|
Delaware
|
|
05-0376157
|
(State or Other Jurisdiction of
|
|
(I.R.S. Employer Identification No.)
|
Incorporation or Organization)
|
|
|
313 Iron Horse Way, Providence, RI
|
|
02908
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
(Do not check if a smaller reporting company)
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31,
2015 |
|
August 1,
2015 |
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
12,293
|
|
|
$
|
17,380
|
|
Accounts receivable, net of allowance of
$10,181
and $7,489, respectively
|
|
491,221
|
|
|
474,494
|
|
||
Inventories
|
|
1,082,979
|
|
|
982,559
|
|
||
Prepaid expenses and other current assets
|
|
40,779
|
|
|
46,976
|
|
||
Deferred income taxes
|
|
32,333
|
|
|
32,333
|
|
||
Total current assets
|
|
1,659,605
|
|
|
1,553,742
|
|
||
Property & equipment, net
|
|
566,522
|
|
|
572,452
|
|
||
Goodwill
|
|
266,660
|
|
|
266,640
|
|
||
Intangible assets, net of accumulated amortization of
$27,578
and $25,717, respectively
|
|
123,990
|
|
|
125,830
|
|
||
Other assets
|
|
33,408
|
|
|
31,526
|
|
||
Total assets
|
|
$
|
2,650,185
|
|
|
$
|
2,550,190
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
495,648
|
|
|
$
|
390,134
|
|
Accrued expenses and other current liabilities
|
|
140,027
|
|
|
129,113
|
|
||
Current portion of long-term debt
|
|
11,632
|
|
|
11,613
|
|
||
Total current liabilities
|
|
647,307
|
|
|
530,860
|
|
||
Notes payable
|
|
316,060
|
|
|
362,993
|
|
||
Long-term debt, excluding current portion
|
|
171,871
|
|
|
174,780
|
|
||
Deferred income taxes
|
|
64,983
|
|
|
65,644
|
|
||
Other long-term liabilities
|
|
29,497
|
|
|
30,380
|
|
||
Total liabilities
|
|
1,229,718
|
|
|
1,164,657
|
|
||
Commitments and contingencies
|
|
—
|
|
|
—
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.01 par value, authorized 5,000 shares; none issued or outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, authorized 100,000 shares; 50,315 issued and outstanding shares at October 31, 2015; 50,096 issued and outstanding shares at August 1, 2015
|
|
503
|
|
|
501
|
|
||
Additional paid-in capital
|
|
426,314
|
|
|
420,584
|
|
||
Accumulated other comprehensive loss
|
|
(20,372
|
)
|
|
(19,443
|
)
|
||
Retained earnings
|
|
1,014,022
|
|
|
983,891
|
|
||
Total stockholders’ equity
|
|
1,420,467
|
|
|
1,385,533
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
2,650,185
|
|
|
$
|
2,550,190
|
|
|
|
|
Three months ended
|
||||||
|
|
|
October 31,
2015 |
|
November 1,
2014 |
||||
Net sales
|
|
|
$
|
2,076,649
|
|
|
$
|
1,992,476
|
|
Cost of sales
|
|
|
1,762,712
|
|
|
1,673,480
|
|
||
Gross profit
|
|
|
313,937
|
|
|
318,996
|
|
||
Operating expenses
|
|
|
257,224
|
|
|
260,048
|
|
||
Restructuring and asset impairment expenses
|
|
|
2,809
|
|
|
555
|
|
||
Total operating expenses
|
|
|
260,033
|
|
|
260,603
|
|
||
Operating income
|
|
|
53,904
|
|
|
58,393
|
|
||
Other expense (income):
|
|
|
|
|
|
||||
Interest expense
|
|
|
3,748
|
|
|
3,255
|
|
||
Interest income
|
|
|
(152
|
)
|
|
(93
|
)
|
||
Other, net
|
|
|
173
|
|
|
616
|
|
||
Total other expense, net
|
|
|
3,769
|
|
|
3,778
|
|
||
Income before income taxes
|
|
|
50,135
|
|
|
54,615
|
|
||
Provision for income taxes
|
|
|
20,004
|
|
|
21,573
|
|
||
Net income
|
|
|
$
|
30,131
|
|
|
$
|
33,042
|
|
Basic per share data:
|
|
|
|
|
|
||||
Net income
|
|
|
$
|
0.60
|
|
|
$
|
0.66
|
|
Weighted average basic shares of common stock outstanding
|
|
|
50,194
|
|
|
49,889
|
|
||
Diluted per share data:
|
|
|
|
|
|
||||
Net income
|
|
|
$
|
0.60
|
|
|
$
|
0.66
|
|
Weighted average diluted shares of common stock outstanding
|
|
|
50,313
|
|
|
50,113
|
|
|
|
|
Three months ended
|
||||||
|
|
|
October 31,
2015 |
|
November 1,
2014 |
||||
Net income
|
|
|
$
|
30,131
|
|
|
$
|
33,042
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|||
Change in fair value of swap agreements
|
|
|
(990
|
)
|
|
—
|
|
||
Foreign currency translation adjustments
|
|
|
61
|
|
|
(2,562
|
)
|
||
Total other comprehensive income (loss), net of tax
|
|
|
(929
|
)
|
|
(2,562
|
)
|
||
Total comprehensive income
|
|
|
$
|
29,202
|
|
|
$
|
30,480
|
|
|
|
Common Stock
|
|
Additional
Paid in Capital
|
|
Accumulated
Other
Comprehensive (Loss) Income
|
|
Retained Earnings
|
|
Total
Stockholders’ Equity
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balances at August 1, 2015
|
|
50,096
|
|
|
$
|
501
|
|
|
$
|
420,584
|
|
|
$
|
(19,443
|
)
|
|
$
|
983,891
|
|
|
$
|
1,385,533
|
|
Stock option exercises and restricted stock vestings, net of tax
|
|
219
|
|
|
2
|
|
|
(657
|
)
|
|
|
|
|
|
|
|
(655
|
)
|
|||||
Share-based compensation
|
|
|
|
|
|
|
|
5,973
|
|
|
|
|
|
|
|
|
5,973
|
|
|||||
Tax benefit associated with stock plans
|
|
|
|
|
|
|
|
414
|
|
|
|
|
|
|
|
|
414
|
|
|||||
Fair value of swap agreements, net of tax
|
|
|
|
|
|
|
|
(990
|
)
|
|
|
|
(990
|
)
|
|||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
61
|
|
|
|
|
|
61
|
|
|||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,131
|
|
|
30,131
|
|
|||||
Balances at October 31, 2015
|
|
50,315
|
|
|
$
|
503
|
|
|
$
|
426,314
|
|
|
$
|
(20,372
|
)
|
|
$
|
1,014,022
|
|
|
1,420,467
|
|
|
|
Three months ended
|
||||||
(In thousands)
|
|
October 31,
2015 |
|
November 1,
2014 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||
Net income
|
|
$
|
30,131
|
|
|
$
|
33,042
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
16,704
|
|
|
14,158
|
|
||
Share-based compensation
|
|
5,973
|
|
|
5,962
|
|
||
Loss on disposals of property and equipment
|
|
194
|
|
|
32
|
|
||
Excess tax benefits from share-based payment arrangements
|
|
(414
|
)
|
|
(1,659
|
)
|
||
Restructuring and asset impairment
|
|
—
|
|
|
555
|
|
||
Deferred income taxes
|
|
—
|
|
|
(6,052
|
)
|
||
Provision for doubtful accounts
|
|
3,207
|
|
|
1,196
|
|
||
Non-cash interest (income) expense
|
|
(102
|
)
|
|
134
|
|
||
Changes in assets and liabilities, net of acquired businesses:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
(19,866
|
)
|
|
(42,079
|
)
|
||
Inventories
|
|
(100,387
|
)
|
|
(150,761
|
)
|
||
Prepaid expenses and other assets
|
|
4,455
|
|
|
4,586
|
|
||
Accounts payable
|
|
58,395
|
|
|
50,878
|
|
||
Accrued expenses and other liabilities
|
|
7,202
|
|
|
(8,735
|
)
|
||
Net cash provided by (used in) operating activities
|
|
5,492
|
|
|
(98,743
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(7,588
|
)
|
|
(27,372
|
)
|
||
Purchases of acquired businesses, net of cash acquired
|
|
(17
|
)
|
|
(7,734
|
)
|
||
Long-term investment
|
|
—
|
|
|
(3,000
|
)
|
||
Net cash used in investing activities
|
|
(7,605
|
)
|
|
(38,106
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||
Proceeds from borrowings of long-term debt
|
|
—
|
|
|
150,000
|
|
||
Repayments of long-term debt
|
|
(2,890
|
)
|
|
(2,902
|
)
|
||
Proceeds from borrowings under revolving credit line
|
|
122,650
|
|
|
127,962
|
|
||
Repayments of borrowings under revolving credit line
|
|
(169,591
|
)
|
|
(176,614
|
)
|
||
Increase in bank overdraft
|
|
47,084
|
|
|
40,674
|
|
||
Proceeds from exercise of stock options
|
|
921
|
|
|
523
|
|
||
Payment of employee restricted stock tax withholdings
|
|
(1,576
|
)
|
|
(2,089
|
)
|
||
Excess tax benefits from share-based payment arrangements
|
|
414
|
|
|
1,659
|
|
||
Capitalized debt issuance costs
|
|
—
|
|
|
(954
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(2,988
|
)
|
|
138,259
|
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
|
14
|
|
|
38
|
|
||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
|
(5,087
|
)
|
|
1,448
|
|
||
Cash and cash equivalents at beginning of period
|
|
17,380
|
|
|
16,116
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
12,293
|
|
|
$
|
17,564
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
4,354
|
|
|
$
|
3,190
|
|
Cash paid for federal and state income taxes, net of refunds
|
|
$
|
1,768
|
|
|
$
|
11,032
|
|
|
Restructuring Costs
|
Cash Payments
|
Restructuring Cost Liability as of October 31, 2015
|
||||||
Severance
|
$
|
2,285
|
|
$
|
(732
|
)
|
$
|
1,553
|
|
Early lease termination
|
225
|
|
—
|
|
225
|
|
|||
Operational transfer costs
|
299
|
|
(299
|
)
|
—
|
|
|||
Total
|
$
|
2,809
|
|
$
|
(1,031
|
)
|
$
|
1,778
|
|
|
|
|
Three months ended
|
||||
|
|
|
October 31,
2015 |
|
November 1,
2014 |
||
Basic weighted average shares outstanding
|
|
|
50,194
|
|
|
49,889
|
|
Net effect of dilutive stock awards based upon the treasury stock method
|
|
|
119
|
|
|
224
|
|
Diluted weighted average shares outstanding
|
|
|
50,313
|
|
|
50,113
|
|
|
|
Fair Value at October 31, 2015
|
|
Fair Value at August 1, 2015
|
||||||||||||||||
(In thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swap
|
|
—
|
|
|
$
|
(2,378
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(726
|
)
|
|
—
|
|
|
|
October 31, 2015
|
|
August 1, 2015
|
||||||||||||
(In thousands)
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt, including current portion
|
|
$
|
183,503
|
|
|
$
|
189,057
|
|
|
$
|
186,393
|
|
|
$
|
192,679
|
|
|
|
Wholesale
|
|
Other
|
|
Eliminations
|
|
Unallocated
|
|
Consolidated
|
||||||||||
Three months ended October 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
|
$
|
2,059,622
|
|
|
$
|
57,807
|
|
|
$
|
(40,780
|
)
|
|
$
|
—
|
|
|
$
|
2,076,649
|
|
Restructuring and asset impairment expenses
|
|
2,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,809
|
|
|||||
Operating income (loss)
|
|
62,065
|
|
|
(6,672
|
)
|
|
(1,489
|
)
|
|
—
|
|
|
53,904
|
|
|||||
Interest expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,748
|
|
|
3,748
|
|
|||||
Interest income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(152
|
)
|
|
(152
|
)
|
|||||
Other, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
