of fiscal 2004. The company does not expect the adoption of SFAS No. 143 to have a material impact on its consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, “Recission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. SFAS No. 145 allows only those gains and losses on the extinguishment of debt that meet the criteria of extraordinary items to be treated as such in the financial statements. SFAS No. 145 also requires sales-leaseback accounting for certain lease modifications that have economic effects that are similar to sales-leaseback transactions. Certain provisions of SFAS No. 145 are effective for transactions occurring after May 15, 2002, while the remaining provisions will be effective for the company in the first quarter of fiscal 2004. The company does not expect the adoption of SFAS No. 145 to have a material impact on its consolidated financial statements.

In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities”. FIN No. 46 states that companies that have exposure to the economic risks and potential rewards from another entity’s assets and activities have a controlling financial interest in a variable interest entity and should consolidate the entity, despite the absence of clear control through a voting equity interest. The consolidation requirements apply to all variable interest entities created after January 31, 2003. For variable interest entities that existed prior to February 1, 2003, the consolidation requirements are effective for annual or interim periods beginning after June 15, 2003. Disclosure of significant variable interest entities is required in all financial statements issued after January 31, 2003, regardless of when the variable interest was created. The company does not expect the adoption of FIN No. 46 to have a material impact on its consolidated financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The company is exposed to market pricing risk consisting of interest rate risk related to debt obligations outstanding, its investment in notes receivable and, from time to time, derivatives employed to hedge interest rate changes on variable and fixed rate debt. The company does not use financial instruments or derivatives for any trading or other speculative purposes.

The company manages interest rate risk through the strategic use of fixed and variable rate debt and, to a limited extent, derivative financial instruments. Variable interest rate debt (commercial paper, bank loans,

industrial revenue bonds and other variable interest rate debt) is utilized to help maintain liquidity and finance business operations. Long-term debt with fixed interest rates is used to assist in managing debt maturities and to diversify sources of debt capital.

The company makes long-term loans to certain retail customers (see Notes Receivable in the Notes to Consolidated Financial Statements for further information) and as such, carries notes receivable in the normal course of business. The notes generally bear fixed interest rates negotiated with each retail customer. The market value of the fixed rate notes is subject to change due to fluctuations in market interest rates. At February 22, 2003, the estimated fair value of notes receivable approximates the net carrying value.

The table below provides information about the company’s financial instruments that are sensitive to changes in interest rates, including notes receivable, debt obligations and interest rate swap agreements. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For notes receivable, the table presents the expected collection of principal cash flows and weighted average interest rates by expected maturity dates. For interest rate swap agreements, the table presents the estimate of the differentials between interest payable and interest receivable under the swap agreements implied by the yield curve utilized to compute the fair value of the interest rate swaps.

	Summary of Financial Instruments
	February 22, 2003					Aggregate payments by fiscal year
	Fair Value		Total			2004			2005			2006			2007			2008			Thereafter
	(in millions, except rates)

Notes receivable

Principal receivable	$	102.2	$	102.2		$	30.3		$	18.1		$	15.4		$	12.0		$	10.6		$	15.8

Average rate receivable				7.8	%		5.6	%		9.3	%		9.5	%		9.5	%		9.6	%		7.9	%

Debt with variable interest rates

Principal payable	$	150.5	$	150.5		$	88.0		$	—		$	2.4		$	2.6		$	1.0		$	56.5

Average variable rate payable				1.4	%		1.6	%		—			1.2	%		1.2	%		1.2	%		1.2	%

Debt with fixed interest rates

Principal payable	$	1,521.6	$	1,435.5		$	23.2		$	271.8		$	60.8		$	71.0		$	4.0		$	1,004.7

Average fixed rate payable				7.2	%		8.3	%		7.7	%		7.2	%		6.8	%		8.5	%		7.1	%

Fixed-to-variable interest rate swaps

Amount receivable	$	20.7	$	20.7		$	8.8		$	6.3		$	3.6		$	1.8		$	0.6		$	(0.4	)

Average variable rate payable				3.9	%

Average fixed rate receivable				7.9	%

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

Any statements in this report regarding SUPERVALU’s outlook for its businesses and their respective markets, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on management’s assumptions and beliefs. Such statements may be identified by such words or phrases as “will likely result,” “are expected to,” “will continue,” “outlook,” “is anticipated,” “estimate,” “project,” “management believes” or similar expressions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements and no assurance can be given that the

results in any forward-looking statement will be achieved. For these statements, SUPERVALU claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

The following is a summary of certain factors, the results of which could cause SUPERVALU’s future results to differ materially from those expressed or implied in any forward-looking statements contained in this report:

competitive practices in the retail food and food distribution industries,

the nature and extent of the consolidation of the retail food and food distribution industries,

our ability to attract and retain customers for our food distribution business and to control food distribution costs,

our ability to grow through acquisitions and successfully integrate acquired entities,

economic conditions that affect the food industry, such as food price deflation and softness in local and national economies, as well as general economic or political conditions that affect consumer buying habits generally,

wartime activities, threats, and acts of terror directed at the food industry that affect consumer behavior, as well as related security costs,

potential work disruptions from labor disputes or national emergencies,

the timing and implementation of certain restructure activities we have announced, including our consolidation of certain distribution facilities and our disposition of under-performing stores and non-operating properties,

the availability of favorable credit and trade terms, and

other risk factors inherent in the retail food and food distribution industries.

These risks and uncertainties are set forth in further detail in Exhibit 99(i) to this report. Any forward-looking statement speaks only as of the date on which such statement is made, and SUPERVALU undertakes no obligation to update such statement to reflect events or circumstances arising after such date.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for by Item 7A is found under the heading of “Quantitative and Qualitative Disclosure About Market Risk” under Part II, Item 7 above.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information called for by Item 8 is found in a separate section of this report on pages F-1 through F-37. See “Index of Selected Financial Data and Financial Statements and Schedules.”

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information called for by Item 10, as to compliance with Section 16(a) of the Securities and Exchange Act of 1934, is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2003 Annual Meeting of Stockholders under the heading “Section 16(a) Beneficial Ownership Reporting Compliance.” Certain information regarding executive officers and directors of the Registrant is included in Part I immediately following Item 4 above.

ITEM 11. EXECUTIVE COMPENSATION

The information called for by Item 11 is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2003 Annual Meeting of Stockholders under the headings “Compensation of Directors,” “Compensation of Executive Officers,” “Option Grants in Last Fiscal Year,” “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values,” “Long-Term Incentive Plans—Awards in Last Fiscal Year,” “Pension Plans and Retirement Benefits,” and “Change in Control and Other Agreements,” and under the heading “Related Party Transactions, Compensation Committee Interlocks and Insider Participation.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

Some of the information called for by Item 12 is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2003 Annual Meeting of Stockholders under the headings “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management.”

The following table sets forth information as of February 22, 2003 about the company’s common stock that may be issued under all of its equity compensation plans:

Equity Compensation Plan Information


	(a)	(b)	(c)

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by security holders (1)	7,397,997	$25.01(3)	4,875,458(4)

Equity compensation plans not approved by security holders (2)(6)	5,685,504	$20.65	3,300,090(5)

Total	13,083,501	$23.18(3)	8,175,548(4)(5)

Includes the company’s 1989 Stock Appreciation Rights Plan, 1983 Employee Stock Option Plan, 1993 Stock Plan, 2002 Stock Plan, SUPERVALU/Richfood Stock Incentive Plan and 2002 Long-Term Incentive Plan.

Includes the company’s 1997 Stock Plan and Restricted Stock Plan.

Excludes 120,000 restricted stock units included in column (a) which do not have an exercise price. Such units vest and are payable in shares after the expiration of the time periods set forth in their restricted stock unit agreements.

In addition to grants of options, warrants or rights, includes the following shares available for issuance in the form of restricted stock, performance awards and other types of stock-based awards: 1993 Stock Plan, 44,049 shares; 2002 Stock Plan, 4,000,000 shares; SUPERVALU/Richfood Stock Incentive Plan, 31,409 shares; and 2002 Long-Term Incentive Plan, 800,000 shares.

Includes 3,212,590 shares under the 1997 Stock Option Plan available for issuance in the form of restricted stock, performance awards and other types of stock-based awards in addition to the granting of options, warrants or stock appreciation rights and 87,500 shares under the Restricted Stock Plan available for issuance as restricted stock.

Does not include outstanding options for 41,243 shares of common stock at a weighted average exercise price of $25.54 per share that were assumed in connection with the merger of Richfood Holdings, Inc. into the company effective August 31, 1999. No further awards will be made under this plan.

1997 Stock Plan. The Board of Directors adopted the 1997 Stock Plan on April 9, 1997 to provide for the granting of non-qualified stock options, restoration options, stock appreciation rights, restricted stock, restricted stock units and performance awards to key employees of the company or any of its subsidiaries. A total of 10,800,000 shares are authorized and may be issued as awards under the plan. The Board amended this plan August 18, 1998, March 14, 2000, and April 10, 2002, and it will terminate on April 9, 2007.

All employees, consultants or independent contractors providing services to the company, other than officers or directors of the company or any of its affiliates who are subject to Section 16 of the Securities Exchange Act of 1934, are eligible to participate in the plan. The Board administers the plan and has discretion to set the terms of all awards made under the plan, except as otherwise expressly provided in the plan. Options granted under the plan may not have an exercise price less than 100 percent of the fair market value of the company’s common stock on the date of the grant. Stock appreciation rights may not be granted at a price less than 100 percent of the fair market value of the common stock on the date of the grant. Unless the Board otherwise specifies, restricted stock and restricted stock units will be forfeited and reacquired by the company if an employee is terminated. Performance awards granted under the plan may be payable in cash, shares, restricted stock, other securities, other awards under the plan or other property when the participant achieves performance goals set by the Board.

Restricted Stock Plan. The Board of Directors adopted the Restricted Stock Plan on April 10, 1991 to provide for the granting of restricted stock to key management employees of the company or any of its subsidiaries who are not subject to the provisions of Section 16 of the Securities Exchange Act of 1934 at the time of an award. The Board amended this plan on February 24, 2001 to increase the total shares available for issuance to 300,000. This plan has no expiration date. The chief executive officer administers this plan and may determine who is eligible to participate in the plan, the number of shares to be covered by each award and the terms and conditions of any award or agreement under the plan (including the forfeiture, transfer or other restrictions relating to such award).

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for by Item 13 is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2003 Annual Meeting of Stockholders under the heading “Related Party Transactions, Compensation Committee Interlocks and Insider Participation.”

ITEM 14. CONTROLS AND PROCEDURES

(a)

Evaluation of disclosure controls and procedures .

Within 90 days prior to the filing date of this report (the “Evaluation Date”), the company carried out an evaluation, under the supervision and with the participation of the company’s management, including the company’s chief executive officer and its chief financial officer, of the effectiveness of the design and operation of the company’s disclosure controls and procedures pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the chief executive officer and chief financial officer concluded that as of the Evaluation Date, the company’s disclosure controls and procedures (as defined in Rule 13a-14(c) under the Exchange Act) are effective to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

(b)

Changes in internal controls.

There were no significant changes in the company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their most recent evaluation nor were there any significant deficiencies or material weaknesses in the company’s internal controls.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1)

Financial Statements:

The consolidated financial statements of the Registrant listed in the accompanying “Index of Selected Financial Data and Financial Statements and Schedules” together with the reports of KPMG LLP, independent auditors, are filed as part of this report.

(2)

Financial Statement Schedules:

The consolidated financial statement schedules of the Registrant listed in the accompanying “Index of Selected Financial Data and Financial Statements and Schedules” together with the reports of KPMG LLP, independent auditors, are filed as part of this report.

(3)

Articles of Incorporation and by-laws:

(3)(i)

Restated Certificate of Incorporation is incorporated by reference to Exhibit (3)(i) to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 15, 2002.

(3)(ii)

Restated Bylaws, as amended.

(4)

Instruments defining the rights of security holders, including indentures:

4.1.

Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, relating to certain outstanding debt securities of the Registrant, is incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3, Registration No. 33-52422.

4.2.

First Supplemental Indenture dated as of August 1, 1990, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-3, Registration No. 33-52422.

4.3.

Second Supplemental Indenture dated as of October 1, 1992, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 13, 1992.

4.4.

Third Supplemental Indenture dated as of September 1, 1995, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated October 2, 1995.

4.5.

Fourth Supplemental Indenture dated as of August 4, 1999, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended September 11, 1999.

4.6.

Fifth Supplemental Indenture dated as of September 17, 1999, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended September 11, 1999.

4.7.

Letter of Representations dated November 12, 1992, between the Registrant, Bankers Trust Company, as Trustee, and The Depository Trust Company relating to certain outstanding debt securities of the Registrant, is incorporated by reference to Exhibit 4.5 to the Registrant’s Report on Form 8-K dated November 13, 1992.

4.8.

Rights Agreement dated as of April 12, 2000, between SUPERVALU INC. and Wells Fargo Bank Minnesota, N.A. (formerly Norwest Bank Minnesota, N.A.) as Rights Agent, including as Exhibit B the forms of Rights Certificate and Election to Exercise, is incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated April 17, 2000.

4.9.

Indenture dated as of November 2, 2001, between SUPERVALU INC. and The Chase Manhattan Bank, as Trustee, including form of Liquid Yield Option ^™ Note due 2031 (Zero Coupon—Senior), is incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3, Registration No. 333-81252.

4.10.

Registration Rights Agreement dated as of November 2, 2001, by and among SUPERVALU INC., Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, is incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-3, Registration No. 333-81252.

4.11.

Form of Credit Agreement, dated as of April 23, 2002, among the Registrant, the Lenders named therein, JP Morgan Chase Bank, as Agent, and Bank One, NA, as Syndication Agent, is incorporated by reference to Exhibit 4.11 to the Registrant’s Current Report on Form 8-K dated April 23, 2002.

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of certain instruments defining the rights of holders of certain long-term debt of the Registrant and its subsidiaries are not filed and, in lieu thereof, the Registrant agrees to furnish copies thereof to the Securities and Exchange Commission upon request.

(10)

Material Contracts:

10.1.

SUPERVALU INC. 2002 Stock Plan is incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended June 15, 2002.*

10.2.

SUPERVALU INC. 1997 Stock Plan, as amended.*

10.3.

SUPERVALU INC. 1993 Stock Plan, as amended, is incorporated by reference to Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the year ended February 27, 1999.*

10.4.

SUPERVALU/Richfood Stock Incentive Plan, as amended, is incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K for the year ended February 23, 2002.*

10.5.

Resolutions of SUPERVALU INC. Board of Directors, amending the SUPERVALU INC. Restricted Stock Plan, as amended, are incorporated by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K for the year ended February 24, 2001.*

10.6.

SUPERVALU INC. 1983 Employee Stock Option Plan, as amended, is incorporated by reference to Exhibit (10)a. to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 12, 1998. *

10.7.

SUPERVALU INC. 1989 Stock Appreciation Rights Plan is incorporated by reference to Exhibit (10)g. to the Registrant’s Annual Report on Form 10-K for the year ended February 25, 1989.*

10.8.

SUPERVALU INC. Executive Incentive Bonus Plan is incorporated by reference to Exhibit (10)c. to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 1997.*

10.9.

SUPERVALU INC. Annual Cash Bonus Plan for Designated Corporate Officers, as amended, is incorporated by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for the year ended February 24, 2001.*

10.10.

SUPERVALU INC. Long-Term Incentive Plan is incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended June 15, 2002.*

10.11.

SUPERVALU INC. Deferred Compensation Plan for Non-Employee Directors, as amended.*

10.12.

SUPERVALU INC. Excess Benefit Plan Restatement, as amended.*

10.13.

SUPERVALU INC. Deferred Compensation Plan as amended.*

10.14.

SUPERVALU INC. Executive Deferred Compensation Plan, as amended.*

10.15.

SUPERVALU INC. Executive Deferred Compensation Plan II, as amended.*

10.16.

Form of Agreement used in connection with the Registrant’s Executive Post Retirement Survivor Benefit Program, is incorporated by reference to Exhibit (10)i. to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 12, 1998.*

10.17.

Form of Change of Control Severance Agreements entered into with certain officers of the Registrant, is incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K for the year ended February 27, 1999. *

10.18.

SUPERVALU INC. Directors Retirement Program, as amended.*

10.19.

SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan is incorporated by reference to Exhibit (10)r. to the Registrant’s Annual Report on Form 10-K for the year ended February 24, 1990.*

10.20.

First Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan is incorporated by reference to Exhibit (10)a. to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 7, 1996.*

10.21.

Second Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan is incorporated by reference to Exhibit (10)r. to the Registrant’s Annual Report on Form 10-K for the year ended February 28, 1998.*

10.22

Third Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan is incorporated by reference to Exhibit (10)h. to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 12, 1998.*

10.23.

Fourth Amendment to SUPERVALU INC. Non-Qualified Supplement Executive Retirement Plan.*

10.24.

SUPERVALU INC. Non-Employee Directors Deferred Stock Plan, as amended.*

10.25.

Restricted Stock Unit Award Agreement for David L. Boehnen is incorporated by reference to Exhibit 10.26 to the Registrant’s Annual Report on Form 10-K for the year ended February 24, 2001.*

10.26.

Restricted Stock Unit Award Agreement for Pamela K. Knous is incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the year ended February 24, 2001.*

10.27.

Restricted Stock Unit Award Agreement for Jeffrey Noddle.*

10.28.

Amended and Restated SUPERVALU INC. Grantor Trust dated as of May 1, 2002, is incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended June 15, 2002.*

Indicates management contracts, compensatory plans or arrangements required to be filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K

(12)

Statement re Computation of Ratios.

12.1.

Ratio of Earnings to Fixed Charges.

(21)

Subsidiaries of the Registrant.

21.1.

SUPERVALU INC. Subsidiaries.

(23)

Consents of Experts and Counsel.

23.1.

Consent of KPMG LLP.

(24)

Power of Attorney.

24.1.

Power of Attorney.

(99)

Additional Exhibits.

99(i)

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act.

99(ii)

Certification of Periodic Financial Report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)

Reports on Form 8-K:

During the fourth quarter of the fiscal year ended February 22, 2003, the Registrant filed no reports on Form 8-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SUPERVALU INC. (Registrant)

DATE: April 25, 2003	By:	/s/ J EFFREY N ODDLE

		Jeffrey Noddle Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date

/s/ J EFFREY N ODDLE Jeffrey Noddle	Chairman of the Board; Chief Executive Officer; President; and Director (principal executive officer)	April 25, 2003

/s/ P AMELA K. K NOUS Pamela K. Knous	Executive Vice President, Chief Financial Officer (principal financial and accounting officer)	April 25, 2003

/s/ L AWRENCE A. D EL S ANTO * Lawrence A. Del Santo	Director

/s/ S USAN E. E NGEL * Susan E. Engel	Director

/s/ E DWIN C. G AGE * Edwin C. Gage*	Director

/s/ W ILLIAM A. H ODDER * William A. Hodder	Director

/s/ G ARNETT L. K EITH , J R .* Garnett L. Keith, Jr.	Director

/s/ R ICHARD L. K NOWLTON * Richard L. Knowlton	Director

/s/ C HARLES M. L ILLIS * Charles M. Lillis	Director

/s/ H ARRIET P ERLMUTTER * Harriet Perlmutter	Director

/s/ S TEVEN S. R OGERS * Steven S. Rogers*	Director

Executed this 25th day of April, 2003, on behalf of the indicated Directors by John P. Breedlove, duly appointed Attorney-in-Fact.

By:

/s/ J OHN P. B REEDLOVE

John P. Breedlove

Attorney-in-Fact

I, Jeffrey Noddle, certify that:

1. I have reviewed this annual report on Form 10-K of SUPERVALU INC.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the annual report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:	April 25, 2003	/s/ J EFFREY N ODDLE

		Chief Executive Officer and President

I, Pamela K. Knous, certify that:

1. I have reviewed this annual report on Form 10-K of SUPERVALU INC.;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Date: April 25, 2003				/s/ P AMELA K. K NOUS

				Executive Vice President, Chief Financial Officer

SUPERVALU INC.

Annual Report on Form 10-K

Items 6, 8 and 15(a)

Index of Selected Financial Data and Financial Statements and Schedules

		Page(s)
Selected Financial Data:

Five Year Financial and Operating Summary		F-2

Financial Statements:

Independent Auditors’ Report of KPMG LLP		F-4

Consolidated composition of net sales and operating earnings for each of the three years ended February 22, 2003, February 23, 2002 and February 24, 2001		F-5

Consolidated statements of earnings for each of the three years ended February 22, 2003, February 23, 2002 and February 24, 2001		F-6

Consolidated balance sheets as of February 22, 2003 and February 23, 2002		F-7

Consolidated statements of stockholders’ equity for each of the three years ended February 22, 2003, February 23, 2002 and February 24, 2001		F-8

Consolidated statements of cash flows for each of the three years ended February 22, 2003, February 23, 2002 and February 24, 2001		F-9

Notes to consolidated financial statements		F-10–F-34

Unaudited quarterly financial information		F-35

Independent Auditors’ Report		F-36

Financial Schedules:

Schedule II: Valuation and qualifying accounts		F-37

All other schedules are omitted because they are not applicable or not required.

F-1

SUPERVALU INC. and Subsidiaries

FIVE YEAR FINANCIAL AND OPERATING SUMMARY

	2003 (c)			2002 (d)			2001 (e)			2000 (f)			1999
Statement of Earnings Data (a) (b) (g)

Net sales	$	19,160,368		$	20,293,040		$	22,520,384		$	19,675,782		$	16,687,253

Cost of sales		16,567,397			17,704,197			19,976,436			17,450,060			14,886,873

Selling and administrative expenses		2,020,110			2,037,771			2,042,259			1,705,003			1,382,212

Gain on sale of Hazelwood Farms Bakeries		—			—			—			(163,662	)		—

Restructure and other charges		2,918			46,300			171,264			103,596			—

Operating earnings		569,943			504,772			330,425			580,785			418,168

Interest, net		161,939			172,774			190,835			135,392			101,907

Earnings before taxes		408,004			331,998			139,590			445,393			316,261

Provision for income taxes		150,962			133,672			66,720			203,703			124,923

Net earnings		257,042			198,326			72,870			241,690			191,338

Net earnings per common share—diluted		1.91			1.48			0.55			1.86			1.57

Balance Sheet Data (a)

Inventories (FIFO) (h)	$	1,194,791		$	1,178,817		$	1,477,180		$	1,622,151		$	1,195,217

Working capital (h)		267,567			36,031			(125,408	)		(197,599	)		188,000

Net property, plant and equipment		2,220,850			2,208,633			2,232,794			2,168,210			1,699,024

Total assets		5,896,245			5,796,249			6,343,152			6,493,292			4,265,949

Long-term debt (i)		2,019,658			1,875,873			2,008,474			1,953,741			1,246,269

Stockholders’ equity		2,009,240			1,899,138			1,783,149			1,820,228			1,305,639


Other Statistics (a) (g)

Net earnings as a percent of net sales (b)		1.34	%		0.98	%		0.32	%		1.23	%		1.15	%

Return on average stockholders’ equity		12.97	%		10.70	%		3.96	%		14.80	%		15.24	%

Book value per common share	$	15.03		$	14.29		$	13.47		$	13.52		$	10.82

Current ratio (h)		1.18:1			1.02:1			0.95:1			0.92:1			1.12:1

Debt to capital ratio (j)		51.8	%		54.3	%		59.7	%		60.0	%		54.6	%

Dividends declared per common share	$	0.56¾		$	0.55¾		$	0.54¾		$	0.53¾		$	0.52¾

Weighted average common shares outstanding—diluted		134,877			133,978			132,829			130,090			121,961

Depreciation and amortization	$	297,056		$	340,750		$	343,779		$	277,062		$	233,523

Capital expenditures	$	439,438		$	388,658		$	511,673		$	539,264		$	346,390

Net cash provided by operating activities	$	573,576		$	692,542		$	611,804		$	345,230		$	552,320

Net cash (used in) investing activities	$	(320,689	)	$	(224,707	)	$	(357,179	)	$	(516,796	)	$	(297,785	)

Net cash (used in) provided by financing activities	$	(235,870	)	$	(466,060	)	$	(255,149	)	$	174,878		$	(253,027	)

F-2

Notes:

(a)

All years include 52 weeks. Dollars in thousands except per share and percentage data.

(b)

Sales and cost of sales have been revised to conform prior years’ data to the current presentation. These reclassifications had no impact on gross profit, earnings before income taxes, net earnings, cash flow, or financial position for any period or their respective trends. See the Summary of Significant Accounting Policies for additional information.

(c)

Fiscal 2003 net earnings include restructure and other charges of $1.8 million or $0.01 per diluted share and represents the net adjustment for changes in estimates related to prior years’ restructure reserves and asset impairment charges primarily due to continued softening of real estate in certain markets.

(d)

Fiscal 2002 net earnings include restructure and other items of $35.2 million or $0.27 per diluted share. This includes total pretax adjustments of $58.8 million, including $46.3 million of restructure charges and $12.5 million in store closing charges recorded in the fourth quarter. The $46.3 million of restructure charges includes $16.3 million for additional efficiency initiatives and $30.0 million of net adjustments to increase prior years’ restructure charges as a result of changes in estimates primarily due to continued softening of real estate in certain markets. The company also recorded $12.5 million in store closing reserves reflected in selling and administrative expenses.

(e)

Fiscal 2001 net earnings include restructure and other items of $153.9 million or $1.16 per diluted share. This includes total pretax adjustments of $240.1 million, including $171.3 million of restructure and other charges related primarily to consolidation of distribution facilities, exit of certain non-core retail markets, and write-off of other items. The pretax adjustments also include $17.1 million in cost of sales for inventory markdowns related to restructure activities and $51.7 million in selling and administrative expenses primarily for store closing reserves and provisions for certain uncollectible receivables.

(f)

Fiscal 2000 net earnings include a net benefit of $10.9 million or $0.08 per diluted share from the gain on sale of Hazelwood Farms Bakeries and restructure charges. This reflects total pretax net adjustments of $60.1 million, which include a $163.7 million gain on sale of Hazelwood Farms Bakeries and $103.6 million of restructure charges related primarily to facility consolidation, non core store disposal, and rationalization of redundant and certain decentralized administrative functions.

(g)

Information adjusted to include stock split in fiscal 1999.

(h)

Inventories (FIFO), working capital and current ratio are calculated after adding back the LIFO reserve. The LIFO reserve for each year is as follows: $145.5 million for fiscal 2003, $140.8 million for fiscal 2002, $140.6 million for fiscal 2001, $135.6 million for fiscal 2000 and $127.4 million for fiscal 1999.

(i)

Long-term debt includes long-term debt and long-term obligations under capital leases.

(j)

The debt to capital ratio is calculated as debt, which includes notes payable, current debt, current obligations under capital leases, long-term debt and long-term obligations under capital leases, divided by the sum of debt and stockholders’ equity.

F-3

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

SUPERVALU INC.

Eden Prairie, Minnesota

We have audited the accompanying consolidated balance sheets of SUPERVALU INC. and subsidiaries (the Company) as of February 22, 2003 and February 23, 2002, and the related consolidated statements of earnings, stockholders’ equity and cash flows for each of the fiscal years in the three-year period ended February 22, 2003. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of SUPERVALU INC. and subsidiaries as of February 22, 2003 and February 23, 2002, and the results of their operations and their cash flows for each of the fiscal years in the three-year period ended February 22, 2003, in conformity with accounting principles generally accepted in the United States of America.

As discussed in the note entitled “New Accounting Standards” to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” on February 24, 2002.

/s/ KPMG LLP

Minneapolis, Minnesota

April 9, 2003

F-4

SUPERVALU INC. and Subsidiaries

CONSOLIDATED COMPOSITION OF NET SALES AND OPERATING EARNINGS

(In thousands, except percent data)

	February 22, 2003 (52 weeks)			February 23, 2002 (52 weeks)			February 24, 2001 (52 weeks)
Net sales
Retail food	$	9,848,230		$	9,549,068		$	9,353,992
		51.4	%		47.1	%		41.5	%
Food distribution		9,312,138			10,743,972			13,166,392
		48.6	%		52.9	%		58.5	%

Total net sales	$	19,160,368		$	20,293,040		$	22,520,384
		100.0	%		100.0	%		100.0	%

Operating earnings
Retail food operating earnings	$	436,537		$	363,304		$	286,520
Food distribution operating earnings		171,589			227,013			251,009
General corporate expenses		(35,265	)		(39,245	)		(35,840	)
Restructure and other charges		(2,918	)		(46,300	)		(171,264	)

Total operating earnings		569,943			504,772			330,425
Interest expense, net		(161,939	)		(172,774	)		(190,835	)

Earnings before income taxes	$	408,004		$	331,998		$	139,590

Identifiable assets
Retail food	$	3,352,164		$	3,098,577		$	3,082,088
Food distribution		2,527,858			2,683,486			3,247,172
Corporate		16,223			14,186			13,892

Total	$	5,896,245		$	5,796,249		$	6,343,152

Depreciation and amortization
Retail food	$	167,143		$	177,585		$	173,418
Food distribution		127,042			160,718			167,253
Corporate		2,871			2,447			3,108

Total	$	297,056		$	340,750		$	343,779

Capital expenditures
Retail food	$	357,342		$	310,738		$	347,540
Food distribution		80,916			74,860			158,591
Corporate		1,180			3,060			5,542

Total	$	439,438		$	388,658		$	511,673

Reportable segment operating earnings were computed as total revenue less associated operating expenses. Fiscal 2002 operating earnings reflect pretax charges of $12.5 million in retail food for store closing reserves. Fiscal 2001 operating earnings reflect pretax charges of $44.5 million in retail food for store closing reserves and $24.3 million in food distribution for inventory markdowns and provisions for certain uncollectible receivables. Identifiable assets are those assets of the company directly associated with the reportable segments.

See notes to consolidated financial statements.

F-5

SUPERVALU INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

	February 22, 2003 (52 weeks)		February 23, 2002 (52 weeks)		February 24, 2001 (52 weeks)

Net sales	$	19,160,368	$	20,293,040	$	22,520,384

Costs and expenses

Cost of sales		16,567,397		17,704,197		19,976,436

Selling and administrative expenses		2,020,110		2,037,771		2,042,259

Restructure and other charges		2,918		46,300		171,264


Operating earnings		569,943		504,772		330,425


Interest

Interest expense		182,499		194,294		212,898

Interest income		20,560		21,520		22,063


Interest expense, net		161,939		172,774		190,835


Earnings before income taxes		408,004		331,998		139,590

Provision for income taxes

Current		89,754		57,312		105,200

Deferred		61,208		76,360		(38,480	)


Income tax expense		150,962		133,672		66,720


Net earnings	$	257,042	$	198,326	$	72,870


Weighted average number of common shares outstanding

Diluted		134,877		133,978		132,829

Basic		133,730		132,940		132,251

Net earnings per common share—diluted	$	1.91	$	1.48	$	0.55

Net earnings per common share—basic	$	1.92	$	1.49	$	0.55

See notes to consolidated financial statements.

F-6

SUPERVALU INC. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	February 22, 2003			February 23, 2002
ASSETS
Current Assets
Cash and cash equivalents	$	29,188		$	12,171
Receivables, less allowance for losses of $21,913 in 2003 and $22,941 in 2002 ($264,392 in 2003 and $0 in 2002 pledged as collateral)		477,429			447,243
Inventories		1,049,283			1,038,050
Other current assets		91,466			78,030

Total current assets		1,647,366			1,575,494

Long-term notes receivable, less allowance for losses of $13,948 in 2003 and $18,876 in 2002		71,917			68,774
Long-term investment in direct financing leases		54,518			68,552
Property, plant and equipment
Land		167,065			172,385
Buildings		1,113,370			1,128,882
Property under construction		26,407			51,977
Leasehold improvements		334,339			285,842
Equipment		1,672,448			1,603,890
Assets under capital leases		575,262			546,289

		3,888,891			3,789,265
Less accumulated depreciation and amortization
Owned property, plant and equipment		1,525,126			1,460,541
Assets under capital leases		142,915			120,091

Net property, plant and equipment		2,220,850			2,208,633

Goodwill		1,576,584			1,531,312
Other assets		325,010			343,484

Total assets	$	5,896,245		$	5,796,249

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Notes payable	$	80,000		$	24,000
Accounts payable		1,081,734			1,016,605
Accrued vacation, compensation and benefits		113,750			148,179
Current maturities of long-term debt		31,124			326,266
Current obligations under capital leases		30,456			30,142
Other current liabilities		188,243			135,038

Total current liabilities		1,525,307			1,680,230

Long-term debt		1,474,929			1,342,428
Long-term obligations under capital leases		544,729			533,445
Deferred income taxes		116,982			90,031
Other liabilities		225,058			250,977
Commitments and contingencies
Stockholders’ equity
Common stock, $1.00 par value: Authorized 200,000 shares
Shares issued, 150,670 in 2003 and 2002		150,670			150,670
Capital in excess of par value		114,028			121,444
Accumulated other comprehensive losses		(79,063	)		(7,075	)
Retained earnings		2,150,932			1,969,984
Treasury stock, at cost, 16,982 shares in 2003 and 17,781 shares in 2002		(327,327	)		(335,885	)

Total stockholders’ equity		2,009,240			1,899,138

Total liabilities and stockholders’ equity	$	5,896,245		$	5,796,249

See notes to consolidated financial statements.

F-7

SUPERVALU INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except per share data)

	Common Stock			Capital in Excess of Par Value			Treasury Stock					Accumulated Other Comprehensive Losses			Retained Earnings			Total
	Shares	Amount		Capital in Excess of Par Value			Shares		Amount			Accumulated Other Comprehensive Losses			Retained Earnings			Total
BALANCES AT FEBRUARY 26, 2000	150,670	$	150,670	$	132,226		(16,008	)	$	(308,788	)	$	—		$	1,846,120		$	1,820,228
Comprehensive income:
Net earnings	—		—		—		—			—			—			72,870			72,870

Total comprehensive income																			72,870
Sales of common stock under option plans	—		—		(3,538	)	279			7,095			—			—			3,557
Cash dividends declared on common stock $0.5475 per share	—		—		—		—			—			—			(72,903	)		(72,903	)
Compensation under employee incentive plans	—		—		(196	)	366			8,271			—			—			8,075
Purchase of shares for treasury	—		—		—		(2,933	)		(48,678	)		—			—			(48,678	)

BALANCES AT FEBRUARY 24, 2001	150,670		150,670		128,492		(18,296	)		(342,100	)		—			1,846,087			1,783,149
Comprehensive income:
Net earnings	—		—		—		—			—			—			198,326			198,326
Derivative financial instrument-unrealized loss, net of deferred taxes of $5.0 million	—		—		—		—			—			(7,075	)		—			(7,075	)

Total comprehensive income																			191,251
Sales of common stock under option plans	—		—		(2,103	)	1,401			28,005			—			—			25,902
Cash dividends declared on common stock $0.5575 per share	—		—		—		—			—			—			(74,429	)		(74,429	)
Compensation under employee incentive plans	—		—		(4,945	)	576			10,293			—			—			5,348
Purchase of shares for treasury	—		—		—		(1,462	)		(32,083	)		—			—			(32,083	)

BALANCES AT FEBRUARY 23, 2002	150,670		150,670		121,444		(17,781	)		(335,885	)		(7,075	)		1,969,984			1,899,138
Comprehensive income:
Net earnings	—		—		—		—			—			—			257,042			257,042
Amortization of loss on derivative financial instrument, net of deferred taxes of $0.2 million	—		—		—		—			—			340			—			340
Minimum pension liability, net of deferred taxes of $47.1 million	—		—		—		—			—			(72,328	)		—			(72,328	)

Total comprehensive income																			185,054
Sales of common stock under option plans	—		—		(9,196	)	2,155			47,618			—			—			38,422
Cash dividends declared on common stock $0.5675 per share	—		—		—		—			—			—			(76,094	)		(76,094	)
Compensation under employee incentive plans	—		—		1,780		152			3,099			—			—			4,879
Purchase of shares for treasury	—		—		—		(1,508	)		(42,159	)		—			—			(42,159	)

BALANCES AT FEBRUARY 22, 2003	150,670	$	150,670	$	114,028		(16,982	)	$	(327,327	)	$	(79,063	)	$	2,150,932		$	2,009,240

See notes to consolidated financial statements.

F-8

SUPERVALU INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	February 22, 2003 (52 weeks)			February 23, 2002 (52 weeks)			February 24, 2001 (52 weeks)
Cash flows from operating activities
Net earnings	$	257,042		$	198,326		$	72,870
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		297,056			340,750			343,779
LIFO expense		4,741			143			4,991
Provision for losses on receivables		15,719			19,898			23,107
(Gain) loss on sale of property, plant and equipment		(5,564	)		4,649			(1,164	)
Restructure and other charges		2,918			46,300			171,264
Deferred income taxes		14,184			76,360			(38,480	)
Equity in earnings of unconsolidated subsidiaries		(39,724	)		(29,156	)		(21,526	)
Other adjustments, net		3,675			(1,228	)		(3,496	)
Changes in assets and liabilities
Receivables		(46,890	)		120,613			(66,482	)
Inventories		(15,974	)		298,150			130,657
Accounts payable		97,783			(386,504	)		(13,845	)
Other assets and liabilities		(11,390	)		4,241			10,129

Net cash provided by operating activities		573,576			692,542			611,804

Cash flows from investing activities
Additions to long-term notes receivable		(61,963	)		(37,372	)		(69,875	)
Proceeds received on long-term notes receivable		57,869			47,794			66,572
Proceeds from sale of assets		65,986			57,798			43,839
Purchases of property, plant and equipment		(382,581	)		(292,927	)		(397,715	)

Net cash used in investing activities		(320,689	)		(224,707	)		(357,179	)

Cash flows from financing activities
Net issuance (reduction) of notes payable		56,000			(551,574	)		2,526
Proceeds from issuance of long-term debt		296,535			218,014			60,000
Repayment of long-term debt		(472,448	)		(19,863	)		(171,692	)
Reduction of obligations under capital leases		(29,767	)		(25,988	)		(28,220	)
Dividends paid		(75,648	)		(74,024	)		(72,244	)
Net proceeds from the sale of common stock under option plans		31,617			19,458			3,085
Payment for purchase of treasury shares		(42,159	)		(32,083	)		(48,604	)

Net cash used in financing activities		(235,870	)		(466,060	)		(255,149	)

Net increase (decrease) in cash and cash equivalents		17,017			1,775			(524	)
Cash and cash equivalents at beginning of year		12,171			10,396			10,920

Cash and cash equivalents at end of year	$	29,188		$	12,171		$	10,396

SUPPLEMENTAL CASH FLOW INFORMATION

The company’s non-cash activities were as follows:

Leased asset additions and related obligations	$	42,829	$	95,730	$	113,958
Minimum pension liability, net of deferred taxes of $47.1 million	$	72,328	$	—	$	—
Interest and income taxes paid:
Interest paid (net of amount capitalized)	$	171,089	$	184,719	$	213,572
Income taxes paid	$	84,674	$	102,123	$	75,266

See notes to consolidated financial statements.

F-9

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:

The consolidated financial statements include the accounts of the company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. References to the company refers to SUPERVALU INC. and Subsidiaries.

Fiscal Year:

The company’s fiscal year ends on the last Saturday in February. The company’s first quarter consists of 16 weeks, while the second, third and fourth quarters each consist of 12 weeks. The last three fiscal years consist of the 52-week periods ending February 22, 2003, February 23, 2002 and February 24, 2001, respectively.

Revenue and Income Recognition:

Revenues and income from product sales are recognized at the point of sale for retail food and upon shipment of the product for food distribution. Revenues and income from services rendered are recognized immediately after such services have been provided.

