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EMPLOYEE STOCK OWNERSHIP PLAN

12 Months Ended

Jul. 30, 2011

(13) EMPLOYEE STOCK OWNERSHIP PLAN

The Company adopted the UNFI Employee Stock Ownership Plan (the "ESOP") for the purpose of acquiring outstanding shares of the Company for the benefit of eligible employees. The ESOP was effective as of November 1, 1988 and has received notice of qualification by the Internal Revenue Service.

In connection with the adoption of the ESOP, a Trust was established to hold the shares acquired. On November 1, 1988, the Trust purchased 40% of the then outstanding common stock of the Company at a price of $4.1 million. The trustees funded this purchase by issuing promissory notes to the initial stockholders, with the Trust shares pledged as collateral. These notes bear interest at 1.33% as of July 30, 2011 and July 31, 2010, and are payable through May 2015. As the debt is repaid, shares are released from collateral and allocated to active employees, based on the proportion of principal and interest paid in the year.

All shares held by the ESOP were purchased prior to December 31, 1992. As a result, the Company considers unreleased shares of the ESOP to be outstanding for purposes of calculating both basic and diluted earnings per share, whether or not the shares have been committed to be released. The debt of the ESOP is recorded as debt and the shares pledged as collateral are reported as unearned ESOP shares in the consolidated balance sheets. During the fiscal years ended July 30, 2011, July 31, 2010, and August 1, 2009, contributions totaling approximately $0.2 million, $0.2 million, and $0.3 million, respectively, were made to the Trust. Of these contributions, less than $0.1 million in fiscal 2011 and fiscal 2010 and approximately $0.1 million in fiscal 2009 represented interest.

The ESOP shares were classified as follows:

		July 30, 2011

		(In thousands)
Total ESOP shares—beginning of year			2,419		2,552
	Shares distributed to employees		(220	)	(133	)

	Total ESOP shares—end of year		2,199		2,419

Allocated shares			1,657		1,711
Unreleased shares			542		708

	Total ESOP shares		2,199		2,419

During the fiscal years ended July 30, 2011 and July 31, 2010, 165,436 shares and 197,085 shares were released for allocation, respectively. The fair value of unreleased shares was approximately $22.6 million and $20.9 million at July 30, 2011 and July 31, 2010, respectively.

- Definition

Entire disclosure of the description of the plan, the basis for determining contributions, including the employee groups covered, and the nature and effect of significant matters affecting comparability of information for all periods presented. For leveraged ESOPs and pension reversion ESOPs, the disclosure may include the basis for releasing shares and how dividends on allocated and unallocated shares are used. Disclosure may also include a description of the accounting policies followed for ESOP transactions, including the method of measuring compensation, the classification of dividends on ESOP shares, and the treatment of ESOP shares for EPS computations. If the employer has both old ESOP shares for which it does not adopt the latest guidance and new ESOP shares for which the new guidance is required, the accounting policies for both blocks of shares may be described. Disclosure may also include the amount of compensation cost recognized during the period, the number of allocated shares, committed-to-be-released shares, and suspense shares held by the ESOP at the balance-sheet date, the fair value of unearned ESOP shares at the balance-sheet date for shares accounted for under the latest guidance, the existence and nature of any repurchase obligation, including disclosure of the fair value of the shares allocated as of the balance sheet date, which are subject to a repurchase obligation.

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