173
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,135
|
|
|||||
Depreciation and amortization
|
|
16,083
|
|
|
621
|
|
|
—
|
|
|
—
|
|
|
16,704
|
|
|||||
Capital expenditures
|
|
7,122
|
|
|
466
|
|
|
—
|
|
|
—
|
|
|
7,588
|
|
|||||
Goodwill
|
|
248,929
|
|
|
17,731
|
|
|
—
|
|
|
—
|
|
|
266,660
|
|
|||||
Total assets
|
|
2,485,086
|
|
|
189,442
|
|
|
(24,343
|
)
|
|
—
|
|
|
2,650,185
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended November 1, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
|
$
|
1,970,719
|
|
|
$
|
59,570
|
|
|
$
|
(37,813
|
)
|
|
$
|
—
|
|
|
$
|
1,992,476
|
|
Restructuring and asset impairment expenses
|
|
555
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
555
|
|
||||
Operating income (loss)
|
|
66,709
|
|
|
(7,599
|
)
|
|
(717
|
)
|
|
—
|
|
|
58,393
|
|
|||||
Interest expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,255
|
|
|
3,255
|
|
|||||
Interest income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
(93
|
)
|
|||||
Other, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
616
|
|
|
616
|
|
|||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,615
|
|
|||||
Depreciation and amortization
|
|
12,409
|
|
|
1,749
|
|
|
—
|
|
|
—
|
|
|
14,158
|
|
|||||
Capital expenditures
|
|
26,937
|
|
|
435
|
|
|
—
|
|
|
—
|
|
|
27,372
|
|
|||||
Goodwill
|
|
256,185
|
|
|
17,731
|
|
|
—
|
|
|
—
|
|
|
273,916
|
|
|||||
Total assets
|
|
2,351,321
|
|
|
176,624
|
|
|
(17,879
|
)
|
|
—
|
|
|
2,510,066
|
|
•
|
our ability to reduce our expenses in amounts sufficient to offset our increased focus on sales to conventional supermarkets and the shift in our product mix as a result of our acquisition of Tony's and the resulting lower gross margins on these sales;
|
•
|
our reliance on the continued growth in sales of natural and organic foods and non-food products in comparison to
|
•
|
our ability to timely and successfully deploy our warehouse management system throughout our distribution
|
•
|
our ability to successfully consummate our expense reduction efforts in connection with the previously announced termination of a contractual customer relationship within the expected timeframe and cost estimates currently contemplated;
|
•
|
the ability to identify and successfully complete acquisitions of other natural, organic and specialty food and non-food products distributors;
|
•
|
our ability to successfully deploy our operational initiatives to achieve synergies from the acquisition of Tony's.
|
•
|
our wholesale division, which includes our broadline natural, organic and specialty distribution business in the United States, UNFI Canada, Inc. ("UNFI Canada"), which is our natural, organic and specialty distribution business in Canada, Tony's, which is a leading distributor of a wide array of specialty protein, cheese, deli, food service and bakery goods, principally throughout the Western United States, Albert’s, which is a leading distributor of organically grown produce and non-produce perishable items within the United States, and Select Nutrition, which distributes vitamins, minerals and supplements;
|
•
|
our retail division, consisting of Earth Origins, which operates our
thirteen
natural products retail stores within the United States; and
|
•
|
our manufacturing division, consisting of Woodstock Farms Manufacturing, which specializes in the international importation, roasting, packaging and distribution of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items, and confections, and our Blue Marble Brands product lines.
|
•
|
expand our marketing and customer service programs across regions;
|
•
|
expand our national purchasing opportunities;
|
•
|
offer a broader product selection than our competitors;
|
•
|
offer operational excellence with high service levels and a higher percentage of on-time deliveries than our competitors;
|
•
|
centralize general and administrative functions to reduce expenses;
|
•
|
consolidate systems applications among physical locations and regions;
|
•
|
increase our investment in people, facilities, equipment and technology;
|
•
|
integrate administrative and accounting functions; and
|
•
|
reduce the geographic overlap between regions.
|
|
|
Three months ended
|
|
||||
|
|
October 31,
2015 |
|
November 1,
2014 |
|
||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Cost of sales
|
|
84.9
|
%
|
|
84.0
|
%
|
|
Gross profit
|
|
15.1
|
%
|
|
16.0
|
%
|
|
Operating expenses
|
|
12.4
|
%
|
|
13.1
|
%
|
|
Restructuring and asset impairment expenses
|
|
0.1
|
%
|
|
—
|
%
|
|
Total operating expenses
|
|
12.5
|
%
|
|
13.1
|
%
|
|
Operating income
|
|
2.6
|
%
|
|
2.9
|
%
|
|
Other expense (income):
|
|
|
|
|
|
||
Interest expense
|
|
0.2
|
%
|
|
0.2
|
%
|
|
Interest income
|
|
—
|
%
|
|
—
|
%
|
|
Other, net
|
|
—
|
%
|
|
—
|
%
|
|
Total other expense, net
|
|
0.2
|
%
|
|
0.2
|
%
|
|
Income before income taxes
|
|
2.4
|
%
|
|
2.7
|
%
|
|
Provision for income taxes
|
|
1.0
|
%
|
|
1.1
|
%
|
|
Net income
|
|
1.5
|
%
|
*
|
1.7
|
%
|
*
|
|
|
Net Sales for the Three Months Ended
|
||||||||||||
Customer Type
|
|
October 31,
2015 |
|
% of
Net Sales
|
|
November 1,
2014 |
|
% of
Net Sales
|
||||||
Independently owned natural products retailers
|
|
$
|
675
|
|
|
33
|
%
|
*
|
$
|
653
|
|
|
33
|
%
|
Supernatural chains
|
|
713
|
|
|
34
|
%
|
|
665
|
|
|
33
|
%
|
||
Conventional supermarkets
|
|
518
|
|
|
25
|
%
|
|
536
|
|
|
27
|
%
|
||
Other
|
|
171
|
|
|
8
|
%
|
|
138
|
|
|
7
|
%
|
||
Total
|
|
$
|
2,077
|
|
|
100
|
%
|
|
$
|
1,992
|
|
|
100
|
%
|
Exhibit No.
|
|
Description
|
3.1
|
|
Second Amended and Restated Bylaws of United Natural Foods, Inc., effective October 23, 2015 (incorporated by reference to the Company’s Current Report on Form 8-K, filed on October 29, 2015).
|
10.1* **
|
|
Offer Letter, dated August 7, 2015, between Michael P. Zechmeister, Senior Vice President and Chief Financial Officer, and the Company.
|
10.2* **
|
|
Terms and Conditions of Grant of Non-Statutory Stock Options to Employee, pursuant to the 2012 Equity Plan, effective September 17, 2015, between Michael P. Zechmeister, Senior Vice President and Chief Financial Officer, and the Company.
|
10.3* **
|
|
Terms and Conditions of Grant of Restricted Share Units to Employee, pursuant to the 2012 Equity Plan, effective September 17, 2015, between Michael P. Zechmeister, Senior Vice President and Chief Financial Officer, and the Company.
|
10.4*+
|
|
Agreement for Distribution of Products, effective September 28, 2015, between Whole Foods Market Distribution, Inc., and the Company.
|
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 October 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statement of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.
|
+
|
Confidential treatment has been requested 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.
|
United Natural Foods, Inc.
|
Investor Relations
|
313 Iron Horse Way
|
Providence, RI 02908
|
|
UNITED NATURAL FOODS, INC.
|
|
|
|
/s/ Michael P. Zechmeister
|
|
Michael P. Zechmeister
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
•
|
You will be paid an annual salary of $450,000.00 (USD) annually ($ 17307.69 bi-weekly). Your salary will be paid on a bi-weekly basis in accordance with the Company’s payroll practices. Pay dates occur every other Friday. In addition you will receive a one-time restricted stock grant equal to the value of your unvested equity at your current employer. A copy of this estimated award is attached for your review along with a term sheet outlining how the actual award will be calculated.
|
•
|
Our annual performance review cycle coincides with our fiscal year and is from August 1 to July 31. Your total compensation will be determined by the company’s board of directors compensation committee utilizing market data, performance and peer group studies reviewed by our CEO and independent compensation consultants.
|
•
|
Your effective date for insurance coverage (medical, dental, vision, life, accidental death/dismemberment, short term disability, and long term disability) will coincide with your date of hire. Most UNFI associates have a 30 day waiting period before being eligible for healthcare benefits. Since you are in a classification with no waiting period for medical and dental coverage, special tax rules apply. Upon enrolling in the medical and/or dental plan, an amount equal to the company contribution to these plans for the first 30 days of employment will be included in your taxable income. The amount of this imputed income will be reflected in the first paycheck following your benefit enrollment.
|
•
|
You will be eligible to participate in UNFI’s Annual Incentive Plan (AIP) targeted at 75% of your base salary based on achievement of certain fiscal year goals and objectives. Your participation in UNFI’s AIP will begin with the 2016 fiscal year beginning on August 1, 2015 and ending on July
|
•
|
You will be eligible to participate in the Company’s LTI equity awards program in FY17 for the year ending July 31, 2016.
|
•
|
You will be eligible to participate in the Company’s 401(k) as of your six month anniversary. The Company matches 50% of the first 8% of eligible compensation contributed to the Company’s 401(k) Plan per pay period. The plan has a four year graded vesting schedule which applies to company matching contributions and begins on your date of hire.
|
•
|
You will be eligible to participate in the Company’s non-qualified deferred compensation plan as of your date of hire. You will have 30 days from your date of hire to enroll in the plan for current plan year. Annual enrollment for each future plan year is held in December.
