SpartanNash Co (Form: 10-K, Received: 02/26/2018 09:20:16)

Dividend per

Effective Quarter

common share

1st through 4th quarters of 2015

1st through 4th quarters of 2016

1st through 4th quarters of 2017

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 30, 2017.

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission File Number: 000-31127

SPARTANNASH COMPANY

(Exact Name of Registrant as Specified in Its Charter)

Michigan		38-0593940
(State or Other Jurisdiction) of Incorporation or Organization)		(I.R.S. Employer Identification No.)

850 76th Street, S.W. P.O. Box 8700 Grand Rapids, Michigan		49518-8700
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (616) 878-2000

Securities registered pursuant to Section 12(b) of the Securities Exchange Act:

Title of Class		Name of Exchange on which Registered
Common Stock, no par value		NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Securities Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by a check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requirement to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or emerging growth company (as defined in Rule 12b-2 of the Securities Exchange Act).

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates based on the last sales price of such stock on the NASDAQ Global Select Market on July 14, 2017 (which was the last trading day of the registrant’s second quarter in the fiscal year ended December 30, 2017) was $955,521,432.

The number of shares outstanding of the registrant’s Common Stock, no par value, as of February 23, 2018 was 36,048,591, all of one class.

DOCUMENTS INCORPORATED BY REFERENCE

Part III, Items 10, 11, 12, 13 and 14

Proxy Statement for Annual Meeting to be held May 23, 2018

Forward-Looking Statements

The matters discussed in this Annual Report on Form 10-K, in the Company’s press releases and in the Company’s website-accessible conference calls with analysts and investor presentations include “forward-looking statements” about the plans, strategies, objectives, goals or expectations of SpartanNash Company and subsidiaries (“SpartanNash” or the “Company”). These forward-looking statements are identifiable by words or phrases indicating that SpartanNash or management “expects,” “anticipates,” “plans,” “believes,” or “estimates,” or that a particular occurrence or event “will,” “may,” “could,” “should,” or “will likely” result, occur or be pursued or “continue” in the future, that the “outlook” or “trend” is toward a particular result or occurrence, that a development is an “opportunity,” “priority,” “strategy,” “focus,” that the Company is “positioned” for a particular result, or similarly stated expectations. Accounting estimates, such as those described under the heading “Critical Accounting Policies” in Item 7 of this Annual Report on Form 10-K, are inherently forward-looking. The Company’s asset impairment and restructuring cost provisions are estimates and actual costs may be more or less than these estimates and differences may be material. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of the Annual Report, other report, release, presentation, or statement.

In addition to other risks and uncertainties described in connection with the forward-looking statements contained in this Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission (“SEC”), there are many important factors that could cause actual results to differ materially. These risks and uncertainties include general business conditions, changes in overall economic conditions that impact consumer spending, the Company’s ability to integrate acquired assets, the impact of competition and other factors which are often beyond the control of the Company, and other risks listed in Part I, “Item 1A. Risk Factors,” of this report and risks and uncertainties not presently known to the Company or that the Company currently deems immaterial.

This section and the discussions contained in Item 1A. “Risk Factors,” and in Item 7, subheading “Critical Accounting Policies” in this report, both of which are incorporated here by reference, are intended to provide meaningful cautionary statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This should not be construed as a complete list of all of the economic, competitive, governmental, technological and other factors that could adversely affect the Company’s expected consolidated financial position, results of operations or liquidity. Additional risks and uncertainties not currently known to SpartanNash or that SpartanNash currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur or information obtained after the date of this Annual Report.

PART I

Item 1. Business

Overview

SpartanNash Company (together with its subsidiaries, “SpartanNash” or the “Company”) is a Fortune 350 company whose core businesses include distributing grocery products to independent grocery retailers (“independent retailers”), national retailers, food service distributors, its corporate owned retail stores, and United States (“U.S.”) military commissaries and exchanges. SpartanNash serves customer locations in 47 states and the District of Columbia, Europe, Cuba, Puerto Rico, Italy, Bahrain, Djibouti and Egypt. Through its Military segment, SpartanNash is a leading distributor of grocery products to military commissaries in the United States. The Company’s Retail segment operates neighborhood supermarkets that emphasize value beyond price, affordable wellness, commitment to local products and, as demonstrated throughout the organization, caring for their community and environment . The Company operates three reportable business segments: Food Distribution, Military and Retail.

