Document:

Form of fiscal 2012 Incentive Award

 Exhibit 10.3 
 

 
  

							
	Award Recipient:	 	[Name]	 		 	Grant Date:             May 17, 2011
				
	Dear [Name]:	 		 		 	

  

	 	Re:	Long-Term Executive Incentive Plan Award - Fiscal Year 2012 

 I am pleased to inform you that Spartan Stores, Inc. (“Spartan”) has awarded to you the opportunity to earn cash incentive compensation under the Executive Cash Incentive Plan of 2010 (the
“Plan”) for a multi-year Performance Period 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 Bonus Amount. Your threshold, target, and maximum Long-Term Incentive Bonus opportunity for the three-year period
covering fiscal 2012, 2013 and 2014 will be communicated to you separately. As discussed in more detail below, your Long-Term Incentive Bonus, if any, will be paid if Spartan achieves at least the threshold levels of performance specified by
the Compensation Committee for the applicable Performance Period and you satisfy the vesting requirements discussed in this letter. 
 2. Performance Measurement and Performance Period. The amount of the Long-Term Incentive Bonus paid to you will be determined by Spartan’s performance with respect to two Performance
Measurements: Earnings Per Share (“EPS”) and Return on Invested Capital (“ROIC”). Sixty percent (60%) of your Long-Term Incentive Bonus will be determined by Spartan’s EPS performance, and forty percent (40%) of
your Long-Term Incentive Bonus will be determined by Spartan’s ROIC performance, in each case during the Performance Period set forth on the following page: 
  

							
	 Performance
Measurement
	  	Percentage of Long-
Term Incentive
Bonus	 	 Performance Period
	  	 Vesting Period

	EPS*	  	60%	 	1 year (fiscal 2012)	  	2 years after completion of the Performance Period (paid after FYE 2014)
				
	ROIC**	  	40%	 	2 years (fiscal 2012 and 2013)	  	1 year after completion of the Performance Period (paid after FYE 2014)

	*	For this measurement, EPS means Diluted Earnings per Share on a Consolidated Net Earnings basis measured at the end of FY2012. 

	**	For this measurement, ROIC means operating profit after tax, adjusted for asset impairment, exit costs and LIFO expense, divided by total invested capital (total assets
plus LIFO reserve less cash and non-interest bearing current liabilities) measured at the end of FY2013. 

 3.
Performance Goals and Payouts. Your Long-Term Incentive Bonus will be determined according to the matrix presented below. The levels of performance for EPS and ROIC have been established by the Compensation Committee and will be communicated
to you separately. No Long-Term Incentive Bonus will be paid unless Spartan achieves the threshold level of performance for at least one of the Performance Measurements. 
 Earnings Per Share 
  

									
	Performance	 	 	Payout	 
	 Level
	  	% of EPS Goal	 	 	% of Target	 
	 —  
	  	 	<80	% 	 	 	0.0	% 
	 Threshold
	  	 	80	% 	 	 	10.0	% 
	 —  
	  	 	85	% 	 	 	32.5	% 
	 —  
	  	 	90	% 	 	 	55.0	% 
	 —  
	  	 	95	% 	 	 	77.5	% 
	 Target
	  	 	100	% 	 	 	100.0	% 
	 —  
	  	 	104	% 	 	 	125.0	% 
	 —  
	  	 	108	% 	 	 	150.0	% 
	 —  
	  	 	112	% 	 	 	175.0	% 
	 Maximum
	  	 	3116.3	% 	 	 	200.0	% 

  
 2 

 ROIC 
  

									
	Performance	 	 	Payout	 
	 Level
	  	% of ROIC GOAL	 	 	% of Target	 
	 —  
	  	 	<97.3	% 	 	 	0.0	% 
	 Threshold
	  	 	97.3	% 	 	 	50.0	% 
	 —  
	  	 	98.0	% 	 	 	62.5	% 
	 —  
	  	 	98.7	% 	 	 	75.0	% 
	 —  
	  	 	99.3	% 	 	 	87.5	% 
	 Target
	  	 	100	% 	 	 	100.0	% 
	 —  
	  	 	100.9	% 	 	 	133.3	% 
	 —  
	  	 	101.9	% 	 	 	166.7	% 
	 Maximum
	  	 	3102.7	% 	 	 	200.0	% 

