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John B. Sanfilippo & Son, Inc.

Sanfilippo Value Added Plan (“SVA Plan”)





	I.	 	Purposes of the Plan
	 
	 	 	The purpose of the Plan is to more closely link incentive cash compensation to the creation
of shareholder value. The Plan is intended to foster a culture of performance and ownership,
promote employee accountability, and establish a framework of manageable risks imposed by
variable pay. The Plan is also intended to reward long-term, continuing improvements in
shareholder value with an opportunity to participate in a portion of the wealth created.
	 
	II.	 	Definitions
	 
	 	 	“Actual Improvement” means the annual change in SVA, as determined under Section V(B)(1) of
the Plan, which can be positive or negative.
	 
	 	 	“Annual Salary” means, with respect to a Participant, his or her annual base salary rate in a
particular fiscal year of the Company.
	 
	 	 	“Board” means the Board of Directors of the Company.
	 
	 	 	“Bonus Bank” means the amount of a Plan Participant’s Bonus potential that is not yet earned
and which is accounted for by the Company in a non-interest bearing book entry account until
such time as it may be earned and paid in the form of Bonus Paids under the Plan.
	 
	 	 	“Bonus Declared” means the annual bonus amount for a Plan Year, as determined under Section V
of the Plan.
	 
	 	 	“Bonus Interval” means the amount of SVA growth or diminution as a variance from Target SVA
Improvement that would either (i) result in the doubling of the Target Bonus for SVA
performance above Target SVA Improvement; or, (ii) result in the realization of no Target
Bonus for SVA performance below Target SVA Improvement.
	 
	 	 	“Bonus Paid” has the meaning set forth in Section VI.B.
	 
	 	 	“Capital Charge” means the Cost of Capital multiplied by the Company’s aggregate
capital, as determined by the Committee.




 









 











John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan





	 	 	“Cause” means the Participant’s (i) commission of an act of fraud, embezzlement or theft in
connection with the Participant’s employment, (ii) commission of intentional wrongful damage
to property of the Company, (iii) failure to perform the material duties of employment after
receipt of written notice from the Company, or (iv) conviction of a felony (or plea of guilty
or nolo contendre).
	 
	 	 	“Change in Control” means the later of: (i) date on which no shares of the Company’s Class A
common stock, $.01 par value per share, remain outstanding, and (ii)(A) a change in the
ownership of the Company, (B) a change in effective control of the Company or (C) a change in
the ownership of a substantial portion of the assets of the Company (each of A, B and C as
defined in Section 409A).
	 
	 	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	 	“Committee” has the meaning set forth in Section IV.A.
	 
	 	 	“Company” means John B. Sanfilippo & Son, Inc., a Delaware corporation, and its successors
and assigns.
	 
	 	 	“Cost of Capital” means the Company’s cost of equity plus its cost of debt, expressed as a
percentage, as determined by the Committee using a weighted average of the expected return on
the Company’s debt and equity capital. Cost of Capital is intended to reflect the rate of
return that an investor could earn by choosing another investment with equivalent risk.
	 
	 	 	“Declared Bonus Multiple” means the multiple determined in accordance with Section V(B)(4) of
the Plan for purposes of determining a Participant’s Bonus Declared.
	 
	 	 	“Disability” means a Participant is (i) unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not less than 12
months, or (ii) by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not less than 3
months under an accident and health plan covering employees of the Company or Subsidiary; or,
if different, as may be defined for purposes of Section 409A.
	 
	 	 	“Key Employee” means a Participant who is a “specified employee” for purposes of Section
409A.




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	 	 	“NOPAT” means the Company’s net operating profit after tax, as determined by the Committee
from the Company’s audited financial statements.
	 
	 	 	“Participant” shall be as defined in Section III.
	 
	 	 	“Performance Target Bonus” means the annual Bonus Declared a Participant would earn, if any,
for a Plan Year if Actual Improvement equaled Target SVA Improvement, determined by
multiplying a Participant’s Annual Salary for that Plan Year by the Participant’s Performance
Target Bonus Percentage for that Plan Year.
	 