|
•
|
You will begin accruing Paid Time Off (PTO) after your first 90 days in role at a rate of 6.77 hours per pay period (biweekly); PTO accruals are available for scheduling in the pay period following the completion of 90 days of employment. PTO provides paid time away from work that can be used for vacation, personal time, holidays other than official Company holidays, sick time or personal/family illness, etc. UNFI also offers six (6) paid holidays pursuant to Company policy.
|
•
|
We are pleased to provide you with a relocation package up to a maximum of $100,000 for certain incurred moving expenses that will help with your move to the Providence, RI area. Moving expenses one year prior to the date of transfer (to be determined) are reimbursable provided that you follow the requirements of the program. As part of this offer, you will be required to sign the Relocation Payback Agreement if you decide to leave the employment of UNFI within twenty-four (24) months from the effective date your location transfer. Generally, this allowance is intended to cover home closing costs and expenses directly related to travel and moving.
|
•
|
As part of the relocation allowance, you will be provided reimbursement for temporary living reimbursement up to the maximum allowed under UNFI’s relocation policy which outlines that UNFI will reimburse reasonable lodging and meal expenses for you for a period of up to thirty (30) days for renters, and sixty (60) days for home owners. Receipts must be submitted and approved prior to reimbursement.
|
•
|
Attached is a term sheet summarizing our offer of compensation and benefits.
|
|
|
|
|
Steven L. Spinner
|
|
|
|
President & CEO
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Steven L. Spinner
|
|
|
8/5/15
|
Signature
|
|
|
Date
|
|
|
|
|
|
|
|
|
UNITED NATURAL FOODS, INC.
|
|
|
ASSOCIATE
|
|
|
|
|
|
|
<<unfi signature>>
|
|
|
|
Michael Zechmeister
|
Element
|
Description
|
||
Position
|
Senior Vice President and Chief Financial Officer
|
||
Start date
|
On or before October 5, 2015
|
||
Annual Salary
|
$450,000, paid consistent with the company’s regular payroll practices
|
||
Annual incentive
|
§
|
Target of 75% of salary, with range between 0% and 150% of salary based on performance
|
|
§
|
Performance determined based on metrics consistent with other similarly-situated executives at the company (combination of corporate financial results and individual performance metrics)
|
||
§
|
Amount pro-rated for time employed during FY16; first payment in September 2016
|
||
Long-term incentive
|
§
§
|
Target of 165% of salary (value of $742,500)
|
|
§
|
Grant made consistent with similarly-situated executives at the company
|
||
§
|
Eligible for annual grant in September 2016
|
||
§
|
Current program contemplated for FY16 is:
|
||
|
¡
|
50% time-based restricted stock units (RSUs), vesting 25% per year on anniversary of grant
|
|
|
¡
|
50% performance units, based on EBIT and ROIC (current design being developed)
|
|
Other benefits
|
Eligible for benefit programs consistent with similarly-situated executives and/or standard company programs; summary below:
|
||
|
¡
|
401(k): 50% match on first 8% of salary
|
|
|
¡
|
Deferred compensation plan
|
|
|
¡
|
Medical benefits, paid time off and related benefits consistent with standard company programs as described in UNFI associate guidebook
|
|
Termination Payments
|
Consistent with standard company program for similarly-situated executives
|
||
§
|
Change in control: 2.99x salary and 3-year average annual incentive
|
||
§
|
Severance for involuntary termination or voluntary termination with Good Reason: 1x annual base salary in effect at time of termination
|
||
Sign-on equity grant
|
§
|
Grant value of $2,020,000, split between 75% time-based RSUs and 25% stock options
|
|
|
¡
|
Time-based RSUs vest 25% per year on anniversary of grant
|
|
|
¡
|
Stock options vest 25% per year on anniversary of grant. Exercise price based on closing price on date of grant.
|
|
§
|
Number of RSUs and stock options determined at time of grant; options will be determined based on an approximate 3:1 ratio with RSUs
|
||
§
|
Unvested sign-on awards would vest in case of involuntary termination
|
||
Relocation
|
Up to $100,000 and reimbursement for temporary living expenses, per standard company policy
|
Whole Foods Market, Inc.
|
Exhibit A
|
|
Fiscal Period Calendar
|
|
|
Period
|
Week
|
Fiscal
2015
|
Fiscal
2016
|
Fiscal
2017
|
Fiscal
2018
|
Fiscal
2019
|
Fiscal
2020
|
Fiscal
2021
|
Fiscal
2022
|
Fiscal
2023
|
Fiscal
2024
|
Fiscal
2025
|
1
|
1
|
10/5/2014
|
10/02/16
|
10/01/17
|
10/07/18
|
10/06/19
|
10/04/20
|
10/03/21
|
10/02/22
|
10/01/23
|
10/06/24
|
10/02/16
|
|
2
|
10/12/2014
|
10/09/16
|
10/08/17
|
10/14/18
|
10/13/19
|
10/11/20
|
10/10/21
|
10/09/22
|
10/08/23
|
10/13/24
|
10/09/16
|
|
3
|
10/19/2014
|
10/16/16
|
10/15/17
|
10/21/18
|
10/20/19
|
10/18/20
|
10/17/21
|
10/16/22
|
10/15/23
|
10/20/24
|
10/16/16
|
|
4
|
10/26/2014
|
10/23/16
|
10/22/17
|
10/28/18
|
10/27/19
|
10/25/20
|
10/24/21
|
10/23/22
|
10/22/23
|
10/27/24
|
10/23/16
|
2
|
5
|
11/2/2014
|
11/01/15
|
10/30/16
|
10/29/17
|
11/04/18
|
11/03/19
|
11/01/20
|
10/31/21
|
10/30/22
|
10/29/23
|
11/03/24
|
|
6
|
11/9/2014
|
11/08/15
|
11/06/16
|
11/05/17
|
11/11/18
|
11/10/19
|
11/08/20
|
11/07/21
|
11/06/22
|
11/05/23
|
11/10/24
|
|
7
|
11/16/2014
|
11/15/15
|
11/13/16
|
11/12/17
|
11/18/18
|
11/17/19
|
11/15/20
|
11/14/21
|
11/13/22
|
11/12/23
|
11/17/24
|
|
8
|
11/23/2014
|
11/22/15
|
11/20/16
|
11/19/17
|
11/25/18
|
11/24/19
|
11/22/20
|
11/21/21
|
11/20/22
|
11/19/23
|
11/24/24
|
3
|
9
|
11/30/2014
|
11/29/15
|
11/27/16
|
11/26/17
|
12/02/18
|
12/01/19
|
11/29/20
|
11/28/21
|
11/27/22
|
11/26/23
|
12/01/24
|
|
10
|
12/7/2014
|
12/06/15
|
12/04/16
|
12/03/17
|
12/09/18
|
12/08/19
|
12/06/20
|
12/05/21
|
12/04/22
|
12/03/23
|
12/08/24
|
|
11
|
12/14/2014
|
12/13/15
|
12/11/16
|
12/10/17
|
12/16/18
|
12/15/19
|
12/13/20
|
12/12/21
|
12/11/22
|
12/10/23
|
12/15/24
|
|
12
|
12/21/2014
|
12/20/15
|
12/18/16
|
12/17/17
|
12/23/18
|
12/22/19
|
12/20/20
|
12/19/21
|
12/18/22
|
12/17/23
|
12/22/24
|
4
|
13
|
12/28/2014
|
12/27/15
|
12/25/16
|
12/24/17
|
12/30/18
|
12/29/19
|
12/27/20
|
12/26/21
|
12/25/22
|
12/24/23
|
12/29/24
|
|
14
|
1/4/2015
|
01/03/16
|
01/01/17
|
12/31/17
|
01/06/19
|
01/05/20
|
01/03/21
|
01/02/22
|
01/01/23
|
12/31/23
|
01/05/25
|
|
15
|
1/11/2015
|
01/10/16
|
01/08/17
|
01/07/18
|
01/13/19
|
01/12/20
|
01/10/21
|
01/09/22
|
01/08/23
|
01/07/24
|
01/12/25
|
1
st
Qtr
|
16
|
1/18/2015
|
01/17/16
|
01/15/17
|
01/14/18
|
01/20/19
|
01/19/20
|
01/17/21
|
01/16/22
|
01/15/23
|
01/14/24
|
01/19/25
|
5
|
17
|
1/25/2015
|
01/24/16
|
01/22/17
|
01/21/18
|
01/27/19
|
01/26/20
|
01/24/21
|
01/23/22
|
01/22/23
|
01/21/24
|
01/26/25
|
|
18
|
2/1/2015
|
01/31/16
|
01/29/17
|
01/28/18
|
02/03/19
|
02/02/20
|
01/31/21
|
01/30/22
|
01/29/23
|
01/28/24
|
02/02/25
|
|
19
|
2/8/2015
|
02/07/16
|
02/05/17
|
02/04/18
|
02/10/19
|
02/09/20
|
02/07/21
|
02/06/22
|
02/05/23
|
02/04/24
|
02/09/25
|
|
20
|
2/15/2015
|
02/14/16
|
02/12/17
|
02/11/18
|
02/17/19
|
02/16/20
|
02/14/21
|
02/13/22
|
02/12/23
|
02/11/24
|
02/16/25
|
6
|
21
|
2/22/2015
|
02/21/16
|
02/19/17
|
02/18/18
|
02/24/19
|
02/23/20
|
02/21/21
|
02/20/22
|
02/19/23
|
02/18/24
|
02/23/25
|
|
22
|
3/1/2015
|
02/28/16
|
02/26/17
|
02/25/18
|
03/03/19
|
03/01/20
|
02/28/21
|
02/27/22
|
02/26/23
|
02/25/24
|
03/02/25
|
|
23
|
3/8/2015
|
03/06/16
|
03/05/17
|
03/04/18
|
03/10/19
|
03/08/20
|
03/07/21
|
03/06/22
|
03/05/23
|
03/03/24
|
03/09/25
|
|
24
|
3/15/2015
|
03/13/16
|
03/12/17
|
03/11/18
|
03/17/19
|
03/15/20
|
03/14/21
|
03/13/22
|
03/12/23
|
03/10/24
|
03/16/25
|
7
|
25
|
3/22/2015
|
03/20/16
|
03/19/17
|
03/18/18
|
03/24/19
|
03/22/20
|
03/21/21
|
03/20/22
|
03/19/23
|
03/17/24
|
03/23/25
|
|
26
|
3/29/2015
|
03/27/16
|
03/26/17
|
03/25/18
|
03/31/19
|
03/29/20
|
03/28/21
|
03/27/22
|
03/26/23
|
03/24/24
|
03/30/25
|
|
27
|
4/5/2015
|
04/03/16
