Document:

Spartan Stores Exhibit 10.2 to Form 10-Q - 07-29-09

EXHIBIT 10.2

SCHEDULE TO NOTES IN FORM OF STOCK OPTION AWARD

	

Note 1

(Name and Title)
	

Note 2

(Shares)

	
Dennis Eidson

     President and Chief Executive Officer
	
37,400

	
Craig C. Sturken

     Executive Chairman
	
14,000

	
David M. Staples

     Executive Vice President and Chief

     Financial Officer
	
13,800

	
Theodore Adornato

     Executive Vice President, Retail

     Operations
	
8,800

	
Alex J. DeYonker

     Executive Vice President, General

     Counsel and Secretary
	
8,800

	
Grantee:
	
[Note 1]
	
 

	
 
	
 
	
 

	
Grant Date:
	
May 15, 2009
	
Date First Exercisable:   May 1, 2010

	
 
	
 

	
Expiration Date:   May 15, 2019
	
Number of Shares:   [Note 2]

	
 
	
 

	
Exercise Price Per Share:   $13.87
	
 

Dear:

	
 
	
Re:
	
Stock Option Grant - Fiscal Year 2010

                    I am pleased to inform you that Spartan Stores, Inc., a Michigan corporation, ("Spartan") has granted to you under the Spartan Stores, Inc. Stock Incentive Plan of 2005 (the "Plan") the option to purchase the shares of Spartan's Common Stock described above (the "Option"). By accepting this grant, you agree that the Option and shares to be issued upon exercise of the Option are 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. 

                    Grant of Nonqualified Option. Spartan grants to you an option to purchase the number of shares of Spartan Common Stock set forth above. This Option is a non-qualified option and is not intended to be an incentive stock option as defined in Section 422(b) of the Internal Revenue Code of 1986, as amended. This grant of an Option shall not confer any right to you to be granted an Option or other awards in the future under the Plan.

                    Term and Vesting. Your right to exercise the Option according to its terms shall commence on the "Date First Exercisable" shown above and shall terminate on the "Expiration Date" shown above, unless earlier terminated under this letter or the Plan. Your right to exercise the Option shall vest over a four-year period as follows: twenty-five percent (25%) of the shares covered by this Option shall vest on the "Date First Exercisable", and twenty-five percent (25%) of such shares shall vest on each of the first, second and third anniversaries of the "Date First Exercisable," in each case rounded to the nearest whole number of shares.

                    Purchase Price; Payment. The price per share of the shares of Common Stock to be purchased upon exercise of the Option shall be the "Exercise Price Per Share" set forth above, subject to adjustment as provided in the Plan. In exercising the Option, you shall pay the exercise price (1) in cash, (2) by check payable to the order of Spartan Stores, Inc., (3) in the form of tendering for surrender previously acquired shares of Spartan Common Stock (such shares to be valued at their Market Value (as determined under the Plan) at the time of delivery to Spartan) that have an aggregate Market Value at the time of exercise equal to the total exercise price of the shares purchased or (4) any combination of the foregoing. For the avoidance of doubt, in the event you choose to pay the purchase price by tendering for surrender previously owned shares, the number of shares issued to you upon the exercise of the Option shall be the net of the shares surrendered.

                    Exercise of Option. You may exercise the vested and exercisable portion of this Option, in whole or in part, by an executed notice of exercise, which shall be effective upon receipt by Spartan's Benefits Manager or his or her designee or successor at Spartan's main office, accompanied by full payment (as set forth above) of the option price; provided, however, that no exercise may occur subsequent to the close of business on the "Expiration Date" set forth above. The notice shall be signed by you or your legal representative and shall set forth the number of shares to be purchased. Upon payment of the purchase price and any required withholding amount, the purchased shares (net of any shares surrendered) will be issued to you; provided, however, that issuance may be postponed for such period as may be required for Spartan with reasonable diligence to comply with any registration requirements under any securities laws or any other laws or regulations applicable to the issuance, listing or transfer of such shares, or any agreements or Nasdaq Marketplace Rules. If you fail to accept and pay for all or any of the shares, your right to exercise the Option with respect to such shares will terminate; however, your remaining Options not yet exercised or terminated shall continue in force. Spartan's Board of Directors has authorized the issuance of shares without share certificates. Any shares issued to you without a paper certificate will be registered in your name in Spartan's books and records and reflected on the account statements issued to you by Smith Barney (or other financial intermediary). Spartan Stores, Inc. is formed under the laws of the State of Michigan. Spartan Stores, Inc. will furnish to you upon request and without charge a

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full statement of the designation, relative rights, preferences, and limitations of the shares of each class authorized to be issued, the designation, relative rights, preferences, and limitations of each series so far as the same have been prescribed, and the authority of the Spartan's Board of Directors to designate and prescribe the relative rights, preferences, and limitations of other series.

