Exhibit 10.3

 

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Award Recipient:

   Grant Date: February 27, 2014

Dear :

Re: Long-Term Executive Cash Incentive Award 2014

I am pleased to inform you that Spartan Stores, Inc., d/b/a SpartanNash Company
(“SpartanNash” or the “Company”) has awarded to you the opportunity to earn
multi-year cash incentive compensation under the Company’s Executive Cash
Incentive Plan of 2010 (the “Plan”) as described in this letter. By accepting
this award, you agree that the award is subject to the terms and conditions of
this letter and the Plan (which are incorporated into this letter by reference).
If there is any conflict between the terms of the Plan and this letter, the
terms of the Plan will control. Capitalized terms not defined in this letter
have the meanings given to them in the Plan.

1. Target Award Amount. Your threshold, target and maximum Long-Term Cash
Incentive Award opportunity will be communicated to you separately. As discussed
in more detail below, your Long-Term Cash Incentive Award, if any, will be paid
with respect to each of the performance measurements described below if
SpartanNash achieves at least the threshold level of performance specified by
the Compensation Committee in the Performance Period for that performance
measurement, and you satisfy the other requirements discussed in this letter.

2. Performance Measurements and Performance Period.

(a) Metrics. The amount of the Long-Term Cash Incentive Award paid to you will
be determined by SpartanNash’s performance with respect to three performance
measurements: Earnings Per Share (“EPS”), net sales and synergies achieved from
the merger between Spartan Stores and Nash-Finch Company. Forty percent (40%) of
your Long-Term Cash Incentive Award will be based on SpartanNash’s EPS
performance, twenty percent (20%) will be based on SpartanNash’s net sales and
forty percent (40%) will be based on merger synergies.

(b) Performance Period. The Long-Term Cash Incentive Award will cover the period
consisting of the fiscal years ending January 3, 2015, January 2, 2016, and
December 30, 2016 (collectively, the “Performance Period”). For each of the
metrics listed in paragraph (a) above, performance will be measured as of the
fiscal year ending December 30, 2016 (“FYE 12/30/16”).

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(c) Summary. The award is summarized on the following table:

 

Performance

Measurement

   Percentage of Long-Term Cash
Incentive Award     Measurement Period  

EPS1

     40 %      FYE 12/30/16   

Net Sales2

     20 %      FYE 12/30/16   

Merger Synergies3

     40 %      FYE 12/30/16   

 

1  For this measurement, EPS means Diluted Earnings per Share on a Consolidated
Net Earnings (adjusted for items not representative of ongoing operations) basis
for each period indicated above.

2  Net sales will be calculated based on the GAAP financial statements of the
Company. In making this calculation, however fuel sales will be calculated
adjusted using a pre-determined sales price margin per gallon sold.

3 Merger synergies will be the synergies achieved from the merger between
Spartan Stores and Nash-Finch Company as reported to the Board of Directors.

3. Performance Goals and Payouts. Your Long-Term Cash Incentive Award will be
determined according to the matrices presented below. The levels of performance
for EPS, net sales and merger synergies have been established by the
Compensation Committee and will be communicated to you separately. No Long-Term
Cash Incentive Award will be paid with respect to a performance measurement
unless SpartanNash achieves the threshold level of performance for that
performance measurement.

EPS

 

     Performance     Payout  

Level

   % of EPS Goal     % of Target  

—  

     <80.0 %      0.0 % 

Threshold

     80.0 %      10.0 % 

—  

     85.0 %      32.5 % 

—  

     90.0 %      55.0 % 

—  

     95.0 %      77.5 % 

Target

     100.0 %      100.0 % 

—  

     104.0 %      124.5 % 

—  

     108.0 %      149.1 % 

—  

     112.0 %      173.6 % 

Maximum

     ³116.3 %      200.0 % 

 

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Net Sales

 

     Performance     Payout  

Level

   % of Net Sales Goal     % of Target  

—  

     <90.0 %      0.0 % 

Threshold

     90.0 %      50.0 % 

—  

     92.5 %      62.5 % 

—  

     95.0 %      75.0 % 

—  

     97.5 %      87.5 % 

Target

     100 %      100.0 % 

—  

     101.5 %      125.0 % 

—  

     103.0 %      150.0 %       104.5 %      175.0 % 

Maximum

     ³106.0 %      200.0 % 

Merger Synergies

 

     Performance     Payout  

Level

   % of Merger Synergies Goal     % of Target  

—  

     <80.0 %      0.0 % 

Threshold

     80.0 %      10.0 % 

—  

     85.0 %      32.5 % 

—  

     90.0 %      55.0 % 

—  

     95.0 %      77.5 % 

Target

     100.0 %      100.0 % 

—  

     104.0 %      124.5 % 

—  

     108.0 %      149.1 % 

—  

     112.0 %      173.6 % 

Maximum

     ³116.3 %      200.0 % 

If SpartanNash’s actual performance achieved for EPS, net sales or merger
synergies exceeds the threshold level and falls between specified levels, then
the percentage of the Target Award that will be paid will be determined by
interpolation. The evaluation of EPS, net sales and merger synergies performance
will exclude the events or their effects set forth in Section 5.3 (a) through
(h) of the Plan.

4. No Additional Vesting Period. Your Long-Term Cash Incentive Award is earned
based on the value of EPS, net sales and merger synergies as measured at FYE
12/30/16. Each component of your Long-Term Cash Incentive Award earned according
to the matrices above, if any, will not be subject to any additional vesting
period following the Performance Period.