|
04/02/17
|
04/01/18
|
04/07/19
|
04/05/20
|
04/04/21
|
04/03/22
|
04/02/23
|
03/31/24
|
04/06/25
|
2
nd
Qtr
|
28
|
4/12/2015
|
04/10/16
|
04/09/17
|
04/08/18
|
04/14/19
|
04/12/20
|
04/11/21
|
04/10/22
|
04/09/23
|
04/07/24
|
04/13/25
|
8
|
29
|
4/19/2015
|
04/17/16
|
04/16/17
|
04/15/18
|
04/21/19
|
04/19/20
|
04/18/21
|
04/17/22
|
04/16/23
|
04/14/24
|
04/20/25
|
|
30
|
4/26/2015
|
04/24/16
|
04/23/17
|
04/22/18
|
04/28/19
|
04/26/20
|
04/25/21
|
04/24/22
|
04/23/23
|
04/21/24
|
04/27/25
|
|
31
|
5/3/2015
|
05/01/16
|
04/30/17
|
04/29/18
|
05/05/19
|
05/03/20
|
05/02/21
|
05/01/22
|
04/30/23
|
04/28/24
|
05/04/25
|
|
32
|
5/10/2015
|
05/08/16
|
05/07/17
|
05/06/18
|
05/12/19
|
05/10/20
|
05/09/21
|
05/08/22
|
05/07/23
|
05/05/24
|
05/11/25
|
9
|
33
|
5/17/2015
|
05/15/16
|
05/14/17
|
05/13/18
|
05/19/19
|
05/17/20
|
05/16/21
|
05/15/22
|
05/14/23
|
05/12/24
|
05/18/25
|
|
34
|
5/24/2015
|
05/22/16
|
05/21/17
|
05/20/18
|
05/26/19
|
05/24/20
|
05/23/21
|
05/22/22
|
05/21/23
|
05/19/24
|
05/25/25
|
|
35
|
5/31/2015
|
05/29/16
|
05/28/17
|
05/27/18
|
06/02/19
|
05/31/20
|
05/30/21
|
05/29/22
|
05/28/23
|
05/26/24
|
06/01/25
|
|
36
|
6/7/2015
|
06/05/16
|
06/04/17
|
06/03/18
|
06/09/19
|
06/07/20
|
06/06/21
|
06/05/22
|
06/04/23
|
06/02/24
|
06/08/25
|
10
|
37
|
6/14/2015
|
06/12/16
|
06/11/17
|
06/10/18
|
06/16/19
|
06/14/20
|
06/13/21
|
06/12/22
|
06/11/23
|
06/09/24
|
06/15/25
|
|
38
|
6/21/2015
|
06/19/16
|
06/18/17
|
06/17/18
|
06/23/19
|
06/21/20
|
06/20/21
|
06/19/22
|
06/18/23
|
06/16/24
|
06/22/25
|
|
39
|
6/28/2015
|
06/26/16
|
06/25/17
|
06/24/18
|
06/30/19
|
06/28/20
|
06/27/21
|
06/26/22
|
06/25/23
|
06/23/24
|
06/29/25
|
3
rd
Qtr
|
40
|
7/5/2015
|
07/03/16
|
07/02/17
|
07/01/18
|
07/07/19
|
07/05/20
|
07/04/21
|
07/03/22
|
07/02/23
|
06/30/24
|
07/06/25
|
11
|
41
|
7/12/2015
|
07/10/16
|
07/09/17
|
07/08/18
|
07/14/19
|
07/12/20
|
07/11/21
|
07/10/22
|
07/09/23
|
07/07/24
|
07/13/25
|
|
42
|
7/19/2015
|
07/17/16
|
07/16/17
|
07/15/18
|
07/21/19
|
07/19/20
|
07/18/21
|
07/17/22
|
07/16/23
|
07/14/24
|
07/20/25
|
|
43
|
7/26/2015
|
07/24/16
|
07/23/17
|
07/22/18
|
07/28/19
|
07/26/20
|
07/25/21
|
07/24/22
|
07/23/23
|
07/21/24
|
07/27/25
|
|
44
|
8/2/2015
|
07/31/16
|
07/30/17
|
07/29/18
|
08/04/19
|
08/02/20
|
08/01/21
|
07/31/22
|
07/30/23
|
07/28/24
|
08/03/25
|
12
|
45
|
8/9/2015
|
08/07/16
|
08/06/17
|
08/05/18
|
08/11/19
|
08/09/20
|
08/08/21
|
08/07/22
|
08/06/23
|
08/04/24
|
08/10/25
|
|
46
|
8/16/2015
|
08/14/16
|
08/13/17
|
08/12/18
|
08/18/19
|
08/16/20
|
08/15/21
|
08/14/22
|
08/13/23
|
08/11/24
|
08/17/25
|
|
47
|
8/23/2015
|
08/21/16
|
08/20/17
|
08/19/18
|
08/25/19
|
08/23/20
|
08/22/21
|
08/21/22
|
08/20/23
|
08/18/24
|
08/24/25
|
|
48
|
8/30/2015
|
08/28/16
|
08/27/17
|
08/26/18
|
09/01/19
|
08/30/20
|
08/29/21
|
08/28/22
|
08/27/23
|
08/25/24
|
08/31/25
|
13
|
49
|
9/6/2015
|
09/04/16
|
09/03/17
|
09/02/18
|
09/08/19
|
09/06/20
|
09/05/21
|
09/04/22
|
09/03/23
|
09/01/24
|
09/07/25
|
|
50
|
9/13/2015
|
09/11/16
|
09/10/17
|
09/09/18
|
09/15/19
|
09/13/20
|
09/12/21
|
09/11/22
|
09/10/23
|
09/08/24
|
09/14/25
|
|
51
|
9/20/2015
|
9/18/2016
|
9/17/2017
|
9/16/2018
|
9/22/2019
|
9/20/2020
|
9/19/2021
|
9/18/2022
|
9/17/2023
|
9/15/2024
|
9/21/2025
|
4
th
|
52
|
9/27/2015
|
9/25/2016
|
9/24/2017
|
9/23/2018
|
9/29/2019
|
9/27/2020
|
9/26/2021
|
9/25/2022
|
9/24/2023
|
9/22/2024
|
9/28/2025
|
Qtr
|
53
|
|
|
|
9/30/2018
|
|
|
|
|
|
9/29/2024
|
|
Price Per
Gallon
|
Surcharge Per Delivery
|
[*CONFIDENTIAL*]
|
|
|
|
•
|
Email (preferred)
|
•
|
UNFI
Website (preferred)
|
•
|
Fax
|
•
|
Billed Not Received- Product was billed on the invoice but missing from the delivery.
|
•
|
Mispick- Right pick label but wrong Product received.
|
•
|
Damage - Product was crushed or broken, damaged by leakage of another Product or otherwise damaged.
|
•
|
Short Code- The Product was received with to short of life given the code date (short code).
|
•
|
Mis-Order - Ordered wrong Product, ordered too many, or changed mind
,
including any returns on Promo Allocations or Turnover Orders. [*CONFIDENTIAL*].
|
•
|
Quality - Product is within code but is spoiled or infested, has defective packaging or otherwise is not up to reasonable quality standards.
|
•
|
Consumer Return - As honored by manufacturers.
|
•
|
Pricing Error
|
•
|
Recall or Withdrawal
|
•
|
Seasonal suncare overstocks (excluding one cycle return at end of 2006 season). The broker or manufacturer may be able to help swap-out inventory.
|
•
|
Demo, sample and tester Product will not be handled as a credit. Contact the broker to request either a Turnover order for free Product or samples from the manufacturer.
|
•
|
Sunday delivery = Credits due by Tuesday 4:30 PM
|
•
|
Monday delivery = Credits due by Wednesday 4:30 PM
|
•
|
Tuesday delivery = Credits due by Thursday 4:30 PM
|
•
|
Wednesday delivery = Credits due by Friday 4:30 PM
|
•
|
Thursday delivery = Credits due by Monday 4:30 PM
|
•
|
Friday delivery = Credits due by Tuesday 4:30 PM
|
•
|
Saturday delivery = Credits due by Tuesday 4:30 PM
|
•
|
Billed Not Received
– One or more entire pallets or totes billed on invoice but missing from shipment
|
•
|
Damage
– If all products on a pallet or in a tote are damaged.
|
•
|
Short Code
– Product received with too short of a code life. Minimum code varies; contact UNFI Claims department for details.
|
•
|
Mis-Order
– Ordered wrong product/too many, changed mind (including any returns on plus-outs, ad/promo allocations, and Turnover Orders). [*CONFIDENTIAL*]. Special order products are not returnable.
|
•
|
Pricing Error
– Wrong price was charged on invoice.
|
•
|
Quality
– Manufacturing problem has compromised product quality so that it does not meet reasonable quality or safety standards. Examples: product is within code but spoiled/infested; seal/packaging is defective.
|
•
|
Consumer Return
– Customer did not like. As honored by manufacturers.
|
•
|
Recall or Withdrawal
– Specific lot codes as listed on manufacturer’s recall/withdrawal notice.
|
•
|
Billed Not Received
– Anything less than an entire pallet/tote at one time (covered by credit allowance).
|
•
|
Damage
- Anything less than a full pallet/full tote at one time (covered by credit allowance).
|
•
|
Mispick
– Right pick label but wrong product received (covered by credit allowance).
|
•
|
Seasonal suncare overstocks
– The broker may be able to swap-out inventory.
|
•
|
Demo, sample or tester product
- The broker may provide samples or a Turnover Order for free product.
|
•
|
Billed Not Received
– One or more entire pallets or totes billed on invoice but missing from shipment
|
•
|
Damage
– If all products on a pallet or in a tote are damaged.
|
•
|
Short Code
– Product received with too short of a code life. Minimum code varies; contact UNFI Claims department for details.
|
•
|
Mis-Order
– Ordered wrong product/too many, changed mind (including any returns on plus-outs, ad/promo allocations, and Turnover Orders). [*CONFIDENTIAL*]. Special order products are not returnable.
|
•
|
Pricing Error
– Wrong price was charged on invoice.
|
•
|
Quality
– Manufacturing problem has compromised product quality so that it does not meet reasonable quality or safety standards. Examples: product is within code but spoiled/infested; seal/packaging is defective.
|
•
|
Consumer Return
– Customer did not like. As honored by manufacturers.
|
•
|
Recall or Withdrawal
– Specific lot codes as listed on manufacturer’s recall/withdrawal notice.
|
•
|
Billed Not Received
– Anything less than an entire pallet/tote at one time (covered by credit allowance).
|
•
|
Damage
- Anything less than a full pallet/full tote at one time (covered by credit allowance).
|
•
|
Mispick
– Right pick label but wrong product received (covered by credit allowance).
|
•
|
Seasonal suncare overstocks
– The broker may be able to swap-out inventory.
|
•
|
Demo, sample or tester product
- The broker may provide samples or a Turnover Order for free product.
|
•
|
.