                    Termination of Employment. If your employment with Spartan terminates, you may exercise the Option as set forth below; provided, however, that in no event may you exercise the Option beyond the Expiration Date set forth above:

                    (1)          Death or Disability. In the event of termination of your employment due to your death or Disability (as defined in the Plan), for a period of twelve months following the termination of employment, you (or the representative of your estate, in the case of death) may exercise any or all of the then-unexercised portion of the Option to the extent vested at the time of the termination. The unvested portion of the Option will be forfeited.

                    (2)          Retirement. In the event of your Retirement (as defined in the Plan), you may exercise any or all of the then unexercised portion of the Option to the extent vested at the time of the Retirement in accordance with the terms of this letter, and the unvested portion of the Option shall continue to vest and be exercisable in accordance with the terms of this letter.

                    (3)          Termination by Spartan. In the event of termination of your employment by Spartan for any reason, effective as of the date of the termination of employment: (a) you will have no further right to exercise the vested portion of the Option and (b) the unvested portion of the Option will be forfeited.

                    (4)          Termination by You. In the event of termination of your employment by you for any reason:  (a) for a period of three months following the termination of employment, you may exercise any or all of the then unexercised portion of the Option to the extent vested at the time of the termination and (b) the unvested portion of the Option will be forfeited.

                    (5)          Change in Control. In the event of a Change in Control (as defined in the Plan), the Option shall vest and be exercisable in accordance with the terms of the Plan.

                    Non-transferability of Option. This Option or any rights therein shall not be sold, exchanged, assigned, or otherwise transferred or pledged or otherwise encumbered in whole or in part, except by will or the laws of descent or distribution, and is exercisable during your lifetime only by you or your guardian or legal representative. If any sale, exchange, assignment, transfer, pledge or encumbrance of this Option or any rights therein shall be made or attempted, or if any attachment, execution, garnishment or lien shall be issued against or placed upon this Option, this Option shall be void and of no further effect.

                    Certifications. You represent and warrant that (1) you are acquiring this Option for your own account and investment and without any intent to distribute any shares upon exercise of the Option and (2) you have been furnished and have read the most recent Annual

-3-

Report to Shareholders of Spartan and the Plan Description relating to the Plan. You shall not resell or distribute the shares received upon exercise of the Option except in compliance with such conditions as Spartan may reasonably specify to ensure compliance with federal and state securities laws.

                    Beneficiary Designation. You may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this letter is to be paid in the case of your death prior to receipt of any or all of such benefit. Each such designation shall revoke all prior designations made by you, shall be in a form prescribed by the Committee, and will be effective only when filed by you in writing with the Vice President Human Resources of Spartan or his or her successor during your lifetime. In the absence of any such designation, benefits remaining unpaid at your death shall be paid to your estate.

                    Withholding. Spartan is entitled to:  (1) withhold and deduct from your future wages (or from other amounts that may be due and owing to you from Spartan), 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 the Options, or (2) require you promptly to remit the amount of such withholding to Spartan before taking any action with respect to the Options. Upon your written authorization, withholding may be satisfied by withholding Common Stock to be issued upon vesting and exercise of the Options or by delivery to Spartan of previously owned Common Stock.

                    Rights as a Shareholder. You shall have no rights as a shareholder of Spartan with respect to the shares subject to this letter until such time as the purchase price has been paid and the shares have been issued to you.

                    Binding Effect; Amendment. This letter agreement 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 Spartan.

                    Miscellaneous.

                    (1)          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. The Committee shall have the right to impose such restrictions on any shares acquired pursuant to this letter, as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such shares. 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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                    (2)          The Board may terminate, amend, or modify the Plan in accordance with the terms of the Plan.

                    (3)          You agree to take all steps necessary to comply with all applicable provisions of federal and state securities laws in exercising your rights under this letter. This letter shall be subject to all applicable laws, rules, and regulations, Nasdaq Marketplace Rules, and to such approvals by any governmental agencies, The Nasdaq Stock Market or any other national securities exchanges as may be required.

