UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.         )

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Filed by a Party other than the Registrant  o

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United Natural Foods, Inc.
(Name of Registrant as Specified In Its Charter)

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November 5, 2019

DEAR FELLOW STOCKHOLDER:

Thank you for your investment in United Natural Foods, Inc. and the trust you have placed in our Board of Directors to oversee our Company’s long-term success.

Fiscal 2019 Highlights and Supervalu Acquisition

Fiscal 2019 was a transformative year for UNFI. We completed the acquisition of SUPERVALU INC. in the first quarter of fiscal 2019, which accelerated our “Build Out the Store” strategy and transformed UNFI into North America’s premier grocery wholesaler. The new UNFI now provides an unmatched selection of products and services, greater scale, and enhanced technologies designed to enable all of our customers to better compete and succeed in a dynamic and ever-changing retail environment. Integration of the two companies continues, and we have realized synergies quicker than we expected.

In July of 2019, we held our first National Expo since the Supervalu acquisition, which provided an opportunity for 6,000 customers and suppliers to get a first-hand view of the vast array of products and services we now offer. As we continue to integrate our systems and processes, optimize our distribution center operations, and educate customers on our expanded offerings, we are excited about where we are going.

Our Continued Commitment to Sustainability

Throughout this transformation, our commitment to doing things the right way remains steadfast. We have been committed to incorporating environmentally sustainable and socially responsible practices into our business activities from our roots.

More recently, in fiscal 2019 we combined our existing charitable foundation with Supervalu’s foundation, to create a single platform for our philanthropy grants. The combined foundations awarded over $1.0 million to 69 organizations in 2019. We expect to release a Corporate Responsibility Report in the coming months, which will include more details on how we serve our communities, employees, and the environment.

Enhancement of Our Corporate Governance Practices

In fiscal 2019, we continued our objective to strengthen our corporate governance practices. We made revisions and enhancements to a number of our corporate policies and processes affecting our Board and executive officers, including a robust Board evaluation and refreshment process, which resulted in two new independent directors appointed to our Board; enhancements to the Stock Ownership Guidelines to require a higher level of stock ownership and to include senior employees; and further changes to our executive compensation program in response to stockholder feedback in our investor engagement meetings.

I encourage you to review this proxy statement, and to vote your shares promptly. Instructions for voting your shares are set out in the proxy statement. On behalf of our Board of Directors, and everyone at UNFI, thank you for your continued support of our Company.

	Sincerely,
	Steven L. Spinner,
	Chairman of the Board and Chief Executive Officer

PLEASE VOTE. STOCKHOLDERS MAY VOTE THROUGH THE INTERNET, BY TELEPHONE OR BY MAIL. PLEASE REFER TO YOUR PROXY CARD OR THE NOTICE OF PROXY AVAILABILITY DISTRIBUTED TO YOU ON OR ABOUT NOVEMBER 5, 2019 FOR INFORMATION ON HOW TO VOTE THROUGH THE INTERNET, BY TELEPHONE OR BY MAIL.

TABLE OF CONTENTS

Forward Looking Statements

This proxy statement contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Our actual results may differ from our expectations, estimates and projections, and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “might” and “continues,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, our expectations with respect to our future performance and the drivers of that performance, including with respect to the impacts of our acquisition of SUPERVALU INC., and our ongoing integration efforts. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside our control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) risks associated with increased leverage in connection with the consummation of the acquisition of Supervalu; (2) our ability to recognize the anticipated benefits of our acquisition and dispositions, including the acquisition of Supervalu, which may be affected by, among other things, increased competition in our industry and the ability of the combined company to grow and manage growth profitably and retain key employees; and (3) other risks and uncertainties identified in our filings with the Securities and Exchange Commission (“SEC”). More information about other potential factors that could affect our business and financial results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended August 3, 2019 filed with the SEC.

GOVERNANCE HIGHLIGHTS

HOW TO ATTEND AND ASK QUESTIONS IN THE MEETING:

For more information about voting and attending the meeting, see “Information About the Meeting,” beginning on page 66.

CORPORATE GOVERNANCE

Governance Highlights

We are committed to best practices in corporate governance as are appropriate and in the best long-term interest of our Company. Some of our key corporate governance practices are summarized below, with further information provided in this proxy statement.

Independent Oversight

Board Skills and Qualifications

Good Governance Practices

Stockholder Protections

We maintain a corporate governance page on our corporate UNFI website that includes key information about our corporate governance initiatives and our Code of Conduct. The corporate governance page can be found at www.unfi.com, by clicking on “Investors—Overview” and then on “Governance”. Copies of our Corporate Governance Principles, our Code of Conduct, our Social and Environmental Policy and the charters for each of the Board’s Committees can be found on our website. We revised and updated each of these documents in fiscal 2019 and (in the case of the Compensation Committee charter and the Code of Conduct) fiscal 2020, in connection with our ongoing comprehensive review of our governance practices. Information contained on our website is not incorporated by reference in this proxy statement or considered to be part of this document.

Director Independence

Our Corporate Governance Principles require a majority of the members of the Board to be independent directors as such term is defined in the New York Stock Exchange (“NYSE”) listing standards. The Board, upon the recommendation of the Nominating and Governance Committee, has determined that eight of its ten current members are independent. Our eight independent directors are Eric F. Artz, Ann Torre Bates, Denise M. Clark, Daphne J. Dufresne, James P. Heffernan, James Muehlbauer, Peter A. Roy and Jack Stahl. Michael S. Funk, one of our co-founders, was an employee until January 1, 2019 and Steven L. Spinner is our employee and CEO, and therefore they are not independent directors.

Our Corporate Governance Principles and the charter for each of the Board’s standing Committees—the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee—require all members of such Committees to be independent within the meaning of the NYSE listing standards and the SEC’s rules. The charter of the Audit Committee also requires each of its members to meet the definition of independence under Section 10A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the SEC’s rules thereunder. The charter of the Compensation Committee requires each of its members to be a non-employee director within the meaning of Rule 16b-3 under the Exchange Act.

Lead Independent Director

The Lead Independent Director is elected annually by the independent directors of the Board. In September 2019, the independent directors appointed Mr. Roy to serve as the Board’s Lead Independent Director. In accordance with our Corporate Governance Principles, the Lead Independent Director must be independent. The Lead Independent Director is responsible for coordinating the activities of the other independent directors and for performing such other duties and responsibilities as the Board may determine from time to time, including:

A description of the duties of the Lead Independent Director is included in the Corporate Governance Principles, a copy of which can be found in the governance section of our website at www.unfi.com.

Board Leadership Structure

The Board is currently led by the Chair of the Board, Mr. Spinner, and by the Lead Independent Director, Mr. Roy. Our Corporate Governance Principles do not require the Chair of the Board to be independent and do not specify whether the positions of Chair of the Board and the CEO must be separated. The Board regularly considers the appropriate leadership structure for the Company and has concluded that the Company and its stockholders are best served by the Board retaining discretion to determine whether the same individual should serve as both CEO and Chair of the Board, or whether the roles should be separated. The Board believes that it is important to retain the flexibility to make this determination at any point in time based on what it believes will provide the best leadership structure for the Company, based on the circumstances at such time. In September 2019, the Board chose to appoint a new Lead Independent Director to lead the Board with Mr. Spinner. Previously, James P. Heffernan had served as Lead Independent Director.

The Board believes that having Mr. Spinner serve as both Chairman and CEO, coupled with strong independent director leadership, including the Lead Independent Director, is the most appropriate leadership structure for the Company at this time, for several reasons. Having a single person fulfill the roles of Chair and CEO promotes decisive leadership, establishes clear accountability and enhances our ability to communicate with a single and consistent voice to stockholders, employees and other stakeholders. Together with our Lead Independent Director and in consultation with the chairs of the Board’s various standing committees, Mr. Spinner is well-positioned to set the Board’s agenda and provide leadership as to the strategic, compliance, and risk matters subject to the Board’s oversight. With over 30 years of operational and leadership experience with distributors of food and non-food products, Mr. Spinner has exceptional industry knowledge, which the Board believes is critical for the chair of a board of a company in an evolving industry, one that has undergone significant change in particular over the past eight years. The Board also noted Mr. Spinner’s strong performance as a leader. Mr. Spinner has most recently brought his industry knowledge and leadership skills to bear in integrating the business of Supervalu with our Company. At present, the Board believes that combining the roles of Chair and CEO, along with having a Lead Independent Director vested with key duties and responsibilities (as discussed above) and the Board’s standing committees consisting of and being chaired by independent directors (as discussed below), provides a formal structure for strong independent oversight of our management team. We plan to continue to examine our corporate governance policies and leadership structures on an ongoing basis so that they continue to meet our Company’s evolving needs.

Risk Oversight

The Board has overall responsibility for risk oversight. The Board exercises its oversight responsibilities with respect to strategic, operational and competitive risks, as well as risks related to the planning for succession of our CEO and other members of senior management. The Board has delegated responsibility for the oversight of certain risks to its committees. The Audit Committee and full Board receive management’s quarterly Enterprise Risk Management and Risk Committee reports and the Audit Committee discusses significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures with management, the Company’s internal audit department and our independent auditor. The Compensation Committee is responsible for developing and maintaining compensation policies and programs that do not encourage our executives to take unnecessary and excessive risks that could threaten our long-term value. The Nominating and Governance Committee oversees our compliance and environmental, social and governance programs. Other committees address risk on an ad hoc basis, as appropriate. All committees report to the full

Board as appropriate, including when a matter rises to the level of a material or enterprise-level risk. Certain risks are overseen by the full Board directly, such as strategic, cyber, other operational and macro-environment risks. We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing our Company.

Compensation Risk

Our Compensation Committee charter requires the Compensation Committee to assess, on an annual basis, whether the Company’s compensation policies and practices encourage the Company’s executive officers or other key employees to take unnecessary and excessive risks that could threaten the value of the Company. The Compensation Committee believes that our compensation policies do not encourage the taking of unnecessary and excessive risks. Our compensation and governance practices are designed to align the interests of our executive officers with the interests of stockholders and the achievement of the Company’s performance objectives. For example:

Anti-Hedging and Insider Trading Policies

Our Stock Ownership Guidelines and our Policy Regarding Trading in Company Securities (“Insider Trading Policy”) include prohibitions against speculative trading activities in relation to Company securities. Senior employees, including executive officers, and non-employee directors are strictly prohibited from entering into any transaction that would operate as a hedge against their ownership position of stock or that would hedge against the financial effect of their building up stock ownership to reach the requirements set forth in our Stock Ownership Guidelines. Under our Insider Trading Policy, directors, certain employees (including executive officers) and other individuals with access to material non-public information about the Company are prohibited from engaging in transactions in Company securities during blackout periods (other than in accordance with a pre-approved Rule 10b5-1 trading plan), and such persons are required to pre-clear (through discussion) any transactions in Company securities with a member of our securities department. Under our policy governing 10b5-1 trading plans, we permit all directors and employees, including executive officers, to enter into 10b5-1 plans. All plans must have a 30-day “cooling-off” period between entering into a plan and the start of trading under that plan, and no plan may be shorter than six months or longer than 18 months.