|
•
|
Billed Not Received
|
•
|
Damage
|
•
|
Mispick
|
•
|
Short Code
|
•
|
Mis-Order
|
•
|
Pricing Error
|
•
|
Quality
|
•
|
Consumer Return
|
•
|
Recall or Withdrawal
|
•
|
Seasonal suncare overstocks
– The broker may be able to swap-out inventory.
|
•
|
Demo, sample or tester product
- The broker may provide samples or a Turnover Order for free product.
|
•
|
Sunday delivery = Credits due by Tuesday 4:30 PM
|
•
|
Monday delivery = Credits due by Wednesday 4:30 PM
|
•
|
Tuesday delivery = Credits due by Thursday 4:30 PM
|
•
|
Wednesday delivery = Credits due by Friday 4:30 PM
|
•
|
Thursday delivery = Credits due by Monday 4:30 PM
|
•
|
Friday delivery = Credits due by Tuesday 4:30 PM
|
•
|
Saturday delivery = Credits due by Tuesday 4:30 PM
|
1.
|
[*CONFIDENTIAL*] -[*CONFIDENTIAL*]
|
2.
|
[*CONFIDENTIAL*]-[*CONFIDENTIAL*]
|
3.
|
[*CONFIDENTIAL*]- [*CONFIDENTIAL*]
|
4.
|
[*CONFIDENTIAL*]- [*CONFIDENTIAL*]
|
5.
|
[*CONFIDENTIAL*]- [*CONFIDENTIAL*].
|
6.
|
[*CONFIDENTIAL*]-[*CONFIDENTIAL*]
|
7.
|
[*CONFIDENTIAL*]-[*CONFIDENTIAL*]
|
8.
|
[*CONFIDENTIAL*] -[*CONFIDENTIAL*]
|
9.
|
[*CONFIDENTIAL*]-[*CONFIDENTIAL*]
|
10.
|
[*CONFIDENTIAL*]-[*CONFIDENTIAL*]
|
11.
|
[*CONFIDENTIAL*]- [*CONFIDENTIAL*]
|
DRY/FROZEN
[*CONFIDENTIAL*]
|
UNFI
|
WFM
|
|
|
|
|
|
|
|
|
|
|
|
|
2)
|
WFM
authorizes in advance these autoships:
|
•
|
Does the cost change email include a monitored item? If yes, go to next step.
|
•
|
[*CONFIDENTIAL*].
|
•
|
[*CONFIDENTIAL*].
|
•
|
The earliest regional cost-plus price change effective date will be considered the national effective date.
|
•
|
[*CONFIDENTIAL*].
|
•
|
[*CONFIDENTIAL*].
|
•
|
If the item currently has an EDLC,
it
should be ended the day before the national effective date.
|
•
|
Email wfmedlc@wholfoods.com
with instructions to end any existing EDLC and/or enter the new EDLC. Ideally, EDLC updates should be data-entered before the 1
st
day of the pricing month prior to the earliest price change date (so they'll be picked up by the EDI price file for that month). Copy the appropriate WFM contact on this email for auditing purposes.
|
2.
|
Business Analysis. The appropriate UNFI party shall end and/or enter the EDLC's and
|
•
Integrity and respect in all of our actions
|
•
Trust and accountability in all relationships
|
•
Open and honest communication with our employees
|
•
Profitable growth of the organization
|
•
A safe and healthy work environment
|
•
Social and environmental responsibility for the health of the planet
|
1
Introduction
|
|
2
UNFI National Contact List
|
|
3
Definitions
|
|
4
General Policies and Guidelines
|
|
A.
TERMS OF PAYMENT
|
|
B.
INVOICES
|
|
C.
GENETICALLY MODIFIED ORGANISMS (GMOs)
|
|
D.
QUALITY ASSURANCE
|
|
E.
TEMPERATURE TESTING
|
|
F.
DISCLOSURE OF SUPPLY CHAIN INFORMATION
|
|
G.
CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT of 2010
|
|
H.
COMPLIANCE WITH FOOD SAFETY LAWS
|
|
I.
PESTICIDES AND PRODUCT REGISTRATION
|
|
J.
DANGEROUS GOODS
|
|
K.
PROPOSITION 65
|
|
L.
GIFT POLICY
|
|
M.
PRODUCT INFORMATION AND INTELLECTUAL PROPERTY
|
|
N.
PRESS RELEASE POLICY
|
|
O.
ORGANIC AND KOSHER CERTIFICATION
|
|
P.
PRODUCT LOSS CLAIMS AND UNSALABLE PRODUCTS
|
|
Q.
CREDITS, RECLAIM AND SPOILS
|
|
R.
W-9 TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION, OR W-8
|
|
S.
PRODUCT CORRESPONDENCE
|
|
T.
SUPPLIER CHANGES
|
|
U.
INVENTORY TRANSFERS AND BALANCING
|
|
V.
SUPPLIER FREIGHT / PICK-UP ALLOWANCE
|
|
W.
PRICE PROTECTION
|
|
X.
PRICING, PRICE CHANGE, BLACK OUT PERIOD, UPC, SIZE AND PACK CHANGES
|
Y.
BRIGHT LINE TESTS FOR THE HANDLING OF PRODUCTS THAT UNDERGO CHANGE IN ORGANIC STATUS
|
|
Z.
INSURANCE CERTIFICATES
|
|
AA.
AUDITS AND INVOICING
|
|
BB.
RECALLS AND PRODUCT WITHDRAWALS
|
|
CC.
UNACCEPTABLE PRODUCTS
|
|
DD.
SUPPLIER & BROKER REPORTS
|
|
5
New Products/Store Openings
|
|
A.
NEW PRODUCT INTRODUCTIONS
|
|
B.
PRODUCT SAMPLES POLICY
|
|
C.
OPENING ORDERS AND RETAILER PLACEMENTS
|
|
6
Product Promotions
|
|
A.
PROMOTIONAL PLANNING AND EXPECTATIONS
|
|
B.
MANUFACTURER CHARGE BACK (MCB)
|
|
C.
EVERYDAY LOW PRICING (EDLP)
|
|
D.
TURNOVER POLICIES
|
|
E.
ADMINISTRATIVE FEES
|
|
F.
RESETS AND OTHER RETAIL SERVICES
|
|
7
Marketing and Advertising
|
|
A.
TRADE MARKETING AND ADVERTISING PROGRAMS
|
|
B.
CONSUMER MARKETING AND ADVERTISING PROGRAMS
|
|
A.
BACKORDERS
|
|
B.
BIOTERRORISM ACT OF 2002
|
|
C.
PRODUCT TAMPERING
|
|
D.
DATE CODES
|
|
E.
MIS-SHIPS/SHORTAGES/OVER-SHIPS
|
|
F.
TITLE AND RISK OF LOSS
|
|
G.
LATE/UNSCHEDULED LOADS
|
|
H.
LOADS UNLOADED PRIOR TO SCHEDULED APPOINTMENT
|
|
I.
LOADS NOT AVAILABLE AT TIME OF SCHEDULED PICK-UP
|
|
J.
PALLETIZATION OF PRODUCTS
|
K.
PALLET EXCHANGE POLICY
|
|
L.
CASE SPLITTING
|
|
M.
LUMPER FEES
|
|
9
Information & Forms
|
|
A.
7 STEP SET UP PROCESS
|
|
B.
NEW SUPPLIER PRODUCT CHECKLIST
|
|
C.
COI (CERTIFICATE OF INSURANCE) EXAMPLE
|
|
D.
W-9
|
|
E.
2013/2014 AD AGREEMENT
|
|
F.
SUPPLIER INFORMATION FORM
|
|
G.
OPENING ORDER – RETAILER PLACEMENT
|
|
H.
GUARANTEED SALE FORM
|
|
I.
FREIGHT PICK-UP FORM
|
|
J.
SUPPLIER/BROKER REPORTS
|
|
K.
ROUTING GUIDE
|
|
L.
THIRD PARTY UNLOADING SERVICE RATE SCHEDULE
|
1
|
Introduction
|
2
|
UNFI National Contact List
|
Advertising Agreement Questions
|
Adagreements@unfi.com
|
Deductions Coordinators
|
deductionswest@unfi.com
deductioncoordinatoreast@unfi.com
|
Inbound Routing
|
inboundlogisticsnational@UNFI.com
|
Insert or B&W Ad Questions
|
Ads@unfi.com
|
Invoices
|
UNFI, Accounts Payable – East Region
PO Box 567
Keene, NH 03431
UNFI, Accounts Payable – West Region
1101 Sunset Blvd
Rocklin, CA 95765
|
New Items
New item forms and information to your SRMs
|
United Natural Foods
Attn: SRM
313 Iron Horse Way
Providence, RI 02908
(401) 528-8634
|
Opening Order Forms – Retail Store Placement
|
Openingorderforms@UNFI.com
|
Pack Changes
All Pack Changes shall be submitted to your SRM and Buyer (at their UNFI email addresses)
|
|
Planogram Product Photos
|
Email to
retailimageservice@unfi.com
Or send CD to:
United Natural Foods
Attn: Image Coordinator
260 Lake Road
Dayville, CT 06241
|
Price Changes
All Price Changes shall be submitted to your SRM and Buyer (at their UNFI email addresses) on the UNFI Price Change Form
|
|
Product Images and Information Updates
Send actual Product samples, electronic files of ingredients, nutritional data, Product photo, logo and key selling points, as listed on the required information page found in the Supplier Packet to the SRM.
|
United Natural Foods
Attn: Marketing
313 Iron Horse Way
Providence, RI 02908
(401) 528-8634
AND
United Natural Foods
Attn: National Marketing Program Manager
2340 Heinz Road
Iowa City, IA 52240
Email hi-res Product photos to:
photography@UNFI.com
Email ingredients and nutritional information to: Prodinfo@unfi.com
|
Product Recalls
Product Recall information must be sent by email only
|
Director National Food Safety & Quality Assurance
recalls@unfi.com
|
Publication Questions
|
Ads@unfi.com
|
Turnovers/EDLP’s
|
Email or fax turnover orders to EAST:
TurnoversEast@unfi.com
Fax: 860-779-9152
Email turnover orders to WEST:
TurnoversWest@unfi.com
Fax: 866-648-8199
Email EDLP to:
EDLPEast@unfi.com
EDLPWest@unfi.com
|
3
|
Definitions
|
•
|
“Consumer” means any entity or person who buys from UNFI’s Customer (as defined below).
|
•
|
“Customer” means any entity that purchases Products from UNFI.
|
•
|
“Product(s)” means goods, including, but not limited to, foods, perishables, consumables, dry goods, personal care items, nutritional supplements, vitamins, non-food items and pet supplies.
|
•
|
“Reclaim” is defined in accordance with the terms outlined in the FMI “Joint Industry Report”, which can be found at:
|
•
|
“Supplier” means the entity that supplies UNFI with Products.
|
•
|
“SRM” means UNFI Supplier Relationship Manager.
|
4
|
General Policies and Guidelines
|
A.