The company provides certain facilitative services between its independent retailers and vendors related to products typically known as Direct Store Delivery (DSD) products. These services include sourcing, invoicing and payment services. Prior to the fourth quarter of fiscal 2003, the amounts invoiced to independent retailers by the company for facilitative services were recorded as net sales and the related amounts due and paid by the company to its vendors were recorded as cost of sales. Commencing with the fourth quarter of fiscal 2003, the company has revised amounts previously reported by reclassifying cost of sales against net sales for all prior periods. The effect is to present the net gross margin associated with such facilitative services as a component of net sales. This reclassification had no impact on gross profit, earnings before income taxes, net earnings, cash flows, or financial position for any period or their respective trends.

(In thousands)	February 22, 2003 (52 weeks)		February 23, 2002 (52 weeks)		February 24, 2001 (52 weeks)

Amounts invoiced to independent retailers	$	663,832	$	630,363	$	690,221

Amounts due and paid to vendors		649,312		615,482		673,895


Net gross margin	$	14,520	$	14,881	$	16,326

Cost of Sales:

Cost of sales includes cost of inventory sold during the period, including purchasing and distribution costs and shipping and handling fees.

The company receives allowances and credits from suppliers for volume incentives, promotional allowances and, to a lesser extent, new product introductions which are typically based on contractual arrangements covering a period of one year or less. Volume incentives and promotional allowances that are earned based on quantities purchased are recognized as a reduction to the cost of inventory. Promotional allowances that are based on the sell-through of products are recognized as a reduction of cost of sales when the products are sold for which the promotional allowances are given. New product introduction allowances compensate the company for costs incurred associated with product handling and are recognized in cost of sales when the product is first stocked, which is generally when all related expenses have been incurred.

F-10

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Advertising expenses are also included as a component of cost of sales and are expensed as incurred. The company recognizes co-operative advertising allowances received from vendors as a reduction of advertising expense in the period in which the related expense occurs. Advertising expenses before allowances were $83.9 million, $86.7 million and $103.4 million for fiscal 2003, 2002 and 2001, respectively.

Cash and Cash Equivalents:

The company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Allowances for Losses on Receivables:

Management makes estimates of the uncollectibility of its accounts and notes receivable portfolios. In determining the adequacy of its allowances, management analyzes the value of the collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. Although risk management practices and methodologies are utilized to determine the adequacy of the allowance, it is possible that the accuracy of the estimation process could be materially impacted by different judgments as to collectibility based on the information considered and further deterioration of accounts.

Reserves for Closed Properties:

LIFO and Retail Inventory Method:

Inventories are stated at the lower of cost or market. For a significant portion of the company’s inventory, cost is determined through use of the last-in, first-out (LIFO) method for food distribution or the retail LIFO method, as applicable. Under the retail LIFO method, otherwise referred to as the retail inventory method (RIM), the valuation of inventories are at cost and the resulting gross margins are calculated by applying a calculated cost-to-retail ratio to the retail value of inventories. Market is replacement value. The company utilized LIFO or the retail LIFO method to value approximately 70.5 percent and 69.8 percent of the company’s consolidated inventories for fiscal 2003 and 2002, respectively. The first-in, first-out method (FIFO) is used to determine cost for some of the remaining highly consumable inventories. If the FIFO method had been used to determine cost of inventories for which the LIFO method is used, the company’s inventories would have been higher by approximately $145.5 million at February 22, 2003 and $140.8 million at February 23, 2002.

Reserves for Self Insurance:

The company is primarily self-insured for workers’ compensation and general and automobile liability costs. It is the company’s policy to record its self insurance liabilities based on claims filed and an estimate of

F-11

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

claims incurred but not yet reported, discounted at a risk free interest rate. Any projection of losses concerning workers’ compensation and general and automobile liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns.

Property, Plant and Equipment:

Property, plant and equipment are carried at cost. Depreciation, as well as amortization of assets under capital leases, are based on the estimated useful lives of the assets using the straight-line method. Estimated useful lives generally are 10 to 40 years for buildings and major improvements, 3 to 10 years for equipment, and the shorter of the term of the lease or expected life for leasehold improvements. Interest on property under construction of $5.9 million, $5.7 million and $8.1 million was capitalized in fiscal years 2003, 2002 and 2001, respectively.

Goodwill and Other Intangible Assets:

In June 2001, the Financial Accounting Standards Board (FASB) approved Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 142 requires companies to cease amortizing goodwill and test at least annually for impairment. Amortization of goodwill ceased on February 24, 2002, at which time it was tested for impairment. Each of the company’s reporting units was tested for impairment by comparing the fair value of the respective reporting unit with its carrying value. Fair value was determined primarily based on valuation studies performed by the company, which considered the discounted cash flow method consistent with the company’s valuation guidelines. The company performed the second annual impairment test as of December 28, 2002 using the same methodology described above. As a result of impairment tests performed, the company recorded no impairment loss.

Prior to the adoption of SFAS 142, goodwill and other intangible assets were amortized on a straight-line basis over an estimated useful life, or if no useful life was determinable, over a period no greater than 40 years. Goodwill is shown net of accumulated amortization of $218.5 million at February 22, 2003 and February 23, 2002.

Retirement Plans:

The company sponsors pension and other retirement plans in various forms covering substantially all employees who meet eligibility requirements. The determination of the company’s obligation and expense for pension and other post retirement benefits is dependent, in part, on management’s selection of certain assumptions used by actuaries in calculating such amounts. These assumptions are described in the Retirement Plans note in the Notes to Consolidated Financial Statements and include, among other things, the discount rate, the expected long-term rate of return on plan assets, and the rates of increases in compensation and healthcare costs. The actuarial assumptions used by the company may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, and longer or shorter life spans of participants.

Financial Instruments:

The company accounts for derivative financial instruments pursuant to SFAS No. 133, “Accounting for Derivatives and Hedging Activities”, and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activity, an Amendment of SFAS No. 133”. SFAS No. 133 and No. 138 require that all derivative financial instruments are recorded on the balance sheet at their respective fair value.

F-12

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The company has only limited involvement with derivative financial instruments and uses them only to manage well-defined interest rate risks. The derivatives used have included interest rate caps, collars and swap agreements. The company does not use financial instruments or derivatives for any trading or other speculative purposes.

Stock-based Compensation:

The company has stock based employee compensation plans, which are described more fully in the Stock Option Plans note in the Notes to Consolidated Financial Statements. The company utilizes the intrinsic value-based method, per APB Opinion No. 25, “Accounting for Stock Issued to Employees,” for measuring the cost of compensation paid in company common stock. This method defines the company’s cost as the excess of the stock’s market value at the time of the grant over the amount that the employee is required to pay. In accordance with APB Opinion No. 25, no compensation expense was recognized for options issued under the stock option plans in fiscal 2003, 2002 and 2001 as the exercise price of all options granted was not less than 100 percent of fair market value of the common stock on the date of grant.

The following table illustrates the effect on net earnings and net earnings per common share if the company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock Based Compensation” to stock-based employee compensation:

	2003			2002			2001
	(In thousands, except per share data)

Net earnings, as reported	$	257,042		$	198,326		$	72,870

Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effect		(9,528	)		(5,501	)		(7,894	)


Pro forma net earnings	$	247,514		$	192,825		$	64,976


Earnings per share—basic:

As reported	$	1.92		$	1.49		$	0.55

Pro forma	$	1.85		$	1.45		$	0.49

Earnings per share—diluted:

As reported	$	1.91		$	1.48		$	0.55

Pro forma	$	1.84		$	1.44		$	0.49

Income Taxes:

The company provides for deferred income taxes during the year in accordance with SFAS No. 109, “Accounting for Income Taxes”. Deferred income taxes represent future net tax effects resulting from temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to be settled or realized. The major temporary differences and their net effect are shown in the Income Taxes note in the Notes to Consolidated Financial Statements.

Net Earnings Per Share (EPS):

EPS is calculated using income available to common shareholders divided by the weighted average of common shares outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted average of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares, such as options, had been exercised.

F-13

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Comprehensive Income:

The company reports comprehensive income in accordance with SFAS No. 130, “Reporting Comprehensive Income”. Comprehensive income refers to revenues, expenses, gains and losses that are not included in net earnings but rather are recorded directly in the Consolidated Statements of Stockholders’ Equity.

Use of Estimates:

Reclassifications:

Certain reclassifications have been made to conform prior years’ data to the current presentation. These reclassifications had no effect on reported earnings.

New Accounting Standards

Recently Adopted Accounting Standards

In June 2001, the FASB approved SFAS No. 142. SFAS No. 142 requires companies to cease amortizing goodwill and test at least annually for impairment. Amortization of goodwill ceased on February 24, 2002, at which time goodwill was tested for impairment. Each of the company’s reporting units were tested for impairment by comparing the fair value of the respective reporting unit with its carrying value. Fair value was determined primarily based on valuation studies performed by the company, which considered the discounted cash flow method consistent with the company’s valuation guidelines. The company performed the second annual impairment test as of December 28, 2002 using the same methodology described above. As a result of impairment tests performed, the company recorded no impairment loss.

F-14

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

for stock-based employee compensation. SFAS No. 148 also amends the disclosure requirements of SFAS No. 123 to require additional disclosure in both annual and interim financial statements on the method of accounting for stock-based employee compensation. The company adopted the disclosure provisions of SFAS No. 148 in the fourth quarter of fiscal 2003.

Emerging Issue Task Force (EITF) Issue No. 01-09, “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of a Vendor’s Products)”, which codified EITF Issue No. 00-14, “Accounting for Certain Sales Incentives”; EITF Issue No. 00-22, “Accounting for ‘Points’ and Certain Other Time-Based or Volume-Based Sales and Incentive Offers, and Offers for Free Products or Services to be Delivered in the Future”; and EITF Issue No. 00-25, “Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor’s Products”, became effective for the company on February 24, 2002. These issues address the appropriate accounting for certain vendor contracts and loyalty programs. This EITF did not have a material impact on the company’s consolidated financial statements.

F-15

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Recently Issued Accounting Standards

RESTRUCTURE AND OTHER CHARGES

Restructure 2002

F-16

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Balance February 23, 2002		Fiscal 2003 Usage			Fiscal 2003 Adjustment			Balance February 22, 2003
	(In thousands)

Lease related costs:

Transportation efficiency initiatives	$	3,235	$	(757	)	$	(1,424	)	$	1,054


		3,235		(757	)		(1,424	)		1,054

Employee related costs:

Administrative realignment		8,000		(4,186	)		(1,424	)		2,390

Transportation efficiency initiatives		5,065		(4,294	)		(771	)		—


		13,065		(8,480	)		(2,195	)		2,390


Total restructure and other charges	$	16,300	$	(9,237	)	$	(3,619	)	$	3,444

Details of the fiscal 2002 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Prior Year	Balance February 23, 2002	Employees Terminated in Fiscal 2003		Balance February 22, 2003

Employees	800	—	800	(650	)	150

Restructure 2001

F-17

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

for property, plant and equipment, goodwill and other intangibles, and other assets were $58.4 million, $21.8 million and $9.5 million, respectively, and were reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings for fiscal 2001. In the fourth quarter of fiscal 2003, the fiscal 2001 asset impairment charges for property, plant and equipment were decreased by $3.6 million primarily due to changes in estimates on exited real estate in certain markets and includes a decrease of $8.2 million in estimates related to certain food distribution properties offset by an increase of $4.6 million in estimates related to certain retail food properties. The impairment charges reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

	Balance February 23, 2002		Fiscal 2003 Usage			Fiscal 2003 Adjustment			Balanc February 22, 2003
	(In thousands)

Lease related costs:

Consolidation of distribution centers	$	8,080	$	(6,852	)	$	5,245		$	6,473

Exit of non-core retail markets		15,969		(13,485	)		6,360			8,844

Disposal of non-core assets and other administrative reductions		7,194		(1,783	)		(1,112	)		4,299


		31,243		(22,120	)		10,493			19,616

Employee related costs:

Consolidation of distribution centers		17,982		(7,917	)		(461	)		9,604

Exit of non-core retail markets		6,172		(4,615	)		1,423			2,980

Disposal of non-core assets and other administrative reductions		554		(779	)		225			—


		24,708		(13,311	)		1,187			12,584


Total restructure and other charges	$	55,951	$	(35,431	)	$	11,680		$	32,200


	Previously Recorded					Fiscal 2003 Adjustment			February 22, 2003

Impairment charges	$	89,742				$	(3,573	)	$	86,169

	Original Estimate	Employees Terminated in Prior Years		Adjustments in Prior Years		Balance February 23, 2002	Employees Terminated in Fiscal 2003		Adjustment		Balance February 22, 2003

Employees	4,500	(3,200	)	(550	)	750	(567	)	(183	)	—

Restructure 2000

F-18

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

impairment costs. The restructure and other charges include costs for facility consolidation, non-core store disposal, and rationalization of redundant and certain decentralized administrative functions. The original reserve amount was reduced by $10.3 million in fiscal 2001, primarily as a result of a change in estimate for the closure of a remaining facility. The reserve amount was subsequently increased $12.2 million in fiscal 2002, due to a change in estimate on a remaining facility primarily due to the softening real estate market.

In the fourth quarter of fiscal 2003, the fiscal 2000 restructure and other charges were decreased by $1.6 million, including a $2.9 million increase to the restructure reserves offset by a decrease in asset impairment charges of $4.5 million. The reserve increase of $2.9 million was a result of changes in estimates on exited real estate primarily due to the continued softening of real estate marketed for sublease in certain markets and higher than anticipated employee related costs.

Included in the asset impairment charges in fiscal 2000 of $17.4 million were writedowns on food distribution assets of $10.6 million for property, plant and equipment, $5.6 million of goodwill and other intangibles and $1.2 million for other assets that were reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings for fiscal 2000. In the fourth quarter of fiscal 2003, the fiscal 2000 asset impairment charges for property, plant and equipment on food distribution properties were decreased by $4.5 million primarily due to changes in estimates on exited real estate in certain markets. The impairment charges reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

	Balance February 23, 2002		Fiscal 2003 Usage			Fiscal 2003 Adjustment			Balance February 22, 2003
	(In thousands)

Lease related costs:

Facility consolidation	$	10,300	$	(3,713	)	$	1,496		$	8,083

Non-core store disposal		4,611		(1,818	)		249			3,042


		14,911		(5,531	)		1,745			11,125

Employee related costs:

Facility consolidation		2,938		(3,866	)		928			—

Infrastructure realignment		142		(363	)		221			—


		3,080		(4,229	)		1,149			—


Total restructure and other charges	$	17,991	$	(9,760	)	$	2,894		$	11,125


	Previously Recorded					Fiscal 2003 Adjustment			February 22, 2003

Impairment charges	$	17,430				$	(4,466	)	$	12,964

F-19

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Original Estimate	Employees Terminated in Prior Years		Adjustments in Prior Years		Balance February 23, 2002

Employees	2,517	(1,693	)	(824	)	—

RESERVES FOR CLOSED PROPERTIES AND ASSET IMPAIRMENT

The company maintains reserves for estimated losses on retail stores, distribution warehouses and other properties that are no longer being utilized in current operations. The reserves for closed properties include management’s estimates for lease subsidies, lease terminations, future payments on exited real estate and severance. Details of the activity in the closed property reserves for fiscal 2003, 2002 and 2001 are as follows:

(In thousands)	Balance February 22, 2003			Balance February 23, 2002			Balance February 24, 2001

Beginning balance	$	74,996		$	68,067		$	40,652

Additions		3,169			12,399			39,565

Usage		(28,292	)		(5,470	)		(12,150	)


Ending balance	$	49,873		$	74,996		$	68,067

The company recognized impairment charges of $15.6 million for fiscal 2003 on the write-down of property, plant and equipment for closed properties. Of the $15.6 million impairment charge, $6.9 million related to food distribution and $8.7 million related to retail food. In fiscal 2002, the company recognized impairment charges of $10.0 million of which $1.2 million related to food distribution and $8.8 million related to retail food. In fiscal 2001, the company recognized impairment charges of $15.8 million of which $0.1 million related to food distribution and $15.7 million related to retail food. Impairment charges, a component of selling and administrative expenses in the Consolidated Statements of Earnings, reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

NOTES RECEIVABLE

Notes receivable arise from financing activities with affiliated retail food customers. Loans to affiliated retailers, as well as trade accounts receivable, are primarily collateralized by the retailers’ inventory, equipment and fixtures. The notes range in length from 1 to 16 years with an average term of 6 years, and may be non-interest bearing or bear interest at rates ranging from 5 to 11 percent.

Included in current receivables are notes receivable due within one year, net of allowance for losses, of $30.3 million and $23.9 million at February 22, 2003 and February 23, 2002, respectively.

GOODWILL AND OTHER INTANGIBLE ASSETS

At February 22, 2003, the company had approximately $1.6 billion of goodwill on its Consolidated Balance Sheets of which $0.9 billion was related to retail food and $0.7 billion was related to food distribution.

F-20

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In the following table, the company has adjusted reported net earnings, diluted net earnings per common share and basic net earnings per common share to exclude amortization expense related to goodwill, that is no longer being amortized upon the adoption of SFAS No. 142:

(In thousands, except per share data)	2003		2002		2001

Reported net earnings	$	257,042	$	198,326	$	72,870

Goodwill amortization		—		48,363		49,405


Adjusted net earnings	$	257,042	$	246,689	$	122,275

Diluted net earnings per common share:

Reported net earnings	$	1.91	$	1.48	$	0.55

Goodwill amortization		—		0.35		0.37


Adjusted net earnings	$	1.91	$	1.83	$	0.92

Basic net earnings per common share:

Reported net earnings	$	1.92	$	1.49	$	0.55

Goodwill amortization		—		0.35		0.37


Adjusted net earnings	$	1.92	$	1.84	$	0.92

The carrying amount of other intangible assets as of February 22, 2003 and February 23, 2002 are as follows:

	Balance February 22, 2003							Balance February 23, 2002
	(In thousands)
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount

Non-compete agreements	$	8,506	$	(4,376	)	$	4,130	$	8,406	$	(3,500	)	$	4,906

Customer lists and other		8,370		(4,313	)		4,057		8,180		(3,914	)		4,266


Total	$	16,876	$	(8,689	)	$	8,187	$	16,586	$	(7,414	)	$	9,172

Other intangible assets are presented in the “Other assets” line in the Consolidated Balance Sheets. Amortization expense of $1.4 million, $1.8 million and $2.4 million was recorded in the fiscal 2003, 2002 and 2001, respectively. Future amortization expense will approximate $1.0 million per year for each of the next five years. Intangible assets with a definite life are amortized on a straight-line basis with estimated useful lives ranging from five to ten years.

INVESTMENTS IN UNCONSOLIDATED EQUITY AFFILIATES

The company recognized $39.7 million, $29.2 million and $21.5 million in earnings from investments in unconsolidated equity affiliates in fiscal 2003, 2002 and 2001, respectively. The equity method of accounting is used for companies and other investments in which the company has significant influence, which generally represents common stock ownership or partnership equity of at least 20% and not more than 50%. At year-end 2003, the company’s investment in unconsolidated equity affiliates primarily include a 22% interest in WinCo Foods and Subsidiaries, the owner and operator of retail supermarkets located in Oregon, Washington, California and Nevada, a 26% interest in International Data, LLC, a strategic outsourcing services provider, specializing in, among other things, data services, check and remittance processing and coupon promotions processing and a 40% interest in Tidyman’s, LLC, the owner and operator of retail supermarkets located in Montana, Idaho and Washington. These investments primarily relate to the retail food segment.

F-21

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FINANCIAL INSTRUMENTS

Interest Rate Swap Agreements

On February 25, 2001, the effective date of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, the company’s existing interest rate swap agreements were recorded at fair value in the company’s Consolidated Balance Sheets. On July 6, 2001, the swaps were terminated and the remaining fair market value adjustments, which are offsetting, are being amortized over the original term of the hedge. Approximately $0.3 million of after-tax loss is expected to be amortized into the Consolidated Statements of Earnings from Accumulated Other Comprehensive Losses within the next 12 months.

In the first quarter of fiscal 2003, the company entered into swap agreements in the notional amount of $225.0 million that exchange a fixed interest rate payment obligation for a floating interest rate payment obligation. The swaps have been designated as a fair value hedge on long-term fixed rate debt of the company and are reflected in “Other assets” in the Consolidated Balance Sheets. At February 22, 2003, the hedge was highly effective. Changes in the fair value of the swaps and debt are reflected as a component of selling and administrative expense in the Consolidated Statements of Earnings, and through February 22, 2003, the net earnings impact was zero.

The company has limited involvement with derivative financial instruments and uses them only to manage well-defined interest rate risks. The company does not use financial instruments or derivatives for any trading or other speculative purposes.

For certain of the company’s financial instruments, including cash and cash equivalents, receivables and notes payable, the carrying amounts approximate fair value due to their short maturities.

Fair Value Disclosures of Financial Instruments

The estimated fair value of notes receivable approximates the net carrying value at February 22, 2003 and February 23, 2002. Notes receivable are valued based on comparisons to publicly traded debt instruments of similar credit quality.

The estimated fair value of the company’s long-term debt (including current maturities) was in excess of the carrying value by approximately $86.1 million and $64.0 million at February 22, 2003 and February 23, 2002, respectively. The estimated fair value was based on market quotes, where available, discounted cash flows and market yields for similar instruments.

The estimated fair value of the company’s interest rate swaps approximates the carrying value at February 22, 2003. The fair value of interest rate swaps are the amounts at which they could be settled and are estimated by obtaining quotes from brokers.

F-22

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DEBT

	February 22, 2003		February 23, 2002
	(In thousands)

7.875% promissory note due fiscal 2010	$	350,000	$	350,000

7.5% promissory note due fiscal 2013		300,000		—

7.625% promissory note due fiscal 2005		250,000		250,000

8.875% promissory note due fiscal 2023		100,000		100,000

Zero-coupon convertible debentures		226,152		216,345

6.23%-6.69% medium-term notes due fiscal 2006-2007		103,500		103,500

7.8% promissory note due fiscal 2003		—		300,000

9.75% senior notes		—		174,098

Variable rate to 7.125% industrial revenue bonds		70,530		71,530

8.28%-9.96% promissory notes due fiscal 2004-2010		26,675		32,420

7.78%, 8.02% and 8.57% obligations with quarterly payments of principal and interest due fiscal 2005 through 2007		47,134		59,845

Other debt		32,062		10,956


		1,506,053		1,668,694

Less current maturities		31,124		326,266


Long-term debt	$	1,474,929	$	1,342,428

Aggregate maturities of long-term debt during the next five fiscal years are:

	(In thousands)

2004	$	31,124

2005		271,843

2006		63,218

2007		73,568

2008		5,059

The debt agreements contain various financial covenants including maximum permitted leverage, minimum net worth, minimum coverage and asset coverage ratios as defined in the company’s debt agreements. The company has met the financial covenants under the debt agreements as of February 22, 2003.

In May 2002, the company completed the issuance of the $300.0 million 10-year 7.50% Senior Notes. A portion of the proceeds was used to redeem the company’s 9.75% Senior Notes due fiscal 2005 on June 17, 2002. In November 2002, the company also retired a $300.0 million 7.8% note that matured.

In August 2002, the company renewed its annual accounts receivable securitization program, under which the company can borrow up to $200.0 million on a revolving basis, with borrowings secured by eligible accounts receivable. Outstanding borrowings under this program at February 22, 2003 and February 23, 2002, were $80.0 million and $0, respectively, and are reflected in Notes payable in the Consolidated Balance Sheets. As of February 22, 2003 there was $264.4 million of accounts receivable pledged as collateral. The average short-term interest rate on the outstanding borrowings was 1.76% for fiscal 2003.

F-23

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

contains various financial covenants including ratios for fixed charge interest coverage, asset coverage and debt leverage, in addition to a minimum net worth covenant. This credit facility replaced the company’s $300.0 million and $400.0 million credit facilities, which had expiration dates in August and October of 2002, respectively. The company had no outstanding borrowings under the credit facilities at February 22, 2003 and February 23, 2002. As of February 22, 2003, letters of credit outstanding under the credit facility were $129.0 million and the unused available credit under the facility was $521.0 million.

In November 2001, the company sold zero-coupon convertible debentures having an aggregate principal amount at maturity of $811.0 million. The proceeds from the offering, net of approximately $5.0 million of expenses, were $208.0 million. The debentures mature in 30 years and are callable at the company’s option on or after October 1, 2006. Holders may require the company to purchase all or a portion of their debentures on October 1, 2003, October 1, 2006 or October 1, 2011 at a purchase price equal to the accreted value of the debentures, which includes accrued and unpaid cash interest. If the option is exercised, the company has the choice of paying the holder in cash, common stock or a combination of the two. The debentures will generally be convertible if the closing price of the company’s common stock on the New York Stock Exchange for twenty of the last thirty trading days of any fiscal quarter exceeds certain levels, at $35.07 per share for the quarter ended June 14, 2003, and rising to $113.29 per share at September 6, 2031. In the event of conversion, 9.6434 shares of the company’s common stock will be issued per $1,000 debenture. The debentures have an initial yield to maturity of 4.5%, which is being accreted over the life of the debentures using the effective interest method. The company may pay contingent cash interest for the six-month period commencing November 3, 2006 and for any six-month period thereafter if the average market price of the debentures for a five trading day measurement period preceding the applicable six-month period equals 120% or more of the sum of the issue price and accrued original issue discount for the debentures. The debentures are classified as long-term debt based on the company’s ability and intent to refinance the obligation with long-term debt if the company is required to repurchase the debentures.

LEASES

Capital and operating leases:

The company leases certain retail food stores, food distribution warehouses and office facilities. Many of these leases include renewal options, and to a limited extent, include options to purchase. Amortization of assets under capital leases was $32.8 million, $31.6 million and $33.3 million in fiscal 2003, 2002 and 2001, respectively.

F-24

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Future minimum obligations under capital leases in effect at February 22, 2003 are as follows:

	Lease Obligations
	(In thousands)

Fiscal Year

2004	$	66,395

2005		65,873

2006		64,513

2007		64,708

2008		63,908

Later		591,981


Total future minimum obligations		917,378

Less interest		402,393


Present value of net future minimum obligations		514,985

Less current obligations		23,615


Long-term obligations	$	491,370

The present values of future minimum obligations shown are calculated based on interest rates ranging from 6.8 percent to 13.8 percent, with a weighted average rate of 8.3 percent, determined to be applicable at the inception of the leases.

In addition to its capital leases, the company is obligated under operating leases, primarily for buildings, warehouses and computer equipment. Future minimum obligations under operating leases in effect at February 22, 2003 are as follows:

	Lease Obligations
	(In thousands)

Fiscal Year

2004	$	141,612

2005		126,064

2006		109,598

2007		97,350

2008		81,985

Later		450,561


Total future minimum obligations	$	1,007,170

The company is party to synthetic leasing programs for two of its major warehouses. The leases qualify for operating lease accounting treatment under SFAS No. 13, “Accounting for Leases”. For additional information on synthetic leases, refer to the Commitments, Contingencies and Off-Balance Sheet Arrangements note in the Notes to Consolidated Financial Statements.

Total rent expense, net of sublease income, relating to all operating leases with terms greater than one year was $113.7 million, $100.7 million and $88.4 million in fiscal 2003, 2002 and 2001, respectively.

F-25

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Future minimum receivables under operating leases and subleases in effect at February 22, 2003 are as follows:

	Owned Property		Leased Property		Total
	(In thousands)

Fiscal Year

2004	$	1,690	$	23,240	$	24,930

2005		1,683		19,967		21,650

2006		1,605		15,729		17,334

2007		1,414		12,747		14,161

2008		1,392		9,443		10,835

Later		6,627		28,686		35,313


Total future minimum receivables	$	14,411	$	109,812	$	124,223

Owned property leased to third parties is as follows:

	February 22, 2003		February 23, 2002
	(In thousands)

Land, buildings and equipment	$	19,161	$	42,343

Less accumulated depreciation		7,171		19,435


Net land, buildings and equipment	$	11,990	$	22,908

Direct financing leases:

Under direct financing capital leases, the company leases buildings on behalf of independent retailers with terms ranging from 5 to 20 years. Future minimum rentals to be received under direct financing leases and related future minimum obligations under capital leases in effect at February 22, 2003 are as follows:

	Direct Financing Lease Receivables		Direct Financing Capital Lease Obligations
	(In thousands)

Fiscal Year

2004	$	12,149	$	11,436

2005		11,178		10,547

2006		10,348		9,768

2007		9,697		9,224

2008		8,646		8,185

Later		39,491		37,816


Total minimum lease payments		91,509		86,976

Less unearned income		30,173		—

Less interest		—		26,776


Present value of net minimum lease payments		61,336		60,200

Less current portion		6,818		6,841


Long-term portion	$	54,518	$	53,359

F-26

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

INCOME TAXES

The provision for income taxes consists of the following:

	2003			2002			2001
	(In thousands)

Current

Federal	$	78,704		$	50,152		$	91,126

State		12,050			7,910			14,674

Tax credits		(1,000	)		(750	)		(600	)

Deferred

Restructure and other items		31,009			18,590			(63,452	)

Other		30,199			57,770			24,972


Total provision	$	150,962		$	133,672		$	66,720

The difference between the actual tax provision and the tax provision computed by applying the statutory federal income tax rate to earnings before taxes is attributable to the following:

	2003			2002			2001
	(In thousands)

Federal taxes based on statutory rate	$	142,801		$	116,199		$	48,856

State income taxes, net of federal benefit		12,153			11,562			4,764

Nondeductible goodwill		—			15,439			22,354

Audit settlements		—			(4,583	)		(6,539	)

Other		(3,992	)		(4,945	)		(2,715	)


Total provision	$	150,962		$	133,672		$	66,720

Temporary differences which give rise to significant portions of the net deferred tax asset (liability) as of February 22, 2003 and February 23, 2002 are as follows:

	2003			2002
	(In thousands)

Deferred tax assets:

Restructure and other items	$	58,515		$	89,524

Net operating loss from acquired subsidiaries		35,853			42,083

Provision for obligations to be settled in future periods		151,233			140,664

Minimum pension liability		47,025			—

Inventories		16,247			16,016

Other		25,783			25,979


Total deferred tax assets		334,656			314,266

Deferred tax liabilities:

Depreciation and amortization		(84,318	)		(83,899	)

Acquired assets adjustment to fair values		(58,886	)		(54,211	)

Tax deductions for benefits to be paid in future periods		(175,507	)		(154,794	)

Other		(87,173	)		(78,407	)


Total deferred tax liabilities		(405,884	)		(371,311	)

Net deferred tax liability	$	(71,228	)	$	(57,045	)

F-27

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The company currently has net operating loss (NOL) carryforwards from acquired companies of $91.2 million for tax purposes, which expire beginning in 2007 and continuing through 2018.

Temporary differences attributable to obligations to be settled in future periods consist primarily of accrued postretirement benefits, vacation pay and other expenses that are not deductible for income tax purposes until paid.

Based on management’s assessment, it is more likely than not that all of the deferred tax assets will be realized; therefore, no valuation allowance is considered necessary.

ACCUMULATED OTHER COMPREHENSIVE LOSSES

The accumulated balances, net of deferred taxes, for each classification of accumulated other comprehensive losses are as follows:

	Derivative Financial Instrument - Unrealized Loss			Minimum Pension Liability Adjustment			Accumulated Other Comprehensive Losses
	(In thousands)

Balances at February 23, 2002	$	(7,075	)	$	—		$	(7,075	)

Minimum pension liability		—			(72,328	)		(72,328	)

Amortization of loss on derivative financial instrument		340			—			340


Balances at February 22, 2003	$	(6,735	)	$	(72,328	)	$	(79,063	)

STOCK OPTION PLANS

The company’s 2002, 1993 and SUPERVALU/Richfood 1996 stock option plans allow the granting of non-qualified stock options and incentive stock options to purchase shares of the company’s common stock, to key salaried employees at prices not less than 100 percent of their fair market value, determined based on the average of the opening and closing sale price of a share on the date of grant. The company’s 1997 stock plan allows only the granting of non-qualified stock options to purchase common shares to salaried employees at fair market value determined on the same basis. In April 2002, the Board of Directors reserved an additional 3.8 million shares for issuance under the 1997 plan. The company also has options outstanding under its 1983 plan, but no further options may be granted under that plan. The plans provide that the Board of Directors or the Executive Personnel and Compensation Committee of the Board (the Committee) may determine at the time of granting whether each option granted, except those granted under the 1997 plan, will be a non-qualified or incentive stock option under the Internal Revenue Code. The terms of each option will be determined by the Board of Directors or the Committee, but shall not be for more than 10 years from the date of grant, generally with a vesting period of zero to four years. Options may be exercised in installments or otherwise, as the Board of Directors or the Committee, may determine.

F-28

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Changes in the options granted, exercised and outstanding under such plans are as follows:

	Shares		Weighted Average Price per Share
	(In thousands)

Outstanding, February 26, 2000	11,742		$	22.01

Granted	4,243			15.15

Exercised	(509	)		15.72

Canceled and forfeited	(1,066	)


Outstanding, February 24, 2001	14,410		$	20.26

Granted	1,215			17.32

Exercised	(1,781	)		15.82

Canceled and forfeited	(677	)


Outstanding, February 23, 2002	13,167		$	20.69

Granted	2,885			28.27

Exercised	(2,896	)		17.44

Canceled and forfeited	(151	)


Outstanding, February 22, 2003	13,005		$	23.10

The outstanding stock options at February 22, 2003 have exercise prices ranging from $12.25 to $40.00 per share and a weighted average remaining contractual life of 6.09 years. Options to purchase 7.9 million and 8.3 million shares were exercisable at February 22, 2003 and February 23, 2002, respectively. These options have a weighted average exercise price of $20.89 and $19.11 per share, respectively. Option shares available for grant were 7.3 million and 1.9 million at February 22, 2003 and February 23, 2002, respectively. The company has reserved 20.3 million shares, in aggregate, for the plans.

As of February 22, 2003, limited stock appreciation rights have been granted and are outstanding under the 1989 stock appreciation rights plan and the 1993 stock plan. Such rights relate to options granted to purchase 2.1 million shares of common stock and are exercisable only upon a “change in control.”

In addition to the stock plans described above, the company incurs expenses under both a long-term incentive plan and restricted stock plans at the discretion of the Board of Directors. Compensation expense under these plans was $4.1 million, $4.7 million and $1.0 million for fiscal 2003, 2002 and 2001, respectively.

See Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements for the impact of stock based compensation on pro forma net earnings and earnings per common share.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions and results:

	2003		2002		2001

Dividend yield		2.00%		2.00%		2.00%

Risk free interest rate		2.86%		4.23%		4.83%

Expected life		4.5 years		4.5 years		5 years

Expected volatility		34.66%		32.50%		30.40%

Estimated fair value of options granted per share	$	7.77	$	4.85	$	4.37

F-29

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

TREASURY STOCK PURCHASE PROGRAM

In August 1996, the Board of Directors authorized a treasury stock purchase program under which the company was authorized to repurchase up to 10.0 million shares of the company’s common stock for reissuance upon the exercise of employee stock options and for other compensation programs utilizing the company’s stock. In fiscal 2001, the company purchased 0.8 million shares under the program at an average cost of $15.92 per share. In fiscal 2002, the company completed the program by purchasing 0.2 million shares at an average cost of $19.97 per share. This brought the total repurchases under the program to 10.0 million shares.

In December 1999, the Board of Directors authorized a treasury stock purchase program under which the company was authorized to purchase up to $140.0 million of the company’s common stock. In fiscal 2001, the company completed the program with the repurchase of 2.1 million shares at an average cost of $16.86 per share. This brought the total repurchases under the program to $140.0 million.

In October 2001, the Board of Directors authorized a treasury stock purchase program under which the company is authorized to purchase up to 5.0 million shares of the company’s common stock for reissuance upon the exercise of employee stock options and for other compensation programs utilizing the company’s stock. In fiscal 2002, the company purchased 1.3 million shares under the program at an average cost of $22.16 per share. In fiscal 2003, the company purchased 1.5 million shares under the program at an average cost of $27.94 per share.

EARNINGS PER SHARE

The following table reflects the calculation of basic and diluted earnings per share:

	2003		2002		2001
	(In thousands, except per share amounts)

Earnings per share—basic

Earnings available to common shareholders	$	257,042	$	198,326	$	72,870

Weighted average shares outstanding		133,730		132,940		132,251


Earnings per share—basic	$	1.92	$	1.49	$	0.55

Earnings per share—diluted

Earnings available to common shareholders	$	257,042	$	198,326	$	72,870

Weighted average shares outstanding		133,730		132,940		132,251

Dilutive impact of options outstanding		1,147		1,038		578


Weighted average shares and potential dilutive shares outstanding		134,877		133,978		132,829


Earnings per share—diluted	$	1.91	$	1.48	$	0.55

COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

The company has guaranteed certain leases and fixture financing loans and other debt obligations of various retailers at February 22, 2003. These guarantees were made to support the business growth of affiliated retailers. The guarantees are generally for the entire term of the lease or other debt obligation. For each guarantee issued, if the affiliated retailer defaults on a payment, the company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees of the affiliated retailer. At February 22, 2003, the maximum amount of undiscounted payments the company would be required to make in the event of default of all guarantees is $305.9 million and represents $200.3 million on a discounted basis. No amount has been accrued for the company’s obligation under its guaranty arrangements. In addition, the company has guaranteed construction loans on warehouses of $26.3 million at February 22, 2003

F-30

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

that the company will purchase upon completion. The company did not enter into any new guarantees or modify existing guarantees after December 31, 2002.

The company is party to synthetic leasing programs for two of its major warehouses. The leases expire in April 2003 and September 2004. The lease that expires in April 2003 has a purchase option of approximately $60 million. The lease that expires in September 2004 may be renewed with the lessor’s consent through September 2006, and has a purchase option of approximately $25 million. At February 22, 2003, the estimated market value of the properties underlying these leases equaled or exceeded the purchase options.

RETIREMENT PLANS

Substantially all non-union employees of the company and its subsidiaries are covered by various contributory and non-contributory pension or profit sharing plans. The company also participates in several multi-employer plans providing defined benefits to union employees under the provisions of collective bargaining agreements.

Contributions under the defined contribution 401(k) and profit sharing plans are determined by plan provisions or at the discretion of the company’s Retirement Committee and were $8.0 million, $16.1 million and $11.9 million for fiscal 2003, 2002, and 2001, respectively. Plan assets also include 2.9 million shares and 3.1 million shares of the company’s common stock at February 22, 2003 and February 23, 2002, respectively. Amounts charged to union pension expense were $35.2 million, $38.4 million and $42.7 million for fiscal 2003, 2002, and 2001, respectively.

Benefit calculations for the company’s defined benefit pension plans for non-union eligible participants are generally based on years of service and the participants’ highest compensation during five consecutive years of employment. Annual payments to the pension trust fund are determined in compliance with the Employee Retirement Income Security Act (ERISA). Plan assets are held in trust and invested in separately managed accounts and publicly traded mutual funds holding both equity and fixed income securities.

In addition to providing pension benefits, the company provides certain health care and life insurance benefits for certain retired employees. Certain employees become eligible for these benefits upon meeting certain age and service requirements.

