Document:

sptn-ex103_56.htm

Exhibit 10.3

 

 

 

 

2017 Long-Term Incentive Plan

 

This document sets forth the SpartanNash Company Long-Term Incentive Plan for awards made during the fiscal year ending December 30, 2017 and covering the three-year period December 28, 2019 (“2017 LTIP”). 

 

1.Authority and Administration. This 2017 LTIP is authorized and administered by the Compensation Committee of the Board of Directors of SpartanNash Company. For Participants in positions at the Vice President level and above, the 2017 LTIP will have two equal award components: equity, in the form of SpartanNash common stock, and cash Compensation Committee. For Participants at the director level, the 2017 LTIP will have only a stock component.  The Compensation Committee retains the discretion to deliver a 2017 LTIP award comprised of all stock in lieu of an award comprised of stock and cash.  Awards will be subject to plan documents as follows: 

 

	
 
	
a)
	
Equity component. The equity component of the 2017 LTIP will be granted under and subject to the Company’s Stock Incentive Plan of 2015. The terms and conditions of vesting of all equity awards, including upon termination in the event of death, retirement, disability, or change in control, are set forth in the Stock Incentive Plan and the individual award letters. 

 

	
 
	
b)
	
Cash Component. The cash component of the 2017 LTIP will be administered under the Executive Cash Incentive Plan of 2015 for Participants who were “named executive officers” in the Company’s proxy statement or Annual Report on Form 10-K for fiscal 2016 or who serve as Executive Vice President or any more senior position. For all other Participants, this 2017 LTIP will be administered under the Cash Incentive Plan of 2010. This 2017 LTIP will be subject to the terms and conditions of the applicable Plan (which are incorporated into this document by reference). If there is any conflict between the terms of the applicable Plan and this 2017 LTIP, the terms of the applicable Plan will control. Capitalized terms not defined in this Plan have the meanings given to them in the applicable Plan. 

 

2.Target Award Amount. Each Participant’s threshold, target and maximum 2017 LTIP award opportunity will be communicated to him or her separately in writing. Each 2017 LTIP award will be paid to the extent SpartanNash achieves at least the threshold level of performance for the applicable performance measurement, and the Participant otherwise satisfies the requirements of the LTIP and the applicable Plan. 

 

 

 

3.Performance Period and Measurements. 

 

	
 
	
a)
	
Performance Measurement. The “Performance Period” for the 2017 LTIP will begin on January 1, 2017 and end on December 28, 2019.  

 

	
 
	
b)
	
Metrics. Payouts under the 2017 LTIP will be determined by SpartanNash’s performance with respect to the metrics below, each of which will be weighted by the corresponding percentage: 

 

	
 
	
 
	
 
	
 
	
 

	
Performance

Measurement
	
  
	
Percentage of Long-Term Cash
Incentive Award
	
 

	
EPS1
	
  
	
 
	
40
	
% 

	
Consolidated Adjusted EBITDA 2
	
  
	
 
	
40
	
% 

	
Plan-based ROIC3
	
  
	
 
	
20
	
% 

 

 

	
1 
	
EPS means Diluted Earnings per Share on a Consolidated Net Earnings (adjusted for items not representative of ongoing operations) basis. 

 

	
2 
	
Consolidated Adjusted EBITDA is a non-GAAP operating financial measure that is defined as net earnings from continuing operations plus depreciation and amortization, and other non-cash items including imputed interest, deferred (stock) compensation, the LIFO provision, as well as adjustments for unusual items that do not reflect the ongoing operating activities of SpartanNash and costs associated with the closing of operational locations, interest expense and the provision for income taxes to the extent deducted in the computation of net earnings.  

 

	
3
	
Plan-based ROIC is calculated by dividing the tax affected operating profit adjusted for income and expenses consistently with the annual incentive plan for the last year of the measurement period and LIFO expense by a 5 quarter average of total invested capital (total assets plus LIFO reserve less cash and non-interest bearing current liabilities), calculated using the last 5 quarters of the measurement period.

 

4.Performance Goals and Payouts. 2017 LTIP award payouts will be determined according to the matrices presented below. The levels of performance for EPS, Consolidated Adjusted EBITDA, and Plan-based ROIC will be communicated to Participants separately. No 2017 LTIP award will be paid with respect to a performance measurement unless SpartanNash achieves the threshold level of performance for that performance measurement. If SpartanNash’s actual performance achieved for EPS, Consolidated Adjusted EBITDA, or Plan-based ROIC 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.