|
TERMS OF PAYMENT
|
B.
|
INVOICES
|
UNFI, Accounts Payable
–
East Region
|
UNFI, Accounts Payable
–
West Region
|
P.O. Box 567
|
1101 Sunset Boulevard
|
Keene, NH 03431
|
Rocklin, CA 95765
|
•
|
Note that Pricing may change due to market conditions, and 90 days’ written notice to UNFI is required on all price changes. Changes in pricing will be reflected on the Purchase Order. When Supplier requests a price change, it is Supplier’s responsibility to email the UNFI Buyer and request adjustment to the price(s) on any previously acknowledged Purchase Order(s) and to then acknowledge the revised Purchase Order(s) by confirming quantities and pricing. When a P.O., previously accepted by the Supplier, conflicts with an Invoice or any other documentation, UNFI reserves the right to have the P.O. price prevail
.
|
C.
|
GENETICALLY MODIFIED ORGANISMS (GMOs)
|
D.
|
QUALITY ASSURANCE
|
E.
|
TEMPERATURE TESTING
|
F.
|
DISCLOSURE OF SUPPLY CHAIN INFORMATION
|
G.
|
CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT of 2010
|
1.
|
It verifies its Product supply chains to evaluate and address risks of human trafficking and slavery (and will disclose to UNFI whether a third party conducted the verification);
|
2.
|
It audits its own suppliers to evaluate compliance with Supplier’s company standards (and will specify to UNFI whether the audits are independent and unannounced);
|
3.
|
It requires its direct suppliers to certify that the products they provide to Supplier comply with the laws of the country in which the supplier does business;
|
4.
|
It maintains internal accountability standards for employees and contractors concerning human trafficking and slavery; and
|
5.
|
It ensures that Supplier employees and management responsible for supply chain management are trained to identify human trafficking and slavery and how to mitigate risks within supply chains.
|
H.
|
COMPLIANCE WITH FOOD SAFETY LAWS
|
I.
|
PESTICIDES AND PRODUCT REGISTRATION
|
1.
|
A pesticide is defined as any substance intended to control, destroy, repel, or attract a pest. Any living organism that causes damage or economic loss or transmits or produces disease may be the target pest. Pests can be animals (e.g. insects or mice), unwanted plants (e.g. weeds), or microorganisms (e.g. plant diseases or germs that is, viruses and bacteria). Pesticide products include not only insecticides and herbicides, but many products not typically thought of as pesticides, including algaecides (e.g. pool chlorine), disinfectants and sanitizers (such as toilet bowl cleaner), repellants (e.g. mosquito repellent), rodenticides (e.g. rat poison), and fungicides (e.g. rose dust).
|
2.
|
Pesticides are required to be registered with the Federal Government and with certain states, including California. California also requires pesticide manufacturers to pay an assessment on sales of pesticides sold in the state.
|
3.
|
Before selling any Product to UNFI, Suppliers must complete UNFI’s Pesticide Questionnaire, which is included in your Supplier Packet and can also be obtained from your SRM.
|
4.
|
The Supplier is responsible for registering, at its sole cost (including fees or assessments), any Product that is required by the EPA or any applicable state agency to be registered as pesticides. The Supplier is also responsible for filing any reports related to such registration. An example of such a registration and assessment is the California “Mill Assessment.”
|
J.
|
DANGEROUS GOODS
|
K.
|
PROPOSITION 65
|
L.
|
GIFT POLICY
|
M.
|
PRODUCT INFORMATION AND INTELLECTUAL PROPERTY
|
N.
|
PRESS RELEASE POLICY
|
O.
|
ORGANIC AND KOSHER CERTIFICATION
|
P.
|
PRODUCT LOSS CLAIMS AND UNSALABLE PRODUCTS
|
1.
|
Defective Product
– This includes defects in Product that may not be apparent until the case is opened by the Customer, such as poorly sealed Product, tops/ends not glued shut, dented cans/damaged boxes inside a sealed, undamaged case, and Product that spoils before the expiration date on the Product.
|
2.
|
Consumer Returns
–
Products returned by the Consumer to the Retail Customer where they purchased it. UNFI asks its Retail Customers to provide explanations and lot/date codes for these returns, but cannot guarantee that it will receive them and be able to pass that information on to Suppliers. In the event that a Supplier notifies UNFI that excessive quantities have been returned, UNFI may, in its sole discretion, investigate.
|
3.
|
Shelf Worn Product
– Products usually found on a retail shelf in a Supermarket Store that a reasonable Consumer would not purchase due to label defects, discontinued, damaged, etc.
|
4.
|
Unsalable
– Products that are removed from the primary channel of distribution for any reason (such as out of date, discontinued, damaged, etc.). They will be disposed of at store level.
|
5.
|
Discontinued Items
– As our mutual Customers review and update retail assortments, there is always the risk of residual inventory being returned from Customer. With the proper information and notification, we will do our best to minimize any excess inventory at the Customer level. However, if a Customer discontinues Product, it is the Supplier’s responsibility to cover this excess or returned inventory.
|
Q.
|
CREDITS, RECLAIM AND SPOILS
|
1.
|
Certain Customers, primarily supermarkets, require reclaim support from their suppliers. This support service is typically a required condition of doing business in the supermarket channel. UNFI defines “reclaim” according to the terms outlined in the FMI “Joint Industry Report.” For more information, visit:
http://www.fmi.org/docs/supply/GMA_Unsale.pdf
. UNFI considers out of code at the shelf, damages at the shelf, promotional residual and reset residual to be included in the definition of “reclaim.”
|
2.
|
Certain Customers, including supermarkets, may utilize a 3rd party reclaim service or manage their reclaims internally, and, in rare circumstances, UNFI may act as the reclaim operator for the Customer. Fees will be imposed on the Supplier in all three of these situations. The fees imposed by UNFI for serving as the reclaim operator are consistent with the fees imposed by both 3rd party reclamation services and by Customer accounts who manage this process internally.
|
3.
|
In addition, certain Customers, including supermarkets, may contract UNFI to act as a 3
rd
party billing agent for reclaims support. In these cases, UNFI will impose an administrative fee on the Supplier for this service/support which will be added on to the invoice at the time of billing. These fees depend on many factors and are subject to change.
|
4.
|
Spoils allowances, given off invoice, are intended to address spoils within UNFI DCs and not to support credits at retail. These spoils allowances, which are typically significantly lower than retail reclaim credits, are intended to share the expense driven by packaging issues, products that go out of code within the DC, etc.
|
R.
|
W-9 TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION, OR W-8
|
S.
|
PRODUCT CORRESPONDENCE
|
•
|
New Product announcements
|
•
|
Promotions
|
•
|
Size, pack and description changes
|
•
|
Price lists and updates
|
T.
|
SUPPLIER CHANGES
|
UNFI, Accounts Payable – East Region
P.O. Box 567
Keene, NH 03431
|
UNFI, Accounts Payable – West Region
1101 Sunset Boulevard
Rocklin, CA 95765
|
AND
to your UNFI Supplier Relationship Manager and Buyer
|
1.
|
UNFI must be provided a minimum of ninety (90) days’ written notice of changes to Supplier’s pick up location. Changes to Supplier’s pick up location may affect freight rates and wholesale price. If UNFI is not timely notified of an address change, and Supplier’s failure to provide timely notice results in increased freight rates/charges to UNFI, UNFI shall not be responsible for such increases until UNFI adjusts its pricing with its Customers.
In the event of change to pickup location, a new freight rate form must be submitted
.
|
2.
|
Supplier may not assign any rights or delegate any obligations without the prior written consent of UNFI, including changes necessitated by an assignment or transfer of ownership. Where an assignment or transfer of ownership has occurred, a new Supplier Agreement and W-9 or W-8 is required in order to continue doing business with UNFI.
|
3.
|
UNFI must be informed of acquisitions or name changes.
|
a.
|
Acquisition – In the event that a Supplier is acquired, a new Supplier Packet must be completed by the acquiring entity.
|
b.
|
Supplier Name Change
|
•
|
In the event that a Supplier is changing its name and maintaining its Taxpayer Identification Number (“TIN”), UNFI must be notified of this change to ensure that the Supplier information is updated in its host system.
|
•
|
If the Supplier is changing its TIN, UNFI requires that a new Supplier be set up. Supplier must complete and submit a new Supplier Packet in order to be set up as a Supplier and do business with UNFI under the new TIN.
|
•
|
Any Supplier name change, regardless of whether Supplier retains or changes the TIN, requires a new W-9 evidencing the new Supplier name and TIN.
|
U.
|
INVENTORY TRANSFERS AND BALANCING
|
V.
|
SUPPLIER FREIGHT / PICK-UP ALLOWANCE
|
W.
|
PRICE PROTECTION
|
X.
|
PRICING, PRICE CHANGE, BLACK OUT PERIOD, UPC, SIZE AND PACK CHANGES
|
1.
|
UNFI will not accept and implement changes on Products that are on promotion until after the promotional period ends.
|
2.
|
Ninety (90) days’ prior written notice is required on all price changes, including changes to off-invoice allowance programs (excluding commodities). Price changes must be submitted on the UNFI Price Change Form, accompanied by a Supplier price list and written documentation explaining the change. The UNFI Price Change Form is available at:
https://unfinc.zendesk.com/home
. In the event that the price change is not submitted with the required 90 days’ notice, UNFI reserves the right to
|
3.
|
UNFI will not accept price changes with an effective date between October 1st and December 31st. All price changes need to be effective prior to, or after, this time.
|
4.
|
Ninety (90) days’ prior written notice is required on all UPC, size and pack changes and must be submitted to the Supplier’s SRM using the appropriate UNFI forms, which are available at:
https://unfinc.zendesk.com/home
. A $35 per item fee will be assessed for all pack changes per DC. Failure to provide the required notice will result in assessment of a $500 fee per occurrence.
|
5.
|
Ninety (90) days’ prior written notice is required for any material changes to Supplier’s Product formulation, labels and or packaging.
|
6.
|
Upon notification that an item has been discontinued by Supplier or UNFI or has undergone a UPC, size or pack change, UNFI will:
|
a.
|
Supply inventory count of items and verify the landed cost of inventory by disposition date.
|
b.
|
Remove Product from inventory and send a notice to the Supplier to arrange for pick up.
|
c.
|
Supply the accounting department with the anticipated credit amount. If the credit amount should exceed open invoices, all payments will be held until the credit amount is cleared from the account.
|
d.
|
Charge $35 per hour (one hour minimum) for any additional UNFI labor.
|
7.
|
If Supplier has not picked up or made arrangements to have the Product picked up within fourteen (14) days from notice, UNFI will send the Product to the local food bank and charge the full landed cost back to Supplier or dispose of it as UNFI sees fit.
|
8.
|
Any change to one of the following will require a new UNFI item number:
|
a.
|
Case pack
|
b.