F-31

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables set forth the changes in benefit obligations and plan assets, a reconciliation of the accrued benefit costs and total benefit costs for the fiscal years for the company’s non-union defined benefit pension plans and the post retirement benefit plans:

	Pension Benefits						Post Retirement Benefits
	February 22, 2003			February 23, 2002			February 22, 2003			February 23, 2002
	(In thousands)

CHANGES IN BENEFIT OBLIGATIONS

Benefit obligations at beginning of year	$	466,770		$	412,517		$	103,687		$	86,246

Service cost		18,333			17,487			1,790			1,902

Interest cost		33,228			31,163			7,336			6,031

Plan amendments		10,123			—			—			(8,294	)

Actuarial (gain) loss		(5,709	)		25,544			5,445			22,396

Benefits paid		(20,362	)		(19,941	)		(6,938	)		(4,594	)


Benefit obligations at end of year	$	502,383		$	466,770		$	111,320		$	103,687


CHANGES IN PLAN ASSETS

Fair value of plan assets at beginning of year	$	396,034		$	409,685		$	—		$	—

Actual return on plan assets		(26,846	)		(11,845	)		—			—

Company contributions		44,278			18,135			4,120			3,424

Plan participants’ contributions		—			—			6,938			4,594

Benefits paid		(20,362	)		(19,941	)		(11,058	)		(8,018	)


Fair value of plan assets at end of year	$	393,104		$	396,034		$	—		$	—


RECONCILIATION OF PREPAID (ACCRUED) COST AND TOTAL AMOUNT RECOGNIZED

Funded status	$	(109,279	)	$	(70,736	)	$	(111,320	)	$	(103,687	)

Accrued contribution		—			3,000			—			—

Unrecognized net loss		169,611			110,236			46,003			43,302

Unrecognized prior service cost		10,134			(148	)		(6,738	)		(7,938	)


Prepaid (accrued) cost	$	70,466		$	42,352		$	(72,055	)	$	(68,323	)



Prepaid benefit cost	$	—		$	42,352

Accrued benefit liability		(52,144	)		—

Intangible asset		10,134			—

Accumulated other comprehensive income		112,476			—


Total recognized	$	70,466		$	42,352

F-32

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Pension Benefits									Post Retirement Benefits
	2003			2002			2001			2003			2002			2001
	(In thousands)

NET BENEFIT COSTS FOR THE FISCAL YEAR

Service cost	$	18,333		$	17,487		$	16,217		$	1,790		$	1,902		$	2,000

Interest cost		33,228			31,163			28,859			7,336			6,031			5,407

Expected return on plan assets		(40,323	)		(41,386	)		(38,231	)		—			—			—

Amortization of:

Unrecognized net loss		—			—			—			2,744			715			167

Unrecognized prior service cost		(158	)		(159	)		(159	)		(1,200	)		(736	)		(271	)

Unrecognized net obligation		2,085			—			(306	)		—			—			—


Net benefit costs for the fiscal year	$	13,165		$	7,105		$	6,380		$	10,670		$	7,912		$	7,303

In March 2002, the company amended its pension plan by adopting the Economic Growth and Tax Relief Reconciliation Act of 2001. The amendments included increasing the maximum plan benefit from $140,000 to $160,000 and the compensation limit from $170,000 to $200,000 and resulted in an increase to the plan’s benefit obligation of approximately $10.1 million in fiscal 2003. In July 2001, the company amended its post retirement medical health care benefit plan, making changes to plan eligibility, benefit coverage, and premium subsidization. This amendment resulted in a decrease in the plan’s benefit obligation of approximately $8.3 million in fiscal 2002.

The company utilized the following assumptions in the calculations for pension and the non-contributory unfunded pension plans:

	2003		2002		2001

Discount rate	7.00	%	7.25	%	7.75	%

Rate of compensation increase	3.25	%	3.50	%	4.00	%

Expected return on plan assets	9.25	%	10.00	%	10.00	%

The assumed health care cost trend rate used in measuring the accumulated post retirement benefit obligation was 9.0 percent in fiscal 2003. The assumed health care cost trend rate will decrease by one percent each year for the next four years until it reaches the ultimate trend rate of 5.0 percent. The health care cost trend rate assumption has a significant impact on the amounts reported. For example, a one percent increase in the trend rate would increase the accumulated postretirement benefit obligation by $6.7 million and the net periodic cost by $0.5 million in fiscal 2003. In contrast, a one percent decrease in the trend rate would decrease the accumulated postretirement benefit obligation by $6.3 million and the net periodic cost by $0.5 million in fiscal 2003. The weighted average discount rates used in determining the benefit obligation were 7.0% and 7.25% for fiscal 2003 and 2002, respectively.

F-33

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The company also maintains non-contributory, unfunded pension plans to provide certain employees with pension benefits in excess of limits imposed by federal tax law. The projected benefit obligation of the unfunded plans was $23.5 million and $18.8 million at February 22, 2003 and February 23, 2002, respectively. The accumulated benefit obligation of these plans totaled $19.3 million and $14.2 million at February 22, 2003 and February 23, 2002, respectively. Net periodic pension cost was $2.7 million, $2.8 million and $2.2 million for 2003, 2002 and 2001, respectively.

SIGNIFICANT CUSTOMER

During fiscal 2003 and 2002, no single customer accounted for ten percent or greater of net sales or accounts receivable. During fiscal 2001, Kmart Corporation (Kmart) represented 10.8 percent of net sales. Receivables outstanding for Kmart at February 24, 2001 were $70.0 million or 11.5 percent. The supply contract with Kmart terminated on June 30, 2001.

SHAREHOLDER RIGHTS PLAN

On April 24, 2000, the company announced that the Board of Directors adopted a Shareholder Rights Plan under which one preferred stock purchase right is distributed for each outstanding share of common stock. The rights, which expire on April 12, 2010, are exercisable only under certain conditions, and may be redeemed by the Board of Directors for $0.01 per right. The plan contains a three-year independent director evaluation provision whereby a committee of the company’s independent directors will review the plan at least once every three years. The rights become exercisable, with certain exceptions, after a person or group acquires beneficial ownership of 15 percent or more of the outstanding voting stock of the company.

SEGMENT INFORMATION

Refer to page F-5 for the company’s segment information.

F-34

UNAUDITED QUARTERLY FINANCIAL INFORMATION

(In thousands, except per share data)

Unaudited quarterly financial information for SUPERVALU INC. and subsidiaries is as follows:

	Fiscal Year Ended February 22, 2003
	First (16 wks)		Second (12 wks)		Third (12 wks)		Fourth (12 wks)		Year (52 wks)

Net sales	$	5,654,424	$	4,339,579	$	4,553,443	$	4,612,922	$	19,160,368

Gross profit	$	756,956	$	591,669	$	596,343	$	648,003	$	2,592,971

Net earnings	$	77,155	$	58,807	$	57,137	$	63,943	$	257,042

Net earnings per common share—diluted	$	0.57	$	0.44	$	0.43	$	0.48	$	1.91

Dividends declared per common share	$	0.1400	$	0.1425	$	0.1425	$	0.1425	$	0.5675
Weighted average shares—diluted	136,139		134,927		134,087		133,934		134,877

	Fiscal Year Ended February 23, 2002
	First (16 wks)		Second (12 wks)		Third (12 wks)		Fourth (12 wks)		Year (52 wks)

Net sales	$	6,742,046	$	4,568,770	$	4,470,548	$	4,511,676	$	20,293,040

Gross profit	$	766,916	$	591,013	$	591,911	$	639,003	$	2,588,843

Net earnings	$	56,968	$	50,568	$	58,016	$	32,774	$	198,326

Net earnings per common share—diluted	$	0.43	$	0.38	$	0.43	$	0.24	$	1.48

Dividends declared per common share	$	0.1375	$	0.1400	$	0.1400	$	0.1400	$	0.5575
Weighted average shares—diluted	132,576		134,249		135,068		134,486		133,978

Note: Fiscal 2003 net earnings include after-tax restructure charges of $1.8 million or $0.01 per diluted share. Fiscal 2002 net earnings include after-tax restructure and other items of $35.2 million or $0.27 per diluted share. Commencing with the fourth quarter of fiscal 2003, previously reported net sales and cost of sales have been revised for all prior periods by reclassifying cost of sales against net sales relating to certain facilitative services it provided between its independent retailers and vendors related to products typically known as Direct Store Delivery (DSD) products. This reclassification had no impact on gross profit, earnings before income taxes, net earnings, cash flows, or financial position for any period or their respective trends. See the Summary of Significant Accounting Policies for additional information.

F-35

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

SUPERVALU INC:

Under date of April 9, 2003, we reported on the consolidated balance sheets of SUPERVALU INC. and subsidiaries as of February 22, 2003 and February 23, 2002, and the related consolidated statements of earnings, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended February 22, 2003, which are included in the annual report on Form 10-K for the 2003 fiscal year. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in the accompanying index. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Minneapolis, Minnesota

April 9, 2003

F-36

SUPERVALU INC. and Subsidiaries

SCHEDULE II—Valuation and Qualifying Accounts

COLUMN A	COLUMN B		COLUMN C	COLUMN D	COLUMN E
Description	Balance at beginning of year		Additions	Deductions	Balance at end of year

Allowance for doubtful accounts:

Year ended:

February 22, 2003	$	22,941,000	14,768,000	15,796,000	$	21,913,000

February 23, 2002		22,750,000	13,536,000	13,345,000		22,941,000

February 24, 2001		22,383,000	11,839,000	11,472,000		22,750,000

Allowance for notes receivable accounts:

Year ended:

February 22, 2003	$	18,876,000	951,000	5,879,000	$	13,948,000

February 23, 2002		18,449,000	6,362,000	5,935,000		18,876,000

February 24, 2001		15,500,000	11,268,000	8,319,000		18,449,000

Closed properties reserves:

Year ended:

February 22, 2003	$	74,996,000	3,169,000	28,292,000	$	49,873,000

February 23, 2002		68,067,000	12,399,000	5,470,000		74,996,000

February 24, 2001		40,652,000	39,565,000	12,150,000		68,067,000

F-37

EXHIBIT INDEX

SUPERVALU INC.

ANNUAL REPORT ON FORM 10-K

Exhibit Number		Exhibit

*3(i)		Restated Certificate of Incorporation.

3(ii)		Restated Bylaws, as amended.

*4.1.		Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, relating to certain outstanding debt securities of the Registrant.

*4.2.		First Supplemental Indenture dated as of August 1, 1990, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.

*4.3.		Second Supplemental Indenture dated as of October 1, 1992, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.

*4.4.		Third Supplemental Indenture dated as of September 1, 1995, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.

*4.5.		Fourth Supplemental Indenture dated as of August 4, 1999, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.

*4.6.		Fifth Supplemental Indenture dated as of September 17, 1999, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.

*4.7.		Letter of Representations dated November 12, 1992, between the Registrant, Bankers Trust Company, as Trustee, and The Depository Trust Company relating to certain outstanding debt securities of the Registrant.

*4.8.		Rights Agreement dated as of April 12, 2000, between SUPERVALU INC. and Wells Fargo Bank Minnesota, N.A. (formerly Norwest Bank Minnesota, N.A.) as Rights Agent, including as Exhibit B the forms of Rights Certificate and Election to Exercise.

*4.9.		Indenture dated as of November 2, 2001, between SUPERVALU INC. and The Chase Manhattan Bank, as Trustee, including form of Liquid Yield Option ^™ Note due 2031 (Zero Coupon—Senior).

*4.10.		Registration Rights Agreement dated as of November 2, 2001, by and among SUPERVALU INC., Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

*4.11.		Form of Credit Agreement, dated as of April 23, 2002, among the Registrant, the Lenders named therein, JP Morgan Chase Bank, as Agent, and Bank One, NA, as Syndication Agent.

*10.1.		SUPERVALU INC. 2002 Stock Plan.

10.2.		SUPERVALU INC. 1997 Stock Plan, as amended.

*10.3.		SUPERVALU INC. 1993 Stock Plan, as amended.

*10.4.		SUPERVALU/Richfood Stock Incentive Plan, as amended.

*10.5.		Resolutions of SUPERVALU INC. Board of Directors, amending the SUPERVALU INC. Restricted Stock Plan, as amended.

*10.6.		SUPERVALU INC. 1983 Employee Stock Option Plan, as amended.

*10.7.		SUPERVALU INC. 1989 Stock Appreciation Rights Plan.

*10.8.		SUPERVALU INC. Executive Incentive Bonus Plan.

*10.9.		SUPERVALU INC. Annual Cash Bonus Plan for Designated Corporate Officers, as amended.

*10.10.		SUPERVALU INC. Long-Term Incentive Plan.

10.11.		SUPERVALU INC. Deferred Compensation Plan for Non-Employee Directors, as amended.

10.12.		SUPERVALU INC. Excess Benefit Plan Restatement, as amended.


10.13.		SUPERVALU INC. Deferred Compensation Plan as amended.

10.14.		SUPERVALU INC. Executive Deferred Compensation Plan, as amended.

10.15.		SUPERVALU INC. Executive Deferred Compensation Plan II, as amended.

*10.16.		Form of Agreement used in connection with the Registrant’s Executive Post-Retirement Survivor Benefit Program.

*10.17.		Form of Change of Control Severance Agreements entered into with certain officers of the Registrant.

10.18.		SUPERVALU INC. Directors Retirement Program, as amended.

*10.19.		SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.

*10.20.		First Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.

*10.21.		Second Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.

*10.22.		Third Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.

10.23.		Fourth Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.

10.24.		SUPERVALU INC. Non-Employee Directors Deferred Stock Plan.

*10.25.		Restricted Stock Unit Award Agreement for David L. Boehnen.

*10.26.		Restricted Stock Unit Award Agreement for Pamela K. Knous.

10.27.		Restricted Stock Unit Award Agreement for Jeffrey Noddle.

*10.28.		Amended and Restated SUPERVALU INC. Grantor Trust dated as of May 1, 2002.

12.1.		Ratio of Earnings to Fixed Charges.

21.1.		SUPERVALU INC. Subsidiaries.


23.1.		Consent of KPMG LLP.

24.1.		Power of Attorney.

99(i).		Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act.

99(ii).		Certification of Periodic Financial Report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Incorporated by Reference

                      EXHIBIT 3.ii

Adopted:       October 23, 1980
Amended:       June 27, 1983
Amended:       December 16, 1986
Amended:       April 13, 1988
Amended:       June 30, 1988
Amended:       February 14, 1990
Amended:       December 12, 1990
Amended:       February 16, 1991
Amended:       June 30, 1992
Amended:       October 9, 1998
Amended:       August 14, 2002

RESTATED BYLAWS
OF
SUPERVALU INC.

Table of Contents

Page
----

ARTICLE I. Offices, Corporate Seal 1
Section 1.01. Registered Office 1
Section 1.02. Corporate Seal 1

ARTICLE II. Meetings of Stockholders 1
Section 2.01. Place and Time of Meetings 1
Section 2.02. Annual Meetings 1
Section 2.03. Special Meetings 1
Section 2.04. Quorum, Adjourned Meetings 1
Section 2.05. Organization 2
Section 2.06. Order of Business 2
Section 2.07. Voting 2
Section 2.08. Inspectors of Election 3
Section 2.09. Notices of Meetings and Consents 3
Section 2.10. Proxies 3
Section 2.11. Waiver of Notice 4
Section 2.12. Stockholder List 4
Section 2.13. Fixing Date for Determination of Stockholders of Record 4
Section 2.14. Stockholder Action by Written Consent 4
Section 2.15. Notice of Stockholder Business and Nominations 5

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ARTICLE III. Board of Directors 7
Section 3.01. General Powers 7
Section 3.02. Number, Election and Term of Office 7
Section 3.03. Annual Meeting 8
Section 3.04. Regular Meetings 8
Section 3.05. Special Meetings 9
Section 3.06. Notice of Meetings 9
Section 3.07. Waiver of Notice 9
Section 3.08. Quorum 9
Section 3.09. Removal 9
Section 3.10. Committees of Directors 9
Section 3.11. Written Action 10
Section 3.12. Compensation 10
Section 3.13. Conference Communications 10

ARTICLE IV. Standing Committees 10
Section 4.01. Standing Committees 10
Section 4.02. Executive Committee 11
Section 4.03. Executive Personnel and Compensation Committee 11
Section 4.04. Finance Committee 11
Section 4.05. Audit Committee 11
Section 4.06. Director Affairs Committee 12

ARTICLE V. Officers 12
Section 5.01. Number 12
Section 5.02. Election, Term of Office and Qualifications 12
Section 5.03. Removal and Vacancies 12
Section 5.04. Chairman and Vice Chairman of the Board 12
Section 5.05. President 13
Section 5.06. Chief Executive Officer 13
Section 5.07. Chief Operating Officer 13
Section 5.08. Vice Presidents 13
Section 5.09. President Pro Tem 13
Section 5.10. Secretary 13
Section 5.11. Treasurer 14
Section 5.12. Controller 14
Section 5.13. Counsel 14
Section 5.14. Duties of Other Officers 14
Section 5.15. Authority to Execute Agreements 14
Section 5.16. Duties of Officers May be Delegated 14
Section 5.17 Compensation 15

ARTICLE VI. Shares and Their Transfer 15
Section 6.01. Certificates for Stock 15
Section 6.02. Issuance of Stock 15
Section 6.03. Partly Paid Stock 15

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Section 6.04. Transfer of Stock 16
Section 6.05. Facsimile Signatures 16

ARTICLE VII. Dividends, Surplus, Etc. 16
Section 7.01. Dividends 16
Section 7.02. Use of Surplus, Reserve 16

ARTICLE VIII. Books and Records, Audit, Fiscal Year 16
Section 8.01. Books and Records 16
Section 8.02. Audit 17
Section 8.03. Fiscal Year 17

ARTICLE IX. Indemnification 17
Section 9.01. Statutory Indemnification 17
Section 9.02. Additional Indemnification 17
Section 9.03. Procedure for Indemnification 18
Section 9.04. Non-Exclusive 18
Section 9.05. Subsidiary Corporations 19

ARTICLE X. Miscellaneous 19
Section 10.01. Periods of Time 19
Section 10.02. Voting Securities Held by the Corporation 19
Section 10.03. Purchase and Sale of Securities 19

ARTICLE XI. Amendments 19
Section 11.01. 19

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RESTATED BYLAWS
OF
SUPERVALU INC.

ARTICLE I.

Offices, Corporate Seal

Section 1.01. Registered Office. The registered office of the corporation in Delaware shall be at 100 West Tenth Street, Wilmington, Delaware, and the resident agent in charge thereof shall be The Corporation Trust Company.

Section 1.02. Corporate Seal. The corporate seal shall be circular in form and have inscribed thereon, the name of the corporation, the year of its incorporation (1925), and the word "Delaware."

ARTICLE II.
Meetings of Stockholders

Section 2.01. Place and Time of Meetings. Meetings of the stockholders may be held at such place and at such time as may be designated by the Board of Directors. In the absence of a designation of place, meetings shall be held at the principal executive office of the corporation. In the absence of a designation of time, the meetings shall be held at 10:00 a.m. local time at the place where the meeting is to be held. Any previously scheduled annual or special meeting of the stockholders may be postponed by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting.

Section 2.02. Annual Meetings. The annual meeting of the stockholders of the corporation for the election of directors and for the transaction of any other proper business shall be held at such date, time and place as may be fixed by resolution of the Board of Directors.

Section 2.03. Special Meetings. Special meetings of the stockholders for any purpose or purposes shall be called only by the Secretary (but only at the written request of a majority of the total number of directors), the Chairman of the Board or the President. Stockholders shall have no power or right to call special meetings. The call of any special meeting shall state the purpose or purposes of the meeting. Business transacted at any special meeting shall be limited to the purposes stated in the call of such meeting.

Section 2.04. Quorum, Adjourned Meetings. The holders of a majority of the shares outstanding and entitled to vote shall constitute a quorum for the transaction of business at any annual or special meeting. If a quorum is not present at a meeting, those present shall adjourn to such day as they shall agree upon by majority vote; provided, however, that any annual or special meeting of stockholders, whether or not a

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quorum is present, may be adjourned from time to time by the Chairman of the meeting. Notice of any adjourned meeting need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. At adjourned meetings, any business may be transacted which might have been transacted at the meeting as originally noticed. If a quorum is present, the stockholders may continue to transact business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 2.05. Organization. At each meeting of the stockholders, the Chairman of the Board or his delegate shall act as Chairman; in the event the Chairman is absent and he has not designated a Chairman, the Vice Chairman of the Board shall act as Chairman, or the Vice Chairman of the Board shall designate a Chairman; in the event the Vice Chairman of the Board is also absent and has not designated a Chairman, the President shall act as Chairman, or the President shall designate a Chairman; and the Secretary of the corporation or in his absence an Assistant Secretary or in his absence any person whom the Chairman of the meeting shall appoint shall act as Secretary of the meeting.

Section 2.06. Order of Business. The order of business at all meetings of the stockholders shall be determined by the Chairman of the meeting. The Chairman of the meeting shall convene and adjourn the meeting and determine and announce the times at which the polls shall be opened and closed at the meeting.

Section 2.07. Voting. Except as may be provided in a resolution or resolutions of the Board of Directors establishing a series of Preferred Stock, and except as may be otherwise provided in the Certificate of Incorporation of the corporation, each stockholder of the corporation entitled to vote at a meeting of stockholders shall have one vote in person or by written proxy for each share of stock having voting rights held by him and registered in his name on the books of the corporation. Upon the request of any stockholder, the vote upon any question before a meeting shall be by written ballot, and all elections of directors shall be by written ballot. All questions at a meeting shall be decided by a majority vote of the number of shares entitled to vote represented at the meeting at the time of the vote except where otherwise required by statute, the Certificate of Incorporation or these Bylaws.

Persons holding stock in fiduciary capacity shall be entitled to vote the shares so held. Unless the Secretary of the corporation has been furnished with a copy of governing instruments or orders which would cause other rules to be applicable, the following rules shall govern the voting of shares standing of record in the names of two or more persons (whether joint tenants, tenants in common, tenants by the entirety, fiduciaries, members of a partnership, or otherwise) or shares held in a fiduciary capacity in which two or more persons have the same fiduciary relationship respecting such shares:

(i) if only one person shall vote, his act shall bind all;

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(ii) if more than one person shall vote, the act of the majority voting shall bind all;

(iii) if more than one person shall vote, but the votes shall be evenly split on any particular matter, then, except as otherwise provided by statute, each fraction may vote the shares in question proportionately.

Section 2.08. Inspectors of Election. For each meeting of the stockholders, the Chairman of such meeting shall appoint one or more inspectors of election to act. Each inspector of election so appointed shall first subscribe an oath or affirmation to execute the duties of an inspector of election at such meeting with strict impartiality and according to the best of his ability. Such inspectors of election, if any, shall take charge of the ballots at such meeting and after the balloting on any question shall count the ballots and shall make a report in writing to the Secretary of such meeting of the results thereof. An inspector of election need not be a stockholder of the corporation, and any officer or employee of the corporation may be an inspector of election on any question other than a vote for or against his election to any position with the corporation or on any other question in which he may be directly interested.

Section 2.09. Notices of Meetings and Consents. Every stockholder may furnish the Secretary of the corporation with an address at which notices of meetings and all other corporate communications may be served on or mailed to him. In the absence of such address, the address on the corporate share registry maintained by the transfer agent shall be sufficient for purposes of the hereinafter described notice. Except as otherwise provided by the Certificate of Incorporation or by statute, a written notice of each annual or special meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of such meeting to each stockholder of record of the corporation entitled to vote at such meeting by delivering such notice of meeting to him personally or depositing the same in the United States mail, postage prepaid, directed to him at the post office address as provided above. Service of notice is complete upon mailing. Personal delivery to any officer of a corporation or association or to any member of a partnership is delivery to such corporation, association or partnership. Every notice of a meeting of stockholders shall state the place, date and hour of the meeting and the purpose or purposes for which the meeting is called.

Section 2.10. Proxies. Each stockholder entitled to vote at a meeting of stockholders or consent to corporate action without a meeting may authorize another person or persons to act for him by proxy by an instrument executed in writing. If any such instrument designates two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so designated unless the instrument shall otherwise provide.

Section 2.11. Waiver of Notice. Notice of any annual or special meeting may be waived either before, at or after such meeting in writing signed by the person or persons entitled to the notice. Attendance of a person at a meeting shall constitute a waiver of

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notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transacting of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of any regular or special meeting of the stockholders need be specified in any written waiver of notice.

Section 2.12. Stockholder List. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder.

Section 2.13. Fixing Date for Determination of Stockholders of Record.

(a) In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action (other than the expression of consent to corporate action in writing without a meeting of stockholders), the Board of Directors shall fix, in advance, a record date, which may not be more than 60 or not less than 10 days before the date of such meeting, nor more than 60 days prior to any other action.

(b) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 2.14. Stockholder Action by Written Consent. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or any officer

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or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.

Section 2.15. Notice of Stockholder Business and Nominations.

(a) Annual Meetings of Stockholders. (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (A) pursuant to the Corporation's notice of meeting, (B) by or at the direction of the Board of Directors or (C) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 2.15, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 2.15.

(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (C) of paragraph
(a)(1) of this Section 2.15, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must be a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 150th day prior to such annual meeting and not later than the close of business on the later of the 120th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (A) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the

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beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner.

(3) Notwithstanding anything in the second sentence of paragraph (a)(2) of this Section 2.15 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increase Board of Directors made by the Corporation at least 100 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Section 2.15 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (A) by or at the direction of the Board of Directors or (B) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 2.15, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.15. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by paragraph (a)(2) of this Section 2.15 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder's notice as described above.

(c) General. (1) Only such persons who are nominated in accordance with the procedures set forth in this Section 2.15 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.15. Except as otherwise provided by law, the Chairman of the meeting shall have the

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power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.15 and, if any proposed nomination or business is not in compliance with this Section 2.15, to declare that such defective proposal or nomination shall be disregarded.

(2) For purposes of this Section 2.15, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this Section 2.15, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.15. Nothing in this Section 2.15 shall be deemed to affect any rights of (i) stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) the holders of any series of Preferred Stock to elect directors under specified circumstances.

ARTICLE III.
Board of Directors

Section 3.01. General Powers. The business of the corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may delegate its authority, subject to its reasonable supervision, to any committee, officer or agent and grant the power to sub-delegate.

Section 3.02. Number, Election and Term of Office.

(a) The Board of Directors currently consists of 14 members and the number of directors may be increased or decreased from time to time by resolution of a majority of the whole Board of Directors or of the holders of at least 75% of the stock of the corporation entitled to vote, considered for the purpose as one class. Except as otherwise provided by law or by these Bylaws, the directors of the corporation shall be elected at the Annual Meeting of stockholders in each year.

The directors of the corporation shall be divided into three classes with the number of directors fixed by or in accordance with the Bylaws divided equally so far as possible among the three classes. At each annual election of directors after the 1976 Annual Meeting of Stockholders, the successors to the directors of each class whose term shall expire in that year shall be elected to hold office for a term of three years from the date of their election and until their successors shall be duly elected and qualified. In case of any increase or decrease in the number of directors, the increase or decrease shall be distributed among the several classes as nearly equal as possible, as shall be determined by the affirmative vote of a majority of the whole Board or by the

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holders of at least 75% of the stock of the corporation entitled to vote, considered as one class.

(b) Vacancies: Newly Created Directorships - If the office of any director becomes vacant at any time by reason of death, resignation, retirement, disqualification, removal from office or otherwise, or if any new directorship is created by any increase in the authorized number of directors, a majority of the directors then in office, although less than a quorum, or the sole remaining director, may choose a successor to fill the newly created directorship, and the director so chosen shall hold office subject to the provisions of these Bylaws, until the next Annual Meeting of Stockholders or until his or her successor shall have been elected and qualified. At such next Annual Meeting the stockholders shall elect a director to fill the balance of the unexpired term of the director whose place was originally vacated or the term established by the Board pursuant to subsection (a) above.

(c) Amendment - Notwithstanding Article XI of these Bylaws, no provision of this Section 3.02 may be amended or rescinded except by the affirmative vote of the holders of at least 75% of the stock of the corporation entitled to vote, considered for the purpose as one class, or by a majority of the whole Board of Directors.

(d) [Intentionally omitted]

(e) Notwithstanding any other provision of these Bylaws, the Board of Directors may nominate William E. C. Dearden for reelection to the Board of Directors at the 1991 Annual Meeting of Stockholders for a term of two years. Upon Mr. Dearden's ceasing to be a director of the corporation, this Section 3.02(e) shall have no further force and effect and shall be deleted from these Bylaws.

Section 3.03. Annual Meeting. As soon as practicable after each annual election of directors, the Board of Directors shall meet at the same place as the annual meeting of shareholders or at the principal executive office of the corporation, or at such other place previously designated by the Board of Directors, for the purpose of electing the officers of the corporation and for the transaction of such other business as may come before the meeting.

Section 3.04. Regular Meetings. Regular meetings of the Board of Directors shall be held from time to time at such time and place as may be fixed by resolution adopted by a majority of the total number of directors.

Section 3.05. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, or by any two of the directors and shall be held from time to time at such time and place as may be designated in the notice of such meeting.

Section 3.06. Notice of Meetings. No notice need be given of any annual or regular meeting of the Board of Directors. Notice of each special meeting of the Board

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of Directors shall be given by the Secretary who shall give at least three (3) days' notice thereof by mail or at least twenty-four (24) hours' notice thereof to each director by telephone, telegram or in person. Notice shall be effective upon dispatch of a letter or telegram (properly addressed to the director) or upon delivery of written or telephoned notice to a person at the regular business or residence address of the director even if such notice is not personally received by the director.

Section 3.07. Waiver of Notice. Notice of any meeting of the Board of Directors may be waived either before, at or after such meeting in writing signed by each director so waiving notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purposes of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors need be specified in any written waiver of notice.

Section 3.08. Quorum. A majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless these Bylaws require a greater number.

Section 3.09. Removal. Any director may be removed from office at any meeting of the stockholders, but only for cause. If one or more directors be so removed, new director(s) may be elected at the same meeting.

Section 3.10. Committees of Directors.

(a) The Board of Directors may, by resolution adopted by a majority of the total number of directors, designate one or more committees in addition to the committees established pursuant to Article IV of these Bylaws, each to consist of one or more of the directors of the corporation, which, to the extent provided in the resolution, may exercise the powers of the Board of Directors in management of the business and affairs of the corporation and may authorize the corporate seal to be affixed to all papers that may require it. The Board of Directors shall elect the directors to serve on each Committee and may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined by the resolution adopted by the directors. The chairman of each committee shall act as secretary of the meeting and prepare minutes of proceedings where formal action is taken by the committee, and each committee shall report their actions and recommendations to the Board of Directors when required.

(b) The provisions of Section 3.06 through 3.08 of these Bylaws with respect to notices of meetings and quorums shall also be applicable to meetings of committees, except as otherwise provided in the Bylaws or resolutions establishing a particular

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committee. Special meetings of any committee shall be called at the request of any member or by the President or Chairman of the Board.

Section 3.11. Written Action. Any action required or permitted to be taken at a meeting of the Board of Directors or any committee thereof may be taken without a meeting if all directors or committee members consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Such action shall be deemed to have been taken upon the effective date appearing in said writing, notwithstanding the fact that some or all of the directors may have signed on a date other than the effective date.

Section 3.12. Compensation. Directors who are not salaried officers of this corporation may receive such fixed sum per Board or Committee meeting attended or fixed annual sum and such other forms of compensation as may be determined by resolution of the Board of Directors. All directors shall receive their expenses, if any, of attendance at meetings of the Board of Directors or any committee thereof. Any director may serve the corporation in any other capacity and receive proper compensation therefor.

Section 3.13. Conference Communications. Directors may participate in any meeting of the Board of Directors, or of any duly constituted committee thereof, by means of a conference telephone conversation or other comparable communication technique whereby all persons participating in the meeting can hear and communicate to each other. For the purposes of establishing a quorum and taking any action at the meeting, such directors participating pursuant to this Section 3.13 shall be deemed present in person at the meeting; and the place of the meeting shall be the place of origination of the conference telephone conversation or other comparable communication technique.

ARTICLE IV.
Standing Committees

Section 4.01. Standing Committees. The corporation shall have such standing committees of the Board of Directors as are provided in Article IV of these Bylaws. The Chairman of each standing committee shall be appointed by vote of a majority of the whole Board of Directors. The provisions of Section 3.10 of the Bylaws shall govern all standing committees, except as may be otherwise provided in the Bylaw establishing the committee. Each standing committee shall perform the duties specified in these Bylaws and shall have such other responsibilities and authority as may from time to time be assigned by the Board of Directors.

Section 4.02. Executive Committee.

(a) Between sessions of the Board of Directors, the Executive Committee shall have, and may exercise, all of the powers of the Board of Directors in the management and affairs of the corporation, including the power to authorize the seal of

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the corporation to be affixed to all papers which may require it, except the Executive Committee shall have no power or authority to (i) adopt an agreement of merger or consolidation, (ii) recommend to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, (iii) recommend to the stockholders a dissolution of the corporation or revocation of a dissolution, or (iv) amend the Certificate of Incorporation or the Bylaws of the corporation. The Executive Committee shall have the power and authority to declare a dividend and to authorize the issuance of stock.

(b) At least one member of the Executive Committee shall be a director of the corporation who is not an employee and no meeting of the Committee shall be deemed to have a quorum unless at least one such member is present. Action by the Executive Committee may be taken only by the unanimous vote of the members present at a meeting in which a quorum is present. The chief executive officer shall be a member of the Executive Committee and shall preside at its meetings in the absence of its Chairman.

Section 4.03. Executive Personnel and Compensation Committee. The Executive Personnel and Compensation Committee shall provide a general review of the corporation's compensation and benefit plans to insure they meet corporate objectives. It shall perform such duties and responsibilities as may from time to time be assigned to it by the Board of Directors. All members of the Committee shall be directors who are not employees of the corporation.

Section 4.04. Finance Committee. The Finance Committee shall act in an advisory capacity and make its recommendations to the management of the corporation and to the Board of Directors on corporate fiscal matters. It shall perform such duties and responsibilities as may from time to time be assigned to it by the Board of Directors.

Section 4.05. Audit Committee.

(a) The Audit Committee shall recommend to the whole Board of Directors the selection of independent certified public accountants to audit annually the books and records of this corporation and shall review the activities and the reports of the independent certified public accountants and shall report the results of such review to the whole Board of Directors. The Audit Committee shall also monitor the internal audit controls of the corporation.

(b) The Audit Committee shall be comprised solely of directors independent of management and free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment as a Committee member.

Section 4.06. Director Affairs Committee. The Director Affairs Committee shall review and make its recommendations to the whole Board of Directors regarding

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nominations of persons to serve on the Board of Directors, and shall have such other duties and responsibilities as may from time to time be assigned to it by the Board of Directors.

ARTICLE V.
Officers

Section 5.01. Number. The officers of the corporation shall consist of a Chairman of the Board, a President, a Treasurer and a Secretary, and, if elected, such additional officers as described in this Article V. The Board of Directors shall designate whether the Chairman of the Board or the President is to be the Chief Executive Officer of the corporation. The directors may designate one or more regional or divisional Presidents and Vice Presidents who shall not be officers of this corporation. Any person may hold two or more offices except President and Vice President.

Section 5.02. Election, Term of Office and Qualifications. At each annual meeting of the Board of Directors, all officers, from within or without their number, shall be elected; however, the Board may elect additional officers at any Board meeting. Such officers shall hold office until the next annual meeting of the directors or until their successors are elected and qualified or until such office is eliminated by a vote of the majority of all directors.

Section 5.03. Removal and Vacancies. Any officer may be removed from his office by a majority vote of the total number of directors with or without cause. A vacancy among the officers by death, resignation, removal, or otherwise may be filled for the unexpired term by the Board of Directors.

Section 5.04. Chairman and Vice Chairman of the Board.

(a) The Chairman of the Board shall preside at all meetings of the directors and shall have such other duties as may be prescribed, from time to time, by the Board of Directors.

(b) In the absence of the Chairman of the Board, the Vice Chairman of the Board shall preside at all meetings of the directors, and shall have such other duties as from time to time may be assigned by the Board of Directors.

Section 5.05. President. The President shall be the Chief Operating Officer of the corporation. He shall have such duties as may, from time to time be prescribed by the Board of Directors or be delegated by the Chief Executive Officer. In the absence of the Chairman of the Board and the Vice Chairman of the Board, or if a Chairman of the Board and Vice Chairman of the Board shall not have been elected, the President shall preside at all meetings of the directors.

Section 5.06. Chief Executive Officer. The Chief Executive Officer shall be either the Chairman of the Board or the President of the corporation. He shall be the principal

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executive officer of the corporation and shall be responsible for the general management, direction and control of all of the business and affairs of the corporation. He shall have such other authority and duties as the Board of Directors may prescribe. The Chief Executive Officer shall report to the Board of Directors and be responsible to them.

Section 5.07. Chief Operating Officer. The Chief Operating Officer shall be the President. He shall be responsible for the daily operations of the corporation's business and shall have such other authority and duties as the Board of Directors or the Chief Executive Officer may prescribe. He shall report to the Chief Executive Officer if the Chief Executive Officer is not also serving as the Chief Operating Officer.

Section 5.08. Vice Presidents. Each Vice President shall have such powers and shall perform such duties as may be prescribed by the Board of Directors or by the Chief Executive Officer. The following categories of Vice Presidents may be elected by the Board of Directors:

(i) Executive Vice Presidents

(ii) Senior Vice Presidents

(iii) Vice Presidents including Group Vice Presidents

Section 5.09. President Pro Tem. In the absence or disability of the President, the Board of Directors may appoint a President Pro Tem who shall have all the powers and duties of the President and shall serve during the aforesaid absence or disability.

Section 5.10. Secretary. The Secretary shall be secretary of and shall attend all meetings of the stockholders and the Board of Directors and shall record the proceedings of such meetings in the minute book of the corporation. He shall give proper notice of meetings of stockholders and Board of Directors. He shall keep the seal of the corporation. He shall perform such other duties as may from time to time be prescribed by the Board of Directors or by the President or the Chairman.

Section 5.11. Treasurer. The Treasurer or his delegate shall keep accurate accounts of all moneys of the corporation received or disbursed. He shall have power to endorse for deposit all notes, checks and drafts received by the corporation. He shall disburse the funds of the corporation as ordered by the directors, making proper vouchers therefor. He shall render to the President and the Board of Directors whenever required an account of all his transactions as Treasurer and of the financial condition of the corporation and shall perform such other duties as may from time to time be prescribed by the Board of Directors or by the President or the Chairman.

Section 5.12. Controller. The duties of the Controller shall be to maintain adequate records and books of account and control of all assets, liabilities and transactions of this corporation; to see that adequate audits thereof are currently and

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regularly made; and, in conjunction with other officers and department heads, to initiate and enforce adequate accounting measures and procedures. He shall perform such other duties as the Board of Directors may from time to time prescribe or require. His duties and powers shall extend to all subsidiary corporations.

Section 5.13. Counsel. The Counsel shall be the legal adviser of the corporation and shall receive such salary for his services as the Board of Directors may fix.

Section 5.14. Duties of Other Officers. Assistant Vice Presidents, Assistant Secretaries, and Assistant Treasurers elected by the Board of Directors shall have the power and authority and may perform all the duties of a Vice President, the Secretary, or the Treasurer, respectively. The duties of such other officers and agents as the Board of Directors may designate shall be set forth in the resolution creating such office or by subsequent resolution.

Section 5.15. Authority to Execute Agreements. The Chairman of the Board, Vice Chairman of the Board, President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Group Vice Presidents are hereby authorized to execute or cause to be executed in the name and on behalf of this corporation, all contracts, agreements, deeds, mortgages, bonds, options, leases, lease and other guarantees of the obligations of others, including subsidiary corporations and customers, stock transfer documents, and such other instruments as may be necessary or desirable in the conduct of the business of the corporation; and said officers are further authorized to sign and affix, or cause to be signed and affixed, the seal of the corporation on any instrument requiring the same, which seal shall be attested by the signature of the Secretary, the Treasurer, any Assistant Secretary or any Assistant Treasurer.