Committees of the Board of Directors

The Board currently has three standing committees: the Compensation Committee, the Audit Committee and the Nominating and Governance Committee. Upon recommendation of the Nominating and Governance Committee, the full Board appoints members of each committee. Each committee is responsible for appointing its chair.

Compensation Committee. The Compensation Committee establishes or approves all policies and procedures related to our human resources function with respect to our executive officers, including employee compensation, incentive programs, and the 401(k) Plan, and administers our stock incentive plans. Additionally, this committee evaluates and establishes the respective compensation of our executive officers on an individual basis, including our CEO and Chief Financial Officer (“CFO”). The Compensation Committee also reviews the compensation of certain other members of our senior management team and recommends to the Board the compensation for our non-employee directors. For a description of the role of the Compensation Committee, its consultants and management in setting executive compensation, please see “EXECUTIVE COMPENSATION—Compensation Discussion and Analysis—How We Make Decisions Regarding Executive Pay.” The Compensation Committee approves our compensation discussion and analysis included in our annual proxy statements. The Compensation Committee oversees our leadership development and management succession planning, as well as our diversity initiatives.

The agenda for meetings of the Compensation Committee is determined by its Chair with the assistance of our CEO, CFO, Chief Human Resources Officer (“CHRO”) and General Counsel and Secretary. Compensation Committee meetings are regularly attended by the Chairman of the Board and CEO, the CFO, the CHRO and the General Counsel. At certain meetings during fiscal 2019, the Compensation Committee met in executive session. The Compensation Committee’s Chair reports the committee’s recommendations on executive compensation to the Board. Independent advisors and our finance, human resources, benefits and legal departments support the Compensation Committee in its duties and may be delegated authority to fulfill certain administrative duties regarding the compensation programs. The Compensation Committee has authority under its charter to retain, approve fees for (and, as may be necessary or advisable, change or terminate) a compensation consultant, legal counsel or other advisor as it deems necessary to assist in the fulfillment of its responsibilities. The Compensation Committee annually evaluates the independence of its consultants and assesses their performance pursuant to a pre-approval policy.

The Compensation Committee’s charter is available on our website, www.unfi.com. The charter was most recently amended in September 2019. The Compensation Committee held six meetings during fiscal 2019. The current members of the Compensation Committee are Messrs. Heffernan (chair), Artz and Stahl, and Ms. Dufresne, each of whom is an independent director under the SEC and NYSE rules applicable to compensation committee members.

Audit Committee. The Audit Committee is responsible for monitoring the integrity of our financial reporting process and systems of internal controls and compliance regarding finance and accounting; monitoring the independence and performance of our independent registered public accounting firm; and overseeing our internal audit department. Among the Audit Committee’s duties are to review the results and scope of the audit and other services provided by our independent registered public accounting firm.

The Audit Committee’s charter is available on our website, www.unfi.com. The charter was most recently amended in October 2018. The Audit Committee held eight meetings during fiscal 2019. The current members of the Audit Committee are Ms. Bates (chair) and Messrs. Heffernan, Muehlbauer and Stahl, each of whom is an independent director under SEC rules and the NYSE listing standards applicable to audit committee members. The Board has determined that Ms. Bates and Messrs. Heffernan, Muehlbauer and Stahl are audit committee financial experts, as defined by the rules and regulations of the SEC.

Nominating and Governance Committee. The Nominating and Governance Committee is responsible for developing, reviewing and recommending to the Board for adoption our Corporate Governance Principles; identifying and nominating candidates for election to the Board; assessing and making recommendations to the Board regarding the size and composition of the Board and the size, composition, scope of authority, responsibilities and reporting obligations of each of the Board’s committees; assisting the Board in conducting performance reviews of the Board and its committees and members; and other duties and responsibilities. The Nominating and Governance Committee is also responsible for reviewing related party transactions under our Related Party Transaction Policy and oversees certain compliance matters under our Code of Conduct that are not related to finance or accounting (which are overseen by the Audit Committee).

For information regarding the director nomination process undertaken by the Nominating and Governance Committee, please refer to “PROPOSAL 1—ELECTION OF DIRECTORS—Nomination of Directors.”

The Nominating and Governance Committee’s charter is available on our website, www.unfi.com. The charter was most recently amended in October 2018. The Nominating and Governance Committee held six meetings during fiscal 2019. The current members of the Nominating and Governance Committee are Mmes. Clark (chair) and Dufresne and Messrs. Roy and Muehlbauer, each of whom is an independent director.

Board Meetings

During fiscal 2019, the Board met 11 times and following many of the Board’s meetings, the independent directors met in executive session without the presence of management (including meetings conducted by telephone conference). All directors attended at least 75% of the aggregate meetings of the Board and of the committees on which they served. We encourage each member of the Board to attend our annual meetings of stockholders. All of our directors attended the 2019 annual meeting through the virtual annual meeting.

Stockholder Engagement

Stockholder engagement is an important and regular part of the Company’s strategy to make sure that the Board and management are aware of and respond to stockholder input on a broad spectrum of business and governance matters. Each of management, our Lead Independent Director, and the Chair of our Compensation Committee have participated in discussions with stockholders as part of our efforts to gain an understanding of stockholder views. For the second consecutive year, the Company reached out to a greater number of investors than in past years. Management found its outreach efforts in 2018 and 2019 to be very helpful in understanding our investors’ perspectives on various business and governance matters and intends to maintain ongoing discussions with a large number of investors each year.

Topics of discussion included corporate governance, specifically Board refreshment and Board leadership structure, updates regarding the acquisition and integration of Supervalu, components of our executive compensation, of which many investors mentioned the improvements made in response to our stockholder engagement last year, and our sustainability and philanthropy programs. Stockholders were supportive of our efforts to strengthen our existing corporate governance policies and were pleased with our efforts regarding Board refreshment.

Board Evaluation and Refreshment

Our Board regularly evaluates its composition, assessing individual director’s skills, qualifications and experience to align the overall Board composition to best meet the needs of the Company’s evolving long-term business strategy. Each year, the Board assesses the directors to be nominated at the annual meeting. The Board uses a skills matrix to assess the different contributions, background and experience of each director. The Nominating and Governance Committee considers prospective candidates and identifies appropriate individuals for the Board’s further consideration. The Nominating and Governance Committee also assesses the proper mix of skills and expertise for directors serving on the Board’s committees. In September 2019, the Board, upon the recommendation of the Nominating and Governance Committee, revised the composition of the Audit and Compensation Committees. The current composition of each committee is disclosed above.

With the acquisition of Supervalu, the Board considered the appropriate size of the Board and determined that it should be expanded to add individuals with varying skills, qualifications and experience. After a thorough Board evaluation process, which included engaging a third-party to conduct interviews and surveys of each Board member, working with a third-party consulting firm, the Nominating and Governance Committee successfully identified two candidates possessing the desired mix of expertise and background to complement the Board’s then-existing skills and experience. The Board appointed James Muehlbauer in April 2019 and Jack Stahl in June 2019 to serve as directors of the Board in recognition of their extensive financial and strategic backgrounds, as well as executive leadership experience. Each of them was appointed to the Audit Committee, while Mr. Muehlbauer also serves on the Nominating and Governance Committee and Mr. Stahl also serves on the Compensation Committee. In September 2019, the Board appointed Mr. Roy as Lead Independent Director to further its efforts of rotation of key Board leadership roles and appointed a new Chair of the Nominating and Governance Committee, Ms. Clark.

The Board has three directors who have served for more than 10 years, in addition to our CEO, while the remaining directors have served for six or fewer years, with two new directors as of 2019. The overall average tenure of the Board is under eight years.

While the Board does not have a formal diversity policy, the Board is in fact diverse in gender and ethnic background, as well as having a broad range of experience. Three out of ten directors are female. Our youngest director is 47 and our oldest director is 73. The Board is highly committed to the Company, as indicated by the high attendance rate for each Board and committee meeting held during fiscal 2019 and prior years.

Sustainability

The Company has long been committed to incorporating environmentally sustainable and socially responsible practices into its business operations. This commitment is described in our Social and Environmental Responsibility Policy, which is available on our website, www.unfi.com. Under its charter, our Nominating and Governance Committee has direct oversight of our policies and strategies addressing environmental, social and governmental matters, including sustainability, corporate responsibility and political contributions, and is responsible for reporting to the Board on such matters at least annually.

Food waste is a key concern for our business. We have committed to reporting annually on our food waste diversion efforts, beginning in 2020, including certain estimated information on the amount of food sent to landfills or cycled through other waste diversion methods, and an estimate of greenhouse gas emissions avoided through our waste diversion programs. This information will be extrapolated through various auditing and testing procedures undertaken by the Company in 2019.

In addition, we are commencing a review of our sustainability programs to determine where we have opportunities to make enhancements that will drive greater value for the communities we serve and our broader business. We expect to complete this review in 2020.

We expect to release our 2019 Corporate Responsibility Report in the coming months, which will include more details on how we serve our communities, employees, and the environment. When issued, the report will be available on the “Sustainability” section of our website.

previous experience includes two other consumer goods companies, Warner Music Group, formerly a division of Time Warner Inc., and Apple Inc. Ms. Clark has over 20 years of experience in the delivery of enterprise resource planning, digital platforms and innovative business transformation initiatives.

Ms. Clark’s extensive background, particularly her expertise involving information technology, allows her to provide the Board valuable guidance on our strategic initiatives, especially as it relates to information technology solutions.

Daphne J. Dufresne, age 47, has served as a member of the Board since October 2016. Ms. Dufresne is a member of the Compensation Committee and Nominating and Governance Committee. Ms. Dufresne has been a Managing Partner of GenNx360 Capital Partners since January 2017. Ms. Dufresne was previously a Managing Director of RLJ Equity Partners, a private equity fund, from December 2005 to June 2016. Ms. Dufresne participated in building the RLJ investment team, raising capital to fund its operations and constructing a partnership with The Carlyle Group, a global private equity firm. Prior to that role, Ms. Dufresne was a Venture Partner during 2005 with Parish Capital Advisors, an investment fund for emerging and experienced institutional investors and a Principal from 1999 to 2005 at Weston Presidio Capital, a private equity organization. She also served as Associate Director in 1997 in the Bank of Scotland’s Structured Finance Group. Ms. Dufresne has been a director of Condor Hospitality Trust, Inc. since June 2015, and was appointed chair in May 2019.