The Company’s fiscal year end is the Saturday closest to December 31. The following discussion is as of and for the fiscal years ending or ended December 29, 2018 ("2018"), December 30, 2017 (“2017” or “current year”), December 31, 2016 (“2016” or “prior year”) and January 2, 2016 (“2015”), all of which include 52 weeks, and January 3, 2015 (“2014”), which included 53 weeks. All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks and will generally include the Easter holiday. The fourth quarter includes the Thanksgiving and Christmas holidays, and depending on the fiscal year end, may include the New Year’s holiday.

Established in 1917 as a cooperative grocery distributor, Spartan Stores Inc. (“Spartan Stores”) converted to a for-profit business corporation in 1973. In January 1999, Spartan Stores began to acquire retail supermarkets in its focused geographic regions. In August 2000, Spartan Stores common stock became listed on the NASDAQ Stock Market under the symbol “SPTN.” On November 19, 2013, Spartan Stores merged with Nash-Finch Company (“Nash-Finch”) and the combined company was named SpartanNash Company. Unless the context otherwise requires, the use of the terms “SpartanNash,” and the “Company” in this Annual Report on Form 10-K refers to the surviving corporation SpartanNash Company and, as applicable, its consolidated subsidiaries.

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On January 6, 2017, the Company acquired certain assets and assumed certain liabilities of Caito Foods Service (“Caito”) and Blue Ribbon Transport (“BRT”). Caito is a leading supplier of fresh fruit and vegetables as well as value-added fresh-cut fruits and vegetables and prepared meals to retailers and food service distributors across 21 states in the Southeast, Midwest and Eastern United States. BRT offers temper ature-controlled distribution and logistics services throughout North America. The acquisition strengthened the Company’s fresh product offerings and value-added services, such as freshly-prepared centerplate and side dish categories, and also complements the Company’s existing supply chain network.

The Company’s differentiated business model of Food Distribution, Military and Retail operations utilizes the complementary nature of each segment and enhances the ability of the Company’s independent retailers to compete in the grocery industry long-term. The model produces operational efficiencies, helps stimulate distribution product demand, and provides sharper visibility and broader business growth options. In addition, the diversification from Food Distribution, Military and Retail provides added flexibility to pursue the best long-term growth opportunities in each segment.

SpartanNash’s long-term goal is to create value for the Company's shareholders, retailers, and customers. To support these strategies, a well differentiated product offering in its Food Distribution, Military, and Retail segments has been established, as well as, the following key management priorities and strategies:

Food Distribution Segment:

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Maximize growth opportunities by leveraging the Company’s unique combination of supply chain capabilities and retail competency to exceed the expectations of current and prospective customers.

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Optimize and grow the network to create a highly efficient national distribution platform that provides innovative and impactful supply chain solutions for a variety of different sales channels.

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Proactively pursue financially and strategically attractive acquisition opportunities.

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Leverage the Caito acquisition to both expand the Company’s product offering into highly desired new categories, including fresh-cut produce and other value-added meal offerings, and to provide these prepared meals and related items to new and existing customers across the network.

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Continue to build an industry leading private brand program that matches customer needs and preferences through a selection of private brands focused on quality, value, variety, taste and convenience.

Military Segment:

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Continue to partner with the Defense Commissary Agency (“DeCA”) in its private brand initiative and overall goal of increasing customer traffic and business at the commissaries by offering one-stop shopping for military customers.

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Leverage the size and scale of the Company’s Food Distribution and Retail segments to attract additional customers to the Company’s Military platform.

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Continue to partner with Coastal Pacific Food Distributors (“CPFD”), the second largest military distributor of grocery products in terms of revenue, to leverage the advantage of a worldwide distribution network.