2

 

 

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
	
  
	
 
	
≥116.3
	
% 
	
 
	
 
	
200.0
	
% 

 

 

Consolidated Adjusted EBITDA

 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
  
	
Performance
	
 
	
 
	
Payout
	
 

	
Level
	
  
	
% of Consolidated Adjusted EBITDA

 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
	
  
	
 
	
100.0
	
% 
	
 
	
 
	
100.0
	
% 

	
—  
	
  
	
 
	
101.3
	
% 
	
 
	
 
	
125.0
	
% 

	
—  
	
  
	
 
	
102.5
	
% 
	
 
	
 
	
150.0
	
% 

	
—  
	
  
	
 
	
103.8
	
% 
	
 
	
 
	
175.0
	
% 

	
Maximum
	
  
	
 
	
≥105.0
	
% 
	
 
	
 
	
200.0
	
% 

 

3

 

 

 

Plan-based ROIC 

 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
  
	
Performance
	
 
	
 
	
Payout
	
 

	
Level
	
  
	
% of ROIC Goal
	
 
	
 
	
% of Target
	
 

	
—  
	
  
	
 
	
<92.0
	
% 
	
 
	
 
	
0.0
	
% 

	
Threshold
	
  
	
 
	
92.0
	
% 
	
 
	
 
	
10.0
	
% 

	
—  
	
  
	
 
	
94.0
	
% 
	
 
	
 
	
32.5
	
% 

	
—  
	
  
	
 
	
96.0
	
% 
	
 
	
 
	
55.0
	
% 

	
—  
	
  
	
 
	
98.0
	
% 
	
 
	
 
	
77.5
	
% 

	
Target
	
  
	
 
	
100.0
	
% 
	
 
	
 
	
100.0
	
% 

	
—  
	
  
	
 
	
103.8
	
% 
	
 
	
 
	
125.0
	
% 

	
—  
	
  
	
 
	
107.5
	
% 
	
 
	
 
	
150.0
	
% 

	
 
	
  
	
 
	
111.3
	
% 
	
 
	
 
	
175.0
	
% 

	
Maximum
	
  
	
 
	
≥115.0
	
% 
	
 
	
 
	
200.0
	
% 

 

 

5.Exclusions. The evaluation of these metrics will exclude the events or their effects set forth in Section 5.3 of the Executive Cash Incentive Plan.

 

6.No Additional Vesting Period. Each 2017 LTIP component earned according to the matrices above, if any, will not be subject to any additional vesting period following the Performance Period. 

 

7.Effect of Termination of Employment without a Change in Control. Except as set forth in Section 8 below: (a) if a Participant’s employment with SpartanNash terminates for any reason other than Retirement, Death, or Total Disability before the end of a Performance Period, any unearned portion of the 2017 LTIP award will be forfeited; and (b) if a Participant’s employment terminates for Retirement, Death or Total Disability, eligibility for payout of an 2017 LTIP award will be determined as follows:

 

	
 
	
a)
	
Death or Total Disability. If more than 12 months remain in the Performance Period, the Participant’s Target Award will be paid on a pro-rata basis based on the number of full weeks of employment during the Performance Period. The Incentive Award will be paid no later than the 15th day of the third month following the date of death or total disability. If 12 months or less remain in the Performance Period, then following the completion of the Performance Period, any earned LTIP award will be paid based on actual performance results on a pro-rata basis based on the number of full weeks of employment 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.

 

	
 
	
b)
	
Retirement. In the event of termination due to Retirement, the  LTIP award, if any, will be the amount the Participant would have earned had 

4

 

 

	
 
		
he or she 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 of employment 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.

 

	
 
	
c)
	
After the Performance Period. For termination due to death, Total Disability, or Retirement occurring after the performance period but before the payout date, the earned LTIP award (if any) will be paid in full no later than the 15th day of the third month following the date of death or total disability. 

 

	
 
	
8.
	
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, a Participant that is employed by SpartanNash on the effective date of the Change in Control will earn a 2017 LTIP award equal to the greater of the Target Award or the projected 2017 LTIP award (with the projected 2017 LTIP award to be calculated by estimating the Company’s expected performance 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 but unpaid 2017 LTIP award will be payable in full upon the earliest to occur of the termination of employment for any reason, or the date that is the 15th day of the third month following the Change in Control. 