Ms. Dufresne’s professional experience, including her role as an equity investor for over 23 years, brings valuable knowledge and insight to our Board. Ms. Dufresne is very familiar with conducting due diligence, negotiating purchase and sale agreements and leading the board during these processes. She possesses experience in owning and managing enterprises like our Company and is familiar with corporate finance, strategic business planning activity and general issues involving various types of stockholders.

Michael S. Funk, age 65, has been a member of the Board since February 1996 and served as Chair of the Board from January 2003 to December 2003, and again from September 2008 to December 2016. Mr. Funk served as our President and Chief Executive Officer from October 2005 to September 2008. Mr. Funk also served as Vice Chair of the Board from February 1996 until December 2002, as our Chief Executive Officer from December 1999 until December 2002 and as our President from October 1996 until December 1999. From its inception in July 1976 until April 2001, Mr. Funk served as President of Mountain People’s Warehouse, Inc., now known as United Natural Foods West, Inc., one of our wholly-owned subsidiaries.

Mr. Funk’s extensive knowledge of our industry and our historical operations, as well as his past service as our Chief Executive Officer, brings to the Board valuable insight into the core operations of our Company and a deep understanding of the natural and organic products distribution business. His institutional knowledge of all operational aspects of our business resulting from his long-term involvement with our Company is valuable to the Board.

James P. Heffernan, age 73, has served as a member of the Board since March 2000. Mr. Heffernan serves as Chair of the Compensation Committee and as a member of the Audit Committee, and until September 2019, served as the Lead Independent Director. Mr. Heffernan has served as a Director of Jason Industries, Inc. since August 2013 and served as a Director of Command Security Corp. from October 2010 until February 2019. Mr. Heffernan previously served as Vice Chairman and Trustee of the New York Racing Association from November 1998 until 2012, a member of the Board of Directors of Solutia, Inc. from February 2008 until July 2012, and a member of the Board of Directors of Columbia Gas System, Inc. from January 1993 until November 2000.

Mr. Heffernan’s overall professional experience, together with his other board service, has provided him with the background and experience of board processes, function, compensation practices and oversight of management that are valuable to the Board.

James Muehlbauer, age 58, has served as a member of the Board of Directors since April 2019. Mr. Muehlbauer serves as a member of the Audit Committee and Nominating and Governance Committee. Mr. Muehlbauer served as the Executive Vice President, Chief Financial and Administrative Officer for The Valspar Corporation from 2013 to 2017. Prior to that role, Mr. Muehlbauer served as Executive Vice President and Chief Financial Officer of Best Buy Co., Inc. from 2007 to 2013.

Mr. Muehlbauer’s extensive finance, commercial and leadership experience with complex, multinational organizations provide him with background and experience in strategic planning, financial oversight, and large-scale business transformations. Mr. Muehlbauer’s knowledge and experience in broad strategic transitions and large-scale integration efforts are a valuable addition to our Board.

Peter A. Roy, age 63, has served as a member of the Board since June 2007 and as the Lead Independent Director since September 2019. Mr. Roy is a member of the Nominating and Governance Committee. Mr. Roy is an entrepreneur and since 1999 has been a strategic advisor to North Castle Partners, a small cap consumer private equity firm. In connection with his role as a strategic advisor to North Castle Partners, Mr. Roy served on the boards of Avalon Natural Products, Inc., Naked Juice Company and Applegate Farms. From 1993 to 1998, Mr. Roy served as President of Whole Foods Market, Inc. and, for five years prior to that, served as President of that company’s West Coast Region.

Mr. Roy’s experience as the President of Whole Foods Market, Inc. allows him to provide the Board essential insight and guidance into the day-to-day operations of natural and organic products retailers, including our largest customer. In addition, his experience in the healthy lifestyle industry helps the Board maintain its focus on our core values, including our sustainability goals.

Steven L. Spinner, age 59, has served as Chairman of the Board since December 2016 and as our Chief Executive Officer and as a member of the Board since September 2008. He also served as our President from September 2008 until August 2018. Prior to joining the Company in September 2008, Mr. Spinner served as a director and as Chief Executive Officer of Performance Food Group Company (“PFG”) from October 2006 to May 2008, when PFG was acquired by affiliates of The Blackstone Group and Wellspring Capital Management. Mr. Spinner previously had served as PFG’s President and Chief Operating Officer beginning in May 2005. Mr. Spinner served as PFG’s Senior Vice President and Chief Executive Officer—Broadline Division from February 2002 to May 2005 and as PFG’s Broadline Division President from August 2001 to February 2002. Mr. Spinner has served as a Director of ArcBest Corporation, a holding company of businesses providing integrated logistics solution, since July 2011 and as its Lead Independent Director since April 2016.

Mr. Spinner’s extensive experience of over 30 years in the wholesale food distribution business, including having held executive management positions with major distribution businesses in the United States, brings valuable insight to the Board beyond the knowledge and insight he brings from being our President and Chief Executive Officer.

Jack Stahl, age 66, has served as a member of our Board since June 2019. Mr. Stahl serves on the Compensation Committee and the Audit Committee. Mr. Stahl has served as a member of the Board and the Lead Director of Catalent, Inc., a contract manufacturing and development company for drugs, biologics and consumer health products since August 2014. Mr. Stahl served as President and Chief Executive Officer of Revlon Inc., a multinational cosmetics, skin care, fragrance and personal care company, from 2002 until his retirement in 2006. Prior to joining Revlon, Mr. Stahl served as President and Chief Operating Officer of The Coca-Cola Company from 2000 to 2001, after previously serving in various management positions of increasing responsibility, including Chief Financial Officer, during a tenure with Coca-Cola which began in 1979. Today, Mr. Stahl also serves on the Board of Advantage Solutions LLC, a leading provider of technology-enabled sales and marketing business solutions, and on the U.S. board of advisors of CVC Capital, a private equity firm. Additionally, he formerly served on the Boards of Schering Plough Corporation, Dr Pepper Snapple Group, Saks, Inc., Coty Inc. and Ahold Delhaize, and was chairman of the board of managers of New Avon LLC.

Mr. Stahl has extensive leadership and significant Board experience. Mr. Stahl has a long-term record of profit and value driving performance in both stable and turnaround operating environments; and significant experience with complex, large, and dynamic organizations. At The Coca-Cola Company and Revlon, he gained significant skills and general management experience in building brands, maximizing customer relationships, and reducing costs.

Majority Vote Standard for Election of Directors

Our Bylaws provide for a majority voting standard for the election of directors in an uncontested election. If the number of nominees exceeds the number of directors to be elected in an election (a contested election), directors will be elected by a plurality standard. When the number of nominees does not exceed the number of directors to be elected (an uncontested election), however, as is the case at this year’s Annual Meeting, our

Bylaws require each of the directors to be elected by a majority of the votes cast (that is, the number of shares voted “for” a director must exceed the number of shares voted “against” that director). If a nominee who is serving as a director is not elected at the annual meeting, under Delaware law the director would continue to serve on the Board as a “holdover director.” However, under our Bylaws, any director who fails to be elected must offer to tender his or her resignation to the Board. The Nominating and Governance Committee would then make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Nominating and Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. The director who offers to tender his or her resignation will not participate in the Board’s decision or the Nominating and Governance Committee’s deliberations (if the director is a member of that committee). All nominees for election as directors at the 2019 annual meeting are currently serving on the Board.

Nomination of Directors

The Nominating and Governance Committee reviews the qualifications of every person recommended as a nominee to the Board, including from third-party firms, to determine whether the recommended nominees are qualified to serve on the Board. The Nominating and Governance Committee has adopted standards by which it identifies nominees and determines if nominees are qualified to serve on the Board. The Nominating and Governance Committee evaluates recommended nominees in accordance with the following criteria:

Following this evaluation, the Nominating and Governance Committee will ultimately make recommendations for membership on the Board and review such recommendations with the Board, which will decide whether to invite or appoint the candidate to be a nominee for election to the Board.

Stockholder Director Recommendations and Proxy Access

Stockholder Director Recommendations. The Nominating and Governance Committee evaluates nominees recommended by stockholders on the same basis as nominees recommended by any other sources, including determining whether the candidate is qualified to serve on the Board based on the qualitative standards described above. To be considered by the Nominating and Governance Committee, a stockholder who wishes to recommend a director nominee must follow the procedures in our Bylaws related to director nominations described under “OTHER MATTERS—Stockholder Proposals for the 2020 Annual Meeting of Stockholders.” Written notice must be delivered or sent by first class U.S. mail addressed to Corporate Secretary, United Natural Foods, Inc., 313 Iron Horse Way, Providence, RI 02908.

Proxy Access. We have also adopted a proxy access provision in our Bylaws that permits a stockholder, or a group of up to 20 stockholders, owning continuously for at least three years, shares of our stock representing an aggregate of at least 3% of the voting power entitled to vote in the election of directors, to nominate and include in our proxy materials director nominees, provided that the stockholder(s), the nominee(s), and the notice satisfy the requirements in our Bylaws. The number of potential proxy access nominees nominated by all eligible stockholders shall not exceed the greater of (A) two or (B) 20% of the directors then in office. Under our Bylaws, to be timely, notice of proxy access director nominations must be received by our Corporate Secretary at the address specified above no earlier than 150 days and no later than 120 days prior to the first anniversary of the date the Company mailed its proxy statement for the preceding year’s annual meeting; provided, however, that if (A) the annual meeting is not within 30 days before or after the anniversary date of the preceding year’s annual meeting, or (B) no annual meeting was held during the preceding year, to be timely the stockholder notice must be received no later than 120 days prior to such annual meeting or, if later, the tenth day after the day on which notice of the date of the meeting was mailed or public disclosure of the date of the annual meeting is first made, whichever occurs first.

Communication with the Board of Directors

Our stockholders may communicate directly with the Board. All communications should be in written form and directed to Corporate Secretary, United Natural Foods, Inc., 313 Iron Horse Way, Providence, RI 02908, who will forward such communications to the appropriate party. All correspondence will be compiled and summarized by the Corporate Secretary and periodically submitted to the Board or individual directors. The Corporate Secretary may also forward certain correspondence elsewhere within the Company for review by a subject matter expert and response, as appropriate.

January 1, 2019, Mr. Funk did not receive cash compensation for his service as a director. Until January 1, 2019, we paid him a base salary and provided him with the health and welfare benefits and other employee benefits generally available to our executives. Mr. Funk’s base salary during fiscal 2019 was $134,100. In addition, Mr. Funk received equity-based compensation for his service as a director. During fiscal 2019, Mr. Funk received an equity grant of RSUs having a value of $365,000, or 11,820 RSUs, of which one half vested immediately and the remaining half vested on the six-month anniversary of the date of grant. Beginning in calendar year 2019, Mr. Funk is no longer an employee of the Company and since January 1, 2019, he receives compensation only for service as a non-employee director on the same terms as the other non-employee directors.

