Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures .
We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.
Management’s Annual Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
•
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
•
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
•
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of August 1, 2020 . In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control-Integrated Framework (2013 framework). Based on its assessment, our management concluded that, as of August 1, 2020 , our internal control over financial reporting was effective based on those criteria at the reasonable assurance level.
Report of the Independent Registered Public Accounting Firm.
The effectiveness of our internal control over financial reporting as of August 1, 2020 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its attestation report which is included in Item 8. Financial Statements and Supplementary Data of this Annual Report.
Changes in Internal Controls Over Financial Reporting
No change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)or 15d-15(f)) occurred during the fiscal quarter ended August 1, 2020 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
127
Table of Contents
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item will be contained, in part, in our Definitive Proxy Statement on Schedule 14A for our Annual Meeting of Stockholders to be held on January 12, 2021 (the “ 2020 Proxy Statement”) under the captions “Directors and Nominees for Director,” “Executive Officers of the Company,” “Delinquent Section 16(a) Reports,” if applicable, “Committees of the Board of Directors”, “Nomination of Directors”, and “Stockholder Director Recommendations and Proxy Access” and is incorporated herein by this reference.
We have adopted a code of conduct and ethics that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and employees within our finance, operations, and sales departments. Our code of conduct and ethics is publicly available on our website at www.unfi.com and is available free of charge by writing to United Natural Foods, Inc., 11840 Valley View Road, Eden Prairie, MN 55344, Attn: Investor Relations. We intend to make any legally required disclosures regarding amendments to, or waivers of, the provisions of the code of conduct and ethics on our website at www.unfi.com. Please note that our website address is provided as an inactive textual reference only.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item will be contained in the 2020 Proxy Statement under the captions “Director Compensation,” “Executive Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation Tables,” “Potential Payments Upon Termination or Change-in-Control,” “CEO Pay Ratio,” “Compensation Risk,” “Compensation Committee Interlocks and Insider Participation” and “Report of the Compensation Committee” and is incorporated herein by this reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item will be contained in the 2020 Proxy Statement under the caption “Stock Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance Under Equity Compensation Plans” and is incorporated herein by this reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item will be contained in the 2020 Proxy Statement under the captions “Certain Relationships and Related Transactions” and “Director Independence” and is incorporated herein by this reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item will be contained in the 2020 Proxy Statement under the captions “Fees Paid to KPMG LLP” and “Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services,” and is incorporated herein by this reference.
128
Table of Contents
PART IV.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
Documents filed as a part of this Annual Report.
1.
Financial Statements . The Financial Statements listed in the Index to Financial Statements in Item 8 hereof are filed as part of this Annual Report.
2.
Financial Statement Schedules . All schedules have been omitted because they are either not required or the information required is included in our consolidated financial statements or the notes thereto included in Item 8 hereof.
3.
Exhibits . The Exhibits listed in the Exhibit Index are filed as part of this Annual Report.
ITEM 16. FORM 10-K SUMMARY
None.
129
Table of Contents
EXHIBIT INDEX
Exhibit No.
Description
2.1
Agreement and Plan of Merger, dated July 25, 2018, by and among SUPERVALU INC., SUPERVALU Enterprises, Inc., the Registrant and Jedi Merger Sub, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on July 26, 2018 (File No. 001-15723)).
2.2
First Amendment to Agreement and Plan of Merger, dated as of October 10, 2018, by and among United Natural Foods, Inc., Jedi Merger Sub, Inc., SUPERVALU INC. and SUPERVALU Enterprises, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on October 10, 2018 (File No. 001-15723)).
3.1
Certificate of Incorporation of the Registrant, as amended (restated for SEC filing purposes only) (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 1, 2015 (File No. 001-15723)).
3.2
Fourth Amended and Restated Bylaws of the Registrant (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on October 19, 2018 (File No. 001-15723)).
4.1
Specimen Certificate for shares of Common Stock, $0.01 par value, of the Registrant (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended August 1, 2009 (File No. 001-15723)).
4.2
Description of the Registrant’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934. (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended August 3, 2019 (File No. 001-15723)).
10.1**
2002 Stock Incentive Plan (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 31, 2003 (File No. 001-15723)).
10.2**
United Natural Foods, Inc. Amended and Restated 2004 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on December 21, 2010 (File No. 001-15723)).
10.3**
Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 31, 2010 (File No. 001-15723)).
10.4**
Form of Non-Statutory Stock Option Award Agreement, pursuant to the 2002 Stock Incentive Plan (Employee) (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 001-15723)).