 

9.Executive Severance Agreement. The 2017 LTIP award opportunity described in this 2017 LTIP is not subject to the provisions of any Executive Severance Agreement with the Company. In the event of a Change in Control, a Participant’s right to receive any portion of the LTIP award described in this 2017 LTIP will be governed exclusively by the terms and conditions of the LTIP.

 

10.Clawback. All 2017 LTIP awards will be subject to the Company’s “clawback” policy providing for the recovery of incentive compensation.

 

11.Delegation of Authority. The Compensation Committee of the Board of Directors has delegated to the Chief Human Resources Officer and her designees the 

5

 

 

authority to administer and interpret the 2017 LTIP, provided that such administration and interpretation is not contrary to the Plan, this 2017 LTIP, or any determination of the Compensation Committee. 

 

 

 

 

12.Other Rules of Participation. 

 

	
 
	
a)
	
Associates in Director level roles or higher are eligible to be considered as a Participant in the 2017 LTIP. 

 

	
 
	
b)
	
Associates who are selected to receive a 2017 LTIP award under this plan will receive a notification of their designation as a 2017 LTIP Participant (“Participant”). Only associates who are in eligible roles on January 1, 2017, or who are hired or promoted into a full-time eligible role on or before July 1, 2017 may be considered for a 2017 LTIP award. No 2017 LTIP awards may be made under the Executive Cash Incentive Plan after March 31, 2017. 

 

	
 
	
c)
	
If a Participant is on a non-FMLA leave during the Performance Period, then the 2017 LTIP award payout, if any, will be prorated based on the number of weeks worked during the Performance Period.

 

	
 
	
d)
	
Associates who are on leave at the beginning of the Performance Period and terminate employment prior to returning to work are not eligible to receive an LTIP award. 

 

 

 

 

 

6sptn-ex104_57.htm

Exhibit 10.4

 

 

 

2017 Annual Incentive Plan

 

This document sets forth the SpartanNash Company Annual Incentive Plan “AIP” for the 2017 fiscal year ending December 30, 2017 (“2017 Plan Year”). 

 

1.Authority and Administration. This AIP is authorized and administered by the Compensation Committee of the Board of Directors of SpartanNash Company. This AIP will be administered under the Executive Cash Incentive Plan of 2015 for any Participant who was a “named executive officer” in the Company’s proxy statement or Annual Report on Form 10-K for fiscal 2016, or who was serving as Executive Vice President or any more senior position as of the end of the 90th day of fiscal 2017. For all other Participants, this AIP will be administered under the Cash Incentive Plan of 2010. This AIP will be subject to the terms and conditions of the applicable Plan (which are incorporated into this document by reference). If there is any conflict between the terms of the applicable Plan and this AIP, the terms of the applicable Plan will control. Capitalized terms not defined in this letter have the meanings given to them in the applicable Plan. 

 

2.Target Award Amount. Each Participant’s threshold, target and maximum AIP award opportunity will be communicated to him or her separately in writing. AIP award opportunities will be expressed as a percentage of base compensation. For the purposes of this AIP, “base compensation” means (a) an associate’s annual base salary (or hourly rate multiplied by 2,080 hours) as of the last day of  the 2017 Plan Year for salaried (exempt) associates,  and (b) all earnings (including regular time, overtime and vacation) for the 2017 Plan Year for hourly (non-exempt) associates.

 

3.Performance Metrics. No portion of an AIP award, including individual goal components, will be earned unless SpartanNash achieves the threshold level of performance of Adjusted Consolidated New Earnings (“CNE”)1.  If the threshold level of adjusted CNE is achieved, each AIP award will be paid to the extent SpartanNash achieves at least the threshold level of performance for the applicable performance measurement and the Participant achieves individual performance goals (if any). In addition, the Participant must otherwise satisfy the requirements of this AIP and the applicable Plan.  Each Participant will be notified in writing of the Performance Metrics s/he must achieve against.   

 

4. Payout Scale for Corporate Metrics. For corporate performance metrics, AIP awards payouts will be earned according to the payout scales below. SpartanNash must achieve the threshold level of performance for CNE for any payout of any portion of an AIP award.   