Deferred Compensation

Our non-employee directors were eligible to participate in the United Natural Foods, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) until it was frozen in February 2019, and, prior to being frozen with respect to new deferrals in January 2007, the United Natural Foods, Inc. Deferred Stock Plan (the “Deferred Stock Plan”, collectively, the “Deferral Plans”). For a description of the Deferral Plans, please see “EXECUTIVE COMPENSATION TABLES—Nonqualified Deferred Compensation—Fiscal 2019.”

Director Compensation Table—Fiscal 2019

The following table summarizes compensation provided to our former Chair of the Board (Mr. Funk) and each individual who served as a non-employee director during fiscal 2019.

Stock Ownership Guidelines

All non-employee directors are required to hold shares of our stock in an amount that is determined in accordance with the requirements of our stock ownership guidelines. The guidelines provide that each of our non-employee directors must acquire and hold shares of our common stock valued at three times the annual cash retainer, not including supplemental retainers for committee leadership. Our stock ownership guidelines require that each new non-employee director is expected to comply with the policy by the end of the fifth year after he or she becomes a member of the Board. Compliance with the guidelines is tested once per year for as long as the director serves on the Board. When calculating whether a director owns a sufficient number of shares under these guidelines, shares owned in a deferred compensation plan are included in the number of shares owned. Vested and unvested restricted stock and RSUs are also included, but unvested stock options do not count. Vested stock options and stock appreciation rights count to the extent of their net value after deduction for the exercise price. Directors are not allowed to hedge their interests in the stock held pursuant to the guidelines. In October 2018, we amended the guidelines for directors to exclude vested stock options to the extent that they do not exceed the net value after deduction for the exercise price; we also added an explicit prohibition against hedging of the interest required to meet the guidelines. Each of Messrs. Funk and Roy held more than 100% of the applicable guideline as of August 3, 2019. Our other directors were below the guidelines as of August 3, 2019, because the decline in our stock price affected the value of the shares they hold. They are nevertheless deemed to be in compliance as of that date as their ownership fell below the applicable requirements due solely to a decline in the stock price. If the reduction in our stock price is sustained at a level specified in our stock ownership guidelines for 18 months, the accumulation period will reset for our directors and they will be required to accumulate more shares to reach the required ownership level.

in which (i) any executive officer, director, nominee, beneficial owner or any of their respective immediate family members or affiliates, on the one hand, and (ii) the Company or any of its subsidiaries, on the other hand, participates. We review the responses to these questionnaires as part of our process for determining whether disclosure is required to be made under the SEC’s related person disclosure rules.

Transactions with Related Persons

We employed Hilary Spinner-Jacobs as a Sales Manager for the New York City and Long Island territories until March 2019. Ms. Spinner-Jacobs is the sister of Steven Spinner, our CEO and Chairman. In fiscal 2019, Ms. Spinner-Jacobs’ total compensation, which included her base salary, an annual cash award under our annual cash incentive plan, company retirement plan contributions and life insurance premiums paid by us, was less than $120,000. She also participated in other benefit programs on the same terms as other U.S. employees in comparable positions.

Steven Spinner has a minority interest in a private equity fund that is managed by his brother that owns a minority interest of less than 10% in each of two of the Company’s suppliers. In addition, Steven Spinner’s brother has direct equity ownership interests in each of these suppliers in excess of 10% of each company. Consolidated annual purchases from the suppliers for fiscal 2019 were approximately $0.2 million. Supplier terms are substantially the same as other suppliers with whom we have similar purchase volumes. We do not believe that Steven Spinner or his brother has a material interest in these transactions.

Described below is information concerning the business experience and qualifications of each of our executive officers except Mr. Spinner whose business experience and qualifications are described above in the section “Proposal 1—Election of Directors.”

John W. Howard was appointed Interim Chief Financial Officer in August 2019. Mr. Howard joined us in July 2019 as Senior Vice President, Finance. Prior to that, Mr. Howard served as Interim Chief Financial Officer for Prime Therapeutics from July 2018 to May 2019. From August 2014 to July 2017, Mr. Howard was Vice President, Corporate Finance for Valspar Corporation leading the global accounting, tax, treasury, regional CFOs and corporate financial planning and analysis. Prior to that, Mr. Howard held a number of finance and tax roles at Celanese Corporation and Reichhold, Inc. Mr. Howard began his career as a tax consultant with Arthur Anderson and PricewaterhouseCoopers.

Sean F. Griffin was appointed Chief Operating Officer in April 2019. He became the Chief Executive Officer of SUPERVALU INC. upon the acquisition of Supervalu by our Company. Prior to the acquisition of Supervalu, Mr. Griffin served as our Chief Operating Officer from September 2014 until August 2018, as our Senior Vice President, Group President from June 2012 to September 2014 and as our Senior Vice President, National Distribution from January 2010 to June 2012. Prior to joining us, Mr. Griffin was East Region Broadline President of PFG. Previously he served as President of PFG in Springfield, MA from 2003 until 2008. He began his career with Sysco Corporation in 1986 and has held various leadership positions in the foodservice distribution industry with U.S. Foodservice, Alliant Foodservice and Sysco Corporation.

Danielle Benedict was appointed as our Chief Human Resource Officer in September 2017. Ms. Benedict previously served as our Senior Vice President, Human Resources from May 2016 to September 2017 and as our National Vice President, Human Resources from August 2014 to May 2016 and Director, Compensation & Benefits from April 2013 to August 2014. Prior to joining us, Ms. Benedict was Vice President, Human Resources & Leadership Development at Clean Harbors Environmental Services from 2007 to 2013. She began her career with Dunkin Brands, Inc. in 1999.

Eric A. Dorne has served as our Chief Administrative Officer and Chief Information Officer since September 2016. Mr. Dorne previously served as our Senior Vice President, Chief Information Officer from September 2011 to September 2016. Prior to joining us, Mr. Dorne was Senior Vice President and Chief Information Officer for The Great Atlantic & Pacific Tea Company, Inc., the parent company of the A&P, Pathmark, SuperFresh, Food Emporium and Waldbaum’s supermarket chains located in the Eastern United States from January 2011 to August 2011, and Vice President and Chief Information Officer from 2005 to 2011. In his more than 30 years at The Great Atlantic & Pacific Tea Company, Mr. Dorne held various executive positions including Vice President of Enterprise IT Application Management and Development, Vice President of Store Operations Systems and Director of Retail Support Services.

Paul S. Green has served as our Chief Supply Chain Officer since August 2018. Mr. Green previously served as our President, Pacific Region from August 2016 to August 2018, Senior Vice President, Operations from June 2014 to August 2016, and Vice President, Operations from May 2010 to June 2014. Prior to joining

us, Mr. Green was Vice President of Sales for PFG-Springfield, MA from 2008 until 2010 and Vice President of Operations for PFG-Springfield, MA from 2005 until 2008. Mr. Green held various other leadership positions in his ten years at PFG. He began his career with Fleming Foods and held several positions over 16 years.

David W. Johnson has served as our Controller and Chief Accounting Officer since October 2018. Prior to our acquisition of Supervalu, Mr. Johnson served as Vice President, Controller of Supervalu since April 2013 and was appointed Chief Accounting Officer of Supervalu in April 2018, after previously serving as Interim Chief Accounting Officer of Supervalu since July 2017. From 2012-2013, Mr. Johnson served as Supervalu’s Vice President, Assistant Controller and as its Senior Director, Assistant Controller from 2011 to 2012.

Jill E. Sutton has served as our Chief Legal Officer, General Counsel and Corporate Secretary since October 2018. From May 2018 to October 2018, she served as our Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary. Prior to joining us, Ms. Sutton was Deputy General Counsel and Corporate Secretary at General Motors from 2015 to 2018 and Executive Vice President, General Counsel and Corporate Secretary at Tim Hortons, Inc. from 2012 to 2015. From 2006-2012, Ms. Sutton held various leadership roles of increasing accountability in the legal department at Tim Hortons, Inc.

Christopher P. Testa has served as our President, United Natural Foods, Inc. since August 1, 2018. In April 2019, he also became Chief Marketing Officer. From August 2016 to August 2018, he served as our President, Atlantic Region. Mr. Testa previously served as President, Woodstock Farms Manufacturing, from September 2012 to August 2016 and President, Blue Marble Brands, from August 2009 until August 2016. Mr. Testa served as Vice President of Marketing for Cadbury Schweppes Americas Beverages from 2002 to 2005 and as CEO of Wild Waters, Inc. from 2005 to 2009.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

In this section, we describe the principles, policies and practices that form the basis for our executive compensation program and how they were applied to our Named Executive Officers in fiscal 2019, as well changes we have made or expect to make for fiscal 2020. For purposes of this Compensation Discussion and Analysis, the following individuals were our Named Executive Officers for fiscal 2019:

Mr. Zechmeister resigned from his position as our Chief Financial Officer effective August 23, 2019. John W. Howard has been appointed Interim Chief Financial Officer until a permanent Chief Financial Officer is named.

Pursuant to the Compensation Philosophy adopted by our Compensation Committee, our compensation policies and programs are designed to support the achievement of our strategic business plans by motivating, retaining and attracting exceptional talent. Our ability to compete effectively in the marketplace depends on the knowledge, capabilities and integrity of our leaders. Our compensation programs help create a high-performance, outcome-driven and principled culture by holding leaders accountable for delivering results, developing our employees and exemplifying our core values. In addition, we believe our compensation policies and programs for leaders and employees are appropriately balanced, reinforce short- and long-term results, and therefore drive behavior that is aligned with our business objectives of driving long-term growth and shareholder value.

In October 2018, we completed the transformational acquisition of Supervalu which greatly expanded the size and complexity of our operations and required our executive officers to take on new and significantly greater levels of responsibility. For example, we now operate more than 60 distribution centers and warehouses, have more than 19,000 employees, offer approximately 250,000 stock keeping units (SKUs), and serve approximately 30,000 unique customer locations. The challenges of integrating the Supervalu business makes it critical for us to continue to be able to attract, retain and appropriately incentivize talented leadership.

In 2018 and fiscal 2019, we adopted changes in our executive compensation policies to reflect best practices. We proactively sought out the views of our shareholders through our shareholder engagement program and have adopted changes that responded to their concerns. We continue to value and respond to the input we receive on executive compensation, as further described below.

Executive Compensation Program Highlights

Our executive compensation program is designed to align our executive compensation with long-term stockholder interests and incorporates the following best practices:

Performance Highlights and Supervalu Acquisition

Fiscal 2019 was an historic year for our company as we completed the acquisition of Supervalu on October 22, 2018 and began our transformation into North America’s premier wholesale distributor. By the end of fiscal 2019, we had combined our natural and conventional businesses, operating with a single executive leadership team. We are nearly complete with our Pacific Northwest distribution center consolidation whereby we will operate out of two distribution centers compared to five previously, a move which will provide significant operating benefits. We realized significant cost synergies, which were partially reinvested into the business. In early fiscal 2020, we successfully created a four-region operating structure with a sales organization aligned in a similar fashion and consolidated to leverage cross-selling opportunities. We believe these changes will advance the execution of our long-term strategic and growth objectives.