Retail Segment:

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Increase customer satisfaction and loyalty by providing quicker, more convenient shopping experiences through the expansion of both the Company’s Fast Lane online ordering and curbside pick-up service as well as grocery home delivery services.

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Focus on high quality fresh offerings, value beyond price, customer convenience and the SpartanNash associates at corporate owned retail stores.

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Provide healthy living options to satisfy growing customer demand for organic, gluten free, and fresh products.

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Enhance the customer experience through an improved assortment of healthier for you products, convenient meal solutions and increased value offerings in private brands and produce.

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Utilize the Company’s technological capabilities to personalize the customer experience and both improve and increase the number of targeted offers to better match the desires of the consumer.

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Supply Chain Network:

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Leverage competitive position, scale and financial flexibility to further grow the distribution channel.

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Gain efficiencies through productivity and efficiency initiatives, technology and by leveraging one supply chain network across segments to further realize benefits from continued investments in the optimization of the supply chain network.

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Leverage the BRT acquisition to realize sales growth and cost reduction opportunities by utilizing the Company’s transportation fleet as well as inbound and outbound lanes.

Food Distribution Segment

The Company’s Food Distribution segment uses a multi-channel sales approach to distribute grocery products to independent retailers, national retailers, food service distributors, e-commerce providers, and the Company’s corporate owned retail stores. Total net sales from the Company’s Food Distribution segment, including sales to corporate owned retail stores that are eliminated in the consolidated financial statements, were approximately $4.9 billion for 2017. As of the end of 2017, the Company believes it is the sixth largest wholesale distributor, in terms of annual revenue, to supermarkets in the United States.

Customers. The Company’s Food Distribution segment supplies grocery products to a diverse group of approximately 2,100 independent retailers with operations ranging from a single store to supermarket chains with over 20 stores, food service distributors and the Company’s corporate owned retail stores. As of December 30, 2017, the Company operates in 47 states by leveraging a platform of 19 distribution centers servicing the Food Distribution and Military segments, with the greatest sales concentration predominantly in the Midwest and South regions. This extensive geographic reach drives economies of scale and provides opportunities for independent retailers to purchase products at competitive prices in order to compete in the grocery industry long-term.

Through its Food Distribution segment, the Company also services national retailers, including Dollar General. Sales to Dollar General are made to more than 14,000 of its retail locations, with sales representing 14.0%, 11.2%, and 10.7% of consolidated net sales for 2017, 2016 and 2015, respectively. The Company’s Food Distribution customer base is diverse, and no other single customer exceeded 3% of consolidated net sales in any of the years presented.

The Company’s ten largest Food Distribution customers (excluding corporate owned retail stores) accounted for approximately 52.0% of total Food Distribution net sales for 2017. Approximately 83% of Food Distribution net sales for 2017 are covered under supply agreements with independent retailers.

Products. The Company’s Food Distribution segment provides a selection of approximately 60,000 stock-keeping units (SKUs) of nationally branded and private brand grocery products (see “Marketing and Merchandising – Private Brands”) and perishable food products, including dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products and pharmacy. With the acquisition of Caito, the product offering also includes fresh protein-based foods, prepared meals, and value-added products such as fresh-cut fruits and vegetables and prepared salads. These product offerings, along with best in class services, allow independent retailers the opportunity to support the majority of their operations with a single supplier. Meeting consumers’ needs will continue to be SpartanNash’s priority as it continues to leverage its complementary business model of Food Distribution, Military and Retail operations.