                    (4)          To the extent not preempted by federal law, this letter shall be governed by, and construed in accordance with, the laws of the state of Michigan.

	
 
	
Very truly yours,

	
 
	
 

	
 
	

	
 
	
 

	
 
	
Dennis Eidson

	
 
	
President & Chief Executive Officer

-5-Spartan Stores Exhibit 10.3 to Form 10-Q - 07-29-09

EXHIBIT 10.3

SCHEDULE TO NOTES IN FORM OF RESTRICTED STOCK UNIT AWARD

	

Note 1

(Name and Title)
	

Note 2

(Threshold Restricted

Stock Units)
	

Note 3

(Target Restricted Stock

Units)
	

Note 4

(Maximum Restricted Stock

Units)

	
Dennis Eidson

     President and Chief

     Executive Officer
	
10,200
	
20,400
	
40,800

	
Craig C. Sturken

     Executive Chairman
	
3,850
	
7,700
	
15,400

	
David M. Staples

     Executive Vice President

     and Chief Financial

     Officer
	
3,750
	
7,500
	
15,000

	
Theodore Adornato

     Executive Vice President,

     Retail Operations
	
2,400
	
4,800
	
9,600

	
Alex J. DeYonker

     Executive Vice President,

     General Counsel and

     Secretary
	
2,400
	
4,800
	
9,600

	
Grantee:   [Note 1]
	
Grant Date:
	
May 15, 2009

	
 
	
 

	
Number of Restricted Stock Units:
	
 

	
 
	
Threshold:
	
[Note 2]
	
 

	
 
	
Target:
	
[Note 3]
	
 

	
 
	
Maximum:
	
[Note 4]
	
 

Dear «First_Name»:

	
 
	
Re:
	
Restricted Stock Unit Award - Fiscal Year 2010

                    I am pleased to inform you that Spartan Stores, Inc., a Michigan corporation, ("Spartan") has granted to you up to [Note 4] Restricted Stock Units ("RSUs") under the Spartan Stores, Inc. Stock Incentive Plan of 2005 (the "Plan"). All or a portion of the RSUs will be converted to shares of Spartan common stock on a one-for-one basis if Spartan achieves specified threshold, target, or maximum levels of earnings per share for the fiscal year ending March 27, 2010 (the "Performance Period"). Any shares you receive upon conversion of the

RSUs will be subject to a vesting period that will end on May 1, 2012. By accepting this grant, you agree that the RSUs and any shares issued under the RSUs are subject to the terms and conditions of this letter and the Plan (which is 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.

          1.          Grant of Restricted Stock Unit. Spartan grants to you up to [Note 4] RSUs (the "Maximum RSUs"), of which [Note 3] represent your "Target RSUs", and [Note 2] represent your "Threshold RSUs." All or a portion of the RSUs will be converted to shares of Spartan common stock in accordance with Section 2 below if Spartan achieves specified threshold, target, or maximum levels of Earnings Per Share for the Performance Period. No shares will be issued if Spartan does not achieve the threshold level of performance. The shares issued under the RSUs, if any, are referred to in this Agreement as the "Earned Shares." The Earned Shares are subject to the restrictions set forth in Sections 3 and 4 of this letter until May 1, 2012, unless earlier terminated in accordance with this letter and the Plan. 

          2.          Conversion and Settlement of RSUs. 

                    (A)          So long as you remain continuously employed by Spartan, an amount up to the Maximum RSUs under this letter will automatically be converted into Earned Shares on a one-for-one basis if, and to the extent that, Spartan achieves specified levels of Earnings Per Share (as defined below) for the Performance Period in accordance with the table set forth on Exhibit A to this Agreement. The threshold, target, and maximum levels of Earnings Per Share for the Performance Period have been established by the Compensation Committee (the "Committee") and will be communicated to you separately. The Committee will determine whether and to the extent that the RSUs will be converted as soon as practicable following the final approval of Spartan's audited financial statements for the Performance Period by the auditing firm engaged by Spartan to review such statements. The date on which the Compensation Committee makes such determination is referred to in this letter as the "RSU Conversion Date." For the purposes of this letter, "Earnings Per Share" means the net earnings per share of Spartan Stores, Inc., on a fully diluted basis as reported in Spartan's audited financial statements for the Performance Period. The Committee has determined that any evaluation of the Earnings Per Share corporate performance will exclude the events or their related effects that occur during the Performance Period for any of the items listed in items (a) through (h) of Section 10.2 of the Plan. 