	 	 	“Performance Target Bonus Percentage” means the percentage of a Participant’s Annual Salary,
as established or approved by the Committee for purposes of determining a Participant’s
Performance Target Bonus.
	 
	 	 	“Plan” means the John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan.
	 
	 	 	“Plan Year” means the fiscal year of the Company.
	 
	 	 	“Retirement” means a Participant’s termination of employment, other than for Cause, either:
(i) on or after age 65, or (ii) on or after age 55 if the Participant has been credited with,
at least, 10 full years of employment at the time of his termination of employment.
	 
	 	 	“Section 409A” means Code Section 409A and all applicable rules and regulations related
thereto.
	 
	 	 	“Subsidiary” means any corporation at least eighty percent (80%) of the outstanding
voting stock of which is owned by the Company.
	 
	 	 	“SVA” means the “shareholder value added” of the Company determined each Plan Year by
deducting the Company’s Capital Charge from NOPAT, as determined by the Committee.
	 
	 	 	“Target Bonus” means the annual bonus a Participant may earn which shall be based on one or
more of the following with weightings as determined by the Committee: Actual Improvement
(with a minimum weighting of eighty percent (80%))and individual Participant performance.
	 
	 	 	“Target SVA Improvement” means the targeted improvement in annual SVA growth for the Bonus
Declared Percentage to be earned in full.
	 
	 	 	III. Eligibility




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John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan





	 	 	An employee of the Company or a Subsidiary who, individually or as part of a group, is
selected by the Committee to be eligible to participate in the Plan for the Plan Year shall
become a Participant as of the first day of such Plan Year, unless otherwise determined by
the Committee.






	IV.	 	Administration






	 	A.	 	The Committee
	 
	 	 	 	The Compensation, Nominating and Corporate Governance Committee of the Board shall be
the Committee hereunder unless a new, independent committee is selected by the Board.
For this purpose, a new Committee will be deemed independent if it is comprised solely
of two or more directors who are “independent directors” within the meaning of the The
Nasdaq Stock Market, Inc.’s rules and regulations.
	 
	 	B.	 	Powers
	 
	 	 	 	The Committee shall have full and exclusive discretionary power to:






	 	1.	 	Interpret the Plan,
	 
	 	2.	 	To determine those employees of the Company and its Subsidiaries who
are eligible to participate in the Plan, and
	 
	 	3.	 	Adopt such rules, regulations, and guidelines (including the
establishment of performance criteria), for administering the Plan as the
Committee may deem necessary or proper, including the full discretion not to make
payment of any or all of the Bonus Paid determined in Section V.






	 	C.	 	Adjustment to Payments
	 
	 	 	 	Subject to final approval of the Committee, individual Participant payments may be
subject to change by recommendation of the Participant’s manager and senior management
team, with consideration given to the individual’s successful job performance. The
Company retains the right to declare forfeited any payment amounts determined hereunder
for any Participant who violates any Company policy.




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John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan





	 	D.	 	Third-Party Advisors
	 
	 	 	 	The Committee may employ attorneys, consultants, accountants, and other persons. The
Board, Committee, the Company and its officers shall be entitled to rely upon the
advice or opinion of such persons.
	 
	 	E.	 	Binding Effect of Committee Actions
	 
	 	 	 	All actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Participants, the Company, and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination, or interpretations made in good faith with respect to the Plan. All
members of the Committee shall be fully protected and indemnified by the Company, to
the fullest extent permitted by applicable law, in respect of any such action,
determination, or interpretation of the Plan.
	 
	 	F.	 	Foreign Jurisdiction
	 
	 	 	 	The Committee shall have the discretion to modify or amend the Plan, or adopt
additional terms and/or conditions, as may be deemed necessary or advisable in order to
comply with the local laws and regulations of any jurisdiction.