Valued-Added Services. The Company provides a comprehensive menu of valued-added services designed to assist retailers in becoming more profitable, efficient, competitive, and informed. The Company’s service departments are strategic partners who fill the gaps when time and resources are limited for the independent customers. From real estate and site surveys to a full spectrum of merchandising and marketing solutions, independent retailers can find the support they need to effectively operate their businesses. The Company provides over 100 distinct value-added services, including the following:

● Retail Development and Consulting		● Consumer Research
● Merchandising		● Product Reclamation
● Marketing and Advertising Solutions		● Inventory Support
● Shelf Management and Planograms		● Category Management
● Accounting, Payroll and Tax Preparation		● Customer Service and Order Entry
● Food Safety and Environmental Health		● Pharmacy Retail and Procurement Services
● Asset Protection		● Retail Pricing
● Supply Solutions		● Training
● Information Services and Technology		● Real Estate

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Military Segment

The Company’s Military segment contracts with manufacturers and brokers to distribute a wide variety of grocery products, including dry groceries, beverages, meat, and frozen foods, primarily to U.S. military commissaries and exchanges. The Company’s Military segment, together with its partner, CPFD, represents the only worldwide delivery solution for providing grocery products to DeCA.

The Company is also the DeCA exclusive worldwide supplier of private brand grocery and related products to U.S. military commissaries. In accordance with its contract with DeCA, the Company procures the grocery and related products from various manufacturers and upon receiving customer orders from DeCA, either delivers the products to the U.S. military commissaries itself or engages CPFD to deliver the products on its behalf. There are approximately 450 SKUs of private brand products currently in the DeCA system as of December 30, 2017, and the Company anticipates up to 1,400 SKUs will be added under the program in 2018.

The distributed grocery products are delivered to over 160 military commissaries and over 440 exchanges located in more than 45 states across the United States, and the District of Columbia, Europe, Cuba, Puerto Rico, Italy, Bahrain, Djibouti and Egypt. The Company’s distribution centers are strategically located among the largest concentration of military bases in the areas the Company serves and near Atlantic ports used to ship grocery products to overseas commissaries and exchanges. The Company’s Military segment has an outstanding reputation as a distributor focused on U.S. military commissaries and exchanges, based in large measure on its excellent service metrics, which include fill rate, on-time delivery and shipping accuracy.

DeCA operates a chain of 237 commissaries on U.S. military installations across the world that sells approximately $4.8 billion of grocery products annually. DeCA contracts with manufacturers to obtain grocery products for the commissary system. Manufacturers either deliver the products to the commissaries themselves or, more commonly, contract with distributors such as SpartanNash to deliver the products. Manufacturers must authorize the distributors as their official representatives to DeCA, and the distributors must adhere to DeCA’s frequent delivery system (“FDS”) procedures governing matters such as product identification, ordering and processing, information exchange and resolution of discrepancies. The Company obtains distribution contracts with manufacturers through competitive bidding processes and direct negotiations.

As of December 30, 2017, the Company has approximately 250 distribution contracts representing approximately 600 manufacturers that supply products to the DeCA commissary system and various exchange systems. Generally, larger contracts or those subject to a request-for-proposal process have definitive durations, whereas smaller contracts generally have indefinite terms; and all contract types allow for termination by either party without cause upon 30 days prior written notice to the other party. The contracts typically specify which commissaries and exchanges to supply on behalf of the manufacturer, the manufacturer’s products to be supplied, service and delivery requirements, and pricing and payment terms. The Company’s ten largest manufacturer customers represented approximately 45.6% of the Company’s Military segment sales for 2017.

As commissaries need to be restocked, DeCA identifies the manufacturer with which an order is to be placed, determines which distributor is the manufacturer’s official representative for a particular commissary or exchange location, and then places a product order with that distributor under the auspices of DeCA’s master contract with the applicable manufacturer. The distributor selects that product from its existing inventory, delivers it to the commissary or commissaries designated by DeCA, and bills the manufacturer for the product shipped. The manufacturer then bills DeCA under the terms of its master contract. Overseas commissaries are serviced in a similar fashion, except that a distributor’s responsibility is to deliver products as and when needed to the port designated by DeCA, which in turn bears the responsibility for shipping the product to the applicable commissary or overseas warehouse. Due to the unique terms of this arrangement, working capital requirements are significant.

After the Company ships a particular manufacturer’s products to commissaries in response to an order from DeCA, the Company invoices the manufacturer for the product price plus a drayage fee that is typically based on a percentage of the purchase price, but may in some cases be based on a dollar amount per case or pound of product sold. The Company’s order handling and invoicing activities are facilitated by procurement and billing systems developed specifically for the Military business, which address the unique aspects of its business, and provide the Company’s manufacturer customers with a web-based, interactive means of accessing critical order, inventory and delivery information.