Section 5.16. Duties of Officers May be Delegated. In the case of the absence or disability of any officer of the corporation or for any other reason deemed sufficient by the Board of Directors, it may delegate his powers or duties to any other officer or to any director during such absence or disability.

Section 5.17. Compensation. The officers of the corporation shall receive such compensation for their services as may be determined from time to time by resolution of the Board of Directors or by one or more committees to the extent so authorized from time to time by the Board of Directors.

ARTICLE VI.
Shares and Their Transfer

Section 6.01. Certificates for Stock. Every holder of shares in the corporation shall be entitled to a certificate, to be in such form as shall be prescribed by the Board of Directors, certifying the number and class of shares of the corporation owned by him. The certificates for such shares shall be numbered in the order in which they shall be issued and shall be signed in the name of the corporation by the Chairman of the

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Board, the President or a Vice President, and by the Secretary or an Assistant Secretary and the seal of the corporation shall be affixed thereto. Every certificate surrendered to the corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such certificate shall have been so cancelled, except in cases provided for in Section 6. 05.

Section 6. 02. Issuance of Stock. The Board of Directors is authorized to cause to be issued shares of the corporation up to the full amount authorized by the Certificate of Incorporation in such amounts and for such consideration as may be determined by the Board of Directors.

Section 6. 03. Partly Paid Stock. The corporation may issue the whole or any part of its stock as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each certificate issued to represent any such partly paid stock, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid stock, the corporation shall declare a dividend upon partly paid stock of the same class, but only upon the basis of the percentage of the consideration actually paid thereon. The Board of Directors may, from time to time, demand payment, in respect of each share of stock not fully paid, of such sum of money as the necessities of the business may, in the judgment of the Board of Directors, require, not exceeding in the whole the balance remaining unpaid on such stock, and such sum so demanded shall be paid to the corporation at such times and by such installments as the directors shall direct. The directors shall give written notice of the time and place of such payments, which notice shall be mailed at least 30 days before the time for such payment, to each holder of or subscriber for stock which is not fully paid at his last known post office address or his last known address on the stock registry.

Section 6.04. Transfer of Stock. Transfer of stock on the books of the corporation may be authorized only by the stockholder named in the certificate, the stockholder's legal representative or the stockholder's duly authorized attorney-in-fact and upon surrender of the certificate or the certificates for such stock. The corporation may treat as the absolute owner of stock of the corporation the person or persons in whose name stock is registered on the books of the corporation. The Board of Directors may appoint one or more transfer agents, who shall keep the stock ledger and transfer book for the transfer of stock of the corporation, and one or more registrars, and may require all certificates of stock to bear the signature of such transfer agents and of such registrars.

Section 6.05. Facsimile Signatures. Whenever any certificate is countersigned by a transfer agent or by a registrar other than the corporation or its employee, then the signatures of the officers or agents of the corporation may be a facsimile. Where a certificate is to bear the signature of a transfer agent and a registrar, the signature of one, but not both, may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on any such certificate

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shall cease to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation as though the person who signed such certificate or whose facsimile signature or signatures had been placed thereon were such officer, transfer agent or registrar at the date of issue.

ARTICLE VII.
Dividends, Surplus, Etc.

Section 7.01. Dividends. The Board of Directors may declare dividends on its capital stock from the corporation's surplus, or if there be none, out of its net profits for the current fiscal year, and/or the preceding fiscal year in such amounts as in its opinion the condition of the affairs of the corporation shall render it advisable unless otherwise restricted by law.

Section 7.02. Use of Surplus, Reserve. The Board of Directors may use any of the corporation's property or funds, unless such would cause an impairment of capital, in purchasing any of the stock, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the corporation. The Board of Directors may from time to time set aside from corporate surplus or net profits such sums as it deems proper as a reserve fund for any purpose.

ARTICLE VIII.
Books and Records, Audit, Fiscal Year

Section 8.01. Books and Records. The Board of Directors of the corporation shall cause to be kept: (a) a share ledger which shall be in charge of the Secretary; (b) records of the proceedings of stockholders and directors:
and (c) such other records and books of account as shall be necessary and appropriate to the conduct of the corporate business.

Section 8.02. Audit. The Board of Directors shall cause the records and books of account of the corporation to be audited at least once for each fiscal year and at such other times as it may deem necessary or appropriate.

Section 8.03. Fiscal Year. The fiscal year of the corporation shall end on the last Saturday in February of each year.

ARTICLE IX.
Indemnification

Section 9.01. Statutory Indemnification. The corporation shall indemnify any director or officer of the corporation and may indemnify any employee or agent of the corporation in the discretion of the Board of Directors for such liabilities in such manner under such circumstances and to such extent as permitted by Section 145 of the Delaware General Corporation Law or its successor, as now enacted or hereafter amended.

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Section 9.02. Additional Indemnification. In addition to that authorized in Section 9.01 herein, the corporation shall indemnify as follows:

(a) The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding (even if such wrongful act arose out of neglect or breach of duty not involving willful misconduct), so long as he did not act out of personal profit or advantage which was undisclosed to the corporation and he acted in a manner he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

(b) The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, including amounts paid in settlement, (even if such wrongful act arose out of neglect or breach of duty not involving willful misconduct), so long as he did not act out of personal profit or advantage which was undisclosed to the corporation and he acted in a manner he reasonably believed to be in or not opposed to the best interests of the corporation.

Section 9.03. Procedure for Indemnification.

(a) The corporation shall be required to make a determination that indemnification under this Article is proper in the circumstances because the person being indemnified has met the applicable standards of conduct set forth in this Article. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to the action, suit or proceeding, even though less than a quorum, (2) by a committee of such directors designated by a majority vote of such directors, even

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though less than a quorum, (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders of the corporation. If a court orders indemnification of the officer or director, no such outside determination is necessary.

(b) Expenses incurred by any person who shall have a right of indemnification under this Article in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action provided that a determination has not been made by independent legal counsel (who may be the regular counsel for the corporation) in a written opinion that it is reasonably likely that the person has not met the applicable standards of conduct for indemnification and provided that the corporation has received an undertaking by or on behalf of the person to repay such expenses unless it shall ultimately be determined that he is entitled to be indemnified by the corporation pursuant to this Article.

Section 9.04. Non-Exclusive.

(a) The indemnification provided by this Article is in addition to and independent of and shall not be deemed exclusive of any other rights to which any person may be entitled under any agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person; provided that any indemnification realized other than under this Article shall apply as a credit against any indemnification provided by this Article.

(b) The corporation may provide indemnification under this Article to any employee or agent of the corporation or of any other corporation of which the corporation owns or controls or at the time owned or controlled directly or indirectly a majority of the shares of stock entitled to vote for election of directors or to any director, officer, employee or agent of any other corporation, partnership, joint venture, trust or other enterprise in which the corporation has or at the time had an interest as an owner, creditor or otherwise, if and whenever the Board of Directors of the corporation deems it in the best interest of the corporation to do so.

(c) The corporation may, to the fullest extent permitted by applicable law from time to time in effect, indemnify any and all persons whom the corporation shall have power to indemnify under said law from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law, if and whenever the Board of Directors of the corporation deems it to be in the best interest of the corporation to do so.

Section 9.05. Subsidiary Corporations. For purposes of this Article and indemnification hereunder, any person who is or was a director or officer of any other corporation of which the corporation owns or controls or at the time owned or controlled

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directly or indirectly a majority of the shares of stock entitled to vote for election of directors of such other corporation shall be conclusively presumed to be serving or to have served as such director or officer at the request of the corporation.

ARTICLE X.
Miscellaneous

Section 10.01. Periods of Time. During any period of time prescribed by these Bylaws, the date from which the designated period of time begins to run shall not be included, and the last day of the period so computed shall be included.

Section 10.02. Voting Securities Held by the Corporation. Unless otherwise ordered by the Board of Directors, the Chief Executive Officer shall have full power and authority on behalf of the corporation (a) to attend and to vote at any meeting of security holders of other corporations in which the corporation may hold securities; (b) to execute any proxy for such meeting on behalf of the corporation; or (c) to execute a written action in lieu of a meeting of such other corporation on behalf of the corporation. At such meeting, by such proxy or by such writing in lieu of meeting, the Chief Executive Officer shall possess and may exercise any and all rights and powers incident to the ownership of such securities that the corporation might have possessed and exercised if it had been present. The Board of Directors may, from time to time, confer like powers upon any other person or persons.

Section 10.03. Purchase and Sale of Securities. Unless otherwise ordered by the Board of Directors, the Chief Executive Officer shall have full power and authority on behalf of the corporation to purchase, sell, transfer or encumber any and all securities of any other corporation owned by the corporation and may execute and deliver such documents as may be necessary to effectuate such purchase, sale, transfer or encumbrance. The Board of Directors may, from time to time, confer like powers upon any other person or persons.

ARTICLE XI.
Amendments

Section 11.01. These Bylaws may be amended, altered or repealed at any meeting of the directors by a vote of the majority of the whole Board of Directors or at any meeting of the shareholders at which a quorum, as defined in Article II, Section 2.04 of these Bylaws, is present by the vote of a majority of the shares voting at the meeting.

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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.

(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.

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.

(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

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

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

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.

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.

(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)

EXHIBIT 10.11

SUPERVALU INC.
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
EFFECTIVE 6/27/96, AS AMENDED

1. A director who is not an employee of the Company or of a subsidiary of the Company may elect to defer receipt of the payment of his cash fees and other cash compensation as a director until such time as he has ceased to be a director, as hereinafter provided.

2. Any election hereunder to defer fees shall apply to all or any part of the cash fees and other cash compensation earned by the director as a director of the Company (quarterly retainer fees as well as fees for attending Board meetings and committee meetings, but not stock option grants or amounts paid pursuant to the Non-Employee Directors Deferred Stock Plan) until termination of such election.

3. Such election shall be made by the director filing a written statement with the Secretary of the Company electing to defer director's fees pursuant to this plan and shall be effective with respect to any fees and other compensation thereafter payable to the electing director for which no services have yet been rendered by said electing director.

4. A director's election to defer director's fees hereunder shall continue thereafter unless and until the director terminates the deferral by giving notice to the Secretary in writing. In the event of such termination of a deferral, the amount previously deferred shall not be paid until such director ceases to be a director.

5. All fees so deferred will be credited to a special bookkeeping account for the director at such times as the fees would have been payable had the director not elected to defer payment thereof.

6. The Company will not set aside any money in trust or otherwise fund the payment of any amounts credited to the director's deferred fee account, but shall make payment to the director when due out of general corporate funds. The director shall have the status solely of an unsecured general creditor of the Company with respect to the amounts credited to the director's deferred fee account.

7. Interest shall be accrued on all deferred fees from and after the date when credited to the director's deferred fee account until paid as hereinafter provided. For all amounts credited to a director's deferred fee account prior to July 1, 1996, interest shall be accrued at the rate of 11% per annum; for all amounts credited to a director's deferred fee account on or after July 1, 1996, interest shall be accrued at the prime interest rate as published in the Wall Street Journal on the first business day of January each year for the ensuing year. Such interest shall be credited to the director's deferred fee account as of the last day of each month and shall be compounded annually.

8. The balance in the director's deferred fee account (including interest thereon) accrued prior to July 1, 1996, shall be paid in ten equal annual installments, each installment being paid on or before January 10 of each year beginning with the calendar year immediately following the year in which the director ceases to be a director. The balance in the director's deferred fee account (including interest thereon) accrued on and after July 1, 1996, shall be paid in a lump sum or in equal annual installments, as the director shall elect at the time the director makes the deferral election under paragraph 1 hereof. Notwithstanding the foregoing, the Company, acting by resolution of the Board exclusive of any director covered by this plan, in its sole discretion may determine to make payment of the balance in the director's deferred fee account (including accrued interest thereon) in one payment or in installments. Furthermore, the director may change the deferred payment election for cash fees and other cash compensation that has previously been deferred into the director's deferred fee account by delivering a subsequent deferral payment election in writing to the Secretary that will take effect at the beginning of the second complete calendar year after the date of the revised deferral payment election. Interest at the rates provided in Section 7 shall be earned on unpaid installments.

The foregoing not to the contrary, after a director ceases to be a director, such person, or in the event of such person's death, his or her surviving spouse or beneficiary, may, at any time, request an immediate lump sum payment of all or part of the present value of his or her deferred fee account that is not yet due and payable, subject to forfeiture of ten percent (10%) of such amount.

9. Upon the death of a director or a former director, any amounts of deferred director's fees and interest accrued shall be paid in full on or before January 10 of the calendar year following the year in which the director dies, to the legal representative of the director's estate or to such person(s) as the director shall have instructed the Company by written instrument filed with the Secretary of the Company and signed by the director.

10. Upon a Change of Control of the Company (as hereinafter defined) the entire balance of the director's deferred fee account shall be paid in full to the director.

CHANGE OF CONTROL:

For purposes hereof, Change of Control shall have the following meaning:

directly from the Company (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) hereof, or

(b) individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, than any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then constituting the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business combination; or

(d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

Last Revised: 11-25-02

EXHIBIT 10.12

SUPERVALU INC.
EXCESS BENEFITS PLAN
(2002 Restatement)

WHEREAS, this corporation and certain subsidiaries of this corporation have heretofore adopted and currently maintain a defined benefit pension plan known as the Super Valu Stores, Inc. Excess Benefit Plan (1989 Restatement), as Amended By that FIRST AMENDMENT adopted and effective June 30, 1998 (hereinafter the "Plan"); and

WHEREAS, this corporation desires to amend and restate the Plan to allow participants therein who have retired or otherwise terminated their employment to request an immediate lump sum payment of all or a portion of their benefits under the Plan subject a forfeiture of a portion of such amount; and

WHEREAS, this corporation desires to further amend the Plan to reflect the change in the corporation's name from Super Valu Stores, Inc. to SUPERVALU INC.;

WHEREAS, this corporation desires to restate the Plan to incorporate the forgoing amendments;

NOW THEREFORE, This corporation does hereby amend and restate the previously established "Super Valu Stores, Inc. Excess Benefit Plan (1989 Restatement)" as follows:

1. Plan Name. This plan shall be referred to as the SUPERVALU INC. EXCESS BENEFITS PLAN (2002 Restatement) (hereinafter the "Plan").

2. Participating Employees.

2. 1. General Rules. The individuals eligible to participate in and receive benefits under the Plan are those of SUPERVALU INC. and its subsidiaries who, on or after February 24, 1985:

(i) are participating employees in the Retirement Plan or a Profit Sharing Plan, or both; and

(ii) are actively employed by SUPERVALU INC. or one of Its subsidiaries; and

(iii) are affirmatively selected for participation in this Plan by the Compensation Committee of the Board of Directors.

2.2. Specific Exclusions. Notwithstanding anything apparently to the contrary in this Plan or in any written communication, summary, resolution or document or oral communication, no individual shall be a participating employee in this Plan, develop benefits under this Plan or be entitled to receive benefits under this Plan (either for himself or his survivors) unless such individual is a member of a select group of management or highly compensated employees (as that expression is used in ERISA). If a court of competent jurisdiction, any representative of the U.S. Department of Labor or any other governmental, regulatory or similar body makes any direct or indirect, formal or informal, determination that an individual is not a member of a select group of management or highly compensated employees (as that expression is used in ERISA), such individual shall not be (and shall not have ever been) a participating employee in this Plan at any time. If any person not so defined has been erroneously treated as a participating employee in this Plan, upon discovery of such error such person's

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erroneous participation shall immediately terminate ab initto and upon demand such person shall be obligated to reimburse SUPERVALU INC. for all amounts erroneously paid to him or her.

3. Benefit for Retirement Plan Participating Employees.

3.1. General Amount. Except to the extent provided otherwise in Section 3.5, this Plan shall pay to participating employees the excess, if any, of:

(i) the amount that would have been payable under the Retirement Plan if such benefit had been determined without regard to the benefit limitations under section 415 of the Code and without regard to the compensation limitation of section 401(a)(17) of the Code, over

(ii) the amount actually paid from the Retirement Plan.

3.2. Form. Except as provided in paragraph 6 below, this benefit (minus the withholding and payroll taxes which must be deducted therefrom) shall be paid to the participating employee directly from the general assets SUPERVALU INC. in such one of the following Actuarially Equivalent forms as the participating employee shall have elected in writing not later than June 1, 1990:

(i) a single lump sum;

(ii) a series of five (5) equal annual installments;

(iii) a series of ten (10) equal annual installments;

(iv) a single life annuity (also known as a Basic Pension);

(v) a joint and 50% to surviving spouse annuity;

(vi) a joint and 67% to surviving spouse annuity; or

(vii) a joint and 100% to surviving spouse annuity.

Actuarially Equivalent value shall be determined by reference to the rules and factors in effect under the Retirement Plan at the time the benefit is first payable. Benefits payable to a surviving spouse shall be paid only to the person, if any, who was the participating employee's surviving spouse at the time of the Termination of Employment. If there is no such surviving spouse at such time, all elections of forms paying benefits to a surviving spouse shall be deemed to be elections of a single life annuity (or Basic Pension) form. Amounts payable to the participating employee in a lump sum or installment form which are not paid at the participating employee's death shall be paid to the participating employee's estate.

3.3. Time. The payment shall be made (in the case of a single lump sum) or commenced (in the case of installments or an annuity) at whichever of the following dates as the participating employee shall have elected in writing delivered to the Committee not later than June 1, 1990:

(i) within thirty (30) days after the participating employee shall have had a Termination of Employment;

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(ii) during the March following the date the participating employee shall have had a Termination of Employment;

(iii) during the March following the date the participating employee shall have attained age sixty-two (62) years or had a Termination of Employment, if later;

(iv) during the March following the date the participating employee shall have attained age sixty-five (65) years or had a Termination of Employment, if later.

The foregoing not to the contrary, following the date a participating employee retires from, or otherwise terminates his or her employment with, SUPERVALU INC. or a subsidiary, such person, or in the event of such person's death, his or her surviving spouse or beneficiary, may, at any time, request an immediate lump sum payment of all or part of the present value of the benefit remaining payable pursuant to Section 3.1 above, subject to forfeiture of ten percent (10%) of such amount.

3.4. Default. If for any reason a participating employee shall have failed to make a timely written designation of form and time for distribution (including reasons beyond the control of the participating employee), the distribution shall be made in a single lump sum during the March following the date the participating employee shall have had a Termination of Employment. If the Participant shall have not filed an application for a benefit within five
(5) years after his Normal Retirement Date (or his Termination of Employment. if later), such benefit shall be permanently and irrevocably forfeited.

3.5. Special Benefit. In lieu of all benefits described in Section 3.1 and Section 5 there shall be paid to (and with respect to) participating employees who:

(i) were born before March 1. 1952, and

(ii) have not less than fifteen (15) years of Credited Service with Super Valu Stores. Inc. and its subsidiaries under the Retirement Plan at termination of employment; and

(iii) are "highly compensated employees" as defined in Code section 414(q) at the time of their termination of employment; and

(iv) were actively employed by SUPERVALU INC. and participating in the Retirement Plan on February 26, 1989,

only the benefits, if any, described in the separate nonqualified plan document titled as the SUPER VALU STORES, INC. NONQUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. Notwithstanding anything apparently to the contrary such persons shall not be entitled to participate in or develop benefits under or receive benefits from this Plan.

4. Benefit For Profit Sharing Plan Participating Employees. This Plan shall provide for participating employees as defined in Section 2.1, the excess, if any, of:

(i) the amount which would have been allocated for the participating employee under the Profit Sharing Plans if such allocation had been determined without regard to the allocation limitations under section 415 of the Code and without regard to the compensation limitation of section 401(a)(17) of the Code, over

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(ii) the amount actually allocated for the participating employee under the Profit Sharing Plans after taking Into account the allocation limitations under section 415 of the Code and the compensation limitation of section 401(a)(17) of the Code.

This benefit shall be credited to an account for the participating employee under the SUPERVALU INC. Deferred Compensation Plan at the same time as the contribution would have been made for the participating employee if it had been made under the Profit Sharing Plan. Provided, however, if the participating employee is not fully (100%) vested under the Profit Sharing Plan at that time of contribution, the contribution shall not be credited under SUPERVALU INC. Deferred Contribution Plan until such time as the participating employee is fully (100%) vested under the Profit Sharing Plan. All matters concerning distribution of this benefit from the SUPERVALU INC. Deferred Compensation Plan to the participating employee or survivors of the participating employee shall be governed under the terms and provisions of the SUPERVALU INC. Deferred Compensation Plan including that plan's accrual of interest provisions (and not this document or the Profit Sharing Plans' documents).

5. Benefit to Retirement Plan Beneficiaries.

5. 1. Amount. There shall be paid under this Plan and to the surviving spouse or other joint or contingent annuitant or beneficiary of a participating employee as defined in Section 2.1 (subject to the exclusion in Section 3.5), the excess, if any, of:

(i) the amount which would have been payable under the Retirement Plan if such benefit had been determined without regard to the benefit limitations of section 415 of the Code and without regard to the compensation limitation of section 401(a)(17) of the Code, over

(ii) the amount actually paid from the Retirement Plan.

5.2. Form. Except as provided in paragraph 6 below, this benefit (minus the withholding and payroll taxes which must be deducted therefrom) shall be paid to such person directly from the general assets of SUPERVALU INC. in such one of the following Actuarially Equivalent forms as the participating employee shall have elected in writing delivered to the Committee not later than June 1, 1990:

(i) a single lump sum;

(ii) a series of five (5) annual installments;

(iii) a series of ten (10) annual installments;

(iv) a single life annuity (for the life of the joint annuitant only).

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Actuarially Equivalent value shall be determined by reference to the rules and factors in effect under the Retirement Plan at the time the benefit is first payable. Benefits payable to a surviving spouse shall be paid only to the person, if any, who was the participating employee's surviving spouse at the time of the Termination of Employment. If there is no such surviving spouse at such Termination of Employment, all elections of forms paying benefits to a surviving spouse shall be deemed to be elections of a single life annuity (or Basic Pension) form. Benefits payable in a lump sum or installment form that have not been paid at the death of the Beneficiary shall be payable to the Beneficiary's estate.

5.3. Time. The payment shall be made (in the case of a single lump sum) or commenced (in the case of installments or an annuity) at whichever of the following dates as the participating employee shall have elected in writing delivered to the Committee not later than June 1, 1990:

(i) within thirty (30) days after the participating employee shall have died;

(ii) during the March following the date the participating employee shall have died;

(iii) during the March following the date the participating employee shall have attained age sixty-two (62) years or died if later;

(iv) during the March following the date the participating employee shall have attained age sixty-five (65) years or died if later.

5.4. Default. If for any reason a participating employee shall have failed to make such a timely written designation of form and time for distribution (including reasons beyond the control of the participating employee), the distribution shall be made in a single lump sum during the March following the date the participating employee shall have died. No spouse, former spouse, designated Joint Annuitant or Beneficiary shall have any right to participate in the Participant's selection of the time or the form of benefit or the designation of a Joint Annuitant or Beneficiary or the changing of the same. If the Participant shall have not filed an application for a benefit within five
(5) years after his Normal Retirement Date (or his Termination of Employment. if later), such benefit shall be permanently and irrevocably forfeited.

6. Commutation of Retirement Plan Excess Benefits. At the election of the Compensation Committee of the Board of Directors of SUPERVALU INC. (or its authorized agent), and for the purpose of minimizing employer payroll or other taxes due on benefits payable under this Plan with respect to the Retirement Plan, the Compensation Committee may commute the value of benefits payable to or with respect to participating employee at the time of the retirement, quit, discharge, death or other termination of employment of the participating employee. The commuted single sum of the value so determined shall be calculated by reference to the interest and mortality factors then in effect under the Retirement Plan with respect to which the commuted benefits are paid. The commuted single sum value shall then be transferred to the SUPERVALU INC. Deferred Compensation Plan as of the date of commutation for payment in accordance with the terms of that plan. If the Compensation Committee elects to commute Retirement Plan benefits payable to or with respect to a participating employee, the Compensation Committee shall cause the participating employee or other person to whom such benefits are payable to be Immediately notified in writing of that commutation.

7. Funding. All benefits payable under this Plan shall be paid exclusively from the general assets of Super Valu Stores. Inc. and no fund or trust shall be established apart from the general assets of such corporation for this purpose nor shall any assets or property be segregated or set apart from such corporation's general assets for the purposes of funding this Plan.

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8. General Matters. This Plan shall not alter, enlarge or diminish any person's employment rights or obligations or rights or obligations under a Retirement Plan or a Profit Sharing Plan. The Compensation Committee of the Board of Directors of SUPERVALU INC. may amend this Plan prospectively, retroactively, or both, at any time and for any reason deemed sufficient by it without notice to any person affected by this Plan and may likewise terminate or curtail the benefits of this Plan both with regard to persons expecting to receive benefits hereunder in the future and persons already receiving benefits at the time of such action. SUPERVALU INC. shall be the Plan Administrator of this Plan.

9. Forfeiture of Benefits. All unpaid benefits under this Plan, including without limiting the generality of the foregoing, undistributed accruals attributable to this Plan which are developed under the SUPERVALU INC. Deferred Compensation Plan, shall be forfeited upon the determination by the Compensation Committee of the Board of Directors of SUPERVALU INC. that the participating employee, either before or after termination of employment:

(i) has engaged in a felonious, fraudulent or other activity resulting in harm to SUPERVALU INC. or a subsidiary;

(ii) has divulged to a competitor any confidential information, or trade information, or trade secrets of SUPERVALU INC. or a subsidiary; or

(iii) has provided SUPERVALU INC. or a subsidiary with materially false reports concerning his business interests or employment; or

(iv) has made materially false representations which are relied upon by SUPERVALU INC. or a subsidiary in furnishing information to shareholders, stock exchange or the Securities and Exchange Commission; or

(v) has maintained an undisclosed, unauthorized and material conflict of interest in the discharge of the duties owed by the participating employee to SUPERVALU INC. or a subsidiary; or

(vi) has engaged in conduct causing a serious violation of state or federal law by SUPERVALU INC. or a subsidiary; or

(vii) has engaged in the theft of assets or funds of SUPERVALU INC. or a subsidiary; or

(viii) has engaged in fraud or dishonesty toward SUPERVALU INC. or a subsidiary which is admitted or judicially proven; or

(ix) has been convicted of any crime which directly or indirectly arose out of his employment relationship with SUPERVALU INC. or a subsidiary or materially affected his ability to discharge the duties of his employment with SUPERVALU INC. or a subsidiary; or

(x) has during his employment or for a period of two years after the termination of his employment engaged in any employment or self-employment with a competitor of SUPERVALU INC. or a subsidiary within the geographical area which is then served by SUPERVALU INC. or the subsidiary.

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10. Claims Procedure. An application for benefits under Section 3. 4. 5 or 6 shall be considered as a claim for the purposes of this section.

10. 1. Original Claim. Any employee, former employee, joint annuitant or beneficiary of such employee or former employee may, if he so desires, file with the Compensation Committee of the Board of Directors of SUPERVALU INC. a written claim for benefits under the Plan. Within ninety (90) days after the filing of such a claim, the Compensation Committee sha11 notify the claimant in writing whether his claim is upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred eighty days from the date the claim was filed) to reach a decision on the claim. If the claim is denied in whole or in part, the Compensation Committee shall state in writing:

(a) the specific reasons for the denial;

(b) the specific references to the pertinent provisions of this Plan Statement an which the denial is based;

(c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

(d) an explanation of the claims review procedure set forth in this section.

10.2. Claims Review Procedure. Within sixty (60) days after receipt of notice that his claim has been denied in whole or in part, the claimant may file with the Compensation Committee a written request for a review and may, in conjunction therewith, submit written issues and comments. Within sixty (60) days after the filing of such a request for review, the Compensation Committee shall notify the claimant in writing whether, upon review, the claim was upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred twenty days from the date the request for review was filed) to reach a decision on the request for review.

10.3. General Rules.

(a) No Inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the claims procedure. The Compensation Committee may require that any claim for benefits and any request for a review of a denied claim be f1led on forms to be furnished by the Compensation Committee upon request.

(b) All decisions on claim and on requests for a review of denied claims shall be made by the Compensation Committee.

(c) The Compensation Committee may, in its discretion, hold one or more hearings on a claim or a request for a review of a denied claim.

(d) Claimants may be represented by a lawyer or other representative (at their own expense), but the Compensation Committee reserves the right to require the claimant to furnish written authorization. A claimant's representative shall be entitled to copies of all notices given to the claimant.

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(e) The decision of the Compensation Committee on a claim and on a request for a review of a denied claim shall be served on the claimant in writing. If a decision or notice is not received by a claimant within the time specified, the claim or request for a review of a denied claim shall be deemed to have been denied.

(f) Prior to filing a claim or a request for a review of a denied claim, the claimant or his representative shall have a reasonable opportunity to review a copy of this Plan Statement and all other pertinent documents in the possession of the Employer and the Compensation Committee.

11. Construction. This Plan is adopted with the understanding that it is in part an unfunded excess benefit plan within the meaning of Section 3(36) ERISA and is in part an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees as provided in sections 201(2), 301(3) and 401(a)(1) of ERISA. Each provision hereof shall be interpreted and administered accordingly.

Unless a contrary intention is clearly expressed herein, terms defined in the Retirement Plan and used in this Plan shall have the meanings assigned in the Retirement Plan insofar as this Plan is developing benefits by reference to the Retirement Plan. Unless a contrary intention is clearly expressed herein, terms defined in a Profit Sharing Plan and used in this Plan shall have the meanings assigned in the Profit Sharing Plan insofar as this Plan is developing benefits by reference to such Profit Sharing Plan.

It is specifically contemplated that the Retirement Plan and the Profit Sharing Plans will, from time to time, be amended and possibly terminated. All such amendments and terminations shall be given effect under this Plan (it being expressly intended that this Plan shall not freeze or lock in the benefit structures of such plans as they exist at the adoption of this Plan or upon the commencement of participation by any participating employee).

This Plan is adopted in the State of Minnesota and shall be construed and enforced according to the laws of that State to the extent such laws are not preempted by federal law.

This Plan will not provide any excess benefits with respect to any stock bonus plan, employee stock ownership plan or PAYSOP. This Plan shall be construed to prevent the duplication of benefits provided under any other plan or arrangement, whether qualified or nonqualified, funded or unfunded, to the extent that such other benefits are provided directly or indirectly by the Employer.

12. Change in Control.

12.1. Special Definitions. A "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 Securities Exchange Act of 1934, as amended (the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the Company or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control, (A) any acquisition directly from the Company or (B) any

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acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company of any corporation controlled by the Company; or

(ii) the consummation of any merger or other business combination of the Company, sale or lease of the Company's assets or combination of the foregoing transactions (the "Transactions") other than a Transaction immediately following which the shareholders of the Company and any trustee orfiduciary of any Company employee benefit plan immediately prior to the Transaction own at least 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 "IncumbentDirectors ") 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); or

(iv) such other event or transaction as the Board shall determine constitutes a Change in Control.

12.2. Amendment. Notwithstanding any other provision of the Plan, during the five (5) years following a change in control, the provisions of the Plan may not be amended if any amendment would adversely affect the rights, expectancies or benefits provided by the Plan (as in effect immediately prior to the change in control), of any Participant, Beneficiary or other person entitled to payments under the Plan.

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EXHIBIT 10.13

SUPERVALU INC.

Deferred Compensation Plan

February 26, 1978

As amended effective November 22, 2002

EXHIBIT 10.13

SUPERVALU INC.
Deferred Compensation Plan

Section 1. Establishment and Purpose

1.1 Establishment. SUPERVALU INC., a Delaware corporation, hereby established, effective as of February 26, 1978, a deferred compensation plan for key executive employees which shall be known as the "SUPERVALU INC., DEFERRED COMPENSATION PLAN (hereinafter called the "Plan").

1.2 Purpose. The purpose of this Plan is to provide a means whereby amounts payable by the Company to key personnel may be deferred to some future period. It is also the purpose of this Plan to motivate such key personnel to continue to make contributions to the growth and profits of the Company and its Subsidiaries.

Section 2. Definitions

2.1 Definitions. Whenever used hereinafter, the following terms shall have the meaning set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Company" means SUPERVALU INC., a Delaware corporation.
(c) "Director" means an individual who is a member of the Board.
(d) "Employee" means a regular salaried key employee (including officers and Directors who are also employees) of the Company or its Subsidiaries, or any branch or division thereof.
(e) "Participant" means any individual who meets the eligibility requirements set forth in Section 3.1 of this Plan.
(f) "Subsidiary" means any corporation, a majority of the voting stock of which is directly or indirectly owned by the Company.
(g) "Year" means the approximately twelve month period coinciding with the Company's fiscal year.

2.2 Gender and Number. Except when otherwise indicated by the context, any masculine technology when used in the Plan shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural.

Section 3. Eligibility for Participation

3.1 Eligibility. Any Employee of the Company or any Subsidiary who is a participant in the SUPERVALU Incentive Bonus Plan or the Subsidiary's Executive Bonus Plan shall be eligible to participate in this Plan. In 'the event a Participant no longer meets the requirements for participation in this plan he shall become an inactive Participant, retaining all the rights described under this Plan, except the right to make any further deferrals, until the time that he again becomes an active Participant.

Section 4. Election to Defer

4.1 Deferral Election. At any time prior to the beginning of a fiscal year, any Participant may, by written notice to the Company, elect to defer:

(a) all or part (in 10% increments up to 100%) of the bonus paid from the Incentive Bonus Plan of the Company or any Subsidiary for such Year, and
(b) up to 20% of the salary to be paid during the Year.

Payment shall be deferred until the earliest to occur of:
(a) Retirement,
(b) Disability,
(c) Death, or
(d) Termination of Employment.

4.2 Manner of Payment_ Election. If a Participant defers any amounts pursuant to Section 4.1, the Participant, by written notice to the Company, shall at the same time elect the manner in which the deferred amount will be paid. The Participant may choose to have payment made either in a lump sum or in 5, 10 or 15 approximately equal annual installments.

4.3 Irrevocable Elections. The elections in Section 4.1 and 4.2 are irrevocable and may not be modified or terminated by the Participant or his beneficiary.

Section 5. Deferred Accounts

5.1 Participant Accounts. The Company shall establish and maintain a bookkeeping account for each Participant, to be credited as of the date the bonus or salary is actually deferred.

5.2 Growth Additions. Each Participant's account shall be credited ratably on the first day of each fiscal -year with a growth addition computed on the balance in the account as of the last day of the immediately preceding year. The growth addition shall be equal to said account balance multiplied by the lower of 8% or the average annual prime rate of interest charged for commercial loans by the First National Bank of Minneapolis during the immediately preceding year. This average shall be computed on the basis of the prime rate of interest in effect on the last business day of each month within said year.

5.3 Retirement Benefit Plan Equivalent. In the event a Participant's retirement plan benefits are decreased in any way due to a deferral of salary or bonus pursuant to Section 4.1 of this Plan, there shall be credited to the Participant's account, on the day retirement plan benefit payments commence, an amount equal to the lump sum actuarial equivalent of the increased monthly income which would have been payable under the retirement plan if the amounts credited to the Participant's account pursuant to Section 5.1 had instead been paid as cash remuneration on the dates such amounts were credited to the Participant's account. Said lump sum actuarial equivalent amount shall be determined by the Board, in its sole discretion, upon the advice of the actuary for the retirement plan. This advice shall be based on interest, mortality and other appropriate assumptions used to value the retirement plan as of the last actuarial valuation immediately preceding such determination. In no event may this provision duplicate in any way, retirement supplements payable from other deferred compensation plans of the Company, whether such plans are qualified or unqualified.

5.4 Charges Against Accounts. There shall be charged against each Participant's account any payments made to the Participant or to his beneficiary in accordance with Section 6. hereof.

5.5 Contractual 0bligation. It is intended that the Company is under a contractual obligation to make payments from a Participant's account when due. Account balances shall not be financed through a trust fund or insurance contracts or otherwise. Payment of account balances shall be made out of the general funds of the Company.

5.6 Unsecured Interest. No participant or beneficiary shall have any interest whatsoever in any specific asset of the Company. To the extent that any person acquires a right to receive payments under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.

Section 6. Payment of Deferred Amounts

6.1 Payment of Deferred Amounts. Payment of a Participant's deferral salary or bonus, plus accumulated growth additions attributable thereto, shall be paid in approximately equal annual installments, in the manner selected by the Participant under Sections 4.1 and 4.2 of this Plan. Payments shall begin as soon as possible after January 1 following the commencement date provided by
Section 4.1 of this Plan. Payment of a Participant's retirement benefit plan equivalent, plus any accumulated growth additions, shall be made over 10 approximately equal annual installments, and shall begin as soon as possible after the January 1 following the date said amount is credited to the Participant's account.

6.2 Financial Emergency. The Board, at its sole discretion, may alter the timing or manner of payment of deferred amounts in the event that the Participant establishes, to the satisfaction of the Board, severe financial hardship. In such event, the Board may:
(a) provide that all or a portion of the amount previously deferred by the Participant shall be paid immediately in a lump sum cash payment,

(b) provide that all or a portion of the installments payable over a period of time shall be paid immediately in a lump sum, or
(c) provide for such other installment payment schedules as it deems appropriate under the circumstances, as long as the amount distributed shall not be in excess of that amount which is necessary for the Participant to meet the financial hardship.

Severe financial hardship will be deemed to have occurred in the event of the Participant's impending bankruptcy, a dependent's long and serious illness, or other events of similar magnitude. The Board's decision in passing on the severe financial hardship of the Participant and the manner in which, if at all, the payment of deferred amounts shall be altered or modified shall be final, conclusive and not subject to appeal.

6.3 Early Withdrawal. In the event a Participant retires from, or otherwise terminates his or her employment with, the Company or its Subsidiaries, such Participant, or in the event of such Participant's death his or her surviving spouse or beneficiary, may, at any time following Participant's retirement or other termination of employment, request an immediate lump sum payment of all or part of the present value of deferred amounts prior to the date same become due and payable pursuant to the provisions of Section 6.1 above, subject to forfeiture of ten percent (10%) of such amounts.

Section 7. Forfeiture

7.1 Forfeiture. In the event that a Participant has deferred amounts under this Plan which have not been paid, and such Participant:
(a) has engaged in a felonious, fraudulent, or other activity resulting in harm to the Company, or
(b) has divulged any of the Company's confidential information or trade information or trade secrets to a competitor, the Board may, at its sole discretion, terminate all of the deferred amounts plus interest additions otherwise payable as it deems appropriate.

Section 8. Beneficiary

8.1 Beneficiary. A Participant may designate a beneficiary or beneficiaries who, upon his death, are to receive the distributions that otherwise would have been paid to him. All designations shall be in writing and shall be effective only if and when delivered to the Secretary of the Company during the lifetime of the Participant. If a Participant designates a beneficiary without providing in the designation that the beneficiary must be living at the time of such distribution, the designation shall vest in the beneficiary all of the distributions whether payable before or after the beneficiary's death, and any distributions remaining upon the beneficiary's death shall be made to the beneficiary's estate.

A Participant may from time to time during his lifetime change his beneficiary or beneficiaries by a written instrument delivered to the Secretary of the Company. In the event a Participant shall not designate a beneficiary or beneficiaries pursuant to this Section, or if for any reason such designation shall be ineffective, in whole or in part, the distribution that otherwise would have been paid to such Participant shall be paid to his estate and in such event, the term "beneficiary" shall include his estate.