                    (B)          Subject to Section 4 below, promptly after the RSU Conversion Date (but in no event later than the 15th day of the third month after the RSU Conversion Date occurs), Spartan shall issue to you a number of Earned Shares in accordance with the Committee's determination in Section 2(A). Any number of RSUs that are not converted in accordance with this letter, effective as of the RSU Conversion Date, shall be forfeited without consideration or settlement.

          3.          Restrictions on RSUs and Earned Shares. 

                    (A)          The RSUs and Earned Shares issued in settlement of RSUs pursuant to Section 2, if any, are subject to the following transfer and forfeiture conditions ("Restrictions"),

2

which will lapse on May 1, 2012, unless such restrictions lapse earlier in accordance with this agreement. Until the Restrictions lapse, the RSUs and Earned Shares generally are not transferable by you except by will or according to the laws of descent and distribution. All rights with respect to the RSUs and Earned Shares are exercisable during your lifetime only by you, your guardian, or your legal representative.

                    (B)          Except as otherwise set forth in this letter, any RSUs or Earned Shares for which the Restrictions have not lapsed will automatically be forfeited without consideration upon the termination of your employment with Spartan. Regardless of the foregoing, the Committee may, in its sole discretion, waive the Restrictions remaining on any or all such RSUs or Earned Shares at the time of termination of employment.

          4.          Effect of Termination of Employment.

                    (A)          Notwithstanding anything to the contrary in this letter, if your employment with Spartan is terminated due to your death, Disability or Retirement (each as defined in the Plan) before May 1, 2012, and absent any Change in Control (as defined in the Plan), then any outstanding RSUs or Earned Shares under this letter will be treated in accordance with the following table:

3

	
Reason for

Termination
	
Timing of Termination

	
Before the RSU Conversion Date
	
After the RSU Conversion Date

	
Death or Disability.
	
You will be entitled to receive a

distribution of Earned Shares as though

your employment continued through the

RSU Conversion Date.
	
The Restrictions applicable to

any Earned Shares will lapse

automatically and the Earned

Shares will vest and no longer be

subject to forfeiture.

	
Retirement.
	
You will be entitled to receive a

distribution of the number of Earned

Shares which you would have received

had your employment continued through

the RSU Conversion Date, multiplied by

the number of full months that have

elapsed from May 15, 2009 through the

date of your Retirement, divided by 36.

The Earned Shares issued will not be

subject to any Restrictions. All

unconverted RSUs will be forfeited.
	
The Restrictions applicable to

any remaining shares of Earned

Shares will terminate

automatically with respect to

that number of shares (rounded

to the nearest whole number)

equal to the total number of

shares of Earned Shares issued

to you under this letter

agreement, multiplied by the

number of full months that have

elapsed from May 15, 2009,

divided by 36. All remaining

Earned Shares will be forfeited

and returned to Spartan.

                    (B)          If a Change in Control occurs at any time during the Performance Period: (i) while you are employed with Spartan, or (ii) following termination of your employment during the Performance Period due to death, Disability, or Retirement, then you will be entitled to receive a distribution of a number of Earned Shares equal to the Target RSUs as of the date of the Change in Control. All unconverted RSUs will be forfeited. 

                    (C)          If a Change in Control occurs after the Performance Period while you are employed with Spartan, then any outstanding RSUs and Earned Shares will be treated as follows: (i) if the RSUs have not been converted to Earned Shares, then you will be entitled to receive a distribution of Earned Shares in accordance with the table set forth on Exhibit A, and such Earned Shares will not be subject to any Restrictions and will not be subject to forfeiture, and any unconverted RSUs will be forfeited; and (ii) if the RSUs have been converted to Earned Shares, then the Restrictions applicable to such Earned Shares will lapse automatically and the Earned Shares will vest and no longer be subject to forfeiture. 

          5.          Rights of Holders. 

                    (A)           RSUs. You will have no cash dividend, liquidation, voting or other rights with respect to the shares of common stock underlying the RSUs until the RSUs are converted

4

into Earned Shares. RSUs are generally not transferable except by will or according to the laws of descent and distribution. This grant of RSUs shall not confer any right to you to be granted other awards in the future under the Plan.