 If Spartan’s actual performance achieved for either EPS or ROIC exceeds the threshold level and
falls between specified levels, then the Compensation Committee may determine by interpolation the percentage of the Target Bonus that will be paid. The evaluation of EPS and ROIC performance will exclude the events or their effects set forth in
Section 5.3 (a) through (h) of the Cash Incentive Plan of 2010. 
 4. Vesting Period. Your Long-Term
Incentive Bonus covers a total period of three years. Each component of your Long-Term Incentive Bonus earned according to the matrix above, if any, will be subject to an additional vesting period during which you must remain employed by Spartan or
one of its subsidiaries (unless the vesting period is terminated earlier in accordance with this letter and the Plan). For the EPS component, the vesting period is two (2) years following completion of the Performance Period, and for the ROIC
component, the vesting period is one (1) year following completion of the Performance Period. Except as provided by the Plan and the terms of this letter, your Long-Term Incentive Bonus, even if earned, will be forfeited if your employment
terminates prior to the expiration of the vesting. 
 5. Effect of Termination of Employment. Except as provided in this
Section 5 and Section 6 below, if your employment with Spartan is terminated for any reason, you will forfeit any: (a) unearned Long-Term Incentive Bonus; (b) earned but unvested Long-Term Incentive Bonus; and (c) earned and
vested but unpaid Long-Term Incentive Bonus. If your employment with Spartan terminates for retirement, death or total disability your eligibility for a Long-Term Incentive Bonus will be determined in accordance with the following table: 

  
 3 

							
	 Reason for

Termination
	 	 Timing of Termination

	 	 	 More than 12 Months

Remaining in

Performance Period
	 	 12 Months or Less

Remaining in

Performance Period
	 	 After Performance

Period, during vesting
 period

	Death or Total Disability	 	Your Target Bonus 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 Incentive Bonus 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 your
death or total disability.	 	Any earned Long-Term Incentive Bonus 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 Incentive Bonus, if any, will be the amount you would have earned had you remained employed with Spartan for 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 Incentive Bonus, if any, will be the amount you would have earned had you remained employed with Spartan for 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 Incentive Bonus will be paid in full no later than the 15th day of the third month following the date of your retirement.

  
 4 

 6. Change in Control. 

(a) During Performance Period. Upon a Change in Control of Spartan Stores (as defined in the
Spartan Stores, Inc. Supplemental Executive Retirement Plan) during the Performance Period, you will earn an Incentive Award equal to the greater of the Target Bonus or the projected Incentive Award based on the Company’s performance as of the
date of the Change in Control, to be paid on a pro-rata basis for the number of full weeks completed of 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 but unvested Incentive Award will be payable in full upon the earliest to occur of the termination of your employment for any reason, the applicable vesting date, or the date that is the 15th day of the third month following the Change in Control. 

7. Executive Severance Agreement. The Long-Term Incentive Bonus 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 Incentive Bonus 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 Incentive Bonus under your Executive Severance Agreement. 
 8. Annual Incentive Award. You will be separately notified of your eligibility to earn an annual incentive award for Fiscal 2012. 

9. Compensation Committee Authority and Discretion. The Plan is administered and interpreted by the Compensation Committee of the
Board of Directors. The Committee may provide that any evaluation of performance may include or exclude special charges or extraordinary items. Although the Committee has authority to exercise reasonable discretion to interpret the Plan and the
performance goals, it may not amend or waive any performance goal after the 90th day of the Performance Period. The Committee has no authority or discretion to increase any Long-Term Incentive Bonus. 

10. Withholding. Spartan is entitled to 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 a
Long-Term Incentive Bonus. 

  
 5 

 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. 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) 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. 