Section 9. Nontransferability

9.1 Nontransferability. In no event shall the Company make any payment under this Plan to any assignee or creditor of a Participant or a beneficiary. Prior to the time of payment hereunder, a Participant or beneficiary shall have no rights by way of anticipation or otherwise to assign or otherwise dispose of any interest under this Plan nor shall such rights be assigned or transferred by operation of law.

Section 10. Administration

10.1 Administration. This Plan shall be administered by a committee of the Board, composed entirely of non-employee Directors. The committee may from time to time establish rules for the administration of this Plan that are not inconsistent with the provisions of this Plan.

10.2 Finality of Determination. The determination of the Board as to any disputed questions arising under this Plan, including questions of construction and interpretation shall be final, binding, and conclusive upon all persons.

10.3 Expenses. The cost of payment from this Plan and the expenses of administering the Plan shall be borne by the Company.

10.4 Tax Withholding. The Company shall have the right to deduct from all payments any Federal, state of local taxes required by law to be withheld with respect to such payments.

Section 11. Amendment and Termination

11.1 Amendment and Termination. The Company expects the Plan to be permanent but, since future conditions affecting the Company cannot be anticipated or foreseen, the Company must necessarily and does hereby reserve the right to amend, modify or terminate the Plan at any time by action of its Board.

Section 12. Applicable Law

12.1 Applicable Law. This Plan shall be governed and construed in accordance with the laws of the State of Minnesota.

Section 13. Merger, Consolidation, or Acquisition

13.1 Merger, Consolidation, or Acquisition. In the event of a merger, consolidation, or acquisition, where the Company is not the surviving corporation, unless the successor or acquiring corporation

shall elect to continue and carry on the Plan, all amounts deferred, plus interest additions and applicable retirement plan equivalent additions shall become immediately payable in full, notwithstanding any other provisions to the contrary.

EXHIBIT 10.14

SUPERVALU INC.

EXECUTIVE DEFERRED COMPENSATION PLAN, as amended

TABLE OF CONTENTS

Section                                                               Page
-------                                                               ----

1.     Establishment and Purpose ....................................... 1

       1.1     Establishment ........................................... 1

       1.2     Purpose ................................................. 1

2.     Definitions ..................................................... 1

       2.1     Definitions ............................................. 1

       2.2     Gender and Number .......................................13

3.     Eligibility for Participation ...................................13

4.     Election to Defer ...............................................14

       4.1     Deferrals ...............................................14

       4.2     Procedure ...............................................14

       4.3     Types of Deferral for Initial Participants ..............15

       4.4     Types of Deferral for Other Participants ................16

       4.5     Fixed and Pre-Retirement Deferrals ......................17

               4.5.1     Fixed Deferrals ...............................17

               4.5.2     Pre-Retirement Deferrals ......................19

       4.6     Maximum and Minimum Deferrals ...........................20

       4.7     Rollover Amounts ........................................20

       4.8     Election to Defer Irrevocable ...........................22

       4.9     Certain Retirement Benefit Plan Equivalents .............23

       4.10    SUPERVALU INC. Defined Contribution Plan and
                 Pre-Tax Savings and Profit Sharing Plan Benefit
                 Equivalents ...........................................24

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5.     Deferral Accounts ...............................................21

       5.1     Establishment and Crediting of Account ..................25

       5.2     Compensation, Rollover Amount and Retirement
               Benefit Plan Deferrals ..................................26

       5.3     Interest ................................................27

       5.4     Contractual Obligation ..................................27

       5.5     Charges Against and Balances of Accounts ................28

       5.6     Statement of Accounts ...................................28

6.     Payment of Benefits .............................................29

       6.1     Retirement Benefits .....................................29

               6.1.1     Incomplete Benefit Units ......................29

               6.1.2     Rollover Benefit Units ........................29

               6.1.3     Qualified Benefit Units .......................29

       6.2     Benefits Upon Disability ................................30

               6.2.1     Disability Benefits ...........................30

               6.2.2     Coordination with Retirement Benefits .........31

               6.2.3     Survivorship Benefits .........................33

       6.3     Benefits for Employees Upon Other Termination of
                 Employment ............................................34

               6.3.1     Amount of Benefit .............................34

               6.3.2     Form of Payment ...............................35

       6.4     Benefits Upon Termination of Employment Following
                 a Change of Control ...................................35

               6.4.1     Payment of Benefits ...........................35

               6.4.2     Election upon Reduction in Plan Interest
                           Rate ........................................36

               6.4.3     Termination of Plan ...........................36

               6.4.4     Parachute Payments ............................37

-ii-

       6.5     Survivorship Benefits ...................................37

               6.5.1     Death Prior to Early Retirement Date ..........37

               6.5.2     Death After Early Retirement Date .............38

               6.5.3     Death After Commencement of Benefits ..........39

               6.5.4     Survivor Spouse Benefit .......................40

       6.6     Form of Payment of Benefits .............................41

               6.6.1     Normal Form ...................................41

               6.6.2     Alternative Forms .............................42

               6.6.3     Deferred Payment ..............................42

               6.6.4     Form of Request ...............................42

       6.7     Recipients of Payments; Designation of
                 Beneficiary ...........................................42

       6.8     Financial Emergency .....................................44

       6.9     Payment of Incomplete Benefit Units and
                 Retirement Benefit Plan Account .......................46

       6.10    Pre-Retirement Benefits .................................47

7.     Forfeiture ......................................................47

8.     Non-Transferability .............................................50

9.     Administration ..................................................50

       9.1     Administration ..........................................50

       9.2     Finality of Determination ...............................51

       9.3     Claims Procedure ........................................51

               9.3.1     Original Claim ................................51

               9.3.2     Claim Review Procedure ........................52

               9.3.3     General Rules .................................52

       9.4     Expenses ................................................53

9.5 Tax Withholding .........................................53

-iii-

       10.     Amendment and Termination ...............................54

       11.     Applicable Law ..........................................55

       12.     No Vested Rights ........................................55

       13.     Binding Agreement .......................................55

Appendix A     Amendments to NonQualified Deferred Compensation Plans

-iv-

SUPERVALU INC.
EXECUTIVE DEFERRED COMPENSATION PLAN

Section 1. Establishment and Purpose

1.1 Establishment.

SUPERVALU INC., a Delaware corporation (hereinafter called the "Company"), hereby establishes effective as of October 1, 1985, this deferred compensation plan for certain of its executive employees which shall be known as the SUPERVALU INC. EXECUTIVE DEFERRED COMPENSATION PLAN (hereinafter called the "Plan").

1.2 Purpose.

The purpose of the Plan is (i) to provide a means whereby amounts payable by the Company to executive employees may be deferred to a future period, (ii) to motivate such executive employees to continue to make contributions to the growth and profits of the Company and (iii) to provide such executive employees certain benefits as hereinafter described upon retirement, death, disability or other termination of employment.

Section 2. Definitions

2.1 Definitions.

Whenever used hereinafter, the following terms shall have the meaning set forth below:

(a) "Age" means the age of the person as of his last birth date.

(b) "Beneficiary" means the person designated by a Participant pursuant to Section 6.7 hereof.

(c) "Benefit Unit" means the agreed upon amount to be deferred by a Participant under the Plan over a specified Deferral Period pursuant to a specific Deferred Compensation Election. A separate Benefit Unit shall also exist with respect to each deferral election with respect to Rollover Amounts.

(d) "Board" means the Board of Directors of the Company.

(e) "Bonus" means payments made from time to time by the Company to certain Employees pursuant to the SUPERVALU INC. Executive Incentive Bonus Plan.

(f) "Change of Control" means:

(i) The acquisition by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), other than the Company or any of its wholly-owned subsidiaries, or any employee benefit plan of the Company and/or any of its wholly-owned subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock or the combined voting power of the Company's then

outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of at least three quarters of the Continuing Directors (as defined below); or

(ii) Individuals who, as of the date hereof, constitute the Board (as of the date hereof the "Continuing Directors") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved in advance by a vote of at least three quarters of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a Continuing Director; or

Approval by the stockholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by three quarters of the Continuing Directors; or

(iii) Any other event that a majority of the Continuing Directors in its sole discretion shall determine constitutes a Change of Control.

(g) "Chief Executive Officer" means the chief executive officer of the Company or the person who regularly performs the duties normally associated with such office on behalf of the Company.

(h) "Company" means SUPERVALU INC., a Delaware corporation, and any Subsidiary thereof.

(i) "Compensation" means (i) for an Employee, the salary, Bonus and other amounts payable by the Company which would have been reported on

Treasury Form W-2 (or any comparable successor form) if reported on a Plan Year basis and if the Employee had not entered into a Deferred Compensation Election, but excluding expense reimbursement, moving expense payments, third-party sick pay, imputed--income (from excess-life insurance premiums, automobile use premiums or any other source), non-qualified stock options, disqualifying dispositions of stock acquired pursuant to the exercise of incentive stock options, stock appreciation rights, amounts attributable to long-term incentive plans (other than the Bonus), severance settlements and similar items of remuneration, and (ii) for a Director, the annual retainer and meeting fees paid by the Company as a result of service as a Director.

(j) "Deferral Account" means the account maintained on the books of the Company with respect to each Benefit Unit for each Participant pursuant to Section 5 hereof.

(k) "Deferral Period" means the period of years during which Compensation or Rollover Amounts are being deferred (or transferred) for a particular Benefit Unit pursuant to a Participant's Deferred

Compensation Election as described in Section 4 hereof.

(1) "Deferred Compensation Election" means a written agreement between a Participant and the Company whereby the Participant agrees to defer a portion of his Compensation or Rollover Amounts and the Company agrees to make benefit payments all in accordance with the terms and conditions of the Plan. With respect to a Participant who is a Director, a Deferred Compensation Election hereunder shall supersede and take precedence over any election to defer compensation filed by such Director pursuant to the Director's Plan.

(m) "Defined Contribution Plan" means the Company's Internal Revenue Service approved profit sharing plans, whether now or hereafter in existence.

(n) "Determination Date" means the last day in each September which coincides with the end of each of the Plan Years and shall be the date on which the amount of a Participant's Deferral Account is determined as provided in Section 5 hereof.

(o) "Director" means an individual who is a member of the Board and who is not an Employee of the Company.

(p) "Director's Plan" means the SUPERVALU INC. Deferred Compensation Plan for Non-Employee Directors. Each Participant who is a Director shall have an account established and credited under the Director's Plan to the extent necessary to carry out-the terms and conditions of the Plan.

(q) "Director's Plan Interest Rate" means the interest rate provided for in paragraph 8 of the Director's Plan.

(r) "Disability" means a Participant's disability as defined in the Social Security eligibility provisions, 42 U.S.C. Section 421, and regulations promulgated thereunder.

(s) "Disability Benefit" means the disability benefit described in
Section 6.2 hereof.

(t) "Early Retirement Date" means (i) for an Employee, the first day of the month following the month in which the Employee reaches age 55, has completed ten (10) or more years of service with the Company and has completed a Qualified Benefit Unit, and (ii) for a Director, the first day of the month following the month in which the Director reaches age 55. Years of service with the Company shall include the period during which the Participant is disabled. All or any part of

the requirements established by this definition may be waived or modified for Employees in the sole and absolute discretion of the Retirement Committee and for Directors in the sole and absolute discretion of the Board.

(u) "Effective Date" means October 1, 1985.

(v) "Employee" means an employee of the Company or any Subsidiary, branch or subdivision thereof, who (i) is employed in a recognized executive administrative or professional capacity and
(ii) has significant management responsibilities or is highly compensated, and (iii) is compensated therefor in a combination of guaranteed base compensation plus periodic additions of variable amounts derived from sources including, but not limited to, a Bonus, other incentive bonus awards and commissions.

(w) "Fiscal Year" means the approximate twelve-month period coinciding with the Company's fiscal year and ending on the last Saturday in each February.

(x) "Incomplete Benefit Unit" means a Benefit Unit for which a Deferred Compensation Election has been made and with respect to which the Participant has not completed deferrals of the total amount of the Stated Deferral.

(y) "Initial Participant" means an Employee, eligible to participate in the Plan, or a Director, either of whom have elected to participate in the Plan by filing a Deferred Compensation Election which is to be effective as of the Effective Date.

(z) "Normal Retirement Date" means (i) for an Employee, the first day of the month following the month in which the Employee reaches age 62, has completed ten (10) or more years of service with the Company and has completed a Qualified Benefit Unit, or, if earlier, the first day of the month following the month in which the Employee reaches age 65 and has completed a Qualified Benefit Unit and (ii) for a Director, the first day of the month following the month in which the Director reaches age 55. Years of service with the Company shall include the period during which the Participant is disabled. All or any part of the requirements established by this definition may be waived or modified for Employees in the sole and absolute discretion of the Retirement Committee and for Directors in the sole and absolute discretion of the Board.

(aa) "Old Plan" means the Super Valu Stores, Inc. Deferred Compensation Plan. Each Participant who

is an Employee shall have an account established and credited under the Old Plan to the extent necessary to carry out the terms and conditions of the Plan.

(bb) "Old Plan Interest Rate" means the interest rate provided for in
Section 5.2 of the Old Plan.

(cc) "Participant" means all Directors and those Employees as may be selected from time to time in the sole and absolute discretion of the Chief Executive Officer, either of whom have elected to participate in the Plan by filing a Deferred Compensation Election hereunder.

(dd) "Plan Interest Rate" means, with respect to any Plan Year, four
(4) percentage points over the average rate for the twelve (12) months preceding the beginning of each Plan Year of Moody's Corporate Bond Yield Average--Monthly Average Corporates as published by Moody's Investor's Service or any successor thereto, all as determined by the Compensation Committee in its sole and absolute discretion, or if such yield is no longer published, a substantially similar average selected by the Compensation and Stock Option Committee of the Board in its sole and absolute discretion.

(ee) "Plan Year" means the twelve-month period beginning on October 1 and ending on the last day in September in each calendar year.

(ff) "Qualified Benefit Unit" means a Benefit Unit with respect to which at least fifty percent (50%) of the-aggregate amount of the Stated Deferral has been deferred.

(gg) "Retirement" means (i) for an Employee, Termination of Employment after reaching the Early Retirement Date or Normal Retirement Date, and (ii) for a Director, Termination of Employment at any time.

(hh) "Retirement Benefit" means the retirement benefit described in
Section 6.1 hereof.

(ii) "Retirement Benefit Plan Account" means a separate account, in the nature of a Deferral Account, established and maintained for each Participant entitled to benefits pursuant to Section 4.9 or
Section 4.10 hereof.

(jj) "Retirement Benefit Plan Amount" means the amount of the benefit determined under Section 4.9 and Section 4.10 hereof.

(kk) "Retirement Committee" means the SUPERVALU INC. Retirement Committee constituted by the Chief Executive Officer for the purpose of

performing certain administrative functions with respect to the employee pension benefit plans of the Company, including the Plan.

(11) "Rollover Amount" means (i) for an Employee, the amount to be transferred from the Employee's account established pursuant to
Section 5.1 of the Old Plan and to be deferred under the Plan as set forth in the Employee's Deferred Compensation Election and
(ii) for Directors, the amount to be transferred from the Director's account under the Director's Plan and to be deferred under the Plan as set forth in the Director's Deferred Compensation Election.

(mm) "Savings Plan" means the Company's SUPERVALU Pre-Tax Savings and Profit Sharing Plan Trust Agreement.

(nn) "Stated Deferral" means the amount with respect to each Benefit Unit which the Participant agrees to defer in accordance with
Section 4 hereof from either his Compensation or from a Rollover Amount.

(oo) "Subsidiary" means any corporation, the majority of the voting stock of which is directly or indirectly owned by the Company.

(pp) "Termination of Employment" means (i) for an Employee, ceasing to be employed by the Company

for any reason whatsoever, including, without limitations, terminations of employment which are voluntary or involuntary, and (ii) for a Director, ceasing to serve as a member of the Board.

2.2 Gender and Number.

Except when otherwise indicated by the context, any masculine terminology, when used in the Plan, shall also include the feminine gender and the definition or use of any term herein in the singular shall also include the plural.

Section 3. Eligibility for Participation

Employees of the Company shall be eligible to participate in the Plan with respect to a Deferral Period if, and only if, so selected or otherwise designated by the Chief Executive Officer. Employees eligible to become Participants after the first Plan Year shall be entitled to defer Compensation hereunder as of the first day of the Fiscal Year following their selection. All Directors shall be eligible to become Participants as of the first day of any Plan Year. A Participant shall cease to be a Participant upon Termination of Employment. A person who for any reason ceases to be a Participant during a Deferral Period or otherwise shall have no further right to defer Compensation hereunder. The Retirement Committee, in its sole and absolute discretion, shall make such rules concerning leaves of absences, re-employment and other

matters concerning eligibility for Participation hereunder as it deems to be in the best interests of the Company.

Section 4. Election to Defer

4.1 Deferrals.

Any Employee eligible to become a Participant, and any Director, may elect not earlier than July 15 and not later than August 31 of a Plan Year to defer Compensation, otherwise payable in subsequent Fiscal Years, in exchange for a Benefit Unit. An Initial Participant shall, prior to a date to be announced by the Retirement Committee, elect to defer Compensation, otherwise payable after October 1, 1985, in exchange for a Benefit Unit. Any Employee or Director eligible to become a Participant when first hired by the Company or when first becoming a member of the Board after the beginning of a Plan Year, as appropriate, may elect to defer Compensation, otherwise payable in subsequent Plan Years, in exchange for a Benefit Unit only in accordance with this Section 4.1.

4.2 Procedure.

A Participant shall make the election provided for in Section 4.1 hereof by executing a Deferred Compensation Election in the form provided by the Company, subject to such terms and conditions as the Retirement Committee may impose, including, but not limited to, medical examinations, health screening, medical records reviews, etc. The Deferred Compensation Election shall set forth the Participant's Stated

Deferral. A Participant shall only be entitled to defer Compensation in the amounts and for the periods determined, from time to time, in the sole and absolute discretion of the Retirement Committee. A separate Deferred Compensation Election must be executed by a Participant with respect to each Benefit Unit, and the total amount of the Stated Deferral for a Benefit Unit must be completed before another Deferred Compensation Election may be made; provided, however, that an election with respect to Rollover Amounts pursuant to
Section 4.7 hereof, may be made before the total amount of the Stated Deferral for a Benefit Unit, with respect to an existing Deferred Compensation Election, has been completed. A Deferred Compensation Election shall be effective if, and only if, it is accepted by the Retirement Committee on behalf of the Company and all the terms and conditions set forth in the Deferred Compensation Election are satisfied in full by the Participant. If accepted by the Retirement Committee, the Compensation to be deferred, as specified in the Deferred Compensation Election, shall be deferred and the Participant's Compensation shall be correspondingly reduced.

4.3 Types of Deferral for Initial Participants.

For Deferred Compensation Elections filed in 1985, an Initial Participant who is an Employee shall be entitled, subject to the other terms and conditions of the Plan, to defer the Participant's Compensation (not including the Participant's

Bonus) otherwise payable after October 1, 1985, and the Participant's Bonus otherwise payable in the calendar years which begin after the filing of such Deferred Compensation Election. For Deferred Compensation Elections filed in 1985, an Initial Participant who is a Director shall be entitled, subject to the other terms and conditions of the Plan, to defer the Director's October 1985 quarterly retainer fee payment, to the extent it is attributable to services performed after the Effective Date, any part of subsequent quarterly retainer fee payments and fees for attending meetings of the Board (and committee meetings), to the extent attributable to meetings taking place after the Effective Date. All subsequent deferrals by Initial Participants shall be subject to the terms and conditions of Section 4.4 hereof.

4.4 Types of Deferral for Other Participants.

A Participant, other than an Initial Participant filing a Deferred Compensation Election in 1985, who is an Employee shall be entitled to defer, subject to the other terms and conditions of the Plan, the Participant's Compensation (not including the Participant's Bonus) payable during the Fiscal Years which begin after the filing of a Deferred Compensation Election and the Participant's Bonus which would otherwise be payable in the calendar years which begin after the filing of such Deferred Compensation Election. A Participant, other than an Initial Participant filing a Deferred Compensation Election

in 1985, who is a Director shall be entitled to defer, subject to the other terms and conditions of the Plan, the Director's Compensation which would otherwise be payable after the filing of the Deferred Compensation Election, to the extent such payments are for services performed as a Director during the calendar year which begins after the filing of such Deferred Compensation Election.

4.5 Fixed and Pre-Retirement Deferrals.

4.5.1 Fixed Deferrals. Unless the requirements of this Section 4.5.1 are waived or otherwise modified by the Retirement Committee, a Participant shall only be entitled to defer Compensation as follows:

(i) Employees. For Employees, the Deferred Compensation Election must provide for the deferral of a fixed amount of the Employee's Compensation, whether from the Employee's Bonus or otherwise. In the event an Employee's Bonus or other Compensation changes in any Plan Year, such change shall not reduce the amount to be deferred-pursuant to his Deferred Compensation Election. In the event an Employee's Bonus in any Plan Year is in excess of the bonus norm amount assigned to his position under the Bonus Plan for the preceding Fiscal Year, if the Employee's Deferred Compensation Election so provides, any such excess Bonus shall be deferred

and taken into account to prepay an already existing Incomplete Benefit Unit. Any such prepayment with respect to an already existing Incomplete Benefit Unit shall reduce the amount to be deterred from the Employee's Compensation otherwise -subject to the Deterred Compensation Election in subsequent Plan Years, in such manner as may be determined by the Retirement Committee in its sole and absolute discretion. Notwithstanding the foregoing, in the event an Employee's Bonus or other Compensation is decreased in any Plan Year, the Retirement Committee may take such action with respect to waiving, modifying or otherwise amending an Employee's Deferred Compensation Election as it deems to be, in its sole and absolute discretion, in the best interests of the Company, including, without limitation, crediting the Employee's Deferral Account with all or any part of the balance of the Stated Deferral and charging interest to the Employee's Deferral Account on such credit, for the period of time such credit has not been recovered by the Company, at a rate equal to the Company's cost of borrowing funds on a short-term, unsecured basis.

(ii) Directors. For Directors, the Deferred Compensation Election must provide for the deferral of a fixed amount of all or any portion of the annual retainer paid to the Director by the Company. In the event of any change in a Director's annual retainer, such change shall be taken into account in the same manner as provided in Section 4.5(i) hereof with respect to an Employee's Compensation. If a Director's Deferred Compensation Election so provides, any deferral with respect to meeting fees paid by the Company to the Director shall be effective only to prepay an already existing Incomplete Benefit Unit. Any such prepayment with respect to an already existing Incomplete Benefit Unit shall reduce the amount to be deferred pursuant to the Deferred Compensation Election, in such manner as may be determined by the Retirement Committee, in its sole and absolute discretion.

4.5.2 Pre-Retirement Deferrals. In the event that a Participant's Deferred Compensation Election so provides, and in accordance with such other terms and conditions as the Retirement Committee, in its sole and absolute discretion, may from time to time impose, a Participant shall be entitled to elect to receive prior to Retirement a maximum of seventy-five

percent (75%) of his Deferral Account attributable to a Benefit Unit with respect to which the Participant has completed deferrals of the total amount of the Stated Deferral.

4.6 Maximum and Minimum Deferrals.

Subject to Section 4.5 hereof, the following maximum and minimum deferrals of Compensation shall apply to the fixed amount to be deferred by any Participant, provided, however, that the Retirement Committee may from time to time, in its sole and absolute discretion, adjust the maximum and minimum deferrals permitted hereunder:

(i) Minimum Deferral--$2,500 per year, for at least four (4) Plan Years from Compensation (not including Bonus or meeting fees);

(ii) Maximum Deferral--for Employees, twenty percent (20%) of Compensation (not including the Participant's Bonus) in the Plan Year in which deferrals pursuant to the Participant's Deferred Compensation Election are first effective, plus one hundred percent (100%) of the bonus norm amount assigned to his position under the Bonus Plan for the preceding Fiscal Year, and for Directors, there is no limitation on the amount which may be deferred hereunder.

4.7 Rollover Amounts.

A Participant may elect, as part of a Deferred Compensation Election, to transfer to and defer under the Plan, in a separate Benefit Unit, all or any portion of his account

balance, if any, in the Old Plan or the Director's Plan, as the case may be. A Participant may also elect, as part of a Deferred Compensation Election filed prior to Termination of Employment, to transfer to and defer under the Plan, in a separate Benefit Unit, all or any portion of his Retirement Benefit Plan Account established pursuant to Sections 4.09 or 4.10 hereof. Any such transfer shall occur in four (4) equal installments over four (4) Plan Years, on the first business day of each calendar year, commencing with the first day of the calendar year which starts immediately after the filing of such Deferred Compensation Election. The procedure for making such an election with respect to a Rollover Amount shall be as determined by the Retirement Committee in its sole and absolute discretion. A Participant making an election to defer a Rollover Amount from the Old Plan or the Director's Plan, as the case may be, waives all rights under such plans with respect to amounts transferred to this Plan, including the right to make elections regarding the time or manner of payment as permitted thereunder; provided, however, that until Rollover Amounts are, in fact, transferred to this Plan from the Old Plan or the Director's Plan as provided herein, the Participant's account in the Old Plan or the Director's Plan, as the case may be, shall continue to be credited with a growth addition based on the Old Plan Interest Rate or the Director's Plan Interest Rate, as the case may be, on the then outstanding

balance of the Participant's account, all in accordance with the terms and conditions of the Old Plan or the Director's Plan. The order in which Rollover Amounts are transferred to this Plan from the Old Plan, the Director's Plan or the Retirement Benefit Plan Account shall be as reasonably determined by the Retirement Committee. Although subject to the minimum deferral amount set forth in Section 4.6 hereof, Rollover Amounts shall not be subject to any maximum deferral limitation.

4.8 Election to Defer Irrevocable.

Except as provided herein by action of the Retirement Committee, a Participant's election to defer any amounts of any nature whatsoever pursuant to the Plan shall be irrevocable when made and accepted by the Retirement Committee and shall not be subject to amendment or modification in any manner whatsoever thereafter. Notwithstanding the foregoing, the Retirement Committee, in its sole and absolute discretion, may allow a Participant, who either (i) expects to retire or terminate employment in the near future but who has not yet retired or terminated employment with the Company for any reason whatsoever, or (ii) has received a promotion and corresponding Compensation increase of significant magnitude, to increase and accelerate amounts to be deferred hereunder, without regard to the maximum deferrals set forth in Section 4.6 hereof, but only for the purpose of completing all or any portion of the Stated Deferral with respect to an

already existing Incomplete Benefit Unit. Any such change concerning Compensation to be deferred hereunder shall be subject to such terms and conditions as the Retirement Committee may impose, in its sole and absolute discretion.

4.9 Certain Retirement Benefit Plan Equivalents.

Pursuant to and conditions of the Super Valu Stores, Inc. 1976 Amended Retirement Plan (or any successor thereto or amended version thereof), any benefits paid hereunder are to be taken into account under said retirement plan in the year in which such Compensation is, in fact, paid to the Participant and not in the year in which such amounts are otherwise earned by the Participant. Except as otherwise provided herein, in the event a Participant's retirement benefits from any company-sponsored Internal Revenue Service approved retirement plan (other than the Defined Contribution Plan or the Savings Plan described in
Section 4.10 hereof) are decreased in any way due to a deferral of Compensation pursuant to the Plan, there shall be credited to the Participant's Retirement Benefit Plan Account, on the day benefits commence under the Plan, a Retirement Benefit Plan Amount which is an amount equal to the lump sum actuarial equivalent of the increased income which would have been payable under the retirement plan if the amounts credited to the Participant's Deferral Account pursuant to the Plan had instead been paid as cash remuneration on the date such amounts were credited thereto. The Retirement Benefit Plan Amount shall be determined by the Retirement Committee, in its sole and

absolute discretion, upon the advice of the actuary for the retirement plans. This advice shall be based on interest, mortality and other appropriate assumptions used to value the retirement plans as of the last actuarial valuation date immediately preceding such determination. Except as provided in
Section 4.7 hereof, the Retirement Benefit Plan Amount credited to a Participant's Retirement Benefit Plan Account pursuant to this Section 4.9 shall not be credited or taken into account with respect to any Benefit Unit. In the event that a Participant's benefits under the SUPERVALU INC. Employee Stock Ownership Plan Trust Agreement are decreased in any manner due to a deferral of Compensation pursuant to the Plan, then notwithstanding any other provisions of the Plan to the contrary, there shall not be any increase in a Participant's account or benefits hereunder (including the Participant's Retirement Benefit Plan Account) to take into account any benefits that would have been payable under the terms and conditions of said Employee Stock Ownership Plan if the amount deferred hereunder had instead been paid as cash remuneration.

4.10 SUPERVALU INC, Defined Contribution Plan and Pre-Tax Savings and Profit Sharing Plan Benefit Equivalents.

Pursuant to the terms and conditions of the Defined Contribution Plan and the Savings Plan, any benefits paid hereunder are to be taken into account under such plans in the

year in which such Compensation is, in fact, paid to the Participant and not in the year in which such amounts are otherwise earned by the Participant. There shall be credited to a Participant's Retirement Benefit Plan Account, within sixty (60) days of the first day of each Fiscal Year, an additional Retirement Benefit Plan Amount equal to the additional contribution, if any, which would have been made by the Company under such plans during the preceding Fiscal Year, if the amounts credited to the Participant's Deferral Account pursuant to the Plan had instead been credited to the Participant's account pursuant to such plans, taking into account the limitations on the amount of the Company contribution provided for in such plans. Such Retirement Benefit Plan Amount shall be determined by the Retirement Committee, in its sole and absolute discretion. Except as provided in Section 4.7 hereof, the Retirement Benefit Plan Amount credited to a Participant's Retirement Benefit Plan Account pursuant to this Section 4.10 shall not be credited or taken into account with respect to any Benefit Unit.

Section 5. Deferral Accounts

5.1 Establishment and Crediting of Account.

Company shall also establish a Retirement Benefit Plan Account on its books with respect to each Participant who is entitled to a Retirement Benefit Plan Amount pursuant to Section 4.9 or Section 4.10 hereof.

5.2 Compensation, Rollover Amount and Retirement Benefit Plan Deferrals.

The Compensation or Rollover Amounts that are deferred pursuant to a Participant's Deferred Compensation Election and the Retirement Benefit Plan Amount shall be credited to a Participant's Deferral Account or Retirement Benefit Plan Account, as appropriate, (i) in the case of Compensation, as of the date the Participant would have otherwise received the Compensation, (ii) in the case of Rollover Amounts, the first business day of the calendar year in which a Rollover Amount is deferred hereunder pursuant to Section 4.7 hereof, and (iii) in the case of a Retirement Benefit Plan Amount, on the dates set forth in
Section 4.9 and Section 4.10 hereof. Amounts shall be credited to a Participant's account under the Old Plan or the Director's Plan in accordance with the terms and conditions of the Plan. The Company shall be entitled to deduct from the Participant's Compensation which is not subject to a Deferred Compensation Election any amount it is required to withhold or collect under any federal, state or local law for taxes or other charges, including, without limitation, Social Security (F.I.C.A.) taxes.

5.3 Interest.

As of each Determination Date, an amount equal to interest earned since the last preceding Determination Date shall be credited to a Participant's Deferral Account and, if applicable, Retirement Benefit Plan Account. For the Deferral Account, interest shall be calculated by applying the Plan Interest Rate compounded annually to the daily balance of the Deferral Accounts since the last preceding Determination Date pursuant to such computational methods as shall be adopted by the Retirement Committee, in its sole and absolute discretion. For the Retirement Benefit Plan Account, interest shall be credited at the Old Plan Interest Rate, in accordance with the terms and conditions of the Old Plan. For any account established under the Old Plan or the Director's Plan pursuant to the terms and conditions of the Plan, interest shall be credited thereto at the Old Plan Interest Rate or the Director's Plan Interest Rate in accordance with the computation method set forth in the Old Plan or the Director's Plan, as the case may be, and in accordance with the terms and conditions of the Plan.

5.4 Contractual Obligation.

other than as a general, unsecured creditor of the Company. Such account balances shall not be financed through a trust fund or any other assets or properties in which a Participant has any interest whatsoever. Payments from such accounts shall be made out of the general funds of the Company. All such accounts shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant pursuant to the Plan. Such accounts shall not constitute or be treated as a trust fund or an interest in any specific assets or properties of the Company of any sort. Notwithstanding the foregoing, payments may be financed by or through the SUPERVALU INC. Agreement and Plans Trust, approved April 13, 1988, as it may be amended from time-to-time.

5.5 Charges Against and Balances of Accounts.

Each Participant's Deferral Account, Retirement Benefit Plan Account, any account established under the Old Plan and any account established under the Director's Plan, as of each Determination Date, shall consist of the balance of such account as of the immediately preceding Determination Date plus the amount to be credited to such account by the Company pursuant to Section 5.3 hereof, less the amount of all distributions, if any, made from such account since the immediately preceding Determination Date.

5.6 Statement of Accounts. The

Retirement Committee, in its sole and absolute discretion, shall from time to time provide to each Participant

a statement in such form as the Retirement Committee deems desirable setting forth the balance to the credit of such Participant in his Deferral Account, Retirement Benefit Plan Account and any accounts established under the Old Plan or the Director's Plan.

Section 6. Payment of Benefits

6.1 Retirement Benefits.

Upon a Participant's Retirement, the Company shall:

6.1.1 Incomplete Benefit Units. Pay to the Participant the Deferral Account balance with respect to any Incomplete Benefit Unit that is not a Qualified Benefit Unit in accordance with the terms and conditions of Section 6.9 hereof; provided, however, that this Section 6.1.1 shall not apply to Benefit Units with respect to Rollover Amounts.

6.1.2 Rollover Benefit Units. Maintain the Deferral Account with respect to any election with respect to Rollover Amounts until all rollovers have been made, and then pay a Retirement Benefit equal to the amount of such Deferral Account determined as of the Determination Date coincident with or next following the end of such Deferral Period in accordance with Section 6.6.

6.1.3 Oualified Benefit Units. Pay to the Participant, with respect to any Qualified Benefit Unit, a Retirement Benefit equal to the amount of his Deferral Account for such Qualified Benefit Unit determined as of the

Determination Date coincident with or next following the date of Retirement. Each Retirement Benefit shall be payable in accordance with Section 6.6 hereof. With respect to a Qualified Benefit Unit for which the Stated Deferral has not been completed in full as of the date of Retirement, the Company shall credit the Participant's Deferral Account with the balance of the Benefit Unit and shall charge interest to the Participant's Deferral Account on such credit, for the period of time such credit has not been recovered by the Company, at a rate equal to the Company's cost of borrowing funds on a short-term, unsecured basis, in effect on the date of Retirement, as determined by the Retirement Committee. The Company shall recover the amount credited to complete a Qualified Benefit Unit, and interest accrued on the credit (i) from the first installment payable pursuant to Section 6.6.1, and from each successive installment until the total amount of the credit and accrued interest has been recovered, or (ii) ratably over the 20-year benefit payment period under Section 6.6.1, as the Retirement Committee, in its sole and absolute discretion, shall elect.

6.2 Benefits Upon Disability.

6.2.1 Disability Benefits. Upon a Participant's Termination of Employment due to Disability, the Company shall pay to the Participant an annual Disability Benefit equal to twenty-five percent (25%) of the Participant's Stated Deferral

for each Benefit Unit, but in the case of an Employee in no event shall such Disability Benefit exceed fifty percent (50%) of the Participant's Compensation during the Plan Year immediately preceding the Plan Year of Disability. Disability Benefits shall be payable in quarterly installments commencing on the first day of the month following the Participant's Termination of Employment for Disability and continuing on the first day of each calendar quarter thereafter until the earliest of (i) the Participant's recovery from the Disability or (ii) the end of the Plan Year in which the Participant receives Retirement Benefits in lieu of Disability Benefits under Section 6.2.2. If at the date of Termination of Employment for Disability, the Participant has an Incomplete Benefit Unit or a Deferral Account with respect to Rollover Amounts, the remaining deferrals shall be deducted from the Disability Benefit payments, or shall continue to rollover from the Old Plan or the Director's Plan in accordance with Section 4.7, as the case may be, until such Benefit Unit is completed.

6.2.2     Coordination with Retirement Benefits.

(i)    Normal Retirement Date. A Participant who reaches the Normal
       Retirement Date while disabled and without making the election
       under Section 6.2.2(ii), below, shall receive, commencing on
       such date, the Retirement Benefit set forth in Section 6.1,
       payable in accordance with Section 6.6 (taking into account

       elections which may be made thereunder), and such Participant
       shall no longer be entitled to receive any Disability Benefits.

(ii)   Early Retirement Date. A Participant whose Termination of
       Employment for Disability occurs prior to the Early Retirement
       Date, but who reaches such date while disabled, may elect
       within thirty (30) days before such date to receive the
       Retirement Benefit set forth in Section 6.1, payable in
       accordance with Section 6.6 (taking into account elections
       which may be made thereunder), in lieu of any Disability
       Benefit. A Participant whose Termination of Employment for
       Disability occurs after the Early Retirement Date (but prior to
       the Normal Retirement Date) may elect within thirty (30) days
       of Termination of Employment to receive the Retirement Benefit
       set forth in Section 6.1, payable in accordance with Section
       6.6 (taking into account elections which may be made
       thereunder), in lieu of any Disability Benefit, as if the
       Participant retired on the Determination Date following the
       election.

(iii)  Termination of Disability Benefits. A Participant who is an
       Employee who makes the election under Section 6.2.2(ii), above,
       shall no longer be entitled to receive any additional
       Disability Benefits as of the date of such election. A
       Participant who is an Employee who reaches the Normal
       Retirement Date while disabled and without making the election
       under 6.2.2(ii), above, shall no longer be entitled to receive
       any Disability Benefits as of such Normal Retirement Date. A
       Participant who is a Director shall be entitled to receive
       Disability Benefits until such Director, in fact, begins
       receiving the Retirement Benefit set forth in Section 6.1.,
       payable in accordance with Section 6.6 (taking into account
       elections which may be made thereunder).

6.2.3   Survivorship Benefits. If a Participant dies while receiving

Disability Benefits under Section 6.2.1, the Company shall pay to the Participant's Beneficiary the pre-retirement survivor's benefit provided for in
Section 6.5.1. If a Participant dies while receiving Retirement Benefits pursuant to Section 6.2.2(i), the Company shall pay the survivor benefits specified in Section 6.5.2, Section 6.5.3, and, if applicable, Section 6.5.4.

6.3 Benefits For Employees Upon Other Terminations of Employment.

This 6.3 shall only apply to a Participant who is an Employee.

6.3.1 Amount of Benefit. Unless the Retirement Committee, in its sole and absolute discretion, waives all or any part of the terms and conditions of this Section 6.3.1, upon a Participant's Termination of Employment for reasons other than death, Disability, or Retirement, the rights of the Participant, his spouse, if any, and his Beneficiary to benefits under this Plan shall cease, except that the Company shall pay to the Participant a benefit determined as follows:

(i) If the Participant at the date of Termination of Employment has been employed by the Company for at least ten (10) years, but has not attained age 55, the benefit under this Section 6.3.1 shall equal the amount of the Participant's Deferral Account as of the date of Termination of Employment calculated as if such date were a Determination Date.

(ii) If the Participant at the date of Termination of Employment has not been employed by the Company for ten (10) years, the benefit under this Section 6.3.1 shall equal the amount in the Participant's Deferral Account calculated as if

such date were a Determination Date; provided, however, that the Deferral Account balance shall be redetermined on a retroactive basis from the date of the Participant's first deferral using the Old Plan Interest Rate.