Key Highlights from fiscal 2019:

Say on Pay Vote and Investor Engagement

Our annual say-on-pay vote is one of our opportunities to receive feedback from stockholders regarding our executive compensation program. Prior to 2017, we consistently received strong stockholder support for our executive compensation for our Named Executive Officers, averaging more than 95% approval for compensation in fiscal years 2014 through 2016. At our 2017 annual meeting, approximately 66% voted against our proposal. Our Board and Compensation Committee took this matter very seriously and made changes to our compensation program as discussed in last year’s Proxy Statement. We are happy to report, that at our annual meeting of stockholders in December 2018, we submitted a proposal to our stockholders to approve on an advisory basis our executive compensation for our Named Executive Officers for fiscal 2018, and over 91% of our stockholders voted for that proposal. In addition to regular communication with our stockholders about our business results, we welcome feedback from our stockholders on our executive compensation programs and corporate governance, including through an established, ongoing stockholder engagement program.

In fiscal 2019, we made further changes to our executive compensation programs in response to investor engagement, and we continue to implement additional changes in response to what we have heard. Investors we spoke with at the end of fiscal 2019 and the beginning of fiscal 2020 tended to view these changes positively. Among other things, we:

Executive Compensation Program Philosophy

Under our executive compensation philosophy adopted by our Compensation Committee, our executive compensation program is designed to:

Our executive compensation program is also designed to reinforce a sense of ownership in the Company, urgency with respect to meeting deadlines and overall entrepreneurial spirit. The program links rewards, including both short- and long-term awards, as well as cash and non-cash awards, to measurable corporate performance metrics established by the Compensation Committee.

The program measures achievement of corporate financial goals. These goals support our short- and long-term business strategies and are aligned with the interests of our stockholders. By aligning all executives to corporate financial goals, we encourage a shared focus and collaborative work toward strong, long-term operating performance. In addition, our executive compensation program is designed to balance our growth strategies with a managed approach to risk tolerance. Our compensation programs provide assurances of stability and a focus on the long term, together with an insistence on personal integrity and compliance.

How We Make Decisions Regarding Executive Pay

The Compensation Committee, management and the Compensation Committee’s independent compensation consultant (which was Semler Brossy for purposes of fiscal 2019 compensation) each play a role in designing our executive compensation program and determining performance levels and associated payouts. We also look at market data and take into consideration stockholder concerns about executive compensation expressed in our stockholder engagement process, as described above.

Role of the Compensation Committee

The Compensation Committee is responsible for establishing, implementing and monitoring our executive compensation program and its adherence to our compensation philosophy. The Compensation Committee approves the performance thresholds and our executive officers’ individual financial and strategic performance metrics applicable to our annual cash incentive plan as described in “Components of our Executive Compensation Program for Fiscal 2019—Performance-Based Annual Cash Incentive Compensation” and sets performance metrics applicable to the performance-based component of our long-term equity incentive plan as described in “Components of our Executive Compensation Program for Fiscal 2019—Long-term Equity-Based Incentive Program”. The Compensation Committee is responsible for approving our employment policies and agreements affecting executive officers. The Compensation Committee also evaluates actual corporate and individual performance against the established goals and determines appropriate levels of compensation for our executives. The Compensation Committee makes all decisions with respect to, and approves, compensation for our executive officers, including base salary, annual cash incentive, long-term equity incentive, and benefits, provided the compensation of our CEO is reviewed and ratified by the independent members of our Board.

As part of the compensation approval process for our executive officers, other than our CEO, the Compensation Committee considers the views and recommendations of management, particularly our CEO. In setting the compensation for all of our executive officers, the Compensation Committee considers the recommendation of its independent compensation consultant as described in greater detail below.

Role of Management

Our CEO and Chairman and CHRO provide the Compensation Committee with an assessment of our corporate performance, market pay practices, and the performance of our executive officers and make recommendations for the compensation of our other executive officers based on this assessment, including recommendations for pay mix and the nature of performance metrics that best support our business objectives. Additionally, our CEO and Chairman, CHRO and CFO discuss with the Compensation Committee management’s internal projections with respect to a variety of performance metrics and operations goals for future fiscal years on which performance-based compensation will be based. The Chief Legal Officer, General Counsel and Corporate Secretary advises on the foregoing matters and provides guidance on governance principles and practices, investor perspectives and regulatory trends and analyses in the context of executive compensation determinations.

No executive officer makes any decision on any element of his or her own compensation, and our Chief Executive Officer and Chairman does not participate in deliberations regarding his compensation, which is recommended by the Compensation Committee to the full Board.

Role of Independent Compensation Consultant

The Compensation Committee selected and directly retained Semler Brossy as its compensation consultant during fiscal 2019 to provide independent, third-party advice and expertise on all aspects of executive compensation and related corporate governance matters, including designing and establishing our executive compensation program for fiscal 2019 and fiscal 2020. Semler Brossy provided input and guidance related to our fiscal 2019 and fiscal 2020 incentive plan design, reviewed our Compensation Discussion and Analysis and associated disclosures, and summarized and provided perspective on market developments related to executive compensation, including regulatory requirements and related disclosures. Semler Brossy only provides services to the Compensation Committee. It does not provide any services to management. The Compensation Committee assessed the independence of Semler Brossy pursuant to SEC and NYSE rules, as described below, and concluded that no conflict of interest exists that would prevent Semler Brossy from serving as an independent consultant to the Compensation Committee. In the future, the Compensation Committee may retain other similar consultants.

As mentioned above, the Compensation Committee analyzed whether the work of Semler Brossy as its compensation consultant raises any conflict of interest, taking into consideration the following factors: (i) Semler Brossy does not provide any other services to the Company; (ii) the amount of fees the Company paid to Semler Brossy represents less than 2% of Semler Brossy’s total revenues; (iii) Semler Brossy maintains policies and procedures designed to prevent conflicts of interest; (iv) Semler Brossy does not have any business or personal relationship with an executive officer of the Company; (v) neither Semler Brossy nor any member of its consulting team directly owns any stock of the Company; and (vi) Semler Brossy does not have any known business or personal relationship with any member of the Committee. The Committee determined, based on its analysis of the above factors, that the work of Semler Brossy and the individual compensation advisors employed by Semler Brossy as compensation consultant to the Committee does not create any conflict of interest. The Committee will continue to monitor the independence of its compensation consultant on an annual basis.

Competitive Marketplace Assessment

In making compensation decisions, the Compensation Committee periodically, generally once per annum in August or September, reviews the compensation packages for officers in like positions with similar responsibilities at “peer” organizations, those that are similar to our company. In addition to compensation levels, the Compensation Committee also reviews program designs, including an assessment of pay vehicles and performance metrics, a Mercer general industry survey and other information provided by Semler Brossy. In selecting appropriate data, the Compensation Committee considered general industry companies with revenue between $10 and $25 billion. The market midpoint among these general industry companies is defined as the average of the 25^th and 50^th percentiles to account for the low-margin nature of the food distribution business relative to general industry companies. The Compensation Committee also reviews data from food and distribution-related businesses. The market midpoint for the food and distribution-related companies is set at the 50^th percentile. In setting compensation for fiscal 2019, the Compensation Committee considered the general industry data described above.

In making decisions in September and October 2018 concerning compensation for fiscal year 2019, the Compensation Committee also considered data from a select mix of the food and distribution-related companies of similar size and facing similar business conditions to the combined business of UNFI and Supervalu, with a median revenue of $17.6 billion. In setting compensation for Named Executive Officers for fiscal 2019, the Compensation Committee considered general industry data and a comparator group consisting of Sysco Corporation, Tech Data Corporation, Arrow Electronics, Inc., US Foods Holding Corp., Synnex Corporation, Avnet, Inc., Performance Food Group Company, CDW Corp., Supervalu, Henry Schein, Inc., Core-Mark Holding Co., Inc., Pilgrim’s Pride Corporation and SpartanNash Company. We were positioned near the 75^th percentile of our peer group with respect to revenue. In making decisions concerning Mr. Griffin’s employment agreement and compensation, the Compensation Committee also examined data for the most highly paid and second most highly paid executives at Sysco Corporation, Synnex Corp., W.W. Grainger, Inc., Staples, Inc., SpartanNash Company, Office Depot, Inc., Tech Data Corporation, CDW Corp., Wesco International, Inc. and Core-Mark Holding Co., Inc.

Market data is only one factor that the Compensation Committee considers when making determinations regarding executive compensation. Other factors considered include individual performance, internal equity, scope of responsibilities, tenure, criticality of the position and executive retention concerns, and the need to recruit new officers. The Compensation Committee does not target a specific positioning versus the market for each role and takes into account all the above factors in determining the competitiveness of our compensation.

Base Salary

For fiscal 2019, each of our Named Executive Officers assumed broader management responsibilities due to the merger with Supervalu, and the increase in their base salaries not only reflects those additional responsibilities, but also is commensurate with base salaries of executives with similar roles in the peer group discussed above. For fiscal 2019, the Compensation Committee considered data from the general industry group and a mix of food and distribution-related companies of similar size and facing similar business conditions to the combined business of UNFI and Supervalu, each as described above. Base salaries were generally targeted at the median of comparator companies similar to UNFI, which is represented by the range between the 25^th and 50^th percentile of general industry information. Mr. Spinner’s salary is in the middle of market midpoints for both the general industry and the comparator groups. Similarly, in the case of Messrs. Zechmeister, Griffin, Testa and Ms. Sutton, the competitive market assessment determined that their base salaries were below market for an employee performing comparable duties and their increase is indicative of our attempt to close this gap. Set forth below are the fiscal 2018 and fiscal 2019 base salaries for the Named Executive Officers and the percentage change between periods.

Performance-Based Annual Cash Incentive Compensation

Performance Metrics. The Compensation Committee is responsible for setting the minimum, target and “stretch” performance levels (objectives to be achieved) and related payout levels from $0 to maximum payout for our performance-based annual cash incentive compensation discussed below. Receipt of this compensation is contingent upon satisfaction of these corporate-wide metrics established by the Compensation Committee. The factors considered in setting this target compensation for fiscal 2019 were focused on fewer metrics given the merger with Supervalu, so that everyone was focused and aligned on key financial metrics tied to our long-term strategy. For our CEO & CFO these metrics originally included adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) and adjusted earnings per diluted share (“adjusted EPS”). For the other NEOs, the only metric was adjusted EBITDA. We believe using adjusted EBITDA as a performance metric focuses our executive officers on growth in core operational performance and rewards all officers for achievement of this important driver of overall financial performance.