|
Retail UPC code
|
c.
|
Brand name
|
d.
|
Unit size
|
•
|
Only exception is an increase in unit size in an amount less than 1 ounce.
|
e.
|
Any change in organic status
|
•
|
A change from organic to non-organic will also require a new UPC code.
|
f.
|
Description
|
•
|
No longer recognizable from original description and is normally associated with an ingredient change.
|
g.
|
Ingredient change
|
•
|
Any ingredient change that adds or removes an allergen as set forth in the then-current FDA allergen list will be assigned a new UNFI product number. For example, milk, eggs, fish (bass, flounder, cod, etc.), crustacean shellfish (crab, lobster, shrimp, etc.), tree nuts (pecans, etc.), peanuts, wheat and/or soybeans.
|
•
|
Any ingredient change that may cause a material change to the Product will be reviewed for a possible UNFI number change (e.g. non-hydrogenated oil to hydrogenated oil).
|
Y.
|
BRIGHT LINE TESTS FOR THE HANDLING OF PRODUCTS THAT UNDERGO CHANGE IN ORGANIC STATUS
|
1.
|
Once UNFI becomes aware of a change in a Product’s organic status, such as where a Supplier has previously and conspicuously labeled a Product as “organic” and then eliminates any labeling references to the organic status as provided under the USDA/NOP labeling standards, but does not change the Product UPC code, we will notify our relevant Customers and the Supplier that we are putting the Product on hold until the UPC code is changed to reflect and communicate a Product change.
|
2.
|
Once UNFI becomes aware of a change in a Product’s organic status, whether or not a Supplier has previously and conspicuously labeled a Product as “organic” as set out above, but the Supplier has previously otherwise represented that the Product is 100% Organic, Organic, or Made With Organic as defined by the USDA/NOP labeling standards, and the Supplier now represents the Product to be less than the previously listed designated organic category, and the Supplier does not alter or change the Product’s UPC code, we will notify our relevant Customers and the Supplier that we are putting the Product on hold until the UPC code is changed to reflect and communicate a Product change.
|
3.
|
Once UNFI becomes aware of a change in a Product’s organic status, where a Product has never been conspicuously labeled as ”100% Organic, Organic, or Made With Organic” as defined by the USDA/NOP labeling standards, although the previous Product had some organic ingredients as defined under the USDA/NOP labeling standards, but the Product now is changed to contain fewer or no organic ingredients or a previous certification representing it included some organic ingredients, although less than 70%, has now been eliminated, but, in any or all cases, the Supplier has not changed the Product’s UPC code, UNFI may change its internal Product code accordingly. UNFI will require the Supplier to immediately create an appropriate Customer notification letter, to be pre-approved by UNFI, to be distributed by UNFI and/or the Supplier, as determined solely by UNFI, to all impacted Customers. If Supplier is designated by UNFI to distribute such communications to the impacted Customers, the Supplier, after timely distributing those communications, shall represent in writing to UNFI that all impacted Customers have been so notified before UNFI will ship the correctly labeled Product.
|
Z.
|
INSURANCE CERTIFICATES
|
1.
|
Supplier will maintain, in any combination of primary and excess policy(ies), commercial/comprehensive general liability insurance (including but not limited to product/completed operations, independent contractors and contractual liability insurance) from a carrier or carriers reasonably satisfactory to UNFI, in a minimum amount of five million dollars ($5,000,000) combined single limit for bodily injury and property damage per occurrence; five million dollars ($5,000,000) for products/completed operations aggregate; and five million dollars ($5,000,000) general aggregate, if Supplier’s Products include any of the following:
|
•
|
Supplements;
|
•
|
Raw or cooked, fresh and/or frozen meats (including beef, poultry, pork, lamb and deli meats); or
|
•
|
Raw or cooked, fresh and/or frozen seafood.
|
2.
|
If Supplier’s Products do not include any of the Products identified in Sec. (Z)(1) above, then Supplier will maintain one million ($1,000,000) combined single limit for bodily injury and property damage per occurrence; two million dollars ($2,000,000) for products/completed operations aggregate; and two million dollars ($2,000,000) general aggregate.
|
3.
|
In addition to the above insurance coverage, Supplier will also maintain the following insurance coverage:
|
a.
|
Worker’s Compensation - Statutory as required by state law;
|
b.
|
Employer’s Liability - $100,000 per accident for bodily injury or disease; $500,000 in the aggregate for disease; and
|
c.
|
Commercial Automobile Liability - $1,000,000 combined single limit covering bodily injury and property damage arising out of the use of any owned, non-owned, leased and hired autos
|
4.
|
The policy(ies) will designate “United Natural Foods, Inc. and its affiliates” as additional insureds on a primary non-contributory basis, and will be endorsed to provide contractual liability insurance in the amount specified above, specifically covering Supplier's obligations to defend and indemnify UNFI as set forth in the UNFI supplier agreement and specifying that such coverage is primary and not contributory. The policy(ies) will also contain a waiver of subrogation in favor of United Natural Foods, Inc. and its affiliates.
|
5.
|
Supplier will provide a certificate of insurance for such coverage, provided by a carrier or carriers with an A.M. Best rating of at least A-, Financial Size category 7, and stating that “United Natural Foods, Inc. and its affiliates” are additional insureds. Supplier will deliver the certificate(s) to Supplier’s UNFI Buyer or Category Manager no later than the Effective Date, and annually thereafter. Supplier’s failure to provide a current, updated COI may result in a disruption of service and may prevent UNFI from purchasing from Supplier.
|
6.
|
The policy(ies) and certificate(s) will also specify that UNFI will be given at least thirty (30) days prior written notice by the insurer in the event of any material modification, cancellation or termination of coverage.
|
AA.
|
AUDITS AND INVOICING
|
BB.
|
RECALLS AND PRODUCT WITHDRAWALS
|
1.
|
Supplier shall cooperate with UNFI on all recalls and market withdrawals, promptly provide information requested by UNFI as needed for UNFI to administer a recall or market withdrawal and comply with all applicable requirements, including but not limited to
UNFI’s Recall Policy for Suppliers
, as may be amended from time to time. In the event of a recall or market withdrawal (as defined below), UNFI will charge Supplier back for all fees related to the recall or market withdrawal, including, but not limited to, any Customer fees related to the recall and charged to UNFI, costs associated with Product retrieval from retail stores, storage, shipping, disposal related costs, and all communication related expenses. Furthermore, UNFI reserves the right to charge back to Supplier any costs and/or fees assessed to or imposed upon UNFI by its Customer(s) resulting from or relating to a press release, government advisory or warning letter relating to the Product. UNFI utilizes a third party recall notification service company called Recall Info Link. This service allows UNFI to contact all Customers within four (4) hours, allowing UNFI to meet compliance regulations. The charges for customer contact via Recall Info Link will be charged back to affected Suppliers. For customers not reached via Recall Info Link, UNFI Customer Service will contact said customers and will charge back Supplier for costs incurred.
|
a.
|
Recall means a Supplier’s removal or correction of a Product that the FDA or USDA considers to be in violation of the laws it administers and against which an agency may initiate legal action (e.g. seizure). Recall does not include a market withdrawal or stock recovery. Market withdrawal means a Supplier’s removal or correction of a Product which does not pose a potential threat to consumer health or safety, is not materially misleading, and is not subject to legal action by the FDA or USDA.
|
2.
|
Supplier must promptly notify UNFI of all recalls and market withdrawals involving Supplier’s Products. Supplier must make every reasonable effort to notify UNFI prior to any public announcement of a recall or market withdrawal involving Supplier’s Products, but such notification must, in all events, occur within six (6) hours of Supplier’s decision to recall or announce a market withdrawal.
|
3.
|
In the event of a recall, Supplier must promptly notify UNFI by completing a Supplier Notification Report and submitting the report electronically via
recalls@UNFI.com
.
|
4.
|
In the event of a market withdrawal, Supplier must promptly notify UNFI by completing a Supplier Notification of Market Withdrawal form and submitting the report electronically to
recalls@UNFI.com
.
|
CC.
|
UNACCEPTABLE PRODUCTS
|
1.
|
The Product is unable to maintain its quality and integrity in accordance with industry standards for the duration of the Product's shelf life;
|
2.
|
The Product is unable to maintain its integrity with respect to its packaging, labeling and/or UPC compliance in accordance with industry standards;
|
3.
|
The Product fails to meet the applicable warranties of this Agreement; or
|
4.
|
The Product is the subject of a recall.
|
DD.
|
SUPPLIER & BROKER REPORTS
|
5
|
New Products/Store Openings
|
A.
|
NEW PRODUCT INTRODUCTIONS
|
B.
|
PRODUCT SAMPLES POLICY
|
C.
|
OPENING ORDERS AND RETAILER PLACEMENTS
|
6
|
Product Promotions
|
A.
|
PROMOTIONAL PLANNING AND EXPECTATIONS
|
1.
|
Yearly promotional plans are encouraged with emphasis on quarterly promotions per Product group.
|
2.
|
An Annual Advertising Agreement is required for each region. Suppliers may not participate in any other UNFI marketing programs unless an Annual Advertising Agreement is current/signed.
|
3.
|
UNFI offers some marketing programs that require a Product’s performance to be in the top segment of its category. UNFI encourages its Suppliers to plan promotional spending for a Product in order to improve its category position and be considered for some of UNFI’s top “invitation only” marketing programs that may further increase the sales of the Supplier’s Product.
|
4.
|
UNFI Promotion Forms shall be completed and emailed to the SRM.
|
5.
|
Where UNFI is unable to purchase Products during a promotional period due to excess inventories, UNFI will require that Supplier shall credit UNFI for the difference in price of the current inventory carried and the promotional discount. This will permit UNFI to honor the promotion.
|
6.
|
Unless agreed to in writing, UNFI will do a deal match between our East and West regions and will apply regional deals nationally.
|
7.
|
If UNFI cannot purchase sufficient quantities during a promotional period to cover the quantities shipped at the discount, it will, on a per region basis, require a credit for the difference in the price of the current inventory carried and the promotional discount. This will allow UNFI to honor the promotion. This will be deducted automatically with no prior authorization or notice given and is expected to be honored.
|
B.
|
MANUFACTURER CHARGE BACK (MCB)
|
C.
|
EVERYDAY LOW PRICING (EDLP)
|
1.
|
EDLPs are Customer specific deals submitted by a Supplier/broker for a minimum of six (6) months. EDLPs submitted for any store that is a member of a chain will be honored for all members of that chain.
|
2.