6.3.2 Form of Payment. The amount in the Participant's Deferral Account shall be payable either (i) in a single lump-sum payment within thirty
(30) days of the date of Termination of Employment, or (ii) in not more than twenty (20) equal annual installments commencing within thirty (30) days of the date of Termination of Employment, as determined by the Retirement Committee in its sole and absolute discretion. If the Retirement Committee determines not to pay the amount in the Deferral Account in the form of a lump-sum payment, unpaid amounts shall be credited with interest compounded annually at a rate equal to the Old Plan Interest Rate in effect on the date of Termination of Employment.

6.4 Benefits Upon Termination of Employment Following a Change of Control.

6.4.1 Payment of Benefits. If, within 24 months after a Change of Control, a Termination of Employment with respect to a Participant occurs for any reason, the rights of the Participant, his spouse, if any, and his Beneficiary to benefits under the Plan shall cease, except that the Participant shall receive the full amount in his Deferral

Account on the date of Termination of Employment calculated as if such date were a Determination Date and without reduction for any reason whatsoever. Such benefit shall be payable in a lump sum as soon as possible. Following such payment, the Participant shall have no further right to any benefit pursuant to this Plan.

6.4.2 Election upon Reduction in Plan Interest Rate. If, within twenty-four (24) months of a Change of Control, the Plan is amended to reduce the Plan Interest Rate, on a prospective basis, a participant may elect within sixty (60) days of the date of the amendment to receive his Deferral Account balance calculated without regard to the reduced rate and as if the date of the election were a Determination Date. The amounts so calculated shall be paid in a lump sum on the first business day of the calendar year following the year of the election. Following such election, the Participant, his spouse, if any, and his Beneficiary shall have no further right to any benefit pursuant to this Plan, other than the lump sum payment provided for in this Section 6.4.2.

without reduction for any reason whatsoever. Such benefit shall be payable in a lump sum as soon as possible following the decision of the Board to terminate the Plan.

6.4.4 Parachute Payments. Notwithstanding anything in the Plan to the contrary, any amount paid under this Section 6.4 which constitutes a "parachute payment," as defined in Section 28OG of the Internal Revenue Code of 1954, as amended, or any successor provision thereto, shall be increased to be equal to one hundred thirty percent (130%) of the amount which would otherwise be paid to a Participant hereunder.

6.5 Survivorship Benefits.

6.5.1 Death Prior to Early Retirement Date. If a Participant dies after the start of a Plan Year with respect to which a Deferred Compensation Election has been made, but prior to the Early Retirement Date, the Company shall pay to the Participant's Beneficiary an annual pre-retirement survivor's benefit equal to fifty percent (50%) of the Participant's Stated Deferral for each Benefit Unit, payable in equal annual installments commencing on the first day of the month coincident with or next following the Participant's death and continuing on the anniversary date of the first payment thereafter until the later of (i) the date the Participant would have reached age 65, or (ii) fifteen
(15) years from the date of the first installment. However, if the Retirement Committee determines after the Participant's death that a

distribution of the Participant's Deferral Account for each Benefit Unit, assuming the Participant elected to retire the day before he died and elected to be paid at that time in accordance with the normal form of payment of Retirement Benefits set forth in Section 6.6.1, would produce a greater benefit than that described above, the Beneficiary shall receive, in lieu of the benefit described above, such Deferral Account balance paid under Section 6.6.1. Payment of the benefit under this Section 6.5.1 shall relieve the Company of the obligation to pay the Retirement Benefit which the Participant's Beneficiary would have otherwise received under Section 6.1 of the Plan.

6.5.2       Death After Early Retirement Date.

(i)  Amount of Benefit. If a Participant dies after the Early
     Retirement Date but while employed by the Company, the Company
     shall pay to the Participant's Beneficiary an amount, calculated
     as of the day before the Participant's death, equal to seven and
     one-half (7-1/2) times the Participant's Stated Deferral for each
     Benefit Unit. However, if the Retirement Committee determines, at
     the time of the Participant's death, that a distribution of the
     benefits, if any, that would have been payable under the Plan had
     the Participant elected to retire the day

     before he died and elected to be paid at that time in accordance
     with the normal form of payment of Retirement Benefits set forth
     in Section 6.6.1 would produce a greater benefit than that
     described above, the Beneficiary shall receive, in lieu of the
     benefit described above, such benefits which would have been
     payable under the Plan had the Participant elected to retire the
     day before he died.

(ii) Form of Payment. The benefit under this Section 6.5.2 shall be payable in equal annual installments commencing on the first day of the month coincident with or next following the Participant's death, and continuing on the anniversary date of such payment thereafter for a period of twenty (20) years. Payment of such benefit shall relieve the Company of the obligation to pay the Retirement Benefit which the Participant's Beneficiary would have otherwise received under Section 6.1 of the Plan.

6.5.3 Death After Commencement of Benefits. If a Participant dies after Retirement Benefit payments have commenced hereunder, but prior to receiving all of the scheduled annual payments, the Company shall pay the remaining annual payments to the Participant's Beneficiary.

6.5.4 Survivor Spouse Benefit. If a Termination of employment occurs for a Participant and such Participant thereafter dies following the Early or Normal Retirement Date and is survived by a spouse, the Company shall pay to such surviving spouse an annual benefit equal to fifty percent (50%) of the annual Retirement Benefit which would have been payable under the Plan had the Participant elected to be paid in accordance with the normal form of payment of Retirement Benefits set forth in Section 6.6.1; provided, however, that if as of the Participant's date of death the spouse is more than thirty-six (36) months younger than the Participant, the amount of such benefit shall be reduced by one-half of one percent (0.5%) for each month's difference in their ages in excess of thirty-six (36). Such benefit shall be paid, at the election of the Retirement Committee, either in equal annual installments continuing until such spouses's death or in a lump-sum amount determined by the Retirement Committee to be the actuarial equivalent thereof. Such benefit shall be paid as of (i) the first day of the month following the month which is twenty (20) years after the commencement of the Participant's Retirement Benefits or (ii) the first day of the month following the month of the Participant's death, whichever occurs later. Payments under this Section 6.5.4 shall be in addition to other payments which the spouse or any other Beneficiary is entitled to receive under the Plan. Payments under this Section 6.5.4 shall only be made in the event that

the Participant was married on the date of his death and such payments shall only be made to such spouse.

6.6 Form of Payment of Benefits.

6.6.1 Normal Form. The normal form of payment of Retirement Benefits shall be equal annual installments based upon the Deferral Account balance as of the Determination Date specified in Section 6.1.2 or Section 6.1.3, whichever applies, commencing on the first day of the month following such Determination Date and continuing on the anniversary date of the first payment thereafter for a period of twenty (20) years. The remaining balance of the Participant's Deferral Account shall continue to be credited on each Determination Date with the Plan Interest Rate, compounded annually, during such period. The Participant's annual payments shall be calculated based on an assumed interest rate of twelve percent (12%) per annum. If the interest actually credited with respect to a Plan Year is more than that assumed, the difference shall be paid to the Participant with the amounts otherwise payable in the next Plan Year or at such other time as the Retirement Committee, in its sole and absolute discretion, shall determine. If the interest actually credited is less than that assumed, the difference shall be deducted either (i) ratably from the amounts payable in following Plan Years, or (ii) from the first amounts payable in the next Plan Year, as the Retirement Committee, in its sole and absolute discretion, shall determine.

6.6.2   Alternative Forms.

  (a)   In lieu of payment of the Retirement Benefit over a twenty
        (20) year period as provided for in Section 6.6.1 above, the
        Retirement Committee may, in its sole and absolute discretion,
        upon the Participant's request, permit the Participant to
        elect to be paid such benefits in a lump sum, over a five (5)
        year, ten (10) year or fifteen (15) year period.

  (b)   With respect to benefits payable pursuant to the provisions of
        Sections 6.1.2, 6.1.3, 6.3.2, 6.5.3, 6.5.4, 6.6.2(a), 6.9, and
        6.10, and notwithstanding any other provision thereof,
        following a Participant's Termination of Employment, a
        Participant may, or in the event of his or her death
        thereafter, Participant's surviving spouse or beneficiary may,
        elect to receive all or a portion of the present value of the
        Participant's Deferral Account or Retirement Benefit Plan
        Account prior to the date same becomes due and payable,
        subject to forfeiture of 10% of the amount to be received.

6.6.3   Deferred Payment. A Participant may also request that the

Retirement Committee, in its sole and absolute discretion, permit a deferral of the commencement of Retirement Benefit payments until the Plan Year in which the Participant reaches age 70-1/2, or in the case of an Employee for up to five (5) Plan Years, whichever occurs first after the Employee's Retirement. If the Retirement Committee permits such a deferral, the Deferral Account shall be credited with interest by applying the Plan Interest Rate, compounded annually, during the period between Termination of Employment and the commencement of benefit payments hereunder.

6.6.4 Form of Request. A request to the Retirement Committee under
Section 6.6.2 or Section 6.6.3 must be made in writing to the Retirement Committee, in such form as it may require, no later than the last day of the calendar year preceding the calendar year in which Retirement occurs.

6.7 Recipients of Payments; Designation of Beneficiary.

All payments to be made by the Company shall be made

to the Participant, if living. Except as otherwise provided herein, in the event of a Participant's death prior to the receipt of all benefit payments, all subsequent payments to be made under the Plan shall be to the Beneficiary of the Participant. Unless otherwise specified in the Participant's Beneficiary designation, in the event a Beneficiary dies before receiving all payments due to such Beneficiary pursuant to this Plan, the then remaining payments shall be paid to the legal representatives of the Beneficiary's estate. The Participant shall designate a Beneficiary, or during his lifetime change such designation, by filing a written notice of such designation with the Company in such form and subject to such rules and regulations as the Retirement Committee may prescribe. If the Participant's Compensation constitutes community property, then any Beneficiary designation made by the Participant other than a designation of such Participant's spouse shall not be effective if any such Beneficiary or beneficiaries are to receive more than fifty percent (50%) of the aggregate benefits payable hereunder, unless such spouse shall approve such designation in writing. If no designation shall be in effect at the time when any benefits payable under this Plan shall become due, the Beneficiary shall be the legal representatives of the Participant's estate.

In the event a benefit is payable to a minor or person declared incompetent or to a person incapable of handling the

disposition of his property, the Retirement Committee may determine to pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent or person. The Retirement Committee may require proof of incompetency, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Retirement Committee and the Company from all liability with respect to such benefit.

6.8 Financial Emergency.

In the event of a Participant's severe financial hardship, the Retirement Committee, in its sole and absolute discretion, may alter the timing or manner of payment of any benefits or deferred amounts to be paid pursuant to the Plan or release the Participant from the obligation of making all or any part of remaining Stated Deferrals with respect to an Incomplete Benefit Unit. Severe financial hardship shall be deemed to have occurred in the event of the Participant's impending bankruptcy, a dependent's long and serious illness or other events of similar magnitude. The Retirement Committee's decision in passing upon the severe financial hardship of the Participant and the manner in which, if at all, the payment or deferral of any amounts pursuant to the Plan shall be altered or modified shall be final, conclusive and not subject to appeal. In the event that the Retirement Committee makes a finding of severe financial hardship, it may:

(i) If the Participant has an Incomplete Benefit Unit and the Retirement Committee has determined to release the Participant from the obligation of making the remaining Stated Deferrals with respect thereto, then recalculate the amount of such Deferral Account using the Old Plan Interest Rate or Director's Plan Interest Rate, as the case may be, and distribute to the Participant or transfer to the Participant's account in the Old Plan or the Director's Plan all or any portion of the Participant's Deferral Account (after taking into account such recalculation) with respect to such Incomplete Benefit Unit.

(ii) Distribute to the Participant or transfer to the Participant's account in the Old Plan or the Director's Plan, as the case may be, all or any part of the balance of the Participant's Deferral Account with respect to a completed Benefit Unit. Prior to any distribution or transfer under this Section 6.8(ii) of all, but not less than all, the Deferral Account balance with respect to any completed Benefit Unit, such Deferral Account shall be credited with interest earned at the Plan Interest Rate from the immediately preceding Determination Date as if

the date of the distribution or transfer were a Determination Date. The Retirement Committee shall have complete and absolute discretion in determining the form of any distribution to be made pursuant to this Section 6.8(ii). The Participant, his spouse, if any, and his Beneficiary waive all rights under the Plan with respect to amounts distributed or transferred in accordance with the terms of this Section 6.8(ii).

The Participant shall have no right to make up any amount distributed or transferred as a result of a determination of financial emergency by the Retirement Committee pursuant to this Section 6.8.

6.9 Payment of Incomplete Benefit Units and Retirement Benefit Plan Account. The Retirement Committee, in its sole and absolute discretion, shall determine the period of time over which any amount attributable to an Incomplete Benefit Unit under Section 6.1.1 hereof, and the balance in a Participant's Retirement Benefit Plan Account, shall be paid. In the event that such amounts are not paid in a lump sum, any remaining balance thereof shall continue to be credited on each Determination Date with the Old Plan Interest Rate or Director's Plan Interest Rate, as may be the case, compounded annually during the period in which payments are being made therefrom. All such payments to be made by the Company shall

be made to the Participant, if living. In the event of a Participant's death prior to the receipt of all such benefit payments, all such subsequent payments shall be made in accordance with the terms and conditions of any Beneficiary designation made pursuant to Section 6.7 hereof.

6.10 Pre-Retirement Benefits. In the event that a Participant has made the election provided for in Section 4.5.2 to receive amounts prior to Retirement, such pre-retirement benefits shall be paid in accordance with such election, either in four (4) equal annual installments or in a lump-sum amount, commencing on the date provided for in such election. For a Participant who is an Employee, the calculation of the amount of such pre-retirement benefit shall be made in accordance with the terms and conditions of the Plan, including, without limitation, Section 6.3 hereof.

Section 7. Forfeiture

In the event that a Participant has deferred amounts under the Plan, which have not been paid, and such Participant:

(i) Voluntarily terminates employment with the Company (or in the case of a Director, service on the Board) before the expiration of twelve (12) months following the date on which such Participant first elected to defer Compensation hereunder pursuant to Section 4 hereof;

(ii) engages in felonious, fraudulent or other activity resulting in harm to the Company;

(iii) divulges any of the Company's confidential information or trade information or trade secrets to a competitor; or

(iv) within three (3) years following a Termination of Employment, other than an involuntary termination, engages directly or indirectly on his own behalf or as a partner, stockholder (other than as a holder of less than one percent (1%) of the outstanding stock of any class of any publicly traded company), director, trustee, principal, agent, employee, consultant or otherwise of any person, firm or corporation in competition with or adverse to the interests of the Company within the entire territory of operations of the Company,

then the Board, in its sole and absolute discretion, may terminate all or any part of a Participant's right to any benefits whatsoever hereunder including, but not limited to, the right to receive any amount with respect to any Deferral Account or Benefit Unit. Any forfeiture pursuant to this Section 7 shall be determined by a majority vote of the entire Board (not including the Participant), but only after the Participant in question shall have had an opportunity to

appear, in person, before the Board to discuss the matter; provided, however, that a Participant who engages in the activities described in clause (iv) above shall be entitled to receive at least an amount equal to the Participant's Deferral Account balance, redetermined on a retroactive basis from the date of the Participant'S first deferral using the Old Plan Interest Rate, or the Director's Plan Interest Rate in the case of a Participant who is a Director.

In the event of a Participant's suicide during the first two (2) years after the filing of any Deferred Compensation Election or any election with respect to a Rollover Amount, the Retirement Committee, in its sole and absolute discretion, may terminate all or any part of a Participant's (or Beneficiary's) right to receive any benefits whatsoever hereunder, including, but not limited to, the right to receive any amount with respect to any Deferral Account or Benefit Unit; provided, however, that the Beneficiary of such a Participant shall be entitled to receive at least an amount equal to that portion of the Participant's Stated Deferral which has in fact been deferred pursuant to the Plan, without increase for any Plan Interest Rate, growth addition or any other amount, payable in such manner as the Retirement Committee, in its sole and absolute discretion, shall determine.

In the event a Participant (i) makes any material misstatement of information in connection with any Deferred

Compensation Election, (ii) fails to disclose to the Company or its agents any material item of his medical history, or (iii) takes any other action (or fails to take any action), which action (or failure to act) results in a loss to the Company under the Plan, then the Retirement Committee, in its sole and absolute discretion, may terminate all or any part of a Participant's (or Beneficiary's) right to receive any benefits whatsoever hereunder, including, but not limited to, the right to receive any amount with respect to any Deferral Account or Benefit Unit.

Section 8. Non-Transferability

In no event shall the Company make any payment under the Plan to any assignee or creditor of a Participant or a Beneficiary. Prior to the time of payment hereunder, a Participant or Beneficiary shall have no rights by way of anticipation or otherwise to assign or otherwise dispose of any interest under the Plan nor shall such rights be assigned or transferred by operation of law.

Section 9. Administration

9.1 Administration.

This Plan shall be administered by the Retirement Committee. The Retirement Committee may from time to time establish rules for the administration of the Plan that are not inconsistent with the provisions of the Plan.

9.2 Finality of Determination.

Any interpretation or determination by the Retirement Committee as to any disputed questions arising under the Plan, including questions of fact (such as when Disability exists) or questions of construction and interpretation, shall be final, binding and conclusive upon all persons.

9.3 Claims Procedure.

If any Participant, beneficiary or other properly interested party is in disagreement with any determination that has been made under the Plan, a claim may be presented, but only in accordance with the procedures set forth herein.

9.3.1 Original Claim.

Any Participant, beneficiary or other properly interested party may, if he so desires, file with the Retirement Committee a written claim for benefits or a determination under the Plan. Within ninety (90) days after the filing of such a claim, the Retirement Committee shall notify the claimant in writing whether his claim is upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred eighty (180) days from the date the claim was filed) to reach a decision on the claim. If the claim is denied in whole or in part, the Retirement Committee shall state in writing:

(i) the reasons for the denial;

(ii) the references to the pertinent provisions of this Plan on which the denial is based;

(iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

(iv) an explanation of the claims review procedure set forth in this section.

9.3.2 Claim Review Procedure.

Within sixty (60) days after receipt of notice that his claim has been denied in whole or in part, the claimant may file with the Retirement Committee a written request for a review and may, in conjunction therewith, submit written issues and comments. Within sixty (60) days after the filing of such a request for review, the Retirement Committee shall notify the claimant in writing whether, upon review, the claim was upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred twenty (120) days from the date the request for review was filed) to reach a decision on the request for review.

9.3.3 General Rules.

(i) No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the foregoing claims procedure. The Retirement Committee may require that any claim for benefits and any request for a review of denied claim be filed on forms to be furnished by the Retirement Committee upon request.

(ii) All decisions on claims and on requests for a review of denied claims shall be made by the Retirement Committee. In accordance with Section 9.2 hereof, decisions of the Retirement Committee shall be final, binding and conclusive upon all persons.

(iii) The Retirement Committee may, in its discretion, hold one or more hearings on a claim or a request for a review of a denied claim.

(iv) Claimants may be represented by a lawyer or other representative (at their own expense), but the Retirement Committee reserves the right to require the claimant to furnish written authorization. A claimant's representative shall be entitled to copies of all notices given to the claimant.

(v) The decision of the Retirement Committee on a claim and on a request for a review of a denied claim shall be served on the claimant in writing. If a decision or notice is not received by a claimant within the time specified, the claim or request for a review of a denied claim shall be deemed to have been denied.

(vi) Prior to filing a claim or a request for a review of a denied claim, the claimant or his representative shall have a reasonable opportunity to review a copy of this Plan and all other pertinent documents in the possession of the Company and the Retirement Committee.

9.4 Expenses.

The cost of payment from the Plan and the expense of administering the Plan shall be borne by the Company.

9.5 Tax Withholding.

The Company shall have the right to deduct from all payments to be made under the Plan, any federal, state or local taxes or other charges required by law to be withheld with respect to such payments.

Section 10. Amendment and Termination

The Company expects the Plan to be permanent but since future conditions affecting the Company cannot be anticipated or foreseen, the Company must necessarily and does hereby reserve the right to amend, modify or terminate the Plan at any time and in any manner whatsoever by action of the Board or the Retirement Committee (with the written concurrence of the Chief Executive Officer). Any such amendment, modification or termination of the Plan may occur either (i) without limitation, by resolution of the Board or (ii) in any respect that does not materially increase the cost of the Plan to the Company, by action of the Retirement Committee (with the written concurrence of the Chief Executive Officer); provided, however, that only the Board shall have the power to terminate the Plan or change the Plan Interest Rate on either a prospective or retroactive basis as hereinafter described. The power to amend the Plan includes the power to change the Plan Interest Rate on both a prospective and retroactive basis but in no event shall the Plan Interest Rate be reduced retroactively to a level below the Old Plan Interest Rate (or for Directors, the Director's Plan Interest Rate) for the years in question; provided, however, that notwithstanding any provision to the contrary herein, upon a Change of Control, neither the Board, the Retirement Committee nor the Company shall have any power or authority to change the Plan Interest

Rate on a retroactive basis. If the Plan is terminated, any remaining deferrals under a Deferred Compensation Election shall not be made and the amount in each Participant's Deferral Account, after being recalculated to take into account any lower Plan Interest Rate, shall be payable as determined by the Retirement Committee in its sole and absolute discretion.

Section 11. Applicable Law

The Plan shall be governed and construed in accordance with the laws of the State of Minnesota. The invalidity of any portion of the Plan shall not invalidate the remainder hereof and said remainder shall continue in full force. The captions and other titles herein are designed for convenience only and are not to be resorted to for the purpose of interpreting any provision of the Plan.

Section 12. No Vested Rights

The Plan and elections hereto shall not be deemed or construed to be a written contract of employment between any Employee or Director and the Company, nor shall any provision of the Plan (i) restrict the right of the Company to discharge any Employee or (ii) in any way whatsoever grant to any Employee or Director the right to receive any guaranteed base compensation, Bonus, incentive bonus awards, commissions, fees or any other payments of any nature whatsoever.

Section 13. Binding Agreement

The provisions of the Plan shall be binding upon the Participant, his or her heirs, personal representatives and

beneficiaries, and subject to the rights granted to amend or terminate the Plan, the provisions of the Plan shall also be binding upon the Company, its successors and assigns.

Pursuant to a resolution, duly adopted by the Board on June 27, 1985, the Retirement Committee, on behalf of the Company, has caused the Plan to be adopted, approved and this document to be executed by the Chief Executive Officer. The Plan shall be effective immediately to the extent necessary to permit deferrals in accordance with the terms and conditions of the Plan to be made as of the effective Date.

SUPERVALU INC.

By
Its Chief Executive Officer

Date:

Adopted: 06/27/85
Amended: 04/13/88
Amended: 11/23/02

041888

384

APPENDIX A

AMENDMENTS TO NONQUALIFIED DEFERRED COMPENSATION PLANS

RESOLVED, that the nonqualified deferred compensation plans maintained by SUPERVALU INC. and known as the SUPERVALU Deferred Compensation Plan and the SUPERVALU INC. Executive Deferred Compensation Plan II("Plans") shall be amended to provide for the following:

1. A matching contribution ("Restoration Match") shall be made for each fiscal year ending on the last Saturday in February ("Fiscal Year") to participants in the Plans who are eligible to participate in the SUPERVALU Pre-Tax Savings and Profit Sharing Plan for such Fiscal Year.

2. Subject to further amendment, the Restoration Match shall be made for the Fiscal Year ending February 22, 1997 and subsequent Fiscal Years.

3. The Restoration Match shall be based on a dollar amount ("Deemed Deferral Amount") equal to the product of (i) a percentage (not to exceed five percent (5%)) determined by dividing the participant's deferrals into the Plans for such Fiscal Year into the participant's income for such Fiscal Year: and (ii) the excess of the participant's income for such Fiscal Year over the compensation limit established under section 401(a)(17) of the Internal Revenue Code for such Fiscal Year (e.g., $150,000 for Fiscal Year ending on February 22, 1997).

4. The Restoration Match for a Fiscal Year shall be equal to the participant's Deemed Deferral Amount multiplied by the aggregate matching rate credited to the participant elective contributions under the SUPERVALU Pre-Tax Savings and Profit Sharing Plan for such Fiscal Year.

5. The Restoration Match shall be credited to the participants under one of the Plans as determined by SUPERVALU INC. as soon as administratively feasible after the close of the Fiscal Year for which it is made and shall be subject to all other rules established under such Plans: provided, however, that it shall be subject to the vesting rules in effect under the SUPERVALU Pre-Tax Savings and Profit Sharing Plan.

FURTHER RESOLVED, to the extent necessary, these resolutions will constitute an amendment to the Plans.

FURTHER RESOLVED, that the Retirement Committee of SUPERVALU INC. is authorized and directed to take whatever actions it deems necessary to implement these resolutions including, but not limited to, approval of amendments of the plan statements which incorporate the provisions of the Plans.

EXHIBIT 10.15

SUPERVALU INC.

THE EXECUTIVE DEFERRED COMPENSATION PLAN II
(amended plan adopted February 8, 1989)

(as amended May 26, 1989 and November 22, 2002)

TABLE OF CONTENTS

Section                                                                    Page
-------                                                                    ----

1.   Establishment and Purpose.............................................  1

     1.1  Establishment....................................................  1

     1.2  Purpose..........................................................  1

2.   Definitions...........................................................  1

     2.1  Definitions......................................................  1

     2.2  Gender and Number................................................ 14

3.   Eligibility for Participation......................................... 14

4.   Election to Defer..................................................... 15

     4.1  Deferrals........................................................ 15

     4.2  Procedure........................................................ 15

     4.3  Types of Deferral for Initial Participants....................... 16

     4.4  Types of Deferral for Other Participants......................... 17

     4.5  Fixed and Pre-Retirement Deferrals............................... 18

          4.5.1   Fixed Deferrals.......................................... 18

          4.5.2   Long-Term Incentive Bonus Deferral....................... 21

     4.6  Pre-Retirement Distributions..................................... 21

     4.7  Maximum and Minimum Deferrals.................................... 22

     4.8  Rollover Amounts................................................. 22

     4.9  Election to Defer Irrevocable.................................... 24

     4.10 Certain Retirement Benefit Plan Equivalents...................... 25

     4.11 SUPERVALU INC. Defined Contribution Plan and
            Pre-Tax Savings and Profit Sharing Plan Benefit
            Equivalents.................................................... 26

 5.  Deferral Accounts..................................................... 27

     5.1  Establishment and Crediting of Account........................... 27

     5.2  Compensation, Rollover Amount and Retirement
          Benefit Plan Deferrals........................................... 28

     5.3  Interest......................................................... 29

     5.4  Contractual Obligation........................................... 30

     5.5  Charges Against and Balances of Accounts......................... 30

     5.6  Statement of Accounts............................................ 31

6.   Payment of Benefits................................................... 31

     6.1  Retirement Benefits.............................................. 31

          6.1.1   Incomplete Benefit Units................................. 31

          6.1.2   Rollover Benefit Units................................... 32

          6.1.3   Qualified Benefit Units.................................. 32

     6.2  Benefits Upon Disability......................................... 33

          6.2.1   Disability Benefits...................................... 33

          6.2.2   Survivorship Benefits.................................... 34

6.3 Benefits for Employees Upon Other Termination of Employment..................................................... 34

6.3.1 Amount of Benefit........................................ 34

6.3.2 Form of Payment.......................................... 35

6.4 Benefits Upon Termination of Employment Following

       a Change of Control............................................ 36

     6.4.1   Payment of Benefits...................................... 36

     6.4.2   Reduction in Plan Interest Rate.......................... 37

     6.4.3   Termination of Plan...................................... 37

     6.4.4   Parachute Payments....................................... 37

6.5  Survivorship Benefits............................................ 38

     6.5.1   Death Prior to Retirement................................ 38

     6.5.2   Death After Commencement of Benefits..................... 39

     6.6  Form of Payment of Benefits...................................... 40

          6.6.1   Normal Form.............................................. 40

          6.6.2   Small Deferral Accounts.................................. 41

          6.6.3   Deferred Payment......................................... 41

     6.7  Recipients of Payments; Designation of
            Beneficiary.................................................... 41

     6.8  Financial Emergency.............................................. 43

     6.9  Payment of Incomplete Benefit Units and
            Retirement Benefit Plan Account and
            Long-Term Incentive Bonus Account.............................. 45

     6.10 Pre-Retirement Benefits.......................................... 46

7.   Forfeiture............................................................ 46

8.   Non-Transferability................................................... 49

9.   Administration........................................................ 50

     9.1  Administration................................................... 50

     9.2  Finality of Determination........................................ 50

     9.3  Claims Procedure................................................. 50

          9.3.1   Original Claim........................................... 50

          9.3.2   Claim Review Procedure................................... 51

          9.3.3   General Rules............................................ 52

     9.4  Expenses......................................................... 53

     9.5  Tax Withholding.................................................. 53

10.  Amendment and Termination............................................. 53

11.  Applicable Law........................................................ 54

12.  No Vested Rights...................................................... 54

13.  Binding Agreement..................................................... 55

Appendix A Amendments to NonQualified Deferred Compensation Plans

SUPERVALU INC.
THE EXECUTIVE DEFERRED COMPENSATION PLAN II

Section 1. Establishment and Purpose

1.1 Establishment.

SUPERVALU INC., a Delaware corporation (hereinafter called the "Company"), hereby establishes effective as of June 1, 1989, this deferred compensation plan for certain of its executive employees which shall be known as the SUPERVALU INC. THE EXECUTIVE DEFERRED COMPENSATION PLAN II (hereinafter called the "Plan").

1.2 Purpose.

Section 2. Definitions

2.1 Definitions.

Whenever used hereinafter, the following terms shall have the meaning set forth below:

(a) "Age" means the age of the person as of his last birth date.

(b) "Beneficiary" means the person designated by a Participant pursuant to Section 6.7 hereof.

(c) "Benefit Unit" means the agreed upon amount to be deferred by a Participant under the Plan over a specified--De7fe'r-r-al Period pursuant to a specific Deferred Compensation Election. A separate

Benefit Unit shall also exist with respect to each deferral election with respect to Rollover Amounts.

(d) "Board" means the Board of Directors of the Company.

(e) "Annual Bonus" means payments made from time to time by the Company to certain Employees pursuant to the Super Valu Stores, Inc. Executive Incentive Bonus Plan or such other bonus plans of the Company or any Subsidiary designated by the Retirement Committee as an "Annual Bonus" for purposes of this Plan.

(f) "Change of Control" means:

plan of the Company and/or any of its wholly owned subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock or the combined voting power of the Company's then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of at least three quarters of the Continuing Directors (as defined below); or

solicitation with respect to the election or removal of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement; considered as though such person were a Continuing Director; or

(iii) Approval by the stockholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by three quarters of the Continuing Directors; or

(iv) Any other event that a majority of the Continuing Directors in its sole discretion shall determine constitutes a Change of Control.

(g) "Chief Executive officer" means the chief executive officer of the Company or the person who regularly performs the duties normally associated with such office on behalf of the Company.

(h) "Company" means SUPERVALU INC., a Delaware corporation, and any Subsidiary thereof.

(i) "Compensation" means (i) for an Employee, the salary, Annual Bonus, Long-Term Incentive Bonus and other amounts payable by the Company which would have been reported on Treasury Form W-2 (or any comparable successor form) if reported on a Plan Year basis and if the Employee had not entered into a Deferred Compensation Election, but excluding expense, reimbursement, moving expense payments, third-party sick pay, imputed income (from excess life insurance premiums, automobile use premiums or any other source), non-qualified stock options, disqualifying dispositions of stock acquired pursuant to the exercise of incentive stock options, stock appreciation rights, severance settlements and similar items of remuneration, and (ii) for a Director, the annual retainer and meeting fees paid by the Company as a result of service as a Director.

(j) "Deferral Account" means the account maintained on the books of the Company with respect to each Benefit Unit for each Participant pursuant to Section 5 hereof.

(k) "Deferral Period" means the period of years during which Compensation or Rollover Amounts are being deferred (or transferred) for a particular Benefit Unit pursuant to a Participant's Deferred Compensation Election as described in
Section 4 hereof.

(m) "Defined Contribution Plan" means the Company's Internal Revenue Service approved profit sharing plans, whether now or hereafter in existence.

(n) "Determination Date" means the last day in each June which coincides with the end of each of the Plan Years and shall be the date on which the amount of a Participant's Deferral Account is determined as provided in Section 5 hereof.

(o) "Director" means an individual who is a member of the Board and who is not an Employee of the Company.

(p) "Director's Plan" means the Super Valu Stores, Inc. Deferred Compensation Plan for Non-Employee Directors. Each Participant who is a Director shall have an account established and credited under the Director's Plan to the extent necessary to carry out the terms and conditions of the Plan.

(q) "Director's Plan Interest Rate" means the interest rate provided for in paragraph 8 of the Director's Plan.

(r) "Disability" means a Participant's disability as defined in the Super Valu Stores, Inc. Long-Term Disability Plan.

(s) "Disability Benefit" means the disability benefit described in
Section 6.2 hereof.

the Company shall include the period during which the Participant is disabled. All or any part of the requirements established by this definition may be waived or modified for Employees in the sole and absolute discretion of the Retirement Committee arid for Directors in the sole and absolute discretion of the Board.

(u) "Effective Date" means June 1, 1989.

(v) "Employee" means an employee of the Company or any Subsidiary, branch or subdivision thereof, who (i) is employed in a recognized executive administrative or professional capacity and
(ii) has significant management responsibilities or is highly compensated, and (iii) is compensated therefor in a combination of guaranteed base compensation plus periodic additions of variable amounts derived from sources including, but not limited to, an Annual Bonus, other incentive bonus awards and commissions.

(w) "Fiscal Year" means the approximate twelve-month period coinciding with the Company's fiscal year and ending on the last Saturday in each February.

(x) "Incomplete Benefit Unit" means a Benefit Unit for which a Deferred Compensation Election has

been made and with respect to which the Participant has not completed deferrals of the total amount of the Stated Deferral.

(z) "Long-Term Incentive Bonus" means payments, if any, made from time to time by the Company to certain Employees pursuant to the SUPERVALU INC. Executive Long-Term Incentive Plan, as the same may be amended from time to time.

(aa) "Long-Term Incentive Bonus Account" means a separate account, in the nature of a Deferral Account, established and maintained for each Participant who has elected to defer a Long-Term Incentive Bonus pursuant to Section 4.5.2 hereof.

(bb) "Normal Retirement Date" means (i) for an Employee, the first day of the month following the month in which the Employee reaches age 62, has completed ten (10) or more years of service with the Company and has completed a Qualified Benefit Unit, or, if earlier, the first day of the month following the month in which the

Employee reaches age 65 and has completed a Qualified Benefit Unit and (ii) for a Director, the first day of the month following the month in which the Director reaches age 55. Years of service with the Company shall include the period during which the Participant is disabled. All or any part of the requirements established by this definition may be waived or modified for Employees in the sole and absolute discretion of the Retirement Committee and for Directors in the sole and absolute discretion of the Board.

(cc) "Old Plan" means the Super Valu Stores, Inc. Deferred Compensation Plan. Each Participant who is an Employee shall have an account established and credited under the Old Plan to the extent necessary to carry out the terms and conditions of the Plan.

(dd) "Old Plan Interest Rate" means the interest rate provided for in
Section 5.2 of the Old Plan.

(ee) "Participant" means all Directors and those Employees as may be selected from time to time in the sole and absolute discretion of the Chief Executive Officer, either of whom have elected to participate in the Plan by filing a Deferred Compensation Election hereunder.

(ff) "Plan Interest Rate" means, with respect to any Plan Year, One Hundred Twenty Percent (120%) of the ten (10)-year rolling average of ten (10)-year U.S. Treasury Notes as in effect as of December 31 of the calendar year immediately preceding the Plan Year to which the Plan Interest Rate applies. The Retirement Committee shall compute the Plan Interest Rate on the basis of information concerning ten (10)-year U.S. Treasury Notes published by Salomon Brothers, Inc.; provided, however, that in the event that Salomon Brothers, Inc. does not publish such information or if for any other reason such information is not available therefrom, the Retirement Committee, in its sole and absolute discretion, will determine from other appropriate, authoritative sources the ten (10)-year U.S. Treasury Note rate for purposes of computing the Plan Interest Rate. The Retirement Committee shall compute the Plan Interest Rate in accordance with the foregoing terms and conditions.

(gg) "Plan Year" means the twelve-month period beginning on July 1 and ending on the last day in June in each calendar year.

(hh) "Qualified Benefit Unit" means a Benefit Unit with respect to which at least fifty percent (50%) of the aggregate amount of the Stated Deferral has been deferred.

(ii) "Retirement" means (i) for an Employee, Termination of Employment after reaching the Early Retirement Date or Normal Retirement Date, and (ii) for a Director, Termination of Employment at any time.

(jj) "Retirement Benefit" means the retirement benefit described in
Section 6.1 hereof.

(kk) "Retirement Benefit Plan Account" means a separate account, in the nature of a Deferral Account, established and maintained for each Participant entitled to benefits pursuant to Section 4.10 or Section 4.11 hereof.

(11) "Retirement Benefit Plan Amount" means the amount of the benefit determined under Section 4.10 and Section 4.11 hereof.

(mm) "Retirement Committee" means the SUPERVALU INC. Retirement Committee constituted by the Chief Executive Officer for the purpose of performing certain administrative functions with respect to the employee pension benefit plans of the Company, including the Plan.

(nn) "Rollover Amount" means (i) for an Employee, the Long-Term Incentive Bonus Account, if subject to an election pursuant to
Section 4.8 hereof, and the amount to be transferred from the Employee's account established pursuant to Section 5.1 of the Old Plan and to be deferred under the Plan as set forth in the Employee's Deferred Compensation Election and (ii) for Directors, the amount to be transferred from the Director's account under the Director's Plan and to be deferred under the Plan as set forth in the Director's Deferred Compensation Election.

(oo) "Savings Plan" means the Company's SUPERVALU Pre-Tax Savings and Profit Sharing Plan Trust Agreement.

(pp) "Stated Deferral" means the amount with respect to each Benefit Unit which the Participant agrees to defer in accordance with
Section 4 hereof from either his Compensation or from a Rollover Amount.

(qq) "Subsidiary" means any corporation, the majority of the voting stock of which is directly or indirectly owned by the Company.

(rr) "Termination of Employment" means (i) for an Employee, ceasing to be employed by the Company for any reason whatsoever, including, without

limitations, terminations of employment which are voluntary or involuntary, and (ii) for a Director, ceasing to serve as a member of the Board.

2.2 Gender and Number.

Section 3. Eligibility for Participation

Employees of the Company shall be eligible to participate in the Plan with respect to a Deferral Period if, and only if, so selected or otherwise designated by the Chief Executive Officer. Employees eligible to become Participants after the first Plan Year shall be entitled to defer Compensation hereunder as of the first day of the Plan Year following their selection. All Directors shall be eligible to become Participants as of the first day of any Plan Year. A Participant shall cease to be a Participant upon Termination of Employment. A person who for any reason ceases to be a Participant during a Deferral Period or otherwise shall have no further right to defer Compensation hereunder. The Retirement Committee, in its sole and absolute discretion, shall make such rules concerning leaves of absences, re-employment and other matters concerning eligibility for Participation hereunder as it deems to be in the best interests of the Company.

Section 4. Election to Defer

4.1 Deferrals.

Any Employee eligible to become a Participant, and any Director, may elect not earlier than November 15 and not later than the last day of a Fiscal Year to defer Compensation, otherwise payable in subsequent Plan Years, in exchange for a Benefit Unit. An Initial Participant shall, prior to a date to be announced by the Retirement Committee, elect to defer Compensation, otherwise payable after July 1, 1989, in exchange for a Benefit Unit. Any Employee or Director eligible to become a Participant when first hired by the Company or when first becoming a member of the Board after the beginning of a Plan Year, as appropriate, may elect to defer Compensation, otherwise payable in subsequent Plan Years, in exchange for a Benefit Unit only in accordance with this Section 4.1.

