Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) On September 28, 2020, Steven L. Spinner announced his intention to step
down from his position as Chief Executive Officer of United Natural Foods, Inc.
(the "Company") upon the appointment of his successor. After an extensive
search, on July 22, 2021, the Company's Board of Directors appointed a new CEO,
whose appointment to that role and to the Board will become effective on August
9, 2021. At that time, Mr. Spinner's resignation as CEO will be effective, and
he will resign as Chair and a member of the Board. Pursuant to the terms of Mr.
Spinner's Second Amendment to Employment Agreement, entered into on March 9,
2021, Mr. Spinner has agreed to provide Management and Board advisory services
to the Company as a consultant for the one-year period following the effective
date of his retirement as CEO (until August 8, 2022).
(c)(d) On July 22, 2021, the Board appointed J. Alexander Miller Douglas, 60, to
the role of Chief Executive Officer and a member of the Board, effective August
9, 2021.
Mr. Douglas most recently served as the Chief Executive Officer of Staples, Inc.
from April 2018 to June 2021, which included leading that company's
business-to-business distribution platform. Prior to Staples, Mr. Douglas served
as President of Coca-Cola North America until February 2018, where he led the
$10 billion revenue business, encompassing all aspects of its consumer and
business-to-business operations. During Mr. Douglas' 30-year tenure at
Coca-Cola, he also served as Global Chief Customer Officer, and held a variety
of positions across sales and marketing. Mr. Douglas began his career at The
Procter & Gamble Company in sales and sales management positions. Since May
2020, Mr. Douglas has served as a member of the Board of Directors of Wawa Inc.,
a leading convenience retailer in the eastern US.
In connection with Mr. Douglas' appointment as the Company's Chief Executive
Officer, the Company provided Mr. Douglas with an offer letter (the "Offer
Letter"), pursuant to which Mr. Douglas will receive an annual base salary of
$1,050,000 and an annual cash bonus with a value of 150% of his base salary
based on achievement of certain fiscal year goals and objectives beginning with
the 2022 fiscal year (commencing August 1, 2021). Mr. Douglas' annual equity
award will be targeted at $3,900,000 beginning with the fiscal 2022 award, which
award will be in the form of time-based restricted stock units ("RSUs") and
performance-based restricted stock units ("PSUs"), in the same proportion and on
the same or similar terms as the long-term incentive awards granted to similarly
situated executives of the Company and further subject to the terms and
conditions of the respective award agreements evidencing the grant. In addition,
Mr. Douglas will be awarded an inducement equity award with a grant date fair
value of $2,000,000, which award will be made in RSUs and PSUs, in the same
proportion, at the same time, and on the same or similar terms as the annual
award described above. Mr. Douglas may participate in the Company's health and
wellness and retirement benefit plans and programs in accordance with the terms
of such plans.
In addition, the Company entered into a Severance Agreement, Change in Control
Agreement, and Indemnification Agreement with Mr. Douglas in connection with his
appointment as CEO. Pursuant to the terms of the Severance Agreement, if Mr.
Douglas' employment is terminated by the Company without Cause or by Mr. Douglas
for Good Reason (each as defined in the Severance Agreement) and subject to an
effective release of claims, he will receive two (2) times his base salary and
annual bonus (at target) in effect as of the date of such termination of
employment, with the base salary amount to be paid over a two-year period and
the bonus amount to be paid in a lump sum payment. In addition, the Company
shall pay Mr. Douglas any earned incentive compensation, which includes a
pro-rated portion of any incentive compensation that he would otherwise receive,
if he were still employed by the Company, based on the Company's actual
performance for the fiscal year during which his employment is terminated,
payable when such earned incentive compensation would otherwise be payable had
his employment not terminated. The Company shall also pay him a lump sum of
$70,000 that he may use to procure group health plan coverage for himself and
his eligible dependents or otherwise. In addition, pursuant to the terms of the
Company's Amended and Restated 2020 Equity Incentive Plan (the "Plan"), upon a
qualifying termination without Cause as defined under the Plan, any RSUs
expected to vest within 365 days of the termination date would vest on an
accelerated basis. If the termination date occurs within 365 days after the
grant date of an RSU award, any outstanding RSUs scheduled to vest within 365
days of the termination date would be prorated for the time worked during the
grant year. For performance-based awards, a prorated portion of any outstanding
PSUs 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 terms of the Change in Control Agreement, upon Mr. Douglas'
termination of employment under certain circumstances in connection with a
Change in Control and subject to an effective release of claims, the Company
shall pay him, in a lump sum, an amount equal to two and a half (2.5) times the
sum of (a) his base salary in effect as of the date of such termination of
employment, plus (b) his annual incentive bonus payment at target levels of
performance, which total amount shall be paid within sixty (60) days of such
termination of employment. The Company shall also pay his annual incentive bonus
payment, prorated for his time of employment, based on actual performance and
payable at the time it would otherwise be paid had his employment not
terminated. Any equity or equity-based awards outstanding at the time of the
Change in Control will become fully vested upon such termination (with all
performance-based criteria deemed met at target levels of performance). The
Company shall also pay Mr.
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Douglas a lump sum of $87,500 that he may use to procure group health plan
coverage for himself and his eligible dependents or otherwise.
Both the Severance Agreement and the Change in Control Agreement contain certain
restrictive covenants applicable to Mr. Douglas both during employment and
thereafter.
The Indemnification Agreement is substantially consistent with the form of
Indemnification Agreement entered into with the Company's other similarly
situated executives.
The foregoing descriptions of the terms and conditions of the Offer Letter,
Severance Agreement, Change in Control Agreement, and Indemnification Agreement
are qualified in their entirety by reference to the agreements. The Offer Letter
is filed herewith as Exhibit 10.1, and the Severance Agreement, Change in
Control Agreement, and Indemnification Agreement will be filed with the
Company's Annual Report on Form 10-K for the fiscal period ending July 31, 2021.
There are no arrangements or understandings between Mr. Douglas and any other
person pursuant to which he was appointed as a director. There are no
transactions involving the Company and Mr. Douglas that the Company would be
required to report pursuant to Item 404(a) of Regulation S-K in connection with
his appointment as a director of CEO.
Item 7.01 Regulation FD Disclosure.
A copy of the press release announcing the leadership changes, including those
described above in Item 5.02, issued by the Company on July 28, 2021 is being
furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K. Exhibit
99.1 shall not be "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or otherwise subject to liabilities
under that Section and shall not be deemed to be incorporated by reference into
any filing of the Company under the Securities Act of 1933 or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Offer Letter, dated July 22, 2021, between the Company and J. Alexander
Miller Douglas
99.1 Press Release, dated July 28, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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