	V.	 	Determination of Bonus Declared






	 	A.	 	Determination of SVA and Actual Improvement






	 	1.	 	Beginning of Plan Year Determinations. At the beginning of each
applicable Plan Year, the following determinations shall be made:






	 	a)	 	The Committee shall determine the Company’s annual SVA as
of the end of the preceding Plan Year.
	 
	 	b)	 	The Committee shall determine or approve Performance
Target Bonus Percentages for each Participant and the Company’s Cost of
Capital for the applicable Plan Year.
	 
	 	c)	 	The Committee shall establish the Target SVA Improvement
and the Bonus Interval for the applicable Plan Year, which standards may be
set by the Committee for one or more Plan Years.






	 	2.	 	End of Plan Year Determinations. As of the end of each applicable
Plan Year, the following determinations shall be made:




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John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan





	 	a)	 	The Committee shall determine the Company’s annual SVA as
of the end of the Plan Year and the resulting Actual Improvement.
	 
	 	b)	 	The Committee shall determine, or approve the
determination of, the Declared Bonus Multiple for such Plan Year, consistent
with the terms of the Plan.






	 	B.	 	Determination of Bonus Declared
	 
	 	 	 	Each Participant shall be credited with a Bonus Declared, if any, for a Plan Year
according to the following:






	 	1.	 	The Actual Improvement in SVA for a Plan Year shall be determined by
subtracting the SVA for the immediately preceding Plan Year from the SVA for the
Plan Year.
	 
	 	2.	 	If the Actual Improvement exceeds the Target SVA Improvement, the
amount of that excess shall be the “Excess Improvement”;
	 
	 	3.	 	If the Target SVA Improvement exceeds the Actual Improvement, the
amount of that excess shall be the “Shortfall”;
	 
	 	4.	 	The Declared Bonus Multiple shall be determined by comparing the
Excess Improvement or Shortfall to the Target SVA Improvement and Bonus Interval,
according to the following:






	 	a)	 	If the Actual Improvement equals the Target SVA
Improvement, the Declared Bonus Multiple shall equal one (1).
	 
	 	b)	 	If the Actual Improvement exceeds the Target SVA
Improvement, the Declared Bonus Multiple shall equal the Excess Improvement
divided by the Bonus Interval, plus one (1).
	 
	 	c)	 	If the Actual Improvement is less than the Target SVA
Improvement, the Declared Bonus Multiple shall equal the Shortfall
(expressed as a negative number) divided by the Bonus Interval, plus one
(1).






	 	5.	 	The Bonus Declared for each Participant shall equal the Participant’s
Performance Target Bonus, multiplied by the Declared Bonus Multiple, with such
amount being credited to the Participant’s Bonus Bank in accordance with Section
VI of this Plan;




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John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan





	 	6.	 	A Participant’s Bonus Declared may be based upon the Declared Bonus
Multiple for the Company only, or at the discretion of the Committee, a
Participant’s Bonus Declared
may be based upon the Declared Bonus Multiple for a particular division,
operation, or Subsidiary of the Company, or combination thereof as determined by
the Committee.






	VI.	 	Payment of Bonus Paid






	 	A.	 	Bonus Bank Determination
	 
	 	 	 	Each Participant shall have a Bonus Bank to which the Bonus Declared shall be credited.
For each applicable Plan Year the Bonus Bank shall be increased by the amount of any
positive Bonus Declared or decreased by the amount of any negative Bonus Declared. The
bonus payable to a Participant with respect to the applicable Plan Year, if any (“Bonus
Paid”), shall be determined as set forth in Section VI.B..
	 