 

 

					
	
Performance level
	
 
	
Adj. Consolidated Net Earnings

% of Budget
	
 
	
Payout

% 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
	
 
	
>=116.3%
	
 
	
200.0%

 

 

 

					
	
Performance level
	
 
	
Net Sales

% of Budget
	
 
	
Payout

% of Target

	
-
	
 
	
<95.00%
	
 
	
0.0%

	
Threshold
	
 
	
95.000%
	
 
	
20.0%

	
-
	
 
	
96.3%
	
 
	
40.0%

	
-
	
 
	
97.50%
	
 
	
60.0%

	
-
	
 
	
98.8%
	
 
	
80.0%

	
Target
	
 
	
100.00%
	
 
	
100.0%

	
-
	
 
	
101.3%
	
 
	
125.0%

	
-
	
 
	
102.50%
	
 
	
150.0%

	
-
	
 
	
103.8%
	
 
	
175.0%

	
Maximum
	
 
	
>=105.00%
	
 
	
200.0%

 

5.Individual Goals. Each Participant may have a combination of Corporate Metrics and individual goals. Individual goals and payout scales must be approved by the appropriate Executive Vice President or Vice President. The target payout for individual goals will vary by Participant. 

 

 

6.Illustration. Each Participant will be provided with an illustration of his or her participation.

 

7. Clawback. All payouts under the AIP are subject to the Company’s “clawback” policy for the recovery of incentive compensation.

 

8.Termination. Except as provided in any Employment Agreement or Executive Severance Agreement: 

 

	
 
	
a)
	
If an associate terminates employment during the 2017 Plan Year due to Retirement, Total Disability or death, then any earned portion of an AIP award will be prorated based on the number of weeks the associate was employed during the 2017 Plan Year.

 

	
 
	
b)
	
Upon a change in control of the Company before the end of the 2017 Plan Year, associates will earn an incentive payout equal to the greater of the target award or the projected award, with the projected award to be determined by estimating the actual performance as of the end of the 2017 Plan Year year based on actual performance in the 2017 Plan Year as of the date of the change in control. The amount of incentive payout will be prorated based on the number of completed weeks in the 2017 Plan Year prior to the change in control. If a change in control occurs after the end of the 2017 Plan Year but prior to payout, any earned incentive award would be paid no later than the 15th day of the third month following the change in control.

 

	
 
	
9.
	
Plan Eligibility.

 

	
 
	
a)
	
Associates must be hired or promoted into a full-time eligible role on or before July 1 of the 2017 Plan Year to be eligible for an AIP award opportunity. 

 

	
 
	
b)
	
Associates must be employed in a full-time eligible role on the last day of the 2017 Plan Year to be eligible for an AIP award payout.

 

	
 
	
c)
	
AIP awards will be prorated for participants who are promoted into an AIP eligible position after the beginning of the 2017 Plan Year and have a minimum of six months of plan participation. Proration is based on the number of weeks in the 2017 Plan Year the associate worked in an AIP eligible position. Working any day in a week will count towards proration for AIP purposes. 

 

	
 
	
d)
	
Associates who move from one AIP eligible position to another with a greater AIP target opportunity (or vice versa) will receive a prorated payout (if one is earned) that multiplies the target(s) times the number of weeks the associate worked in position eligible for that target opportunity. 

 

 

	
 
	
e)
	
Associates on a non-FMLA leave will receive a prorated portion of any earned AIP award based on actual weeks worked during the 2017 Plan Year. Associates who are on any type of leave at the beginning of the 2017 Plan Year and who terminate employment prior to returning to work will not be eligible for an award. 

 

 

 

	
	 

	
1 
	
 Consolidated Net Earnings are adjusted for (a) asset write downs. (b) litigation or claim judgments or settlements, (c) changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary non recurring items as described in ASC 225-20 Presentation-Income Statement – Extraordinary and Unusual Items and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable fiscal year(s), (f) acquisitions, divestitures or accounting changes, (g) foreign exchange gains and losses, and (h) other special charges or extraordinary items, which for the 2017 Plan year shall include any net losses attributable to the DeCA Private Label Program.  In the event a profit is earned on the DeCA Private Label business, the profit will be allocated equally between the Food Distribution and MDV business units when determining the business unit earnings performance.

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