EX-10.4 5 sptn-ex104_57.htm EX-10.4 sptn-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.