10.5**
Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (Director) (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 001-15723)).
10.6**
Form of Non-Statutory Stock Option Award Agreement, pursuant to the Amended and Restated 2004 Equity Incentive Plan (Employee) (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2012 (File No. 001-15723)).
10.7**
United Natural Foods, Inc. 2012 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on December 18, 2012 (File No. 001-15723)) (the “2012 Equity Plan”).
10.8**
Form of Terms and Conditions of Grant of Non-Statutory Stock Options to Employee, pursuant to the 2012 Equity Plan (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 26, 2013 (File No. 001-15723)).
10.9**
Form of Terms and Conditions of Grant of Non-Statutory Stock Options to Director, pursuant to the 2012 Equity Plan (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 26, 2013 (File No. 001-15723)).
10.10**
United Natural Foods, Inc. Amended and Restated 2012 Equity Incentive Plan (incorporated by reference to the Registrant’s Definitive Proxy Statement on Schedule 14A for the Registrant’s Annual Meeting of Stockholders held on December 16, 2015 (File No. 001-15723)) (the “A&R 2012 Equity Plan”).
10.11**
Form of Terms and Conditions of Grant of (Pro-Rata Vesting) Restricted Share Units to Employee, pursuant to the A&R 2012 Equity Plan (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 30, 2016 (File No. 001-15723)).
10.12**
Form of Terms and Conditions of Grant of (Cliff Vesting) Restricted Share Units to Employee, pursuant to the A&R 2012 Equity Plan (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 30, 2016 (File No. 001-15723)).
10.13**
Revised Form Indemnification Agreement for Directors and Officers (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended August 3, 2013 (File No. 001-15723)).
10.14+
Agreement for the Distribution of Products between the Registrant and Whole Foods Market Distribution, Inc., effective September 28, 2015 (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2015 (File No. 001-15723)).
10.15**
Form of Restricted Share Unit Award Agreement pursuant to the A&R 2012 Equity Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on November 2, 2016 (File No. 001-15723)).
130
Table of Contents
Exhibit No.
Description
10.16**
Form of Restricted Share Unit Award Agreement pursuant to the A&R 2012 Equity Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on November 2, 2016 (File No. 001-15723)).
10.17**
Form of Terms and Conditions of Grant of Restricted Share Units to Employee pursuant to the A&R 2012 Equity Plan. (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 29, 2017 (File No. 001-15723)).
10.18 +
Loan Agreement dated August 30, 2018, by and among the Registrant, United Natural Foods West, Inc., UNFI Canada, Inc., the financial institutions that are parties thereto as lenders, Bank of America, N.A., Bank of America, N.A. (acting through its Canada branch) and the other parties thereto (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended July 28, 2018 (File No. 001-15723)).
10.19
First Amendment to Loan Agreement, dated October 19, 2018, by and among the Registrant and United Natural Foods West, Inc., UNFI Canada, Inc., the financial institutions that are parties thereto as lenders, Bank of America, N.A., Bank of America, N.A. (acting through its Canada branch), and the other parties thereto (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on October 25, 2018 (File No. 001-15723)).
10.20
Second Amendment to Loan Agreement, dated January 24, 2019, by and among the Registrant and United Natural Foods West, Inc., UNFI Canada, Inc., the financial institutions that are parties thereto as lenders, Bank of America, N.A., Bank of America, N.A. (acting through its Canada branch), and the other parties thereto (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q, filed on March 7, 2019 (File No. 001-15723)).
10.21*
Third Amendment to Loan Agreement, dated August 14, 2020, by and among the Registrant and United Natural Foods West, Inc., UNFI Canada, Inc., the financial institutions that are parties thereto as lenders, Bank of America, N.A., Bank of America, N.A. (acting through its Canada branch), and the other parties thereto.
10.22
Term Loan Agreement, dated October 22, 2018, by and among United Natural Foods, Inc., SUPERVALU INC., Goldman Sachs Bank USA and the lenders party thereto (incorporated by reference to Registrant’s Current Report on Form 8-K filed on October 25, 2018 (File No. 001-15723)).
10.23**
Amended and Restated Employment Agreement, dated as of November 5, 2018 and effective as of October 22, 2018, by and among United Natural Foods, Inc. and Steven L. Spinner (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).
10.24**
Amendment to Amended and Restated Employment Agreement, dated as of February 6, 2020, by and between the Registrant and Steven L. Spinner (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).
