Item 5. Other Information
Item 5. Other Information
Following a review of our severance program, the Compensation Committee of our Board determined that it was in the best interest of the Company to provide for prorated vesting upon certain specified severance events, excluding terminations for “Cause” or other exclusions set forth in the Amended and Restated 2020 Equity Incentive Plan (the “Plan”). After consultation with the Compensation Committee’s independent compensation consultant, the Committee determined that such modifications were consistent with market practice for equity plan participants. The Committee believed that the complete forfeiture of equity upon severance was overly punitive in light of the long-term performance required prior to termination, and for performance awards, continued performance, for vesting and settlement of such awards. Rather, the Committee believed that the recognition of continued employment during the respective multiyear vesting of such awards prior to termination was a more appropriate approach. Under the Committee’s disciplined approach, no more than one tranche scheduled to vest post termination would vest for time-based awards; and for performance-based awards, only pre-termination days of service would count toward prorated vesting.
The allowance for partial equity vesting upon termination also incentivizes equity participants to remain focused on driving the long-term performance of the Company, even when certain significant severance events may be occurring at the Company, such as structural reorganizations, leadership transitions, major transactions, or other events that may result in associate terminations. Given that the number of restricted stock units vesting upon separation is limited, with forfeiture of remaining equity awards linked to service period, and in each instance the Company, and not the associate, determines eligibility, the Committee believes that such modifications were in the best interest of the Company and do not incentivize unnecessary or undue risk in the Company’s executive compensation programs.
At the Committee’s recommendation, on June 3, 2021, our Board of Directors approved an amendment to the Plan. The amendment provides for the prorated vesting of existing and future awards of time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) for all Plan participants, which includes the Company’s Section 16 officers and Named Executive Officers, upon a qualifying “Separation From Service Without Cause,” as defined in the Plan.
Upon a Separation from Service without Cause, any RSUs expected to vest within 365 days of the separation date would vest on an accelerated basis. If the separation date occurs within 365 days after the grant date of an RSU award, any outstanding RSUs scheduled to vest within 365 days of the separation date would be prorated for the time worked during the grant year. For performance-based awards, a prorated portion of any outstanding PSUs, determined by the number of days worked in the performance period for such awards to the date of termination, will remain outstanding (will not be forfeited) and would vest on the scheduled vesting date, subject to actual performance. The remainder of RSUs and PSUs not vesting in accordance with the Plan terms would be forfeited. Pursuant to the Plan, the Compensation Committee has authority to make determinations as to the timing, conditions, and acceleration of vesting of equity awards granted under the Plan, including in regard to any separation of service. As a result, the amendment to the Plan does not require stockholder approval under applicable law or rules of the New York Stock Exchange.
The foregoing is a summary of, and is subject to, the actual terms and conditions regarding the vesting of equity upon certain terminations, as set forth in the Plan, and is qualified in its entirety by reference to the Plan and award agreements. A copy of the Amended and Restated 2020 Equity Incentive Plan, as further amended, is filed herewith as Exhibit 10.1. Copies of the Form of RSU Award Agreement and Form of PSU Award Agreement for equity awards granted under the Plan, as amended, are filed herewith as Exhibits 10.2 and 10.3, respectively.
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Item 6. Exhibits
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 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 31, 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)).
10.1* ** Amended and Restated 2020 Equity Incentive Plan, as amended on June 3, 2021.
10.2* ** Form of RSU Award Agreement pursuant to the Registrant’s Amended and Restated 2020 Equity Incentive Plan
10.3* ** Form of PSU Award Agreement pursuant to the Registrant’s Amended and Restated 2020 Equity Incentive Plan
10.4 Amendment No. 1 to Term Loan Agreement, dated as of February 11, 2021, by and among the Registrant and SUPERVALU INC., Credit Suisse AG, Cayman Islands Branch , Goldman Sachs Bank USA and the other lender parties thereto (incorporated by reference to the Registrant ’ s Quarterly Report on Form 10-Q for the quarter ended January 30, 2021, filed on March 10, 2021 (File No. 001-15723).
10.5 First Amendment to Agreement for Distribution of Products, dated as of March 3, 2021, by and among the Registrant and Whole Foods Market Distribution, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed on March 4, 2021 (File No. 001-15723)).
10.6** Third Amendment to Transition Agreement, dated as of March 9, 2021, by and among the Registrant, SUPERVALU INC. and Michael Stigers (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 30, 2021, filed on March 10, 2021 (File No. 001-15723)).
10.7** Retention Agreement, dated as March 8, 2021, by and between the Registrant and Christopher Testa (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended January 30, 2021, filed on March 10, 2021 (File No. 001-15723)).
10.8** Second Amendment to Amended and Restated Employment Agreement, dated as of March 9, 2021, 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 January 30, 2021, filed on March 10, 2021 (File No. 001-15723).
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 Quarterly Report on Form 10-Q for the quarterly period ended May 1, 2021, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.
104 The cover page from our Quarterly Report on Form 10-Q for the third quarter of fiscal 2021, filed with the SEC on June 9, 2021, formatted in Inline XBRL (included as Exhibit 101).
______________________________________________
* Filed herewith.
** Denotes a management contract or compensatory plan or arrangement.
* * *
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SIGNATURES
Pursuant to the requirements 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 and duly authorized officer)
Dated: June 9, 2021
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.