4.2 Procedure.

from time to time, in the sole and absolute discretion of the Retirement Committee. A separate Deferred Compensation Election must be executed by a Participant with respect to each Benefit Unit, and, unless waived by the Retirement Committee, in its sole and absolute discretion, the total amount of the Stated Deferral for a Benefit Unit must be completed before another Deferred Compensation Election may be made; provided, however, that an election with respect to Rollover Amounts pursuant to Section 4.8 hereof, may be made in accordance with the terms and conditions of the Plan before the total amount of the Stated Deferral for a Benefit Unit, with respect to an existing Deferred Compensation Election, has been completed. A Deferred Compensation Election shall be effective if, and only if, it is accepted by the Retirement Committee on behalf of the Company and all the terms and conditions set forth in the Deferred Compensation Election are satisfied in full by the Participant. If accepted by the Retirement Committee, the Compensation to be deferred, as specified in the Deferred Compensation Election, shall be deferred and the Participant's Compensation shall be correspondingly reduced.

4.3 Types of Deferral for Initial Participants.

For Deferred Compensation Elections filed in 1989, an Initial Participant who is an Employee shall be entitled, subject to the other terms and conditions of the Plan, to defer the Participant's Compensation (not including the Participant's

Annual Bonus or Long-Term Incentive Bonus) otherwise payable after July 1, 1989, and the Participant's Annual Bonus and Long-Term Incentive Bonus otherwise payable in the calendar years which begin after the filing of such Deferred Compensation Election. For Deferred Compensation Elections filed in 1989, an Initial Participant who is a Director shall be entitled, subject to the other terms and conditions of the Plan, to defer the Director's September 1989 quarterly retainer fee payment, to the extent it is attributable to services performed after June 30, 1989, any part of subsequent quarterly retainer fee payments and fees for attending meetings-of the Board (and committee meetings), to the extent attributable to meetings taking place after June 30, 1989. All subsequent deferrals by Initial Participants shall be subject to the terms and conditions of Section 4.4 hereof.

4.4 Types of Deferral for Other Participants.

A Participant, other than an Initial Participant filing a Deferred Compensation Election in 1989, who is an Employee shall be entitled to defer, subject to the other terms and conditions of the Plan, the Participant's Compensation (not including the Participant's Annual Bonus or Long-Term Incentive Bonus) payable during the Plan Years which begin after the filing of a Deferred Compensation Election and the Participant's Annual Bonus and Long-Term Incentive Bonus which would otherwise be payable in the calendar years which begin

after the filing of such Deferred Compensation Election. A Participant, other than an Initial Participant filing a Deferred Compensation Election in 1989, who is a Director shall be entitled to defer, subject to the other terms and conditions of the Plan, the Director's Compensation which would otherwise be payable after the filing of the Deferred Compensation Election, to the extent such payments are for services performed as a Director during the calendar year which begins after the filing of such Deferred Compensation Election.

4.5 Fixed and Long-Term Incentive Bonus Deferrals.

(i) Employees. For Employees, the Deferred Compensation Election must provide for the deferral of a fixed amount of the Employee's Compensation, whether from the Employee's Annual Bonus or otherwise, but excluding any Long-Term Incentive Bonus. In the event an Employee's Compensation changes in any Plan Year, such change shall not reduce the amount to be deferred pursuant to his Deferred Compensation Election. In the event an Employee's Annual Bonus in any Plan Year is in excess of the bonus norm amount

assigned to his position under the Annual Bonus Plan for the preceding Fiscal Year, if the Employee's Deferred Compensation Election so provides, any such excess Annual Bonus shall be deferred and taken into account to prepay an already existing Incomplete Benefit Unit. Any prepayment with respect to an already existing Incomplete Benefit Unit shall reduce the amount to be deferred from the Employee's Compensation otherwise subject to the Deferred Compensation Election in subsequent Plan Years, in such manner as may be determined by the Retirement Committee in its sole and absolute discretion. Long-Term Incentive Bonus amounts may not be used to prepay an-already existing Incomplete Benefit Unit. Notwithstanding the foregoing, in the event an Employee's Annual Bonus or other Compensation is decreased in any Plan Year, the Retirement Committee may take such action with respect to waiving, modifying or otherwise amending an Employee's Deferred Compensation Election as it deems to be, in its sole and absolute discretion, in the best interests of the Company, including, without limitation, crediting the Employee's

Deferral Account with all or any part of the balance of the Stated Deferral and charging interest to the Employee's Deferral Account on such credit, for the period of time such credit has not been recovered by the Company, at a rate equal to the Company's cost of borrowing funds on a short-term, unsecured basis.

4.5.2 Long-Term Incentive Bonus Deferral. In the Event that a Participant's Deferred Compensation Election so provides, and in accordance with such other terms and conditions as the Retirement Committee in its sole and absolute discretion may from time to time impose, a Participant shall be entitled to defer up to 100% of any Long-Term Incentive Bonus to which such a Participant may otherwise be entitled. A Participant's Long-Term Incentive Bonus which is being deferred hereunder shall be credited to the Participant's Long-Term Incentive Bonus Account within sixty (60) days of the date a Participant's Long-Term Incentive Bonus would otherwise have been paid except as provided in Section 4.8 hereof, and a Participant's Long-Term Incentive Bonus credited to a Participant's Long-Term Incentive Bonus Account pursuant to this
Section 4.5.2 shall not be credited or taken into account with respect to any Benefit Unit.

4.6 Pre-Retirement Distributions.

In the event that a Participant's Deferred Compensation Election so provides, and in accordance with such other terms and conditions as the Retirement Committee, in its sole and absolute discretion, may from time to time impose, a Participant shall be entitled to elect to receive prior to Retirement a maximum of seventy-five percent (75%) of his Deferral Account attributable to a Benefit Unit with respect to which the Participant has completed deferrals of the total amount of the Stated Deferral.

4.7 Maximum and Minimum Deferrals.

(i) Minimum Deferral--$3,000 per year, for at least four (4) Plan Years from Compensation (not including Annual Bonus, or Long-Term Incentive Bonus or meeting fees) or $12,000 for any Long-Term Incentive Bonus which is the subject of the Participant's Deferred Compensation Election;

(ii) Maximum Deferral--for Employees, twenty percent (20%) of Compensation (not including the Participant's Annual Bonus or Long-Term Incentive Bonus) in the Plan Year in which deferrals pursuant to the Participant's Deferred Compensation Election are first effective, plus one hundred percent (100%) of the bonus norm amount assigned to his position under the Annual Bonus Plan for the preceding Fiscal Year, plus one hundred percent (100%) of any Long-Term Incentive Bonus which is the subject of the Participant's Deferred Compensation Election, and for Directors, there is no limitation on the amount which may be deferred hereunder.

4.8 Rollover Amounts.

A Participant may elect, as part of a Deferred Compensation Election, to transfer to and defer under the Plan,

in a separate Benefit Unit, all or any portion of his account balance, 4-f any, in the Old Plan or the Director's Plan, as the case may be. A Participant may also elect, as part of a Deferred Compensation Election filed prior to earning an Long-Term Incentive Bonus, to transfer to and defer under the Plan in a separate Benefit Unit, all or any portion of his Long-Term Incentive Bonus Account established pursuant to Section 4.5.2 hereof. Any of the foregoing transfers shall occur in four (4) annual installments, (i) in the case of transfers from the Old Plan or the Director's Plan, as the case may be, on the first business day of each calendar year, commencing with the first day of the calendar year which starts immediately after the filing of such Deferred Compensation Election, and (ii) in the case of transfers from the Long-Term Incentive Bonus Account, commencing with the day as may be determined in the sole and absolute discretion of the Retirement Committee, but not later than the first business day of August following the date on which an amount is credited to a Participant's Long-Term Incentive Bonus Account. The procedure for making such an election with respect to a Rollover Amount shall be as determined by the Retirement Committee in its sole and absolute discretion. A Participant making an election to defer a Rollover Amount from the Old Plan or the Director's Plan, as the case may be, waives all rights under such plans with respect to amounts transferred to this

Plan, including the right to make elections regarding the time or manner of payment as permitted thereunder; provided, however, that until Rollover Amounts are, in fact, transferred to this Plan from the Old Plan or the Director's Plan as provided herein, the Participant's account in the Old Plan or the Director's Plan, as the case may be, shall continue to be credited with a growth addition based on the old Plan Interest Rate or the Director's Plan Interest Rate, as the case may be, on the then outstanding balance of the Participant's account, all in accordance with the terms and conditions of the Old Plan or the Director's Plan. The order in which Rollover Amounts are transferred to this Plan from the Old Plan, the Director's Plan or the Long-Term Incentive Bonus Account shall be as reasonably determined by the Retirement Committee. Although subject to the minimum deferral amount set forth in Section 4.7 hereof, Rollover Amounts shall not be subject to any maximum deferral limitation.

4.9 Election to Defer Irrevocable.

allow a Participant, who either (i) expects to retire or terminate employment in the near future but who has not yet retired or terminated employment with the Company for any reason whatsoever, or (ii) has received a promotion and corresponding Compensation increase of significant magnitude, to increase and accelerate amounts not yet earned to be deferred hereunder, without regard to the maximum deferrals set forth in Section 4.7 hereof, but only for the purpose of completing all or any portion of the Stated Deferral with respect to an already existing Incomplete Benefit Unit. Any, such change concerning Compensation to be deferred hereunder shall be subject to such terms and conditions as the Retirement Committee may impose, in its sole and absolute discretion.

4.10 Certain Retirement Benefit Plan Equivalents.

Pursuant to the terms and conditions of the Super Valu Stores, Inc. 1976 Amended Retirement Plan (or any successor thereto or amended version thereof), any benefits paid hereunder are to be taken into account under said retirement plan in the year in which such Compensation is, in fact, paid to the Participant and not in the year in which such amounts are otherwise earned by the Participant. Except as otherwise provided herein, in the event a Participant's retirement benefits from any company-sponsored Internal Revenue Service approved retirement plan (other than the Defined Contribution Plan or the Savings Plan described in Section 4.11 hereof) are

decreased in any way due to a deferral of Compensation pursuant to the Plan, there shall be credited to the Participant's Retirement Benefit Plan Account, on the day benefits commence under the Plan, a Retirement Benefit Plan Amount which is an amount equal to the lump sum actuarial equivalent of the increased income which would have been payable under the retirement plan if the amounts credited to the Participant's Deferral Account pursuant to the Plan had instead been paid as cash remuneration on the date such amounts were credited thereto. The Retirement Benefit Plan Amount shall be determined by the Retirement Committee, in its sole and absolute discretion, upon the advice of the actuary for the retirement plans. This advice shall be based on interest, mortality and other appropriate assumptions used to value the retirement plans as of the last actuarial valuation date immediately preceding such determination. The Retirement Benefit Plan Amount credited to a Participant's Retirement Benefit Plan Account pursuant to this Section 4.10 shall not be credited or taken into account with respect to any Benefit Unit.

4.11 SUPERVALU INC. Defined Contribution Plan and Pre-Tax Savings and Profit Sharing Plan Benefit Equivalents.

Pursuant to the terms and conditions of the Defined Contribution Plan and the Savings Plan, any benefits paid hereunder are to be taken into account under such plans in the year in which such Compensation is, in fact, paid to the

Participant and not in the year in which such amounts are otherwise earned by the Participant. There shall be credited to a Participant's Retirement Benefit Plan Account, within ninety (90) days of the first day of each Fiscal Year, an additional Retirement Benefit Plan Amount equal to the additional contribution, if any, which would have been made by the Company under such plans during the preceding Fiscal Year, if the amounts credited to the Participant's Deferral Account pursuant to the Plan had instead been credited to the Participant's account pursuant to such plans, taking into account the limitations on the amount of the Company contribution provided for in such plans. Such Retirement Benefit Plan Amount shall be determined by the Retirement Committee, in its sole and absolute discretion. The Retirement Benefit Plan Amount credited to a Participant's Retirement Benefit Plan Account pursuant to this Section 4.11 shall not be credited or taken into account with respect to any Benefit Unit.

Section 5. Deferral Accounts

5.1 Establishment and Crediting of Account.

The Company shall establish a separate Deferral Account on its books with respect to each Benefit Unit for each Participant and shall credit to such Deferral Account certain amounts in accordance with the provisions of the Plan. The Company shall also establish on its books a Retirement Benefit Plan Account with respect to each Participant who is entitled

to a Retirement Benefit Plan Amount pursuant to Section 4.10 or Section 4.11 hereof and a Long-Term Incentive Bonus Account with respect to each Participant who has elected to defer such amount pursuant to Section 4.5.2 hereof.

5.2 Compensation, Rollover Amount and Retirement Benefit Plan Deferrals.

The Compensation or Rollover Amounts that are deferred pursuant to a Participant's Deferred Compensation Election and the Retirement Benefit Plan Amount and Long-Term Incentive Bonus, if applicable, shall be credited to a Participant's Deferral Account, Retirement Benefit Plan Account or Long-Term Incentive Bonus Account, as appropriate, (i) in the case of Compensation, as of the date the Participant would have otherwise received the Compensation, (ii) in the case of. Rollover Amounts, the first business day of the calendar year in which a Rollover Amount is deferred hereunder pursuant to Section 4.8 hereof,
(iii) in the case of a Retirement Benefit Plan Amount, on the dates set forth in Sections 4.10 and Section 4.11 hereof and (iv) in the case of a Long-Term Incentive Bonus, on the dates set forth in Section 4.5.2. Amounts shall be credited to a Participant's account under the Old Plan or the Director's Plan in accordance with the terms and conditions of the Plan. The Company shall be entitled to deduct from the Participant's Compensation which is subject to a Deferred Compensation Election any amount it is required to

withhold or collect under any federal, state or local law for taxes or other charges, including, without limitation, Social Security (F.I.C.A.) taxes.

5.3 Interest.

As of each Determination Date, an amount equal to interest earned since the last preceding Determination Date shall be credited to a Participant's Deferral Account and, if applicable, Retirement Benefit Plan Account and Long-Term Incentive Bonus Account. For the Deferral Account, interest shall be calculated by applying the Plan Interest Rate compounded annually to the balance of the Deferral Accounts since the last preceding Determination Date pursuant to such computational methods as shall be adopted by the Retirement Committee, in its sole and absolute discretion. For the Retirement Benefit Plan Account and the Long-Term Incentive Bonus Account, interest shall be credited at the Old Plan Interest Rate, in accordance with the terms and conditions of the Old Plan. For any account established under the Old Plan or the Director's Plan pursuant to the terms and conditions of the Plan, interest shall be credited thereto at the old Plan Interest Rate or the Director's Plan Interest Rate in accordance with the computation method set forth in the old Plan or the Director's Plan, as the case may be, and in accordance with the terms and conditions of the Plan.

5.4 Contractual Obligation.

It is intended that the Company is under a contractual obligation to make payments in accordance with the terms and conditions of the Plan from a Participant's Deferral Account, Retirement Benefit Plan Account, Long-Term Incentive Bonus Account, any account established under the Old Plan and any account established under the Director's Plan. A Participant shall have no rights to such payments, other than as a general, unsecured creditor of the Company. Such account balances shall not be financed through a trust fund or any other assets or properties in which a Participant has any interest whatsoever. Payments from such accounts shall be made out of the general funds of the Company. All such accounts shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant pursuant to the Plan. Such accounts shall not constitute or be treated as a trust fund or an interest in any specific assets or properties of the Company of any sort. Notwithstanding the foregoing, payments may be financed by or through the Super Valu Stores, Inc. Agreement and Plans Trust, approved April 13, 1988, as it may be amended from time-to-time.

5.5 Charges Against and Balances of Accounts.

Each Participant's Deferral Account, Retirement Benefit Plan Account, Long-Term Incentive Bonus Account any account established under the Old Plan and any account

established under the Director's Plan, as of each Determination Date, shall consist of the balance of such account as of the immediately preceding Determination Date plus the amount to be credited to such-account by the Company pursuant to Section 5.3 hereof, less the amount of all distributions, if any, made from such account since the immediately preceding Determination Date.

5.6 Statement of Accounts.

The Retirement Committee, in its sole and absolute discretion, shall from time to time provide to each Participant a statement in such form as the Retirement Committee deems desirable setting forth the balance to the credit of such Participant in his Deferral Account, Retirement Benefit Plan Account, Long-Term Incentive Account and any accounts established under the Old Plan or the Director's Plan.

Section 6. Payment of Benefits

6.1 Retirement Benefits.

Upon a Participant's Retirement, the Company shall:

6.1.1 Incomplete Benefit Units. Pay to the Participant the Deferral Account balance (including the Retirement Benefit Plan Account and any Long-Term Incentive Bonus Account which is not subject to an election pursuant to Section 4.8 hereof) with respect to any Incomplete Benefit Unit that is not a Qualified Benefit Unit in accordance with the terms and conditions of Section 6.9 hereof; provided, however, that this Section 6.1.1 shall not apply to Benefit Units with respect to Rollover Amounts.

6.1.2 Rollover Benefit Units. Maintain the Deferral Account with respect to any election with respect to Rollover Amounts (including the Long-Term Incentive Bonus Account, if applicable) until all rollovers have been made, and then pay a Retirement Benefit equal to the amount of such Deferral Account determined as of the Determination Date coincident with or next following the end of such Deferral Period in accordance with Section 6.6.

6.1.3 Qualified Benefit Units. Pay to the Participant, with respect to any Qualified Benefit Unit, a Retirement Benefit equal to the amount of his Deferral Account for such Qualified Benefit Unit determined as of the Determination Date coincident with or next following the date of Retirement. Each Retirement Benefit shall be payable in accordance with Section 6.6 hereof. With respect to a Qualified Benefit Unit for which the Stated Deferral has not been completed in full as of the date of Retirement, the Company shall credit the Participant's Deferral Account with the balance of the Benefit Unit and shall charge interest to the Participant's Deferral Account on such credit, for the period of time such credit has not been recovered by the Company, at a rate equal to the Company's cost of borrowing funds on a short-term, unsecured basis, in effect on the date of Retirement, as determined by the Retirement Committee. The Company shall recover the amount credited to complete a

Qualified Benefit Unit, and interest accrued on the credit (i) from the first installment payable pursuant to Section 6.6.1, and from each successive installment until the total amount of the credit and accrued interest has been recovered, or (ii) ratably over the 20-year benefit payment period under Section 6.6-1, as the Retirement Committee, in its sole and absolute discretion, shall elect.

6.2 Benefits Upon Disability.

6.2.1 Disability Benefits. Upon a Participant's Termination of Employment due to Disability, the Company shall complete the Participant's deferrals with respect to an already existing Incomplete Benefit Unit in accordance with the Participant's Deferred Compensation Election. In no event shall a Participant be entitled to any Disability Benefit based on changes in his physical or mental condition occurring after Termination of Employment. Such a Participant's Retirement Benefit shall commence upon the earliest of the Early or Normal Retirement Dates provided for in Section 6.1. The Company shall recover amounts credited to complete such an already existing Incomplete Benefit Unit pursuant to this Section 6.2.1, without interest, from the first installment of Retirement Benefits payable pursuant to Section 6.6, and from survivor's benefits payable pursuant to Section 6.5.1, and from each successive installment until the total amount of the credit has been recovered.

6.2.2 Survivorship Benefits. If a Participant dies following a Termination of Employment due to Disability pursuant to Section 6.2.1, but prior to the receipt of any Retirement Benefits the Company shall pay to the Participant's Beneficiary the survivor s benefit provided for in Section 6.5.1.

6.3 Benefits For Employees Upon Other Terminations of Employment.

This 6.3 shall only apply to a Participant who is an Employee.

6.3.1 Amount of Benefit. Unless the Retirement Committee, in its sole and absolute discretion, waives all or any part of the terms and conditions of this Section 6.3.1 (including allowing the maintenance of a Participant's then existing Deferral Account), upon a Participant's Termination of Employment for reasons other than death, Disability, or Retirement, the rights of the Participant, his spouse, if any, and his Beneficiary to benefits under this Plan shall cease, except that the Company shall pay to the Participant a benefit determined as follows:

Deferral Account (including the Participant's Retirement Benefit Plan Account and Long-Term Incentive Bonus Account, if any) as of the date of Termination of Employment calculated as if such date were a Determination Date.

(ii) If the Participant at the date of Termination of Employment has not been employed by the Company for ten (10) years the benefit under this Section 6.3.1 shall equal the amount in the Participant's Deferral Account (including the Participant's Retirement Benefit Plan Account and Long-Term Incentive Bonus Account, if any) calculated as if such date were a Determination Date; provided, however, that the Deferral Account balance shall be redetermined on a retroactive basis from the date of the Participant's first deferral using the Old Plan Interest Rate.

6.3.2 Form of Payment. The amount in the Participant's Deferral Account (including the Participant's Retirement Benefit Plan Account and Long-Term Incentive Bonus Account, if any) shall be payable either (i) in a single lump-sum payment within thirty (30) days of the date of Termination of Employment, or (ii) in not more than twenty (20) equal annual installments commencing within thirty (30) days of

the date of Termination of Employment, as determined by the Retirement Committee in its sole and absolute discretion. If the Retirement Committee determines not to pay the amount in the Deferral Account (including the Retirement Benefit Plan Account and Long-Term Incentive Bonus Account, if applicable) in the form of a lump-sum payment, unpaid amounts shall be credited with interest compounded annually at a rate equal to the Old Plan Interest Rate in effect on the date of Termination of Employment.

6.4 Benefits Upon Termination of Employment Following a Change of Control.

6.4.1 Payment of Benefits. If, within twenty-four (24) months after a Change of Control, a Termination of Employment with respect to a Participant occurs for any reason, the rights of the Participant, his spouse, if any, and his Beneficiary to benefits under the Plan shall cease, except that the Participant shall receive the full amount in his Deferral Account (including the Retirement Benefit Plan Account and Long-Term Incentive Bonus Account, if applicable) on the date of Termination of Employment calculated as if such date were a Determination Date and without reduction for any reason whatsoever. Such benefit shall be payable in a lump sum as soon as possible. Following such payment, the Participant shall have no further right to any benefit pursuant to this Plan.

6.4.2 Reduction in Plan Interest Rate. If, within twenty-four (24) months of a Change of Control, the Plan is amended to reduce the Plan Interest Rate, on a prospective basis, a Participant shall then receive his Deferral Account (including the Retirement Benefit Plan Account and Long-Term Incentive Bonus Account, if applicable) balance calculated without regard to the reduced rate and as if the date of such reduction were a Determination Date. The amounts so calculated shall be paid in five (5) equal annual installments commencing on the first day of the month following such reduction in Plan Interest Rate in accordance with the terms and conditions of Section 6.6.1.

6.4.3 Termination of Plan. In the event of a Change of Control, the Board may within twelve (12) months thereof terminate the Plan and, notwithstanding any provision of the Plan to the contrary, a Participant shall then receive the full amount in his Deferral Account (including Retirement Benefit Plan Account and Long-Term Incentive Bonus Account, if any), calculated as if the date of the termination of the Plan were a Determination Date and without reduction for any reason whatsoever. Such benefit shall be payable in a lump sum as soon as possible following the decision of the Board to terminate the Plan.

6.4.4 Parachute Payments. Notwithstanding anything in the Plan to the contrary, any amount paid under this

Section 6.4 which constitutes a "parachute payment," as defined in Section 28OG of the Internal Revenue Code of 1986, as amended, or any successor provision thereto, shall be increased to be equal to one hundred thirty percent (130%) of the amount which would otherwise be paid to a Participant hereunder.

6.5 Survivorship Benefits.

6.5.1 Death Prior to Retirement. If a Participant dies after the start of a Plan Year with respect to which a Deferred Compensation Election has been made, but prior to Retirement, or if a Participant dies following a Termination of Employment due to Disability pursuant to Section 6.2.1 but prior to the receipt of any Retirement Benefits, the Company shall pay to the Participant's Beneficiary an annual survivor's benefit equal to twenty-five percent (25%) of the Participant's Stated Deferral for each Benefit Unit, payable in equal annual installments commencing on the first day of the month coincident with or next following the Participant's death and continuing-on the anniversary date of the first payment thereafter until fifteen (15) years from the date of the first installment. The Beneficiary of a Participant who has died following a Termination of Employment which takes place prior to the Early Retirement Date therefor shall not be entitled to any benefits pursuant to this Section 6.5.1. However, if the Retirement Committee determines after the Participant's death that a distribution of the Participant's Deferral Account

(including any Retirement Plan Benefit Account or Long-Term incentive Bonus Account) for each Benefit Unit, assuming the Participant elected to retire the day before he died and elected to be paid at that time in accordance with the normal form of payment of Retirement Benefits set forth in Section 6.6.1, would produce a greater benefit than that described above, the Beneficiary shall receive, in lieu of the benefit described above, such Deferral Account balance paid under Section 6.6.1. Payment of the benefit under this Section 6.5.1 shall relieve the Company of the obligation to pay the Retirement Benefit which the Participant's Beneficiary would have otherwise received under Section 6.1 of the Plan.

6.5.2 Death After Commencement of Benefits. If a Participant dies after Retirement Benefit payments have commenced hereunder, but prior to receiving all of the scheduled annual payments, the Company shall pay the remaining annual payments to the Participant's Beneficiary; provided, however, that the Retirement Committee, in its sole and absolute discretion, may, at any time following such a Participant's death, decide to pay the remaining balance in the Participant's Deferral Account (including Retirement Plan Benefit Account and Long-Term Incentive Bonus Account, if applicable, in a lump sum.

6.6 Form of Payment of Benefits.

6.6.1 Normal Form. (a) The normal form of payment of Retirement Benefits shall be equal annual installments based upon the Deferral, Account balance as of the Determination Date specified in Section 6.1.2 or Section 6.1.3, whichever applies, commencing on the first day of the month following such Determination Date and continuing on the anniversary date of the first payment thereafter for a period of five (5), ten (10), fifteen (15), or twenty (20) years or in a lump sum, as provided in a Participant's Deferred Compensation Election. The remaining balance of the Participant's Deferral Account, if any, shall continue to be credited on each Determination Date with the Plan Interest Rate, compounded annually, during such period. The Participant's annual payments shall be calculated based on an assumed interest rate equal to the Old Plan Rate for the Fiscal Year immediately preceding the date of each payment hereunder. If the interest actually credited with respect to a Plan Year is more than that assumed, the difference shall be paid to the Participant with the amounts otherwise payable in the next Plan Year or at such other time as the Retirement Committee, in its sole and absolute discretion, shall determine. If the interest actually credited is less than that assumed, the difference shall be deducted either (i) ratably from the amounts payable in following Plan Years, or (ii) from the first amounts payable in the next Plan

Year, as the Retirement Committee, in its sole and absolute discretion, shall determine. (b) With respect to benefits payable pursuant to the provisions of Sections 6.1.2, 6.1.3, 6.3.2, 6.5.2, and 6.9, and notwithstanding any other provision thereof, following a Participant's Termination of Employment, such Participant may, or in the event of his or her death thereafter, such Participant's surviving spouse or beneficiary may, elect to receive all or a portion of the present value of the Participant's Deferral Account or Retirement Benefit Plan Account prior to the date same becomes due and payable, subject to forfeiture of 10% of the amount to be received.

6.6.2 Small Referral Accounts. Notwithstanding any other provision of the Plan or a Participant's Deferred Compensation Election, the Retirement Committee, taking into account the expense and inconvenience of administering the Plan with respect to small deferral accounts as set forth herein, shall distribute a Participant's Retirement Benefit in a lump sum. This Section 6.6.2 shall only apply to small deferral accounts which shall mean all deferral accounts with a balance of $10,000 or less at the time Retirement Benefits payable pursuant to Section 6.6.1 would otherwise commence.

6.6.3 Deferred Payment. If a Participant's Deferred Compensation Election so provides, the commencement of Retirement Benefit payments may be deferred for a period so elected by the Participant, but not later than the Plan Year in which the Participant reaches age 70-1/2. If the Retirement Committee, in its sole and absolute discretion, accepts such a deferral, the Deferral Account shall be credited with interest by applying the Plan Interest Rate, compounded annually, during the period between Termination of Employment and the commencement of benefit payments hereunder.

6.7 Recipients of Payments; Designation of Beneficiary.

All payments to be made by the Company shall be made to the Participant, if living. Except as otherwise provided

herein, in the event of a Participant's death prior to the receipt of all benefit payments, all subsequent payments to be made under the Plan shall be to the Beneficiary of the Participant in accordance with a Participant's election pursuant to Section 6.6 hereof, subject to the right granted the Retirement Committee pursuant Section 6.5.2. Unless otherwise specified in the Participant's Beneficiary designation, in the event a Beneficiary dies before receiving all payments due to such Beneficiary pursuant to this Plan, the then remaining payments shall be paid to the legal representatives of the Beneficiary's estate. The Participant shall designate a Beneficiary, or during his lifetime change such designation, by filing a written notice of such designation with the Company in such form and subject to such rules and regulations as the Retirement Committee may prescribe. If the Participant's Compensation constitutes community property, then any Beneficiary designation made by the Participant other than a designation of such Participant's spouse shall not be effective if any such Beneficiary or beneficiaries are to receive more than fifty percent (50%) of the aggregate benefits payable hereunder, unless such spouse shall approve such designation in writing. If no designation shall be in effect at the time when any benefits payable under this Plan shall become due, the Beneficiary shall be the legal representatives of the Participant's estate.

In the event a benefit is payable to a minor or person declared incompetent or to a person incapable of handling the disposition of his property, the Retirement Committee may determine to pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent or person. The Retirement Committee may require proof of incompetency, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Retirement Committee and the Company from all liability with respect to such benefit.

6.8 Financial Emergency

In the event of a Participant's severe financial hardship, the Retirement Committee, in its sole and absolute discretion, may alter the timing or manner of payment of any benefits or deferred amounts to be paid-pursuant to the Plan or release the Participant from the obligation of making all or any part of remaining Stated Deferrals with respect to an Incomplete Benefit Unit. Severe financial hardship shall be deemed to have occurred in the event of the Participant's impending bankruptcy, a dependent's long and serious illness or other events of similar magnitude. The Retirement Committee's decision in passing upon the severe financial hardship of the Participant and the manner in which, if at all, the payment or deferral of any amounts pursuant to the Plan shall be altered

or modified shall be final, conclusive and not subject to appeal. In the event that the Retirement Committee makes a finding of severe financial hardship, it may:

Deferral Account shall be credited with interest earned at the Plan Interest Rate from the immediately preceding Determination Date as if the date of the distribution or transfer were a Determination Date. The Retirement Committee shall have complete and absolute discretion in determining the form of any distribution to be made pursuant to this Section 6.8(ii). The Participant, his spouse, if any, and his Beneficiary waive all rights under the Plan with respect to amounts distributed or transferred in accordance with the terms of this Section 6.8(ii).

The Participant shall have no right to make up any amount distributed or transferred as a result of a determination of financial emergency by the Retirement Committee pursuant to this Section 6.8.

6.9 Payment of Incomplete Benefit Units, Retirement Benefit Plan Account and Long-Term Incentive Bonus Account.

Any amount attributable to an Incomplete Benefit Unit under Section 6.1.1 hereof, and the balance in a Participant's Retirement Benefit Plan Account and Long-Term Incentive Bonus Account, shall be paid in accordance with a Participant's election pursuant to Section 6.6 hereof, subject to the right granted the Retirement Committee pursuant to Section 6.5.2. In the event that such amounts are not paid in a lump sum, any remaining balance

thereof shall continue to be credited on each Determination Date with the Old Plan Interest Rate or Director's Plan Interest Rate, as may be the case, during the period in which payments are being made therefrom. All such payments to be made by the Company shall be made to the Participant, if living. In the event of a Participant's death prior to the receipt of all such benefit payments, all such subsequent payments shall be made in accordance with the terms and conditions of any Beneficiary designation made pursuant to Section 6.7 hereof.

6.10 Pre-Retirement Benefits.

In the event that a Participant has made the election provided for in
Section 4.6 to receive amounts prior to Retirement, such pre-retirement benefits shall be paid in accordance with such election, either in four (4) equal annual installments or in a lump-sum amount, commencing on the date provided for in such election. For a Participant who is an Employee, the calculation of the amount of such pre-retirement benefit shall be made in accordance with the terms and conditions of the Plan, including, without limitation, Section 6.3 hereof.

Section 7. Forfeiture

In the event that a Participant has deferred amounts under the Plan, which have not been paid, and such Participant:

(i) Voluntarily terminates employment with the Company (or in the case of a Director, service on

the Board) before the expiration of twelve (12) months following the date on which such Participant first elected to defer Compensation hereunder pursuant to Section 4 hereof;

(ii) engages in felonious, fraudulent or other activity resulting in harm to the Company;

(iii) divulges any of the Company's confidential information or trade information or trade secrets to a competitor; or

Account (including any Retirement Benefit Plan Account or Long-Term Incentive Bonus Account) or Benefit Unit. Any forfeiture pursuant to this Section 7 shall be determined by a majority vote of the entire Board (not including the Participant), but only after the Participant in question shall have had an opportunity to appear, in person, before the Board to discuss the matter; provided, however, that a Participant who engages in the activities described in clause (iv) above shall be entitled to receive at least an amount equal to the Participant's Deferral Account balance, redetermined on a retroactive basis from the date of the Participant's first deferral using the Old Plan Interest Rate, or the Director's Plan Interest Rate in the case of a Participant who is a Director.

In the event of a Participant's suicide during the first two (2) years after the filing of any Deferred Compensation Election or any election with respect to a Rollover Amount, the Retirement Committee, in its sole and absolute discretion, may terminate all or any part of a Participant's (or Beneficiary's) right to receive any benefits whatsoever hereunder, including, but not limited to, the right to receive any amount with respect to any Deferral Account (including any Retirement Benefit Plan Account or Long-Term Incentive Bonus Account) or Benefit Unit; provided, however, that the Beneficiary of such a Participant shall be entitled to

receive at least an amount equal to that portion of the Participant's Stated Deferral which has in fact been deferred pursuant to the Plan, without increase for any Plan Interest Rate, growth addition or any other amount, payable in such manner as the Retirement Committee, in its sale and absolute discretion, shall determine.

In the event a Participant (i) makes any material misstatement of information in connection with any Deferred Compensation Election, (ii) fails to disclose to the Company or its agents any material item of his personal or medical history (including, but not limited to, habits of drug, chemical or tobacco use), or (iii) takes any other action (or fails to take any action), which action (or failure to act) results in a loss to the Company under the Plan, then the Retirement Committee, in its sole and absolute discretion, may terminate all or any part of a Participant's (or Beneficiary's) right to receive any benefits whatsoever hereunder, including, but not limited to, the right to receive any amount with respect to any Deferral Account (including any Retirement Benefit Plan or Long-Term Incentive Bonus Account) or Benefit Unit.

Section 8. Non-Transferability

anticipation or otherwise to assign or otherwise dispose of any interest under the Plan nor shall such rights be assigned or transferred by operation of law.

Section 9. Administration

9.1 Administration.

9.2 Finality of Determination.

9.3 Claims Procedure.

9.3.1 Original Claim.

Filing of such a claim, the Retirement Committee shall notify the claimant in writing whether his claim is upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred eighty (180) days from the date the claim was filed) to reach a decision on the claim. If the claim is denied in whole or in part, the Retirement Committee shall state in writing:

(i) the reasons for the denial;

(ii) the references to the pertinent provisions of this Plan on which the denial is based;

(iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

(iv) an explanation of the claims review procedure set forth in this section.

9.3.2 Claim Review Procedure.

than one hundred twenty (120) days from the date the request for review was filed) to reach a decision an the request for review.

9.3.3 General Rules.

(iii) The Retirement Committee may, in its discretion, hold one or more hearings on a claim or a request for a review of a denied claim.

9.4 Expenses.

The cost of payment from the Plan and the expense of administering the Plan shall be borne by the Company.

9.5 Tax Withholding.

Section 10. Amendment and Termination

Interest Rate on both a prospective and retroactive basis but in no event shall the Plan Interest Rate be reduced retroactively to a level below the Old Plan Interest Rate (or for Directors, the Director's Plan Interest Rate) for the years in question; provided, however, that notwithstanding any provision to the contrary herein, upon a Change of Control, neither the Board, the Retirement Committee nor the Company shall have any power or authority to change the Plan Interest Rate on a retroactive basis. If the Plan is terminated, any remaining deferrals under a Deferred Compensation Election shall not be made and the amount in each Participant's Deferral Account, after being recalculated to take into account any lower Plan Interest Rate, shall be payable as determined by the Retirement Committee in its sale and absolute discretion.

Section 11. Applicable Law

Section 12. No Vested Rights

The Plan and elections hereto shall not be deemed or construed to be a written contract of employment between any

Employee or Director and the Company, nor shall any provision of the Plan (i) restrict the right of the Company to discharge any Employee or (ii) in any way whatsoever grant to any Employee or Director the right to receive any guaranteed base compensation, Annual Bonus, Long-Term Incentive Bonus, incentive bonus awards, commissions, fees or any other payments of any nature whatsoever.

Section 13. Binding Agreement

The provisions of the Plan shall be binding upon the Participant, his or her heirs, personal representatives and beneficiaries, and subject to the rights granted to amend or terminate the Plan, the provisions of the Plan shall also be binding upon the Company, its successors and assigns.

Pursuant to a resolution, duly adopted by the Board on February 8, 1989, the Retirement Committee, on behalf of the Company, has caused the Plan to be adopted, approved and this document to be executed by the Chief Executive Officer. The Plan shall be effective immediately to the extent necessary to permit deferrals in accordance with the terms and conditions of the Plan to be made as of July 1.

SUPERVALU INC.

By
Its Chief Executive Officer

Date:

Adopted:

APPENDIX A

AMENDMENTS TO NONQUALIFIED DEFERRED COMPENSATION PLANS

2. Subject to further amendment, the Restoration Match shall be made for the Fiscal Year ending February 22, 1997 and subsequent Fiscal Years.

FURTHER RESOLVED, to the extent necessary, these resolutions will constitute an amendment to the Plans.

EXHIBIT 10.18

SUPERVALU INC.
DIRECTORS RETIREMENT PROGRAM
Effective June 27, 1996, as amended

Effective June 27, 1996, the Directors Retirement Program is terminated, subject to the payment of benefits earned by directors prior to such termination in accordance with the following provisions. Directors who have served as non-employee, outside directors on the SUPERVALU Board will receive an annual retirement fee equal to $20,000 per year, payable quarterly, commencing when the outside director leaves the Board or at age 55, whichever is later. This annual fee is payable for the lesser of the number of years of Board service as an outside director prior to June 27, 1996, or ten years, subject to the director being available to management for consultation services and engaging in no activity directly competitive to the Company's business. For purposes of this paragraph, years of service shall be measured from Annual Meeting to Annual Meeting and any director who serves for less than a full year shall be considered to have served for a full year if the director has served at least four months. Upon a Change of Control (as hereinafter defined) of the Company any retirement compensation otherwise payable in installments shall be accelerated and paid to the director. Upon the death of the director, the director's retirement compensation shall be paid to the legal representative of the director's estate or to such person(s) as the director shall have instructed the Company by written instrument filed with the Secretary of the Company and signed by the director. The foregoing not to the contrary, following a director's retirement from the Board, or the attainment of age 55, whichever is later, such person, or in the event of such person's death, his or her surviving spouse or beneficiary, may, at any time, request an immediate lump sum payment of all or part of the present value of his or her benefits then due and payable under this Program, subject to forfeiture of ten percent (10%) of such amount.