|
EDLPs must be submitted on the UNFI EDLP form (which can be obtained from your chain (Key Account Manager). The East Region requires a sixty (60) day lead time. The West Region requires a ten (10) business day lead time. EDLPs not timely received for the indicated start date will take effect the day after they are entered into UNFI’s system. EDLPs cannot be backdated. Credits will not be issued for EDLPs not timely submitted. EDLPs must be submitted with a specific end date (e.g. DD/MM/YY) or they may be submitted as “ongoing.” EDLPs identified by the Supplier as “ongoing” require a sixty (60) day lead time and will end only after receiving sixty (60) days notification from the Supplier or Supplier’s broker. It is the Supplier’s/Supplier’s broker’s responsibility to inform the Customer of the EDLP end date.
|
3.
|
Any extensions to an EDLP must be submitted on a new EDLP form with the appropriate lead time. UNFI will not issue credits for lapsed EDLPs.
|
4.
|
UNFI will not be responsible for tracking, monitoring, or providing performance reporting on any Customer on an EDLP program, and will not be responsible for enforcing case minimums or maximums.
|
5.
|
Changes to Product pricing or pack size, additions/deletions of SKUs, or introduction of new seasonal or special promotional items that necessitate a change to the original EDLP shall be submitted by Supplier or Supplier’s broker. Supplier must submit such changes with a new EDLP Form, which can be obtained from the SRM, and other UNFI forms, as applicable. To ensure that UNFI can administer accurate customer discounts and pricing, where Customers do not require price change lead time, Suppliers must submit EDLP forms a minimum of seven days prior to the discount start date. Where Customers do require price change lead time, Supplier must submit EDLP forms a minimum of 60 days prior to the discount start date. Suppliers that fail to comply with these notice requirements may forfeit EDLP discounts. UNFI reserves the right not to issue credits for discounts missed due to untimely submission of an EDLP.
|
6.
|
EDLP discounts shall be submitted as MCB percentage discounts. If there is an off invoice (purchase order allowance) during the EDLP deal period the off invoice will be backed out of the MCB.
|
D.
|
TURNOVER POLICIES
|
1.
|
UNFI requires a minimum of two business days to process Turnover Orders.
|
2.
|
All Turnover Orders must be submitted on the Turnover Form via email, fax or mail. UNFI will not accept Turnover Orders via telephone.
|
3.
|
Turnover Orders will not be back ordered or held for Product availability.
|
4.
|
Order quantities on Turnover Orders should reflect UNFI case pack (unit of issue). Quantities will be entered for the case pack of the product number submitted.
|
5.
|
UNFI item code numbers and store account numbers must be on all Turnover Orders.
|
6.
|
The Turnover Form must be completed with all information.
|
7.
|
A four week lead time is required for ad items, demo Products, or holiday stock. Please include the aforementioned information on the Turnover Form
.
|
8.
|
All promotional items must be shipped within the published dates specified on the front cover of UNFI’s Monthly Specials Book.
|
9.
|
A separate Turnover Form is required for each ship date and each customer.
|
E.
|
ADMINISTRATIVE FEES
|
F.
|
RESETS AND OTHER RETAIL SERVICES
|
7
|
Marketing and Advertising
|
A.
|
TRADE MARKETING AND ADVERTISING PROGRAMS
|
1.
|
Tri-Annual Wholesale Catalog Advertising
–
The Wholesale Catalog is the main reference for UNFI Customers for Products, pricing and ordering. Suppliers can use Wholesale Catalog advertising to highlight key selling points and build brand awareness.
|
2.
|
Monthly Specials Book
–
The Monthly Specials Book offers the opportunity to focus attention on a Supplier’s new products, promotions and seasonal Products.
|
3.
|
Website Advertising Program
–
The Website Advertising Program includes display advertisements and “ads-as-content” advertising options on UNFI’s secure Customer website. Ads can be targeted to specific channels, regions and DCs and can be linked to additional information, videos, etc.
|
4.
|
Foodservice Advertising
–
The Foodservice Catalog, published three times a year, contains Products hand-picked for the foodservice channel. Foodservice advertising programs include catalog, email and website banner ad opportunities.
|
B.
|
CONSUMER MARKETING AND ADVERTISING PROGRAMS
|
1.
|
Consumer Circular Programs, the Natural Connection and Customized Marketing Program
–
These Programs drive Product sales, encourage consumer trial and promote brand loyalty.
|
2.
|
HEALTHY Clippings® Coupon Tear Pad Program
–
This program promotes trial purchases.
|
3.
|
Celebration Programs
–
The Celebration Programs combine consumer education and promotions focused on selected categories and special interests, including supplements, Earth Day and non-GMO Products.
|
4.
|
Trailer Advertising
–
UNFI’s trailers can be used as rolling billboards and can be targeted to focus on certain specific geographic regions.
|
8
|
Shipping and Receiving Products
|
A.
|
BACKORDERS
|
B.
|
BIOTERRORISM ACT OF 2002
|
1.
|
Deliveries: All deliveries to UNFI of Products covered by the Bioterrorism Act (e.g. “food” and beverages for humans and animals and related packaging, as defined in the Bioterrorism Act) must comply with the Bioterrorism Act, including, but not limited to the requirements set for in Section V(B)(2).
|
2.
|
DC receiving and shipping: Each driver shall provide the following information to the UNFI receiving or shipping office personnel at the time of the driver’s scheduled check-in:
|
a.
|
Driver’s name and photo proof of identity: valid commercial driver’s license (CDL) and/or company issued photo badge identification. All identification will be photocopied.
|
b.
|
Transporter/carrier company name and street address, city, state, zip code (a P.O. Box address is insufficient), telephone number, fax number and email address.
|
C.
|
PRODUCT TAMPERING
|
D.
|
DATE CODES
|
1.
|
UNFI requires that all Products be identified with an open coded shelf life or “use by” date, which shall appear on the Product and be printed on the outside of the shipping case. UNFI reserves the right to accept products that do not adhere to this requirement, however in all such cases supplier must provide the actual expiration date, by product, on the packing slip and/or Bill of Lading.
|
2.
|
UNFI requires that the shelf life of all Products be at least 75% of the production shelf life at the time of receipt. UNFI requires that the Supplier provide the appropriate SRM written, updated information regarding production shelf life and guaranteed minimum shelf life at time of receipt.
|
3.
|
If Products do not have a human readable calendar expiration date on the outside shipping case, UNFI will bill-back any Products that are not sold before the expiration date on the package.
|
E.
|
MIS-SHIPS/SHORTAGES/OVER-SHIPS
|
1.
|
Supplier shall maintain a 95% fill rate or higher. Failure to meet or exceed the acceptable service level may result in item replacement and discontinuation or financial penalty. If UNFI is shorted items on incoming orders and Product subsequently becomes available, Supplier shall notify and expedite these items to our distribution centers at the Supplier’s expense.
|
2.
|
In the event of a mis-ship and UNFI receives Product that it did not order, UNFI will notify Supplier of the Product and inventory count, and Supplier will be responsible for all costs associated with the mis-ship.
|
3.
|
Supplier must notify the UNFI Buyer of any shortages/out of stocks before delivery or pickup. Any Product shorted will be placed on a new PO and will be shipped at Supplier’s expense.
|
4.
|
In the event an over-ship occurs, UNFI may agree to receive the Product above and beyond the purchase order quantity at a discounted rate of 35% OI, with a $35 minimum charge, unless instructed otherwise by Supplier.
|
5.
|
Where an over-ship occurs and UNFI declines to receive the Product into inventory, UNFI may, in its sole discretion, store the Product in its DC. Any such Product must be removed from the DC within two weeks of the date that it was received at the DC. In the event that the Product is not removed from the DC within two weeks, UNFI may, in its sole discretion, dispose of any such Product stored in the DC, and assess a fee of $25 per pallet per week for any such product that UNFI. Any costs associated with removal, as well as the $25 per pallet per week fee, shall be borne by and charged back to Supplier. UNFI assumes no liability for any over-shipments stored in its DC.
|
F.
|
TITLE AND RISK OF LOSS
|
G.
|
LATE/UNSCHEDULED LOADS
|
31 – 60 Minutes Late
|
$50.00 per occurrence
|
Over 60 Minutes Late
|
$200.00 per occurrence
|
Unscheduled Load
|
$300.00 per occurrence
|
No Show/Rescheduled with less than 72 hours of the appointment time
|
$300.00 per occurrence
|
H.
|
LOADS UNLOADED PRIOR TO SCHEDULED APPOINTMENT
|
Unloading 24 hours or more prior to the appointment date and within normal receiving hours
|
$50.00 per occurrence
|
Unloading 24 hours or more prior to the appointment date and outside of normal receiving hours
|
$100.00 per occurrence
|
I.
|
LOADS NOT AVAILABLE AT TIME OF SCHEDULED PICK-UP
|
Truck Order Not Used (TONU)
|
$350 per occurrence
|
Detention
|
$60 per hour after 2 hours from the original pick-up appointment. If UNFI or its carrier is late, detention fees shall not apply.
|
J.
|
PALLETIZATION OF PRODUCTS
|
K.
|
PALLET EXCHANGE POLICY
|
1.
|
UNFI will pay $4.50 for exchange pallets and $6.50 for each #1 grade pallet only if so noted on the bill of lading.
|
2.
|
The delivery bill of lading and invoice must indicate the number and type of pallets exchanged (“ins and outs”) for UNFI to authorize payment.
|
3.
|
UNFI does not participate in any pallet pool programs (e.g. CHEP) nor will UNFI accumulate pallets for return.
|
4.
|
UNFI does not accept iGPS plastic pallets.
|
5.
|
UNFI will exchange pallets one for one.
|
L.
|
CASE SPLITTING
|
M.
|
LUMPER FEES
|
9
|
Information & Forms
|
B.
|
7 STEP SET UP PROCESS
|
C.
|
COI (CERTIFICATE OF INSURANCE) EXAMPLE
|
D.
|
W-9
|
E.
|
2013/2014 AD AGREEMENT
|
F.
|
SUPPLIER INFORMATION FORM
|
G.
|
OPENING ORDER – RETAILER PLACEMENT
|
H.
|
GUARANTEED SALE FORM
|
I.
|
FREIGHT PICK-UP FORM
|
J.
|
SUPPLIER/BROKER REPORTS
|
K.
|
ROUTING GUIDE
|
L.
|
THIRD PARTY UNLOADING SERVICE RATE SCHEDULE
|
1.
|
I have reviewed this quarterly report on Form 10-Q of United Natural Foods, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Steven L. Spinner
|
|
Steven L. Spinner
|
|
Chief Executive Officer
|
|
|
|
|
Note:
|
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of United Natural Foods, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Michael P. Zechmeister
|
|
Michael P. Zechmeister
|
|
Chief Financial Officer
|
|
|
|
|
Note:
|
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
|
|
/s/ Steven L. Spinner
|
|
Steven L. Spinner
|
|
Chief Executive Officer
|
|
|
|
December 10, 2015
|
Note:
|
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
|
|
/s/ Michael P. Zechmeister
|
|
Michael P. Zechmeister
|
|
Chief Financial Officer
|
|
|
|
December 10, 2015
|
Note:
|
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
|