Adjusted EBITDA is a non-GAAP performance metric that we further adjust in setting performance compensation. Earnings per diluted share (EPS) is a GAAP metric that we adjust in setting compensation, with the result that adjusted EPS is also a non-GAAP metric.

The Compensation Committee retains the ability to adjust targets in certain circumstances, including in the event that unbudgeted or unforeseen events would materially impact achievement such that it is not reflective of actual performance against the objectives it was designed to achieve. In making any such adjustment, consistent with established guidelines, the Compensation Committee reviews, among other things, the original target and the budget upon which the target was based, whether the events giving rise to a potential adjustment had been entered into or been contemplated at the time the performance targets were established and whether these factors are related to our core operating performance. After consideration of these factors, the Compensation Committee may determine to make adjustments to metrics or payouts where, absent such adjustment, the payout would not, in the Compensation Committee’s determination, be reflective of actual performance.

Performance-Based Annual Cash Incentive Targets (Potential Payouts). For our Named Executive Officers, the annual cash award targets, or potential payouts, for fiscal 2019 at various Company-wide performance levels were set as percentages of base salary as follows:

For example, if the Company achieved its targets at the threshold level, Mr. Spinner’s potential cash incentive would be an amount equal to 52.5% of his base salary; at target level, he would potentially receive a cash incentive in an amount equal to 150% of his base salary; and at the stretch level he would potentially receive an award equal to 300% of his base salary. The actual payout would also depend, however, on whether the Company met the threshold performance level. If performance were below the threshold level, there would be no payout. In addition, payout could be adjusted at the discretion of the Compensation Committee based on such factors as it deemed appropriate.

The bonus opportunities described above reflect the increased responsibilities of the individual officers following the Supervalu acquisition and alignment with market. For fiscal 2019, Mr. Spinner’s target was increased from 100% to 150% of base salary, Mr. Griffin’s target was increased from 75% to 125% of base salary, Ms. Sutton’s target was increased from 50% to 75% of base salary and each of Messrs. Testa and Zechmeister’s target remained unchanged at 75%.

Performance Targets. In initially setting the performance targets for fiscal 2019, the Compensation Committee reviewed historical levels of performance of each of legacy UNFI and Supervalu, expected initiatives in connection with the integration of the combined company, and the competitive environment. In establishing the intended degree of difficulty of the payout levels for each performance metric, the Compensation Committee set the performance targets at levels that required successful implementation of corporate operating objectives for meaningful payouts to occur. The Compensation Committee believed that the initial targets related to “threshold” performance were achievable in light of budgeted expectations, but the payouts for “target” performance and

“stretch” performance each required significant improvement over the prior year’s comparable performance after taking into account the impact of important Company-specific initiatives designed to support our growth and enhance our long-term operating results, including significant integration efforts. We believe that one of the best indicators of how difficult a performance metric was to achieve is reflected in what level of payout the executive actually received with respect to the metric.

The following is a breakdown of the original financial goals applied to each of the Named Executive Officers and the weighting of those metrics. These metrics provide a balanced performance-measurement framework that captures both earnings and profitability.

In contrast to prior years, to promote a shared focus by all executives on improving the core operating performance of the Company, annual incentive compensation for all Named Executive Officers, other than the CEO and the CFO, were weighted 100% to adjusted EBITDA. Personal and subjective goals, which in previous years had factored in the CEO’s annual incentive compensation, were no longer considered. Adjusted EPS was originally a component of the bonus potential for the CEO and the CFO to reflect their responsibility for Company performance beyond the level of internal operating improvements. As discussed in more detail below, the Compensation Committee determined that adjusted EPS would have resulted in a payout that was not in line with performance and exercised negative discretion with respect to Mr. Spinner’s payout.

Initial Establishment of Performance Targets. The performance targets tied to corporate-level financial goals selected by the Compensation Committee for the Named Executive Officers for fiscal 2019 were set in February 2019 at the following amounts:

Determination of Performance-Based Annual Cash Incentive Plan Payouts. In September 2019, the Compensation Committee reviewed with management our anticipated financial results for fiscal 2019 and certain proposed adjustments to adjusted EBITDA and adjusted EPS described below. The Compensation Committee approved the proposed adjustments and determined the levels at which adjusted EBITDA and adjusted EPS had been achieved as set forth below:

The Compensation Committee has the discretion to reduce the payout of annual incentive compensation to any Named Executive Officer. Adjusted EPS for purposes of determining performance was positively impacted by an $80 million purchase accounting adjustment, which, as shown above, would have resulted in a payout of 200% with respect to that metric and a blended 121.74% total payout to Mr. Spinner. The Compensation Committee determined that such a payout was not in line and exercised negative discretion with respect to the payout of Mr. Spinner’s 2019 cash incentive payment. For internal equity purposes, the Committee determined to base Mr. Spinner’s payout on the achievement and level for adjusted EBITDA, which was 43.49%. Payments of the bonus amount were made in a lump sum to each Named Executive Officer as described in the table below following the filing of our Annual Report on Form 10-K for the year ended August 3, 2019. The amount in the table below reflects Mr. Spinner’s actual payout. Mr. Zechmeister resigned prior to the bonus payout date and therefore forfeited any potential bonus payout.

Long-term Equity-Based Incentive Program

2019 Grant of Time-Vesting and Performance Units. Our long-term equity-based incentive program in fiscal 2019 for our Named Executive Officers consisted of RSUs and PSUs. Approximately 50% of the aggregate grant date fair value of these units awarded to Named Executive Officers represented RSUs and 50% were PSUs.

The Compensation Committee believes that a mix of time- and performance-based vesting restricted stock units provides a Named Executive Officer with an incentive to improve our stock price performance and a direct alignment with stockholders’ interests, as well as a continuing stake in our long-term success. In addition, because the time-based equity awards vest ratably over four years, and the performance units vest two years from the date of grant, if earned, we believe these awards provide strong retention incentives for the executives to remain employees of ours over the long term. As described below, in fiscal 2020, we made further changes to our program based on investor feedback to align vesting periods to three years.

In fiscal 2019, the Compensation Committee determined the target grant date fair value of equity awards for our compensation program was to be based on percentages of the recipient’s then base salary dependent on the eligible employee’s position within the Company. For our Named Executive Officers, the percentages were:

These grants were made in September and December when the Compensation Committee also approved changes to our executive officers’ annual base salaries and equity incentive targets, after the Supervalu acquisition.

Performance-Metrics for Performance Units. PSUs granted in fiscal 2019 (September 2018) have two equally-weighted performance criteria: fiscal 2019-2020 adjusted EBITDA and fiscal 2019-2020 adjusted return on invested capital (adjusted ROIC). Adjusted ROIC for purposes of the long-term incentive plan represents net operating profit after income taxes, divided by the sum of total debt and stockholders’ equity, plus or minus certain adjustments falling into categories approved by the Compensation Committee. Pursuant to the terms of the Company’s Equity Incentive Plan, the Compensation Committee may adjust performance criteria for certain enumerated events that are not directly related to the operations of the Company or within reasonable control of management. The Compensation Committee believes these metrics encourage a focus by our management team

on improving core operational performance and long-term value creation. Targets were based on projections for both fiscal years, taking into account the Supervalu acquisition in the first quarter of fiscal 2019. The applicable Named Executive Officers are eligible to earn between 0% and 200% of their targeted award, depending on our performance during the relevant measurement period. Adjusted EBITDA and adjusted ROIC must meet a minimum threshold level of performance for any payout to occur (shown below). In addition to the performance criteria tied to adjusted EBITDA and adjusted ROIC, the Compensation Committee approved the ability to adjust the number of units that will vest upward or downward by up to 10% depending on how our common stock price performs relative to the S&P Mid Cap 400 Index (“Relative TSR”) over the two-year performance period ending on the close of fiscal 2020.

The performance metrics underlying these performance units were established by the Compensation Committee based on our business planning process with target level of performance established at levels that were, at the time of the grant, consistent with our internally prepared projections with significant improvements over those projections required to achieve above-target payouts and a threshold level of adjusted EBITDA and/or adjusted ROIC established below which none of the performance units would be earned.

Prior Long-term Equity-Based Incentive Program, Results & Payouts

Fiscal 2018 Executive Two-Year LTIP. The performance-based restricted stock units granted in fiscal 2018 (September 2017) have two metrics: fiscal 2019 adjusted EBITDA, calculated in the same manner as the metrics for the annual cash incentive plan, and fiscal 2019 adjusted ROIC, calculated as described above. The applicable Named Executive Officers were eligible to earn between 0% and 200% of their targeted award, depending on our performance during the relevant measurement period with respect to five levels of performance for adjusted EBITDA and adjusted ROIC, respectively. In addition to the performance criteria tied to adjusted EBITDA and adjusted ROIC, the grants included the ability for the Compensation Committee to adjust the number of units that will vest upward or downward by up to 10% depending on the Relative TSR over the two-year performance period. The number of units that will vest is adjusted up or down proportionally by up to 10% based on the number of basis points difference between our performance and the performance of the S&P Mid Cap 400 Index.

In September 2019, the Compensation Committee reviewed performance against the two-year performance period ending in fiscal 2019. The original adjusted EBITDA target was $368 million and adjusted ROIC was 7.55%. Targets were increased to account for the impact of the Supervalu acquisition and to require a “makeup” for fiscal 2018 underperformance. Performance ranges between threshold and maximum levels remained at the originally approved payout curves.

Based on the matrix below, payout was 5.3% due to adjusted EBITDA results of $588.9 million, which reflects the adjustments described above, below threshold, and adjusted ROIC of 4.21%. See Annex B for reconciliation to the most comparable GAAP metric.

The number of earned PSUs was then adjusted downward by 10% as a result of application of the Relative TSR modifier. The table below shows the number of shares earned compared to target.

Fiscal 2017 CEO Awards (Fiscal 2019 Component & Cumulative 3-Year)

In fiscal 2017 (October 2016), the Compensation Committee approved a special PSU award for Mr. Spinner to align his compensation with our Company’s long-term success during a critical period of our Company’s strategic efforts. Mr. Spinner’s award totaled 150,000 units at target level of performance with vesting for 50,000 units annually at target level performance based 50% each on the Company’s net sales and adjusted EBITDA for each of fiscal 2017, 2018 and 2019 and 25,000 units at target level performance based on our cumulative adjusted EBITDA for the three-year period inclusive of fiscal 2017, 2018 and 2019.

In September 2019, the Compensation Committee reviewed performance against the targets for the fiscal 2019 net sales and adjusted EBITDA, as well as the cumulative performance of adjusted EBITDA for fiscal 2017 through 2019. Below are the targets, threshold and actual results and related payouts for these awards.

Fiscal 2017 and fiscal 2018 components have paid out at 96.7% and 107.5% of target, respectively. The table below represents fiscal 2019 and cumulative three-year targets and results only.