	 	B.	 	Determination of Bonus Paid
	 
	 	 	 	After the end of each applicable Plan Year, after first crediting the Participant’s
Bonus Bank with the Participant’s Bonus Declared (which may be positive or negative),
the Company shall pay each Participant a Bonus Paid equal to the sum of (i) the
Participant’s Bonus Declared, if positive (but not exceeding 120% of the Performance
Target Bonus), plus (ii) one-third (1/3) of the Participant’s remaining Bonus Bank
balance as of the payment date (after reducing for (i)); provided that the Bonus Paid
may not exceed the Participant’s Bonus Bank. If the amount in a Participant’s Bonus
Bank prior to determining the Bonus Paid is less than the Participant’s Bonus Declared,
the entire amount of the Participant’s Bonus Bank shall be paid. No Bonus Paid shall
be payable to a Participant unless and until the Participant has a positive balance in
his or her Bonus Bank as of an applicable payment date. The Bonus Paid shall be paid by
the Company within thirty (30) days following the Committee’s determination of the
Declared Bonus Multiple, but in no event earlier than the first day of the Plan Year
following the applicable Plan Year and no later than the fifteenth (15th)
day of the third month following the end of the applicable Plan Year. The Bonus Paid
determined under this subsection shall not be earned and vested by the Participant
until such time as the date on which it is paid.




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John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan





	 	C.	 	Payment Upon Termination of Employment






	 	1.	 	In General. Except as specified below, in the event a Participant’s
employment is terminated for any reason or the Participant becomes ineligible to
participate in the Plan, (i) the Participant shall not earn, and Participant’s
Bonus Bank shall not be credited with, any Bonus Declared for the Plan Year in
which the termination occurs, and (ii) in the event that the prior Plan Year Bonus
Paid has not yet been paid, the Participant shall not earn, and Participant’s
Bonus Bank shall not be credited with, any Bonus Declared for such prior Plan
Year. The full amount of the Participant’s Bonus Bank shall be forfeited in its
entirety as of the termination date and the Participant shall have no rights or
interests in the Plan thereafter. However, the Committee, in its sole discretion,
may elect to pay some or all of such Participant’s Bonus Bank on such terms as it
deems appropriate, provided that any such payment is made within 2 and 1/2 months
following the end of the Plan Year in which employment termination occurs.
	 
	 	2.	 	Upon Death, Disability, Retirement or Termination by the Company
Other than for Cause. In the event of a Participant’s termination of employment
due to death, Disability, Retirement or by the Company other than for Cause, the
Participant’s Bonus Bank shall be credited as of the end of the Plan Year in which
the termination occurs
(the “Termination Year”), with a Bonus Declared determined in accordance with
Section VI(B) of the Plan, multiplied by a fraction (the “Completion Multiple”),
the numerator of which shall equal the total number of days during the
Termination Year in which the Participant was employed by the Company, and the
denominator of which shall be 365. Thereafter, following the payment, if any, of
the Bonus Paid for the Termination Year, the full amount of the Participant’s
Bonus Bank (if a positive balance then exists) shall be considered earned as of
the termination date and shall be paid by the Company to the former Participant,
or in the event of his or her death, to his or her estate or designated
beneficiary, in one lump sum within the time set forth in Section VI(B) above and
the Participant shall have no rights or interests in the Plan thereafter. At the
discretion of the Committee, any payment hereunder that is due to termination of
employment by the Company other than for Cause may be subject to a requirement
that the Participant execute a release of claims




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John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan





	 	 	 	(including claims relating to
age discrimination) against the Company and related persons at the time and in
the form determined by the Company from time to time.






	VII.	 	General Provisions






	 	A.	 	No Right to Employment or Participation
	 
	 	 	 	No Participant or other person shall have any claim or right to be retained in the
employment of the Company or a Subsidiary by reason of the Plan or any Bonus Declared
or Bonus Bank. Selection for eligibility to participate in the Plan for any given Plan
Year shall not entitle the Participant to participate in any subsequent Plan Year. In
the event a Participant is not selected to participate in a subsequent Plan Year, such
Participant’s Bonus Bank shall remain unchanged for such year and Participant shall not
be entitled to any payment of such Bonus Bank unless and until such Participant again
becomes eligible or is again selected to participate in the Plan.
	 