10.25**
Employment Agreement, dated as of November 5, 2018 and effective as of October 22, 2018, by and among United Natural Foods, Inc. and Sean F. Griffin (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).
10.26**
Amendment to Employment Agreement, dated as of February 6, 2020, by and between the Registrant and Sean F. Griffin (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).
10.27**
Form of Amended and Restated Severance Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on October 29, 2019 (File No. 001-15723)).
10.28**
Form of Second Amended and Restated Change in Control Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).
10.29**
Terms and Conditions of Grant of Restricted Share Units pursuant to the Second Amended and Restated 2012 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).
10.30**
Form of Performance-Based Vesting Restricted Share Unit Award Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).
10.31**
Amended and Restated Indemnification Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 8, 2018 (File No. 001-15723)).
10.32**
Offer Letter, effective February 9, 2020, between John W. Howard, Chief Financial Officer, and the Registrant (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).
10.33**
Senior Management Annual Cash Incentive Plan, as amended (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended November 1, 2019 (File No. 001-15723)).
10.34**
United Natural Foods, Inc. 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s Definitive Proxy Statement on Schedule 14A for the Registrant’s Annual Meeting of Stockholders held on December 18, 2019 (File No. 001-15723)) (the “2020 Equity Incentive Plan”).
10.35**
Form of RSU Award Agreement (Director) pursuant to the Registrant’s 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on December 19, 2019 (File No. 001-15723)).
10.36**
Form of RSU Award Agreement (Employee I) pursuant to the Registrant’s 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on December 19, 2019 (File No. 001-15723)).
131
Table of Contents
Exhibit No.
Description
10.37**
Form of RSU Award Agreement (Employee II) pursuant to the Registrant’s 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on December 19, 2019 (File No. 001-15723)).
10.38**
Form of PSU Award Agreement pursuant to the Registrant’s 2020 Equity Incentive Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on December 19, 2019 (File No. 001-15723)).
10.39**
Form of RSU Award Agreement (Director) pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants made beginning March 2020) (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).
10.40**
Form of RSU Award Agreement (Employee I) pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants made beginning March 2020) (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 1, 2020 (File No. 001-15723)).
10.41* **
Form of RSU Award Agreement (Employee) pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants made beginning September 2020).
10.42* **
Form of PSU Award Agreement pursuant to the Registrant’s 2020 Equity Incentive Plan (for grants made beginning September 2020).
21*
Subsidiaries of the Registrant.
23.1*
Consent of Independent Registered Public Accounting Firm.
31.1*
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*
The following materials from the United Natural Foods, Inc.’s Annual Report on Form 10-K for the fiscal year ended August 1, 2020, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statement of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
104
The cover page from the Registrant’s Annual Report on Form 10-K for the year ended August 1, 2020, filed with the SEC on September 29, 2020, formatted in Inline XBRL (included in Exhibit 101).
* Filed herewith.
** Denotes a management contract or compensatory plan or arrangement.
+ Confidential treatment has been requested and granted with respect to certain portions of this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Omitted portions have been filed separately with the United States Securities and Exchange Commission.
132
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UNITED NATURAL FOODS, INC.
/s/ JOHN W. HOWARD
John W. Howard
Chief Financial Officer (Principal Financial Officer)
Dated: September 29, 2020
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Title
Date
/s/ STEVEN L. SPINNER
Chief Executive Officer and Chairman (Principal Executive Officer)
September 29, 2020
Steven L. Spinner
/s/ JOHN W. HOWARD
Chief Financial Officer (Principal Financial Officer)
September 29, 2020
John W. Howard
/s/ DAVID W. JOHNSON
Chief Accounting Officer (Principal Accounting Officer)
September 29, 2020
David W. Johnson
/s/ ERIC F. ARTZ
Director
September 29, 2020
Eric F. Artz
/s/ ANN TORRE BATES
Director
September 29, 2020
Ann Torre Bates
/s/ DENISE M. CLARK
Director
September 29, 2020
Denise M. Clark
/s/ DAPHNE J. DUFRESNE
Director
September 29, 2020
Daphne J. Dufresne
/s/ MICHAEL S. FUNK
Director
September 29, 2020
Michael S. Funk
/s/ JAMES P. HEFFERNAN
Director
September 29, 2020
James P. Heffernan
/s/ JAMES L. MUEHLBAUER
Director
September 29, 2020
James L. Muehlbauer
/s/ PETER A. ROY
Director
September 29, 2020
Peter A. Roy
/s/ JACK L. STAHL
Director
September 29, 2020
Jack L. Stahl
133