(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

 5612316 

Accepted and Agreed to: 
  

 
  

 
 Date 

  
 6Form of amended and restated fiscal 2011 Incentive Award

 Exhibit 10.4 
 

 
  

							
	Award Recipient:	 	[Name]	 	 Original Grant Date:
	 	May 17, 2010
		 		 	 Date of Revision
	 	June 15, 2011

 Dear [Name]: 
  

	 	Re:	Amended and Restated Long-Term Executive Incentive Plan Award - Fiscal Year 2011 

This letter supersedes the prior letter furnished to you regarding the Fiscal Year 2011 Long-Term Incentive Bonus. This letter changes
the administration of payouts in the event retirement, death, disability, or change in control. 
 I am pleased to inform you
that Spartan Stores, Inc. (“Spartan”) has awarded to you the opportunity to earn cash incentive compensation under the Executive Cash Incentive Plan of 2010 (the “Plan”) for a multi-year Performance Period 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 Bonus Amount. Your threshold, target, and maximum Long-Term Incentive Bonus opportunity for the three-year period covering fiscal 2011, 2012 and 2013 were previously communicated to
you. As discussed in more detail below, your Long-Term Incentive Bonus, if any, will be paid if Spartan achieves at least the threshold levels of performance specified by the Compensation Committee for the applicable Performance Period and
you satisfy the vesting requirements discussed in this letter. 
 2. Performance Measurement and Performance Period. The
amount of the Long-Term Incentive Bonus paid to you will be determined by Spartan’s performance with respect to two Performance Measurements: Earnings Per Share (“EPS”) and Return on Invested Capital (“ROIC”). Sixty percent
(60%) of your Long-Term Incentive Bonus will be determined by Spartan’s EPS performance, and forty percent (40%) of your Long-Term Incentive Bonus will be determined by Spartan’s ROIC performance, in each case during the
Performance Period set forth on the following page: 
  

							
	 Performance
Measurement
	  	Percentage of Long-
Term Incentive
Bonus	 	 Performance Period
	  	 Vesting Period

	EPS*
	  	60%	 	1 year (fiscal 2011)	  	2 years after completion of the Performance Period (paid after FYE 2013)
				
	ROIC**	  	40%	 	2 years (fiscal 2011 and 2012)	  	1 year after completion of the Performance Period (paid after FYE 2013)

	*	For this measurement, EPS means Diluted Earnings per Share on a Consolidated Net Earnings basis measured at the end of FY2011. 

	**	For this measurement, ROIC means operating profit after tax, adjusted for asset impairment, exit costs and LIFO expense, divided by total invested capital (total assets
plus LIFO reserve less cash and non-interest bearing current liabilities) measured at the end of FY2012. 

 3.
Performance Goals and Payouts. Your Long-Term Incentive Bonus will be determined according to the matrix presented below. The levels of performance for EPS and ROIC have been established by the Compensation Committee and will be communicated
to you separately. No Long-Term Incentive Bonus will be paid unless Spartan achieves the threshold level of performance for at least one of the Performance Measurements. 
 Earnings Per Share 
  

									
	Performance	 	 	Payout	 
	 Level
	  	% of EPS Goal	 	 	% of Target	 
	 —  
	  	 	<80	% 	 	 	0.0	% 
	 Threshold
	  	 	80	% 	 	 	10.0	% 
	 —  
	  	 	85	% 	 	 	32.5	% 
	 —  
	  	 	90	% 	 	 	55.0	% 
	 —  
	  	 	95	% 	 	 	77.5	% 
	 Target
	  	 	100	% 	 	 	100.0	% 
	 —  
	  	 	104	% 	 	 	125.0	% 
	 —  
	  	 	108	% 	 	 	150.0	% 
	 —  
	  	 	112	% 	 	 	175.0	% 
	 Maximum
	  	 	3116.3	% 	 	 	200.0	% 

  
 2 

 ROIC 
  

									
	Performance	 	 	Payout	 
	 Level
	  	% of ROIC GOAL	 	 	% of Target	 
	 —  
	  	 	<97.3	% 	 	 	0.0	% 
	 Threshold
	  	 	97.3	% 	 	 	50.0	% 
	 —  
	  	 	98.0	% 	 	 	62.5	% 
	 —  
	  	 	98.7	% 	 	 	75.0	% 
	 —  
	  	 	99.3	% 	 	 	87.5	% 
	 Target
	  	 	100	% 	 	 	100.0	% 
	 —  
	  	 	100.9	% 	 	 	133.3	% 
	 —  
	  	 	101.9	% 	 	 	166.7	% 
	 Maximum
	  	 	3102.7	% 	 	 	200.0	% 

