July 23, 2012, 6:31 PM.A week after Supervalu /quotes/zigman/242335 /quotes/nls/svu SVU 0.00%suspended its dividend and said it was considering a sale, its board of directors approved issuing non-qualified stock options and retention agreements to certain executives, according to a regulatory filing Monday.
The struggling supermarket chain disclosed in its 10-Q that the board approved non-qualified stock options to “retain and motivate key employees” as the grocer attempts its business turnaround. The options have an exercise price of $2.28 a share and vest in three equal installments beginning July 17, 2013.
Supervalu shares closed Monday at $2.21.
The filing shows CEO Craig Herkert was awarded 346,875 options. CFO Sherry Smith got 150,000 options, while executive vice president Janel Haugarth was allotted 156,250 options and EVP Andrew Herring, 125,000.
The retention agreements call for full payments if the executives stay with the company for the next two years. The payments do vest, meaning 10% of the total amount will be paid January 16, 2013. Another 20% vests July 16, 2013, 30% January 16, 2014 and 40% July 16, 2014. Details of the retention agreements are: Maximum payments for Smith and Haugarth are worth $750,000, while Herring would receive $500,000.