5. Effect of Termination of Employment. Except as provided in this Section 5 and
Section 6 below, if your employment with SpartanNash is terminated for any
reason before the end of the Performance Period, you will forfeit any unearned
Long-Term Cash Incentive Award. If your employment with SpartanNash terminates
for retirement, death or total disability, your eligibility for a Long-Term Cash
Incentive Award will be determined in accordance with the table on the following
page:

 

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Timing of Termination

Reason for
Termination

 

More than 12 Months Remaining until the end of
the Performance Period

 

12 Months or Less Remaining until the end of the
Performance Period

 

After Performance Period but before payment
date

Death or Total Disability   Your Target Award will be paid on a pro-rata basis
based on the number of full weeks you were employed during the Performance
Period. The Incentive Award will be paid no later than the 15th day of the third
month following the date of your death or total disability.   Following the
completion of the Performance Period, any earned Long-Term Cash Incentive Award
will be paid based on actual performance results on a pro-rata basis based on
the number of full weeks you were employed during the Performance Period. The
Incentive Award will be paid no later than the 15th day of the third month
following the date of the end of the Performance Period.   Any earned Long-Term
Cash Incentive Award will be paid in full no later than the 15th day of the
third month following the date of your death or total disability. Retirement  
Your Long-Term Cash Incentive Award, if any, will be the amount you would have
earned had you remained employed with SpartanNash until the end of the
Performance Period based on actual performance results, paid on a pro-rated
basis for the number of full weeks you were employed during the Performance
Period. The Incentive Award will be paid no later than the 15th day of the third
month following the date of the end of the Performance Period.   Your Long-Term
Cash Incentive Award, if any, will be the amount you would have earned had you
remained employed with SpartanNash until the end of the Performance Period based
on actual performance results, paid on a pro-rated basis for the number of full
weeks you were employed during the Performance Period. The Incentive Award will
be paid no later than the 15th day of the third month following the date of the
end of the Performance Period.   Any earned Long-Term Cash Incentive Award will
be paid in full no later than the 15th day of the third month following the date
of your retirement.

6. Change in Control.

(a) Before the end of the Performance Period. Upon a Change in Control of
SpartanNash (as defined in the Plan) before the end of the Performance Period,
provided that you are employed by SpartanNash upon such Change in Control, you
will earn an Incentive Award equal to the greater of the Target Award or the
projected Incentive Award (with the projected Incentive Award to be calculated
by estimating the Company’s

 

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expected performance with respect to EPS, net sales and merger synergies for the
Performance Period based on the Company’s performance in the then-current fiscal
year as of the date of the Change in Control projected out through the end of
the Performance Period), to be paid on a pro-rata basis for the number of full
weeks completed in the Performance Period prior to the Change in Control. The
Incentive Award will be paid no later than the 15th day of the third month
following the Change in Control.

(b) After Performance Period. Upon a Change in Control following the Performance
Period, any earned Incentive Award will be payable in full upon the earliest to
occur of the termination of your employment for any reason, or the date that is
the 15th day of the third month following the Change in Control.

7. Executive Severance Agreement. The Long-Term Cash Incentive Award opportunity
described in this letter is not subject to the provisions of your Executive
Severance Agreement with the Company. In the event of a Change in Control, your
right to receive any portion of the Long-Term Cash Incentive Award described in
this letter will be governed exclusively by the terms and conditions of this
letter, and you will not receive any additional payment for the Long-Term Cash
Incentive Award under your Executive Severance Agreement.

8. Annual Incentive Award. You will be separately notified of your eligibility
to earn an annual incentive award for 2014.

9. Compensation Committee Authority and Discretion. The Plan is administered and
interpreted by the Compensation Committee of the Board of Directors. Although
the Committee has authority to exercise reasonable discretion to interpret the
Plan and the performance goals, it generally may not amend or waive any
performance goal after the 90th day of the fiscal year. The Committee has no
authority or discretion to increase any Long-Term Cash Incentive Award.

10. Withholding. SpartanNash is entitled to withhold and deduct from your future
wages (or from other amounts that may be due and owing to you from SpartanNash),
or make other arrangements for the collection of, all legally required amounts
necessary to satisfy any and all federal, state, local and foreign withholding
and employment-related tax requirements attributable to a Long-Term Cash
Incentive Award.

11. Clawback. This award is subject to any “clawback” policy providing for the
recovery of incentive compensation that the Company may adopt within ninety
(90) days of this award, or as may be required under applicable law, rule or
regulation.

12. Miscellaneous.

(a) This letter and your rights hereunder are subject to all the terms and
conditions of the Plan, as the same may be amended from time to time, as well as
to such rules and regulations as the Committee may adopt for administration of
the Plan. It is expressly understood that the Committee is authorized to
administer, construe and make all determinations necessary or appropriate to the
administration of the Plan and this letter, all of which shall be binding upon
you.

 

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(b) The Board may terminate, amend or modify the Plan in accordance with the
terms of the Plan.

(c) This letter and the Plan shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, successors and
permitted assigns. This letter agreement shall not be modified except in a
writing executed by you and SpartanNash.

(d) This letter shall be governed by, and construed in accordance with, the laws
of the state of Michigan.

Very truly yours,

/s/ Dennis Eidson

Dennis Eidson

President and Chief Executive Officer

Accepted and Agreed to:

 

Name

 

Date

 

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