The original fiscal 2019 targets for net sales and adjusted EBITDA were $10,050 million and $353 million, respectively. The original three-year cumulative target for adjusted EBITDA was $1,010 million. Following the Supervalu transaction, the Committee revised the targets upward to reflect the acquisition and avoid a payout level that was not reflective of operational performance. At the same time, the Committee removed the GAAP EPS gateway metrics for each period as it was originally included because it was not reflective of operational performance of the newly combined company and in light of the number of adjustments to GAAP EPS that were likely as a result of the Supervalu acquisition.

(Metric in 000’s except per share and % data)

(Metric in 000’s except per share and % data)

As a result of the above achievements, Mr. Spinner earned 53,345 and 24,243 shares with respect to the fiscal 2019 metrics and cumulative 3-year metrics, respectively.

Other Compensation and Benefits

The Named Executive Officers are eligible for the same level and offering of benefits that we make available to other employees, including our 401(k) plan, health care plan, life insurance plans, and other welfare benefit programs. In addition to the standard benefits offered to all employees, the Named Executive Officers were eligible to participate in the Deferral Plans prior to such plans being frozen. For a description of the Deferral Plans, see “EXECUTIVE COMPENSATION TABLES—Nonqualified Deferred Compensation—Fiscal 2019.” below. We do not have any defined benefit pension plans available to our Named Executive Officers. The Deferral Plans were frozen in February 2019 and are expected to be paid out in early 2020.

Additional Benefits. We provide certain Named Executive Officers with additional benefits that we believe are reasonable and consistent with our overall executive compensation program. The costs of these benefits constitute only a small portion of each Named Executive Officer’s total compensation and includes, for certain Named Executive Officers, contributions to our defined contribution plan, the payment of premiums for life insurance, housing and automobile allowances, relocation expenses and commuting air travel reimbursement. We offer perquisites and other benefits that we believe to be competitive with benefits offered by companies with whom we compete for talent for purposes of recruitment and retention.

Retirement. Under the Company’s stock incentive plan and historically in its award agreements with executives, an executive who retired would generally forfeit his or her award if it had not yet vested. In the second quarter of fiscal 2019, after reviewing retirement provisions and practices for the treatment of equity awards at comparable companies, the Compensation Committee determined to change the terms of its long-term compensation awards to accommodate executives who might consider retiring and to better assure that their awards provided an incentive to work for the long-term best interests of the Company regardless of their retirement plans. Accordingly, the Committee determined that time-vesting RSUs will continue to vest during retirement on the same terms as they would if the executive had not retired, but without the requirement that they remain employed. PSUs will be treated similarly on retirement, but subject to actual performance at the time achievement of performance objectives is measured. In addition, an executive’s equity awards granted in the year of retirement will be prorated to reflect the service period prior to the date of retirement. Retirement vesting is only available to employees age 59 or older who voluntarily terminate employment after at least 10 years of service to the Company.

The Compensation Committee determined to make no changes to target levels as a percent of base salary for our annual cash incentive plan and long-term incentive plan. According, fiscal 2020 targets remain unchanged and are as set forth below.

Other changes to fiscal 2020 compensation program.

In September and October 2019, the Compensation Committee reviewed our executive compensation program, including feedback received through our stockholder engagement program in the last two years. The Compensation Committee made the following changes to our plan design.

Employment Agreements with Messrs. Spinner and Griffin, Severance Agreements and Change in Control Agreements

Employment Agreement with Steven L. Spinner

We are a party to an employment agreement with Mr. Spinner which was entered into in October 2016, and amended and restated on November 5, 2018 (as amended and restated, the “Spinner Employment Agreement”).

The initial term of the Spinner Employment Agreement is through December 31, 2020 and may be renewed for one year by mutual consent of the parties. Under the agreement, Mr. Spinner will receive an annual base salary of $1,200,000 and will be eligible to participate in the Company’s annual cash and long-term incentive plans with a target annual bonus opportunity of 150% of his annual base salary and target annual equity opportunity of 425% of his annual base salary, respectively.

Upon a termination by the Company without Cause (as defined in the Spinner Employment Agreement), resignation by Mr. Spinner for Good Reason (as defined in the Spinner Employment Agreement) or if the Company does not offer to renew the initial term and Mr. Spinner’s employment terminates thereafter for any reason (except for Cause), subject to the effectiveness of a release in favor of the Company, Mr. Spinner will receive (a) 200% of his then current base salary, (b) 200% of his current-year annual cash incentive payments based on target performance and (c) the pro-rated portion of the current-year annual cash incentive payments he would have been owed for the fiscal year in which his employment was terminated based on the Company’s actual results when measured against the performance metrics applicable to Mr. Spinner for that period. Severance also would include payments to Mr. Spinner of $35,000 that he could use to pay for medical benefits for himself and his dependents following termination. In addition, if Mr. Spinner were terminated without Cause or Mr. Spinner voluntarily terminated his employment for Good Reason, any stock options awarded to Mr. Spinner and not vested and exercisable on or prior to the date of Mr. Spinner’s termination that would otherwise have become vested and exercisable on or prior to the first anniversary of the date of Mr. Spinner’s termination, and any shares of restricted stock (including RSUs settled in shares of common stock) and performance-based vesting equity awards (including PSUs settled in shares of common stock) granted to Mr. Spinner that would have had any restrictions thereon removed or vested on or prior to the first anniversary of the date of Mr. Spinner’s termination, would, in each case, have any restrictions thereon removed or become vested, as the case may be, with such restrictions with respect to any performance-based vesting equity awards to be removed on that number of awards as Mr. Spinner would have earned based on performance at the greater of target or actual levels of performance for the current year (but only if any gateway performance metrics applicable to the awards are achieved).

If Mr. Spinner’s employment is terminated without Cause or Mr. Spinner voluntarily terminates his employment for Good Reason during the two-year period following a Change in Control (each as defined in the Spinner Employment Agreement), in lieu of the non-Change in Control severance payments and benefits, and subject to the effectiveness of a release in favor of the Company, Mr. Spinner will receive (a) 2.99 times his then current base salary, (b) 2.99 times the current-year annual cash incentive payments based on target performance and (c) the pro-rated portion of the current-year annual cash incentive payments he would have been owed for the fiscal year in which his employment was terminated based on the Company’s actual results when measured against the performance metrics applicable to Mr. Spinner for that period. The Company would be required to make payments to Mr. Spinner of $105,000 that he may use to pay for medical benefits for himself and his dependents following termination. In addition, any and all unvested and unexercised stock options, restricted stock, restricted stock units and performance-based vesting equity awards granted to Mr. Spinner would be treated in accordance with the applicable award agreements evidencing such equity-based awards and any applicable election forms related thereto. The Spinner Employment Agreement contemplates that if any payments or benefits otherwise payable to Mr. Spinner constitute “parachute payments” within the meaning of Section 280G of the Code and are subject to the excise tax imposed by Section 4999 of the Code, then such payments and benefits will either be (x) delivered in full, or (y) delivered as to such lesser extent that would result in no portion of such payments and benefits being subject to such excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account applicable taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by Mr. Spinner on an after-tax basis, of the greatest amount of benefits.

Under the Spinner Employment Agreement, upon a termination of employment due to retirement (defined as a voluntary termination of employment on or after the date he has attained fifty-nine (59) years of age and has provided ten (10) years of service to the Company), Mr. Spinner’s outstanding equity awards will vest in full with performance determined, as applicable, based on actual performance for the year of termination; provided, however, that awards granted in the year of retirement will be prorated to reflect Mr. Spinner’s service period prior to retirement.

Receipt of any severance payments or benefits is conditioned upon Mr. Spinner’s release of claims against the Company and its officers and directors.

In addition, the Spinner Employment Agreement contains provisions governing the nondisclosure and nonuse of confidential information of the Company, provisions requiring the assignment of certain intellectual property rights to the Company, and non-competition and non-solicitation restrictive covenants which remain in existence for one year or, in the event of termination for “Cause” or without “Good Reason”, two years following Mr. Spinner’s termination.

Finally, the Spinner Employment Agreement provides that the Company may seek recoupment for incentive compensation in any of the circumstances covered by the Company’s recently amended recoupment policy or any violation of the covenants in the Spinner Employment Agreement relating to non-competition or non-solicitation, nondisclosure and nonuse of confidential information.

Employment Agreement with Sean F. Griffin

On November 5, 2018, the Company entered into an employment agreement with Sean F. Griffin (the “Griffin Employment Agreement”), pursuant to which Mr. Griffin will serve as Chief Executive Officer of SUPERVALU INC., a subsidiary of the Company, which became effective, as to compensation arrangements, on October 22, 2018.

The initial term of the Griffin Employment Agreement is through October 22, 2021 and automatically renews for one-year periods thereafter unless either party gives proper notice of nonrenewal. Under the agreement, Mr. Griffin will receive an annual base salary of $930,000 and will be eligible to participate in the Company’s annual cash and long-term incentive plans with a target annual bonus opportunity of 125% of his annual base salary and a target annual equity opportunity of 250% of his annual base salary, respectively.

Upon a termination by the Company without Cause (as defined in the Griffin Employment Agreement) or resignation by Mr. Griffin for Good Reason (as defined in the Griffin Employment Agreement, which definition includes, in addition to customary provisions, the failure by the Company to appoint Mr. Griffin as its CEO), and subject to the effectiveness of a release in favor of the Company, Mr. Griffin will receive: (a) 1.0 times the sum of (i) base salary and (ii) target annual bonus; (b) a pro-rated annual cash bonus for the year of termination based on actual performance; (c) a cash payment of $35,000 for medical benefits; and (d) one additional year of vesting for all outstanding equity awards, with performance determined, as applicable, based on the greater of target and actual performance for the fiscal year in which the termination takes place.

If such a termination without Cause or resignation for Good Reason takes place during the two-year period following a Change in Control (as defined in the Griffin Employment Agreement), in lieu of the severance described above, and subject to the effectiveness of a release in favor of the Company, Mr. Griffin will receive: (a) 2.50 times the sum of (i) base salary and (ii) target annual bonus; (b) a pro-rated annual cash bonus for the year of termination based on actual performance; (c) a cash payment of $105,000 for medical benefits; and (d) all outstanding awards will vest in full with performance determined, as applicable, based on target performance. In addition, any and all unvested and unexercised stock options, restricted stock, restricted stock units and performance-based vesting equity awards granted to Mr. Griffin would be treated in accordance with the applicable award agreements evidencing such equity-based awards and any applicable election forms related thereto. The Griffin Employment Agreement contemplates that if any payments or benefits otherwise payable to Mr. Griffin constitute “parachute payments” within the meaning of Section 280G of the Code and are subject to the excise tax imposed by Section 4999 of the Code, then such payments and benefits will either be (x) delivered in full, or (y) delivered as to such lesser extent that would result in no portion of such payments and benefits being subject to such excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account applicable taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by Mr. Griffin on an after-tax basis, of the greatest amount of benefits.