CHANGE OF CONTROL

For purposes hereof, Change of Control shall have the following meaning:

(a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"): provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) hereof, or

excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board, providing for such Business Combination; or

(d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

EXHIBIT 10.23

FOURTH AMENDMENT OF SUPERVALU INC. NONQUALIFIED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Effective February 26, 1989, this corporation established an unfounded nonqualified deferred compensation plan for certain executive employees in accordance with the terms of the Plan Statement entitled SUPERVALU INC. NONQUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, as amended by a First Amendment, a Second Amendment and a Third Amendment. SUPERVALU INC. has reserved to itself the power to amend said Plan Statement and it now desires to amend the Plan Statement in the following respects:

1. EARLY WITHDRAWALS. Effective November 22, 2002, a new Section 4.4 is hereby added to the Plan Statement which reads as follows:

4.4 Early Withdrawal. A Participant, or in the event of such Participant's death, his or her surviving spouse or beneficiary, may, at any time, following the date such Participant retires from, or otherwise terminates employment with, SUPERVALU INC. or a subsidiary, request an immediate lump sum payment of all or part of the present value of the Actuarial Equivalent of the amounts payable to the Participant in the Basic Pension form, subject to forfeiture of ten percent (10%) of such amount."

2. SAVINGS CLAUSE. Save and except as herein expressly amended the Plan Statement shall continue in full force and effect.

EXHIBIT 10.24

SUPERVALU INC.
NON-EMPLOYEE DIRECTORS DEFERRED STOCK PLAN

1. Purpose. The purpose of the SUPERVALU INC. Non-Employee Directors Deferred Stock Plan (the "Plan") is to further strengthen the alignment of interests between members of the Board of Directors (the "Board") of SUPERVALU INC. (the "Company") who are not employees of the Company (the "Participants") and the Company's stockholders through the increased ownership by Participants of shares of the Company's common stock, par value $1.00 per share ("Common Stock"). This will be accomplished by (i) providing to Participants deferred compensation in the form of the right to receive shares of Common Stock for services rendered in their capacity as directors, and (ii) allowing Participants to elect voluntarily to defer all or a portion of their fees for services as members of the Board pursuant to the Plan in exchange for the right to receive shares of Common Stock valued at 110% of the cash fees otherwise payable.

2. Eligibility. Each member of the Board of Directors of the Company who is not an employee of the Company or of any subsidiary of the Company shall be eligible to participate in the Plan.

3. Formula Share Award. Effective on July 1, or the first business day thereafter in each year (the "Award Date"), the Company shall award each Participant who shall continue to serve on the Board following the Award Date, as a credit to the Participant's account under the Plan (the "Deferred Stock Account"), that number of shares (rounded to the nearest one-hundredth share) of Common Stock, having an aggregate fair market value on the Award Date of Twenty Thousand Dollars ($20,000) (the "Award"). The Award shall be in addition to any cash retainer, stock options, or other remuneration received by the Participant for services rendered as a director. If, after receiving an Award, the Participant shall cease to serve on the Board prior to the Company's next annual meeting, for any reason other than death or permanent disability, then such Participant's Deferred Stock Account shall be reduced by (i) that number of shares equal to 1/12 of the Award for each full calendar month during which the Participant did not serve as a director of the Company, plus (ii) any dividends paid on that number of shares of Common Stock specified in (i) above during the period that the Participant did not serve as a director of the Company.

4. Election to Defer Cash Compensation. A Participant may elect to defer, in the form of a credit to the Participant's Deferred Stock Account all or a portion of the annual cash retainer, meeting fees for attendance at meetings of the Board and its committees, committee chairperson retainers, and any other fees and retainers ("Compensation") otherwise payable to the director in cash during the period following the effective date of the deferral election. Such deferral election shall be made pursuant to Section 5.

5. Manner of Making Deferral Election. A Participant may elect to defer Compensation pursuant to the Plan by filing, no later than December 31 of each year (or by such other date as the Committee shall determine), an irrevocable election with the Corporate Secretary on a form provided for that purpose ("Deferral Election"). The Deferral Election shall be effective with respect to Compensation payable on or after July 1 of the following year unless the Participant shall revoke or change the election by means of a subsequent Deferral Election in writing that takes effect on the date specified therein but in no event earlier than six (6) months (or such other period as the Committee, as defined in Section 17, shall determine) after the subsequent Deferral Election is received by the Company. The Deferral Election form shall specify an amount to be deferred expressed as a dollar amount or as a percentage of the Participant's Compensation otherwise payable in cash for the director's services.

6. Credits to Deferred Stock Account for Elective Deferrals. On the first day of each calendar quarter (the "Credit Date"), a Participant shall receive a credit to his or her Deferred Stock Account. The amount of the credit shall be the number of shares of Common Stock (rounded to the nearest one-hundredth of a share) determined by dividing an amount equal to 110% of the Participant's Compensation payable on the Credit Date and specified for deferral pursuant to Section 5 hereof, by the fair market value on the Credit Date of a share of Common Stock.

7. Fair Market Value. The fair market value of shares of Common Stock as of a given date for all purposes of the Plan, shall be the closing sale price per share of Common Stock as reported on the consolidated tape of the New York Stock Exchange on the relevant date or, if the New York Stock Exchange is closed on such day, then the day closest to such date on which it was open.

8. Dividend Credit. Each time a dividend is paid on the Common Stock, the Participant shall receive a credit to his or her Deferred Stock Account equal to that number of shares of Common Stock (rounded to the nearest one-hundredth of a share) having a fair market value on the dividend payment date equal to the amount of the dividend payable on the number of shares credited to the Participant's Deferred Stock Account on the dividend record date.

9. Maximum Number of Shares to be Credited Under the Plan. Subject to adjustment as provided in Section 10, the maximum number of shares of Common Stock that may be credited under the Plan is 500,000 shares.

10. Adjustments for Certain Changes in Capitalization. If the Company shall at any time increase or decrease the number of its outstanding shares of Common Stock or change in any way the rights and privileges of such shares by means of the payment of a stock dividend or any other distribution upon such shares payable in Common Stock, or through a stock split, subdivision, consolidation, combination, reclassification, or recapitalization involving the Common Stock, then the numbers, rights, and privileges of the shares credited under the Plan shall be increased,

decreased, or changed in like manner as if such shares had been issued and outstanding, fully paid, and nonassessable at the time of such occurrence.

11. Deferral Payment Election. At the time of making the Deferral Election, each Participant shall also complete a deferral payment election specifying one of the payment options described in Section 12 and 13, and the year in which amounts credited to the Participant's Deferred Stock Account shall be paid in a lump sum pursuant to Section 12, or in which installment payments shall commence pursuant to Section 13. The Participant may change the deferral payment election by means of a subsequent deferral payment election in writing that will take effect (i) immediately upon receipt for deferrals credited after the date the Company receives such subsequent deferral payment election and (ii) at the beginning of the second calendar year following the date of the revised deferral payment election for deferrals previously credited to the Participant's Deferred Stock Account.

12. Payment of Deferred Stock Accounts in a Lump Sum. Unless a Participant elects to receive payment of his or her Deferred Stock Account in installments as described in Section 13, credits to a Participant's Deferred Stock Account shall be payable in full on January 10 of the year following the Participant's termination of service on the Board (or the first business day thereafter) or such other date as elected by the Participant pursuant to Section
11. All payments shall be made in shares of Common Stock plus cash in lieu of any fractional share. Notwithstanding the foregoing, in the event of a Change of Control (as defined in Section 19), credits to a Participant's Deferred Stock Account as of the business day immediately prior to the effective date of the transaction constituting the Change of Control shall be paid in full to the Participant or the Participant's beneficiary or estate, as the case may be, in whole shares of Common Stock (together with cash in lieu of a fractional share) on such date. Notwithstanding the foregoing, following a Participant's termination of service on the Board, such Participant, or in the event of his or her death, such Participant's surviving spouse or beneficiary, may elect to receive all or a portion of the present value of his or her Deferred Stock Account prior to the date such amount becomes due and payable, subject to forfeiture of 10% of the amount to be received.

13. Payment of Deferred Stock Accounts in Installments. A Participant may elect to have his or her Deferred Stock Account paid in annual installments following termination of service as a director or at such other time as elected by the Participant pursuant to Section 11. All payments shall be made in shares of Common Stock plus cash in lieu of any fractional share. All installment payments shall be made annually on January 10 of each year (or the first business day thereafter). The amount of each installment payment shall be computed as the number of shares credited to the Participant's Deferred Stock Account on the Computation Date, multiplied by a fraction, the numerator of which is one and the denominator of which is the total number of installments elected (not to exceed fifteen) minus the number of installments previously paid. Amounts paid prior to the final installment payment shall be rounded to the nearest whole number of shares; the final installment payment shall be for the whole number of shares then credited to the Participant's Deferred Stock Account, together

with cash in lieu of any fractional shares. Notwithstanding the foregoing, following a Participant's termination of service on the Board, such Participant, or in the event of his or her death, such Participant's surviving spouse or beneficiary, may elect to receive all or a portion of the present value of his or her Deferred Stock Account prior to the date such amount becomes due and payable, subject to forfeiture of 10% of the amount to be received. Further notwithstanding the foregoing, in the event of a Change of Control (as defined in Section 19), credits to a Participant's Deferred Stock Account as of the business day immediately prior to the effective date of the transaction constituting the Change of Control shall be paid in full to the Participant or the Participant's beneficiary or estate, as the case may be, in whole shares of Common Stock (together with cash in lieu of a fractional share) on such date.

14, Death of Participant. If a Participant dies before receiving all payments to which he or she is entitled under the Plan, payment shall be made in accordance with the Participant's designation of a beneficiary on a form provided for that purpose and delivered to and accepted by the Committee (as hereinafter defined) or, in the absence of a valid designation or if the designated beneficiary does not survive the Participant, to such Participant's estate.

15. Nonassignability. No right to receive payments under the Plan nor any shares of Common Stock credited to a Participant's Deferred Stock Account shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution. The designation of a beneficiary by a Participant pursuant to Section 14 does not constitute a transfer.

16. Participants Are General Creditors of the Company. Benefits due under this Plan shall be funded out of the general funds of the Company. The Participants and beneficiaries thereof shall be general, unsecured creditors of the Company with respect to any payments to be made pursuant to the Plan and shall not have any preferred interest by way of trust, escrow, lien or otherwise in any specific assets of the Company. If the Company shall, in fact, elect to set aside monies or other assets to meet its obligations hereunder (there being no obligation to do so), whether in a grantor's trust or otherwise, the same shall, nevertheless, be regarded as a part of the general assets of the company subject to the claims of its general creditors, and neither any Participant nor any beneficiary of any Participant shall have a legal, beneficial, or security interest therein.

17. Administration. The Plan shall be administered by a committee (the "Committee") of three or more individuals appointed by the Board to administer the Plan. The members of the Committee must be members of, and shall serve at the discretion of, the Board. The members of the Committee shall be "disinterested persons" as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Act"), or any successor rule or definition adopted by the Securities and Exchange Commission ("Rule 16b-3"), if, in the opinion of counsel for the Company, the absence of "disinterested" administrators would adversely impact the availability of the

exemption from Section 16(b) of the Act provided by Rule 16b-3 for any Participant's acquisition of Common Stock under the Plan.

Subject to the provisions of the Plan, the Committee shall have sole and complete authority to construe and interpret the Plan; to establish, amend and rescind appropriate rules and regulations relating to the Plan; to administer the Plan; and to take all such steps and make all such determinations in connection with the Plan as it may deem necessary or advisable to carry out the provisions and intent of the Plan. All determinations of the Committee shall be made by a majority of its members, and its determinations shall be final and conclusive for all purposes and upon all persons, including, but without limitation, the Company, the Committee, the Participants and their respective successors in interest.

18. Amendment and Termination. The Board may at any time terminate, suspend, or amend this Plan; provided, however, that the provisions of Sections 2 and 3 may not be amended more than once in every six months other than to comport with changes in the Internal Revenue Code, ERISA, or the rules thereunder. No such action shall deprive any Participant of any benefits to which he or she would have been entitled under the Plan if termination of the Participant's service as a director had occurred on the day prior to the date such action was taken, unless agreed to by the Participant.

19. Change of Control. "Change of Control" means any one of the following events:

(a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company
(ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) hereof; or

(b) individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then constituting the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs

as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

20. Effective Date. The effective date of the Plan shall be the date of approval of the Plan by the Company's stockholders.

Last Revised: 2/9/00

EXHIBIT 10.27

SUPERVALU INC.
1993 STOCK PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

This Restricted Stock Unit Award Agreement (this "Agreement"), dated as of October 20, 1997, is entered into between SUPERVALU INC., a Delaware corporation (the "Company"), and Jeffrey Noddle, a key employee of the Company (the "Participant").

The Company, pursuant to its 1993 Stock Plan (the "Plan"), desires to carry out the purpose of the Plan by awarding to the Participant Restricted Stock Units, representing the right to receive shares of Common Stock, par value $1.00 per share, of the Company ("Common Stock"), subject to the terms and conditions contained in this Agreement and in the Plan. Terms used in this Agreement which are defined in the Plan shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein.

Accordingly, in consideration of the premises and the agreements contained herein, the parties hereto hereby agree as follows:

1. Grant of Restricted Stock Units

The Company, effective as of the date of this Agreement, hereby grants to the Participant 30,000 Restricted Stock Units, each Restricted Stock Unit representing the right to receive one share of Common Stock on such date as set forth herein, subject to the terms and conditions contained herein (the "Restricted Stock Units").

2. Rights of the Participant with Respect to Restricted Stock Units

The rights of the Participant with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights become vested in accordance with Section 3 hereof. The Participant shall not be entitled to any rights of a stockholder of the Company's Common Stock solely by reason of this award of Restricted Stock Units. Neither the Participant nor the Participant's legal representatives shall have any of the rights and privileges of a stockholder of the Company with respect to shares of Common Stock issuable in payment of the Restricted Stock Units unless and until certificates for such shares shall have been issued pursuant to Section 4 hereof.

3. Vesting; Forfeiture

(a) Subject to the terms and conditions of this Agreement, the Restricted Stock Units shall vest in installments on the dates and in the amounts shown below if the Participant remains continuously employed by the Company or a subsidiary of the Company until such date.

-1-

                                                          Percentage of
           Date                                  Restricted Stock Units Vested

Participant's 56th Birthday                                  71%
Participant's 57th Birthday                                  86%
Participant's 58th Birthday                                 100%

       (b)     Notwithstanding the vesting provisions contained in Section 3(a)

above, but subject to the other terms and conditions contained herein, upon the date of the consummation of a "Change of Control" as defined in the Change of Control Severance Agreement, dated April 10, 1990, or any successor agreement thereto, between the Company and the Participant (the "Severance Agreement"), prior to any termination of the Participant's employment with the Company or a subsidiary of the Company, all of the Restricted Stock Units granted to the Participant pursuant to this Agreement shall vest immediately.

(c) Upon the Participant's termination of employment with the Company or a subsidiary of the Company, any Restricted Stock Units that have not vested pursuant to the vesting provisions set forth in either Section 3(a) or 3(b) above shall be forfeited and all associated rights shall lapse without value.

(d) Subject to the terms and conditions of this Agreement, if the Participant dies before reaching age sixty (60), the Participant's legal representatives, beneficiaries or heirs, as the case may be, shall be entitled to the Restricted Stock Units that have vested pursuant to Section 3(a) or 3(b) above prior to the date of such death, but any Restricted Stock Units that have not so vested by such date shall be forfeited and all associated rights shall lapse without value.

4. Payment of Restricted Stock Units; Issuance of Shares

(a) If all or a portion of the Restricted Stock Units vest pursuant to Section 3(a) above, the Company shall make payment to the Participant by issuing one share of the Company's Common Stock for each Restricted Stock Unit that has vested pursuant to Section 3(a) above on the later of the following dates (the "Payment Date"):

(i) the date the Participant reaches age 60; and

(ii) the first anniversary of the date of the Participant's termination of employment with the Company or a subsidiary of the Company or the 30th day following the date of the Participant's death, if earlier.

Promptly following the Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

-2-

(b) If the Restricted Stock Units vest pursuant to Section 3(b) above, the Company shall make payment to the Participant by issuing one share of the Company's Common Stock for each Restricted Stock Unit granted to the Participant pursuant to this Agreement as of the date of the consummation of a "Change of Control" as defined in the Severance Agreement (the "Change of Control Payment Date"). Promptly following the Change of Control Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

(c) If the Participant should die before reaching age sixty (60) and Restricted Stock Units shall have vested as of the date of such death as provided in Section 3(d) above, then, notwithstanding the payment provisions of
Section 4(a) above, the Company promptly shall cause to be issued one or more stock certificates, registered in the name of the Participant's legal representatives, beneficiaries or heirs, as the case may be, evidencing the shares issued in payment of the vested Restricted Stock Units.

(d) For purposes of this Agreement, the date of the Participant's termination of employment shall be the date on which the Participant actually or effectively ceases to be an employee of the Company or a subsidiary of the Company, in accordance with the Company's personnel policies. The Participant shall not be deemed to have terminated employment as a result of short-term illness, vacation or other authorized leave of absence, provided the Participant continues to be an employee and returns to his duties as an employee following the completion of such illness, vacation or other absence.

(e) The Participant shall also not be deemed to have terminated employment as a result of a disability which renders the Participant incapable of returning to work. In the event of such a disability, the Restricted Stock Units shall continue to vest as and when provided in Section 3 and shall be paid as and when provided in Sections 4(a)-(c) above as if the Participant had remained employed by the Company. For purposes of this Section 4(e), "disability" is defined as eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.

5. Adjustments

In the event of any stock dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company, or other similar corporate transaction or event, the Committee may, as it determines to be appropriate, adjust the number and/or type of shares subject to the Restricted Stock Units.

6. Covenant Not to Compete and Protection of Confidential Information

(a) The Participant stipulates and represents that the following facts are true: the Participant is an Executive Vice President of the Company and led one of the Company's

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primary business units; the Participant participates as a member of the Company's senior executive staff; by virtue of his position on that senior executive staff, the Participant has had access to highly sensitive and confidential information regarding, without limitation, the Company's margins on products in all areas of its business, financial data and strategic plans for all areas of the Company's business, and the Participant has a business relationship with most if not all of the Company's major customers and it is an important part of the Participant's responsibilities to cultivate and further those relationships. The Participant acknowledges that this information was gained by virtue of his employment at the Company, is confidential and--secret information from which -the Company draws economic value, actual or potential, from its not being generally known to persons outside the Company, is information which Company has taken reasonable measures to preserve its confidentiality, and could not easily be duplicated by others, and is information which the Company required considerable time and effort to develop. The Participant further acknowledges that the misuse, misappropriation or disclosure of this information could cause irreparable harm to the Company, both during and after the term of the Participant's employment.

(b) The Participant agrees that he will not, within the Continental United States, directly or indirectly, own, manage, operate, join, control, be employed by or participate in ownership, management, operation or control of, provide consulting services to, or be connected in any manner with any business that competes with the Company or any of its food retailing or food wholesaling affiliates; provided, however, that this subparagraph (b) shall not apply after a "Change of Control" as defined in the Severance Agreement. The Participant shall retain the right to seek the written approval of the Company's Chief Executive Officer to waive the requirements of this Paragraph 6(b) with respect to any particular activity in which the Participant seeks to engage, which approval shall be granted or denied based upon the Company's reasonable desire to protect its business interest, but in its sole discretion.

(c) The Participant agrees that during his employment and at all times thereafter the Participant will hold in a fiduciary capacity for the benefit of the Company and will not divulge or disclose, directly or indirectly, to any other person, firm or business, all confidential or proprietary information, knowledge and data (including, but not limited to, processes, programs, trade "know how," ideas, details of contracts, marketing plans, strategies, business development techniques, business acquisition plans, personnel plans, pricing practices and business methods and practices) relating in any way to the business of the Company, its affiliates, customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company does business ("Confidential Data"), except upon the Company's written consent or as required by the Participant's duties with the Company, for so long as such Confidential Data remains confidential and all such Confidential Data, together with all copies thereof and notes and other references thereto, shall remain the sole property of the Company.

(d) The Participant agrees that the Participant will not either directly, or in concert with others, recruit, solicit or induce, or attempt to induce, any employee or employees of the Company or any of its subsidiaries to terminate their employment with the Company

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and/or become associated with another employer. The Participant further agrees that the Participant will not either directly, or in concert with others, solicit, divert or take away or attempt to divert or take away, the business or patronage of any of the customers or accounts which were contacted, solicited or served by the Company while the Participant was employed with the Company.

(e) The Participant agrees not to make disparaging statements about the Company, its officers, directors, agents, employees, products or services which are false or misleading.

(f) The Participant agrees that except as otherwise provided in
Section 6(c) above, the foregoing covenants contained in this Section 6 shall continue in effect until the later of age sixty (60) or one (1) year after the Participant's termination (for any reason whatsoever) of employment with the Company. The Participant acknowledges that damages which may arise from a breach of any of the foregoing covenants contained in this Section 6 are impossible to ascertain or prove with certainty. If any covenant in this Section 6 is breached, all Restricted Stock Units shall be forfeited, and all associated rights shall lapse and be terminated, and in addition to other legal remedies which may be available, the Company shall be entitled to an immediate injunction from a court of competent jurisdiction to end such breach, without further proof of damage.

(g) To the extent any provision of this Section of the Agreement shall be determined to be invalid or unenforceable, such provision shall be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. In furtherance of and not in limitation of the foregoing, the Participant expressly agrees that should the duration of or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. The Participant acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under

(h) Nothing in this Section 6 shall amend, limit, terminate or replace any other confidentiality or non-compete obligation that the Participant may have in any other agreement with the Company. 7.

7. Transferability

The Restricted Stock Units shall not be transferable otherwise than by will or the laws of descent and distribution. More particularly (but without limiting the generality of the foregoing), the Restricted Stock Units may not be assigned, transferred (except as aforesaid), 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 Restricted Stock

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Units contrary to the provisions hereof and the levy of an execution, attachment or similar process upon the Restricted Stock Units shall be void.

8. Taxes

(a) The Participant acknowledges that he will consult with his personal tax advisor regarding the income tax consequences of the vesting and payment of the Restricted Stock Units or any other matters related to this Agreement. 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 the Participant.

(b) The Participant may elect to satisfy any federal and state income tax withholding obligations arising from the payment of the Restricted Stock Units pursuant to Section 4 hereof by (i) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered in payment of the Restricted Stock Units having a Fair Market Value (as defined in the Plan) equal to the amount of federal and state income taxes required to be withheld in connection with such payment or (ii) delivering to the Company shares of Common Stock other than the shares issuable in connection with the payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. The Participant may elect to satisfy any federal and state income tax withholding obligations arising prior to the payment of the Restricted Stock Units pursuant to Section 4 hereof by delivering to the Company shares of Common Stock other than the shares issuable in payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. Any election must be made on or before the date that the amount of taxes to be withheld is determined.

9. No Right to Employment

Nothing in this Agreement or in the Plan shall be construed as giving the Participant any right to be retained in the employ of the Company or any subsidiary of the Company, nor shall this Agreement or the Plan affect in any way the right of the Company or a subsidiary of the Company to terminate the Participant's employment at any time, with or without cause.

10. General Provisions

(a) The Restricted Stock Units are granted pursuant to the Plan and are subject to the terms and conditions contained therein. A copy of the Plan is available to the Participant upon request.

(b) This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to the Restricted Stock Units.

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(c) This Agreement is subject to all applicable laws and the applicable rules and regulations of any governmental agencies or national securities exchanges. The Company shall not be required to issue or deliver any shares of Common Stock in payment of the Restricted Stock Units until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of the New York Stock Exchange) as may be determined by the Company to be applicable are satisfied.

(d) The validity, construction and effect of this Agreement, and any rules and regulations relating to this Agreement, shall be determined in accordance with the laws of the State of Minnesota (other than its law respecting choice of law), except to the extent the general corporation law of the State of Delaware would be applicable.

(e) If any provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any applicable jurisdiction, 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 this Agreement, such provision shall be stricken and the remainder of this Agreement shall remain in full force and effect.

(f) The headings in this Agreement are for convenience of reference only and shall not be deemed in any way to be material or relevant to the construction or interpretation of this Agreement or any provision hereof.

IN WITNESS WHEREOF, the Company and the Participant have signed this Agreement as of the date first above written.

SUPERVALU INC.

By: /s/ Michael W. Wright
    ---------------------
    Its: Chairman and CEO

PARTICIPANT

/s/ Jeffrey Noddle
------------------
Jeffrey Noddle

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EXHIBIT 12.1

SUPERVALU INC. and Subsidiaries

Ratio of Earnings to Fixed Charges

For Fiscal Years Ended

(In thousands, except ratios)	2003			2002			2001			2000			1999
Earnings before income taxes	$	408,004		$	331,998		$	139,590		$	445,393		$	316,261
Less undistributed earnings of less than fifty percent owned affiliates:		(16,368	)		(13,450	)		(9,429	)		(6,605	)		(5,943	)
Earnings before income taxes		391,636			318,548			130,161			438,788			310,318
Interest expense		182,499			194,294			212,898			154,482			124,111
Interest on operating leases		44,864			35,971			29,047			23,838			18,574

		618,999			548,813			372,106			617,108			453,003

Total fixed charges	$	227,363		$	230,265		$	241,945		$	178,320		$	142,685

Ratio of earnings to fixed charges		2.72			2.38			1.54			3.46			3.17

EXHIBIT 21.1

SUPERVALU INC.
Subsidiaries

As of February 22, 2003

(All are Subsidiary Corporations 100% Owned Directly or Indirectly, Except as Noted)

PERCENTAGE OF VOTING
JURISDICTION SECURITIES OWNED BY
OF ORGANIZATION IMMEDIATE PARENT
--------------- --------------------
SUPERVALU INC.
Blaine North 1996 L.L.C. Delaware Limited Liability Company 70%
Bloomington 1998 L.L.C. Delaware Limited Liability Company 40%
Burnsville 1998 L.L.C. Delaware Limited Liability Company 77.5%
Coon Rapids 2002 L.L.C. Delaware Limited Liability Company 64%
Diamond Lake 1994 L.L.C. Delaware Limited Liability Company 25%
Forest Lake 2000 L.L.C. Delaware Limited Liability Company 65%
Fridley 1998 L.L.C. Delaware Limited Liability Company 74.5%
Hastings 2002 L.L.C. Delaware Limited Liability Company 51.0%
Inver Grove Heights 2001 L.L.C. Delaware Limited Liability Company 66.0%
Keltsch Bros., Inc. Indiana 100%
Maplewood East 1996 L.L.C. Delaware Limited Liability Company 70%
Max Club, Inc. Minnesota 100%
Great Valu LLC Virginia Limited Liability Company 100%
Monticello 1998 L.L.C. Delaware Limited Liability Company 90%
NAFTA Industries Consolidated, Inc. Texas 51%
NAFTA Industries, Ltd. Texas Limited Partnership 51%
International Data, LLC Indiana Limited Liability Company 50%
NC&T Supermarkets, Inc. Ohio 100%
Nevada Bond Investment Corp. I Nevada 100%
Northfield 2002 L.L.C. Delaware 51%
Planmark Architecture of Oregon, P.C. Oregon 100%
Planmark, Inc. Minnesota 100%
Plymouth 1998 L.L.C. Delaware Limited Liability Company 62.5%
Preferred Products, Inc. Minnesota 100%
Richfood Holdings, Inc. Delaware 100%
Market Funding, Inc. Delaware 100%
Retail Licensing Corporation Delaware 100%
Richfood, Inc. Virginia 100%
Bridgeview Warehouse LLC Delaware Limited Liability Company 100%
75th Avenue Headquarters LLC Delaware Limited Liability Company 100%
Cabot Morgan Real Estate Company Delaware 100%
California Ontario Warehouse LLC Delaware Limited Liability Company 100%
Dart Group Financial Corporation Delaware 100%
Discount Books East, Inc. Delaware 100%
GWM Holdings, Inc. Virginia 100%
Market Brands, Inc. Delaware 100%
Market Improvement Corporation Virginia 100%
Market Insurance Agency, Inc. Virginia 100%
Market Leasing Company Virginia 100%
Penn Brands, Inc. Delaware 100%
Pennsy Warehouse Leasing Corporation Delaware 100%
Pennsy Drive Warehouses LLC Delaware 100%
Retail Funding Corporation, Inc. Virginia 100%
Rich-Temps, Inc. Virginia 100%
Rotelle Management, Inc. Pennsylvania 100%
SFW Holding Corp. Delaware 100%
Shoppers Food Warehouse Corporation Delaware 100%
RBC Corporation Maryland 100%
SFW DC Corp. District of Columbia 100%
SFW Investment Corporation Delaware 100%

PERCENTAGE OF VOTING
JURISDICTION SECURITIES OWNED BY
OF ORGANIZATION IMMEDIATE PARENT
--------------- --------------------
Spring House Leasing, Inc. Pennsylvania 100%
Super Rite Foods, Inc. Delaware 100%
FF Acquisition LLC Virginia Limited Liability Company 100%
FF Construction L.L.C. Virginia Limited Liability Company 100%
Foodarama LLC Delaware Limited Liability Company 100%
Foodarama, Inc. Maryland 100%
Foodarama Group, Inc. Maryland 100%
Midway Markets of Delaware, Inc. Delaware 100%
Food-A-Rama G.U., Inc. Maryland 100%
Oxon Run, Inc. 100%
SRF Subsidiary Corporation Delaware 100%
Richfood Procurement LLC Virginia Limited Liability Company 100%
Risk Planners Agency of Ohio, Inc. Ohio 100%
Risk Planners of Mississippi, Inc. Mississippi 100%
Risk Planners of Pennsylvania, Inc. Pennsylvania 100%
Risk Planners, Inc. Minnesota 100%
Risk Planners of Illinois, Inc. Illinois 100%
Risk Planners of Montana, Inc. Montana 100%
Risk Planners of Washington, Inc. Washington 100%
Savage 2002 L.L.C. Delaware Limited Liability Company
Shakopee 1997 L.L.C. Delaware Limited Liability Company 25%
Shorewood 2001 L.L.C. Delaware Limited Liability Company 55%
Silver Lake 1996 L.L.C. Delaware Limited Liability Company 51%
SUPERVALU Finance, Inc. Minnesota 100%
SUPERVALU Management Corp. Delaware 100%
SUPERVALU Pharmacies, Inc. Minnesota 100%
SUPERVALU Receivables, Inc. Delaware 100%
SUPERVALU Transportation, Inc. Minnesota 100%
SUVACO Insurance International, Ltd. Islands of Bermuda 100%
Sweet Life Products Co., Inc. New York 75%
Valu Ventures, Inc. Minnesota 100%
Valu Ventures 2, Inc. Indiana 100%
SUPERVALU Terre Haute Limited Partnership Indiana Limited Partnership 100%
Western Dairy Distributors, Inc. Colorado 100%

Supermarket Operators of America Inc. Delaware 100%
Advantage Logistics - Southeast, Inc. Alabama 100%
Clyde Evans Markets, Inc. Ohio 100%
Scott's Food Stores, Inc. Indiana 100%
SV Ventures* Indiana General Partnership 50%
SUPERVALU Receivables Funding Delaware 100%
Corporation

SUPERVALU Holdings, Inc. Missouri 100%
Advantage Logistics Southwest, Inc. Arizona 100%
Advantage Logistics - PA LLC Pennsylvania 100%
Airway Redevelopment Corporation Missouri 100%
Augsburger's, Inc. Indiana 100%
Butson's Enterprises, Inc. New Hampshire 100%
Butson's Enterprises of
Massachusetts, Inc. Massachusettts 100%
Butson's Enterprises of Vermont, Inc. Vermont 100%
Keatherly, Inc. New Hampshire 100%
Peoples Market, Incorporated New Hampshire 100%
Violette's Supermarkets, Inc. New Hampshire 100%
East Main Development, Inc. Rhode Island 100%
GM Distributing, Inc. California 100%

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PERCENTAGE OF VOTING
JURISDICTION SECURITIES OWNED BY
OF ORGANIZATION IMMEDIATE PARENT
--------------- --------------------
John Alden Industries, Inc. Rhode Island 100%
Livonia Holding Company, Inc. Michigan 100%
Foodland Distributors Michigan General Partnership 50%
Mohr Developers, Inc. Missouri 100%
Mohr Distributors of Litchfield, Inc. Illinois 100%
Moran Foods, Inc. Missouri 100%
Deals-Nothing Over A Dollar, L.L.C. Missouri Limited Liability Company 100%
Save-A-Lot Food Stores, Inc. Missouri 100%
Lot 18 Redevelopment Corp. Missouri 100%
Rostraver Township L.L.C. Pennsylvania 85%
Rostraver Township Pennsylvania Limited Partnership 1%
Shop 'N Save Warehouse Foods, Inc. Missouri 100%
Shop 'N Save St. Louis, Inc. Missouri 100%
WSI Satellite, Inc. Missouri 100%
SUPERVALU Holdings - PA LLC Pennsylvania Limited Liability Company 100%
SV Markets, Inc. Ohio 100%
SV Ventures* Indiana General Partnership 50%
SVH Holding, Inc. Delaware 100%
SVH Realty, Inc. Delaware 100%
Total Insurance Marketing Enterprises, Inc. Pennsylvania 100%
Ultra Foods, Inc. New Jersey 100%
Verona Road Associates, Inc. Pennsylvania 100%
WC&V Supermarkets, Inc. Vermont 100%
Wetterau Finance Co. Missouri 100%
Wetterau Insurance Co. Ltd. Bermuda 100%

* SV Ventures is a general partnership between SUPERVALU Holdings, Inc. and Scott's Food Stores, Inc. each of which holds a 50% interest. Both general partners are direct subsidiaries of Supermarket Operators of America, Inc.

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EXHIBIT 23.1

Independent Auditors’ Consent

The Board of Directors

SUPERVALU INC.:

We consent to incorporation by reference in the Registration Statements No. 33-16934, No. 33-50071, No. 333-10151, No. 333-24813, No. 333-61365, No. 333-72851, No. 333-89157, No. 333-32354, No. 333-32356, No. 333-43538, No. 333-44570, 333-100912, 333-100913, 333-100915, 333-100917 and 333-100919 on Form S-8 and No. 33-56415, No. 333-94965, No. 333-43538 and No. 333-81252 on Form S-3 of SUPERVALU INC., of our reports dated April 9, 2003, relating to the consolidated balance sheets of SUPERVALU INC. and subsidiaries as of February 22, 2003 and February 23, 2002, and the related consolidated statements of earnings, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended February 22, 2003, and the related schedule, which reports appear in the 2003 annual report on Form 10-K of SUPERVALU INC.

/s/ KPMG LLP

KPMG LLP

Minneapolis, Minnesota

April 25, 2003

EXHIBIT 24.1

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Jeffrey Noddle, David L. Boehnen, John P. Breedlove and Warren E. Simpson, and each of them, the undersigned's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the undersigned and in such person's name, place and stead, in any and all capacities (including the undersigned's capacity as Director and/or Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or any other officer of SUPERVALU INC.), to sign SUPERVALU's Annual Report on Form 10-K to be filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year ended February 22, 2003, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, this Power of Attorney has been signed as of the 9th day of April, 2003, by the following persons:

/s/ Lawrence A. Del Santo                   /s/ Charles M. Lillis
----------------------------------          ------------------------------------
Lawrence A. Del Santo                       Charles M. Lillis


/s/ Susan E. Engel                          /s/ Jeffrey Noddle
----------------------------------          ------------------------------------
Susan E. Engel                              Jeffrey Noddle


/s/ Edwin C. Gage                           /s/ Harriet Perlmutter
----------------------------------          ------------------------------------
Edwin C. Gage                               Harriet Perlmutter


/s/ William A. Hodder                       /s/ Steven S. Rogers
----------------------------------          ------------------------------------
William A. Hodder                           Steven S. Rogers


/s/ Garnett L. Keith
----------------------------------
Garnett L. Keith


/s/ Richard L. Knowlton
----------------------------------
Richard L. Knowlton


/s/ Pamela K. Knous
----------------------------------
Pamela K. Knous

EXHIBIT 99(i)

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act

In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”), SUPERVALU INC. (the “company”) is filing the cautionary statements set forth below, identifying important factors that could cause the company’s actual results to differ materially from those projected in forward-looking statements made by, or on behalf of the company. When used in this Annual Report on Form 10-K and in future communications, and in oral statements made by or with the approval of an authorized executive officer, the words or phrases “will likely result”, “are expected to”, “will continue”, “is anticipated”, “estimate”, “project”, “believe”, or similar expression are intended to identify forward-looking statements within the reference to a readily available written document in connection with forward-looking statements as defined in the Act. These factors are in addition to any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statement.

Retail Food Business Risks

The company’s retail food segment faces risks which may prevent the company from maintaining or increasing retail sales and earnings including: competition from other retail chains, supercenters, non-traditional competitors and emerging alterative formats; operating risks of retail operations; potential work disruptions from labor disputes or national emergencies; general economic, political or wartime conditions that affect consumer spending habits generally or acts of terror directed as the food industry that affect consumer behavior; and the adverse impact from the entry of other retail chains, supercenters and non-traditional or emerging competitors into markets where the company has a retail concentration.

Food Distribution Business Risks

The company’s sales and earnings in its food distribution operations are dependent on (i) the company’s ability to attract new customers and retain existing customers; (ii) the success of its customers in competing with other retail chains, supercenters, and non-traditional competitors, and emerging alternative formats; (iii) general economic, political or wartime conditions that affect consumer spending habits generally or acts of terror directed at the food industry that affect consumer behavior; and (iv) its ability to control costs. While the company believes that its efforts will enable it to attain its goals, certain factors could adversely impact the company’s results, including: declines in sales to its independent retailer customer base due to competition and other factors; consolidations of retailers or competitors; increased self-distribution by chain retailers; increases in operating costs; increases in credit risk associated with open accounts and financing activities with independent retailers; potential work disruptions from labor disputes or national emergencies; and the entry of new or non-traditional distribution systems into the industry.

Risk of Expansion and Acquisition

The company intends to continue to grow its retail and distribution businesses through new store openings, new affiliations and in part through acquisitions. Expansion is subject to a number of risks, including the adequacy of the company’s capital resources; the location of suitable store or distribution center sites and the negotiation of acceptable lease terms; and the ability to hire and train employees. In addition, acquisitions involve a number of special risks, including: making acquisitions at acceptable rates of return; the diversion of management’s attention to assimilation of the operations and integration of personnel of the acquired business; possible costs and other risks of integrating or adapting operating systems; and potential adverse short-term effects on the company’s operating results.

Liquidity

Management expects that the company will continue to replenish operating assets with internally generated funds unless additional funds are necessary to complete acquisitions. If capital spending significantly exceeds anticipated capital needs, additional funding could be required from other sources. In addition, acquisitions could affect the company’s borrowing costs and future financial flexibility.

Litigation

The company has reported that several class action lawsuits were filed against it in July 2002 alleging that certain of its officers and directors violated Federal securities laws by issuing materially false and misleading statements relating to its financial performance. See Part II, Item 1 “Legal Proceedings”, of this report for more information regarding this matter. The costs and other effects of those proceedings and other legal and administrative cases and proceedings, and settlements, are impossible to predict with certainty.

The foregoing should not be construed as exhaustive and the company disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

EXHIBIT 99(ii)

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of SUPERVALU INC. (the “company”) certifies that the Annual Report on Form 10-K of the company for the fiscal year ended February 22, 2003, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in that Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the company for the period and as of the dates covered thereby.

Dated: April 25, 2003		/s/ J EFFREY N ODDLE
		Jeffrey Noddle Chief Executive Officer and President

Dated: April 25, 2003		/s/ P AMELA K. K NOUS
		Pamela K. Knous Executive Vice President, Chief Financial Officer