 If Spartan’s actual performance achieved for either EPS or ROIC exceeds the threshold level and
falls between specified levels, then the Compensation Committee may determine by interpolation the percentage of the Target Bonus that will be paid. The evaluation of EPS and ROIC performance will exclude the events or their effects set forth in
Section 5.3 (a) through (h) of the Executive Cash Incentive Plan of 2010. 
 4. Vesting Period. Your
Long-Term Incentive Bonus covers a total period of three years. Each component of your Long-Term Incentive Bonus earned according to the matrix above, if any, will be subject to an additional vesting period during which you must remain employed by
Spartan or one of its subsidiaries (unless the vesting period is terminated earlier in accordance with this letter and the Plan). For the EPS component, the vesting period is two (2) years following completion of the Performance Period, and for
the ROIC component, the vesting period is one (1) year following completion of the Performance Period. Except as provided by the Plan and the terms of this letter, your Long-Term Incentive Bonus, even if earned, will be forfeited if your
employment terminates prior to the expiration of the vesting. 
 5. Effect of Termination of Employment. Except as
provided in this Section 5 and Section 6 below, if your employment with Spartan is terminated for any reason, you will forfeit any: (a) unearned Long-Term Incentive Bonus; (b) earned but unvested Long-Term Incentive Bonus; and
(c) earned and vested but unpaid Long-Term Incentive Bonus. If your employment with Spartan terminates for retirement, death or total disability your eligibility for a Long-Term Incentive Bonus will be determined in accordance with the
following table: 

  
 3 

							
	 Reason for

Termination
	 	 Timing of Termination

	 	 	 More than 12 Months

Remaining in

Performance Period
	 	 12 Months or Less

Remaining in

Performance Period
	 	 After Performance

Period, during vesting
 period

	Death or Total Disability	 	Your Target Bonus 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 Incentive Bonus 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 your
death or total disability.	 	Any earned Long-Term Incentive Bonus 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 Incentive Bonus, if any, will be the amount you would have earned had you remained employed with Spartan for 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 Incentive Bonus, if any, will be the amount you would have earned had you remained employed with Spartan for 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 Incentive Bonus will be paid in full no later than the 15th day of the third month following the date of your retirement.

  
 4 

 6. Change in Control. 

(a) During Performance Period. Upon a Change in Control of Spartan Stores (as defined in the
Spartan Stores, Inc. Supplemental Executive Retirement Plan) during the Performance Period, you will earn an Incentive Award equal to the greater of the Target Bonus or the projected Incentive Award based on the Company’s performance as of the
date of the Change in Control, to be paid on a pro-rata basis for the number of full weeks completed of 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 but unvested Incentive Award will be payable in full upon the earliest to occur of the termination of your employment for any reason, the applicable vesting date, or the date that is the 15th day of the third month following the Change in Control. 

7. Executive Severance Agreement. The Long-Term Incentive Bonus 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 Incentive Bonus 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 Incentive Bonus under your Executive Severance Agreement. 
 8. Annual Incentive Award. You will be separately notified of your eligibility to earn an annual incentive award for Fiscal 2011. 

9. Compensation Committee Authority and Discretion. The Plan is administered and interpreted by the Compensation Committee of the
Board of Directors. The Committee may provide that any evaluation of performance may include or exclude special charges or extraordinary items. Although the Committee has authority to exercise reasonable discretion to interpret the Plan and the
performance goals, it may not amend or waive any performance goal after the 90th day of the Performance Period. The Committee has no authority or discretion to increase any Long-Term Incentive Bonus. 

10. Withholding. Spartan is entitled to 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 a
Long-Term Incentive Bonus. 

  
 5 

 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. 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) 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. 

(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

 This Amended and Restated Long-Term Executive Incentive Plan Award is Accepted and Agreed to by: 

 
  

 
  
 Date 
 5612314 

  
 6

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