Upon a termination of employment due to retirement (as defined in the Griffin Employment Agreement), Mr. Griffin’s outstanding equity awards will vest in full with performance determined, as applicable, based on actual performance for the year of termination; provided, however, that awards granted in the year of retirement will be prorated to reflect Mr. Griffin’s service period prior to Retirement.

Like the Spinner Employment Agreement, receipt of any severance payments or benefits is conditioned upon Mr. Griffin’s release of claims against the Company and its officers and directors.

In addition, as in the case of the Spinner Employment Agreement, the Griffin Employment Agreement contains provisions governing the nondisclosure and nonuse of confidential information of the Company, provisions requiring the assignment of certain intellectual property rights to the Company, and non-competition and non-solicitation restrictive covenants which remain in existence for one year or, in the event of termination for “Cause” or without “Good Reason”, two years following Mr. Spinner’s termination.

Finally, like the Spinner Employment Agreement, the Griffin Employment Agreement provides that the Company may seek recoupment for incentive compensation in any of the circumstances covered by the

Company’s recently amended recoupment policy or any violation of the covenants in the Spinner Employment Agreement relating to non-competition or non-solicitation, nondisclosure and nonuse of confidential information.

Severance Agreements and Change in Control Agreements

We are currently a party to severance agreements and change in control agreements with each of Mr. Testa and Ms. Sutton. The Compensation Committee believes that the protections afforded in these severance agreements and change in control agreements are reasonable and are an important element in retaining our executive officers. We amended the severance and change in control agreements on November 5, 2018, as described below.

Each of the severance agreements includes confidentiality, non-competition and intellectual property assignment provisions, which apply during the employment period and continue for a one-year period following termination of employment for any reason. The change in control agreements also include confidentiality, non-competition and intellectual property assignment provisions, which apply during the employment period and continue for a two-year period following a termination of employment that occurs within two years after a Change in Control. Under the prior change in control agreements, the confidentiality and non-competition provisions applied during the employment period and during a one-year period following a termination of employment that occurs within one year of a Change in Control. None of our executives is a party to an agreement providing for “gross up” payments for excise taxes imposed upon termination following a change in control.

The severance agreements were amended to include a three-year term from the effective date (October 23, 2019, after giving effect to the amendments described below). Prior to November 5, 2018, the severance arrangements with executive officers other than Mr. Spinner did not contain an expiration date.

Outside the context of a Change in Control, if we terminate any of the executive officers party to these agreements for any reason other than Cause, death, or disability or such executive resigns for Good Reason, we would be required to pay to the executive (i) the executive’s base salary, as in effect as of the termination date of employment for a period of one year following termination of employment, and (ii) make a cash payment in the amount of $35,000 to such individual that may be used by the executive to pay for post-termination medical benefits. Effective October 23, 2019, we further amended the severance agreements to provide for payment of a prorated portion of incentive compensation earned based on the number of days of service in the year of termination of employment, in exchange for an updated list of competitors in the restrictive covenants included in the severance agreements.

Any benefits to be paid upon a change in control under the change in control agreements are “double trigger,” which requires both a Change in Control and a termination of a Named Executive Officer by us for a reason other than Cause, death or disability or a resignation by the executive for Good Reason within two years of the date of the Change in Control. Under the change in control agreements, if either a termination of the executive for a reason other than Cause, death or disability or his resignation for Good Reason within two year of the date of a Change in Control, the executive would be entitled to receive a lump sum payment equal to (i) a multiple of his or her base salary (multiple of 2 times in the case of Mr. Testa and Ms. Sutton), as in effect at that time of his termination of employment, (ii) a multiple of the executive’s annual cash incentive payments based on target performance for the fiscal year in which the executive is terminated (1.5 times in the case of Mr. Testa and Ms. Sutton), and (iii) the prorated portion of the executive’s current-year annual cash incentive payments they would have been owed for the fiscal year in which his employment was terminated based on the Company’s actual results when measured against the performance metrics applicable to them for that performance period.

Under the change in control agreements, we will also be required to make a cash payment in the amount of $105,000 to such individual that may be used by the individual to pay for post-termination medical benefits for himself and his dependents. In addition, any and all unvested and unexercised stock options, restricted stock, restricted stock units and performance-based vesting equity awards granted to the Named Executive Officer will become fully vested, including performance awards, which shall vest at target level of performance unless a greater level of vesting is provided for in the applicable award agreement. The provision of all such benefits will be subject to any restrictions under applicable law, including under Section 409A of the Code. In establishing the multiples of base salary and bonus that a terminated executive would be entitled to receive following his termination without Cause or for Good Reason following a Change in Control, the Compensation Committee

considered the need to be able to competitively recruit and retain talented executive officers who often-times seek protection against the possibility that they might be terminated without Cause or be forced to resign for Good Reason following a Change in Control (each as defined in the applicable agreement).

Other Programs, Policies and Considerations

Recoupment (Clawback) Policy

We have adopted a recoupment policy applicable to our executive officers, including our Named Executive Officers, other principal officers and certain key employees or former employees designated by the Board or our Chief Executive Officer. Under the policy, if the Company’s financial statements are required to be restated for any reason, except when due to a change in accounting policy that has a retroactive effect, the Board will review all performance-based compensation awarded or earned for all periods materially affected by such restatement. In addition, the Board will review all performance-based compensation awarded or earned that is based on performance metrics that appear to be materially inaccurate or affected in any way by fraud, regardless of whether a restatement of the Company’s financial statements is required. If the Board determines that the payment of such performance-based compensation was predicated upon the achievement of certain financial statement results that were subsequently corrected, material inaccuracy or fraud, and a lower incentive payment or award would been made based upon the restated financial results or corrected performance metrics, then the Board will, to the extent permitted by applicable law, seek recoupment from the persons covered by the policy for the extent of such performance-based compensation as it deems appropriate, after a review of all relevant facts and circumstances.

If the Board determines that a person covered by the policy has engaged in conduct that will cause damage to the Company or is inimical or in any manner contrary to the best interests of the Company, and if the conduct resulted in a material inaccuracy in the Company’s financial statements or performance metrics which affects such person’s compensation, then the Board may require reimbursement of performance-based compensation that is greater than would have been paid or awarded if calculated based on accurate financial statements or performance metrics.

Prior to October 2018, our recoupment policy covered only Named Executive Officers and applied only in the limited event of a financial statement restatement. The October 2018 amendments extended the coverage to other officers and key employees, including former employees, extended the scope to material inaccuracies in performance metrics and added the provision described above concerning inimical conduct resulting in damage to the Company.

Section 304 of the Sarbanes-Oxley Act of 2002 requires the recovery of incentive awards from our Chief Executive Officer and Chief Financial Officer if we are required to restate our financials due to material noncompliance with any financial reporting requirements as a result of misconduct.

Stock Ownership Guidelines

The Compensation Committee believes stock ownership guidelines are a key vehicle for aligning the interests of management and our stockholders. A meaningful ownership stake by our officers demonstrates to our stockholders a strong commitment to our success. Accordingly, the Board has adopted stock ownership guidelines that require our executive officers to hold shares of our common stock having an aggregate market value from time to time which equals or exceeds three times their base salary, and in the case of Mr. Spinner, six times his base salary. Each executive is expected to comply with the policy by the fifth year after he or she became subject to the guidelines. Compliance with the guidelines is tested once per year for as long as the officer is employed by the Company. When calculating whether an officer owns a sufficient number of shares under these guidelines, shares owned in the 401(k) Plan and deferred compensation plans are included in the number of shares owned. Vested and unvested restricted stock and restricted stock units are also included, but unvested stock options do not count. Vested stock options and stock appreciation rights count to the extent of their net value after deduction for the exercise price. Officers are not allowed to hedge their interests in the stock held pursuant to the guidelines. In October 2018, we amended the guidelines for officers to exclude vested stock options to the extent that they do not exceed the net value after deduction for the exercise price; we also added an explicit prohibition against hedging of the interest required to meet the guidelines. At the same time, we extended the guidelines to cover officers below the executive officer level, who must hold common stock having

an aggregate market value equal to his or her base salary and have a five-year period (commencing in 2020) in which to meet the requirements. Our guidelines provide that, once in compliance, an officer shall be deemed to remain in compliance despite a subsequent reduction in stock price that may otherwise cause non-compliance. Each of our executive officers, other than Ms. Sutton, who is still in the accumulation period, were below the guidelines as of August 3, 2019 because the decline in our stock price affected the value of the shares they hold. They are deemed to be in compliance as of that date as their ownership fell below the applicable requirements due solely to a decline in the stock price. If the reduction in our stock price is sustained at a level specified in our stock ownership guidelines for 18 months, the accumulation period will reset for our executive officers and they will be required to accumulate more shares to reach the required ownership level.

Hedging and Insider Trading Policy

Our Insider Trading Policy prohibits our Directors and certain employees, including executive officers, from engaging in certain speculative transactions in our equity securities, including short sales, hedging transactions and pledging our stock as security.

Tax Deductibility of Compensation

When it reviews compensation matters, the Compensation Committee considers, among other matters, the anticipated tax and accounting treatment of payments and benefits with respect to us and, when relevant, to the executive. Section 162(m) of the Code imposes an annual deduction limit of $1 million on the amount of compensation paid to each of the Chief Executive Officer and certain other Named Executive Officers. Prior to the effectiveness of the Tax Cuts and Jobs Act, this deduction limit did not apply to compensation that qualified as “performance-based compensation” (as defined in Section 162(m)). The Tax Cuts and Jobs Act eliminated the qualified “performance-based compensation” exemption from Section 162(m), subject to an exception for compensation paid pursuant to a written binding contract that was in effect on November 2, 2017 and has not been modified in any material respect after such date. The Compensation Committee also approved, and may continue to approve, compensation that exceeds the $1 million limitation and is non-deductible (e.g., service-based restricted stock units, non-performance-based cash payments, onboarding grants for new hires or performance-based compensation that exceeds certain limits in our stock incentive plan). While accounting and tax treatment are relevant issues to consider, the Compensation Committee believes that stockholder interests are best served by not restricting flexibility in designing compensation programs, even though such programs may result in non-deductible compensation expenses for tax purposes.

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table—Fiscal Years 2017-2019

The following table sets forth for each of the Named Executive Officers: (i) the dollar value of base salary and non-equity incentive compensation earned during the fiscal year indicated; (ii) the aggregate grant date fair value related to all equity-based awards made to the Named Executive Officer for the fiscal year indicated; (iii) non-qualified deferred compensation earnings during the fiscal year where applicable; (iv) all other compensation for the fiscal year indicated; and (v) the dollar value of total compensation for the fiscal year indicated.