                    (B)          Earned Shares. You shall have all voting, dividend, liquidation, and other rights with respect to the Earned Shares held of record by you as if you held unrestricted Common Stock; provided, however, that the unvested portion of any Earned Shares shall be subject to any restrictions on transferability or risks of forfeiture imposed pursuant to this letter or the Plan. Any non-cash dividends or distributions paid with respect to unvested Earned Shares shall be subject to the same restrictions as those relating to the Earned Shares granted to you under this letter agreement. After the Restrictions applicable to the Earned Shares lapse, you shall have all shareholder rights, including the right to transfer the shares, subject to such conditions as Spartan may reasonably specify to ensure compliance with federal and state securities laws.

          6.          Uncertificated Shares. Spartan's Board of Directors has authorized the issuance of shares without share certificates. Any Earned Shares issued to you without a paper certificate will be registered in your name in Spartan's books and records and reflected on the account statements issued to you by Smith Barney (or other financial intermediary). Spartan Stores, Inc. is formed under the laws of the State of Michigan. Spartan Stores, Inc. will furnish to you upon request and without charge a full statement of the designation, relative rights, preferences, and limitations of the shares of each class authorized to be issued, the designation, relative rights, preferences, and limitations of each series so far as the same have been prescribed, and the authority of the Spartan's Board of Directors to designate and prescribe the relative rights, preferences, and limitations of other series. 

          7.          Certifications. You represent and warrant that you are acquiring the RSUs and Earned Shares for your own account and investment and without any intent to resell or distribute. You shall not resell or distribute the Earned Shares following the lapse of the Restrictions except in compliance with such conditions as Spartan may reasonably specify to ensure compliance with federal and state securities laws.

          8.          Beneficiary Designation. You may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this letter is to be paid in case of your death prior to receipt of any or all of such benefit. Each such designation shall revoke all prior designations made by you, shall be in a form prescribed by the Committee, and will be effective only when filed by you in writing with the Vice President Human Resources of Spartan or his or her successor during your lifetime. In the absence of any such designation, benefits remaining unpaid at your death shall be paid to your estate.

          9.          Withholding. Spartan is entitled to: (1) withhold and deduct from your future wages (or from other amounts that may be due and owing to you from Spartan), 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 the award of RSUs and Earned Shares, or (2) require you promptly to remit the amount of such withholding to Spartan before taking any action with respect to such RSUs and

5

Earned Shares. Upon your written authorization, withholding may be satisfied by withholding Common Stock to be released upon vesting of and lapse of restrictions with respect to shares of the Earned Shares or by delivery to Spartan of previously owned Common Stock.

          10.          Binding Effect; Amendment. 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 Spartan.

          11.          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. The Committee shall have the right to impose such restrictions on any shares acquired pursuant to this letter, as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such shares. 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.

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

                    (C)          You agree to take all steps necessary to comply with all applicable provisions of federal and state securities laws in exercising your rights under this letter. This letter shall be subject to all applicable laws, rules, and regulations, Nasdaq Marketplace Rules, and to such approvals by any governmental agencies, The Nasdaq Stock Market or any other national securities exchanges as may be required.

                    (D)          To the extent not preempted by federal law, this letter shall be governed by, and construed in accordance with, the laws of the state of Michigan.

	
 
	
Very truly yours,

	
 
	

	
 

	
 

	
 
	
Dennis Eidson

	
 
	
President and Chief Executive Officer

6

Exhibit A

Performance/Conversion of RSUs

	
 
	
 
	
Level
	
 
	
Percentage of Target

Earnings Per Share for

Fiscal 2009

 

	
 
	
Percentage of

Target RSUs

Converted to

Earned Shares

	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
<90
	
%
	
 
	
0
	
%
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
Threshold
	
 
	
90
	
%
	
 
	
50
	
%
	
 

	
 
	
 
	
 
	
 
	
95
	
%
	
 
	
75
	
%
	
 

	
 
	
 
	
Target
	
 
	
100
	
%
	
 
	
100
	
%
	
 

	
 
	
 
	
 
	
 
	
105
	
%
	
 
	
117
	
%
	
 

	
 
	
 
	
 
	
 
	
110
	
%
	
 
	
133
	
%
	
 

	
 
	
 
	
 
	
 
	
115
	
%
	
 
	
150
	
%
	
 

	
 
	
 
	
 
	
 
	
120
	
%
	
 
	
167
	
%
	
 

	
 
	
 
	
Maximum
	
 
	
>125
	
%
	
 
	
200
	
%

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