	 	B.	 	Plan Expenses
	 
	 	 	 	The expenses of the Plan and its administration shall be borne by the Company.
	 
	 	C.	 	Plan Not Funded
	 
	 	 	 	The Plan shall be unfunded. The Company shall not be required to establish any special
or separate fund or to make any other segregation of assets to assure the payment of
any Bonus Declared or Bonus Bank under the Plan.
	 
	 	D.	 	Reports
	 
	 	 	 	The appropriate officers of the Company shall cause to be filed any reports, returns,
or other information regarding the Plan, as may be required by applicable statute,
rule, or regulation.
	 
	 	E.	 	Governing Law
	 
	 	 	 	The validity, construction, and effect of the Plan, and any actions relating to the
Plan, shall be determined in accordance with the laws of the state of Illinois and
applicable federal law, without regard to the conflicts of laws provisions of any
state.




VIII. Amendment and Termination of the Plan



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John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan







	 	 	The Board may, from time to time, amend the Plan in any respect, or may discontinue or
terminate the Plan at any time, provided, however, that:






	 	A.	 	Impact on Existing Rights
	 
	 	 	 	No amendment, discontinuance or termination of the Plan shall alter or otherwise affect
the amount credited to a Participant’s Bonus Bank or affect the amount of a Bonus
Declared which may be earned prior to the date of termination;
	 
	 	B.	 	Impact on SVA Performance Measurement System
	 
	 	 	 	No amendment shall be made which would replace the SVA performance measurement system
for purposes of determining the Bonus Declared under the Plan during a Plan Year for
such Plan Year, provided that the Board or Committee shall have the authority to adjust
and establish Target SVA Improvement, Performance Target Bonus Percentages, and other
criteria utilized in the SVA performance measurement system;
	 
	 	C.	 	Consequence of Full Termination of Plan
	 
	 	 	 	In the event of the termination of this Plan, the full amount, if any, then credited to
a Participant’s Bonus Bank shall be paid in full within sixty (60) days following the
effective date of termination, but in no event later than the fifteenth
(15th) day of the third month following the Plan Year in which the Plan is
terminated. If the Plan is terminated prior to the end of a Plan Year, the Bonus
Declared for that Plan Year shall be determined and credited to a Participant’s Bonus
Bank as set forth in Section VI of the Plan, assuming that Target SVA Improvement for
that Plan Year had been achieved, then pro-rated for the actual number of days in the
Plan Year before the Plan was terminated; and
	 
	 	D.	 	Consequence of Change in Control
	 
	 	 	 	In the event of a Change in Control, the Bonus Declared for that Plan Year shall be
determined and credited to a Participant’s Bonus Bank as set forth in Section VI of the
Plan, assuming that Target SVA Improvement for that Plan Year had been achieved, then
pro-rated for the actual number of days in the Plan Year before the Change in Control,
except that the Bonus Paid shall equal one hundred percent (100%) of the Participant’s
Bonus Bank after such pro-rated Bonus Declared is credited, and shall be paid at the
effective time of the Change in Control.
	 
	 	E.	 	Section 409A
	 
	 	 	 	Notwithstanding anything to the contrary in this Plan:




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John B. Sanfilippo & Son, Inc. Sanfilippo Value Added Plan





	 	1.	 	To the extent required in order to avoid accelerated taxation and/or
tax penalties under Section 409A, amounts that would otherwise be payable pursuant
to this Plan during the six-month period immediately following the Participant’s
termination of employment shall instead be paid on the first business day after
the date that is six months following the Participant’s “separation from service”
within the meaning of Section 409A; and
	 
	 	2.	 	A Participant shall not be entitled to any payments resulting from or
arising due to a “termination of employment”, “termination” or “retirement” (or
other similar term having a similar import) unless (and until) such Participant
has “separated from service” within the meaning of Section 409A.






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