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Retail Segment

As of December 30, 2017, the Company operates 145 corporate owned retail stores in nine states, predominantly in the Midwest region primarily under the banners of Family Fare Supermarkets, D&W Fresh Market, VG’s Grocery, Dan’s Supermarket and Family Fresh Market . Retail banners and numbers of stores are more fully detailed in Item 2, “Properties,” of this report. The Company’s corporate owned retail stores range in size from approximately 14,000 to 90,000 total square feet, or on average, approximately 42,000 total square feet per store.

The Company’s neighborhood market strategy distinguishes its corporate owned retail stores from supercenters and limited assortment stores by focusing on value beyond price, affordable wellness, commitment to local products, and caring for the community and environment. The Company’s strategy is also focused on increasing customer satisfaction through quality service and convenience, and in the second quarter of 2017, the Company introduced Fast Lane, its new online ordering and curbside pick-up service. The Company now offers the service in approximately 40 corporate owned retail stores and anticipates rolling it out to up to 30 stores in 2018. The Company also began piloting home delivery services in the fourth quarter of 2017 to further improve convenience and service for its customers.

The Company’s corporate owned retail stores offer nationally branded and private brand grocery products (see “Marketing and Merchandising – Private Brands”), as well as perishable food products including dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products and health and beauty care products. Private brand grocery products typically generate higher retail margins while also improving customer loyalty by offering quality products at affordable prices.

As of December 30, 2017, the Company offers pharmacy services in 87 of its corporate owned retail stores (of which 76 of the pharmacies are owned), and operates one free-standing pharmacy location. The Company believes the pharmacy service offering in its corporate owned retail stores is an important part of the consumer experience. In its Michigan pharmacies and a number of its pharmacies in Minnesota and Nebraska, the Company offers free medications (antibiotics, diabetic medications and prenatal vitamins) along with generic drugs for $4 and $10, and meal planning solutions for preventative health and education for its customers.

As of December 30, 2017, the Company operates 31 fuel centers primarily at its corporate owned retail stores operating predominantly under the banners Family Fare Quick Stop and D&W Quick Stop . These fuel centers offer refueling facilities and in the adjacent convenience store, a limited variety of popular consumable products. The Company’s prototypical Quick Stop stores are approximately 1,100 square feet in size.

The Company’s corporate owned retail stores are primarily the result of acquisitions prior to June 2015, including the merger with Nash-Finch in November 2013. The following chart details the changes in the number of corporate owned retail stores over the last five fiscal years, including the transition year ended December 28, 2013:

	2013		2014		2015		2016		2017
Number of stores at beginning of year		101		172		162		163		157
Stores acquired or constructed during year		78		1		7		—		—
Stores closed or sold during year		7		11		6		6		12
Number of stores at end of year		172		162		163		157		145

During 2017, the Company completed five major remodels and also opened one new fuel center. In connection with the remodeling efforts, the Company converted three corporate owned retail stores to the Family Fare Supermarkets banner. The Company expects to continue making targeted capital investments during 2018 through remodels at select corporate owned retail stores and, if opportunities arise, by either opening additional fuel centers or entering into partnerships with existing fuel operations. The Company will continue to evaluate its store base and expects to close or sell five to seven stores in 2018 depending on circumstances and opportunities.

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Supply Chain Network

The Company continues to integrate its supply chain organization to optimize the network, increase asset utilization and leverage programs that will drive more value for its retailers, customers, and shareholders. The Company continually reviews the optimization of its network and, through doing so, has added Food Distribution operations to several facilities which were previously dedicated solely to the Military segment. The Company consolidated one warehouse during the year and may close, open, or acquire warehouses in the future depending on needs and opportunities. The Company also made significant progress in integrating the Caito and BRT operations by rolling out Caito products to other warehouses and customers and by integrating BRT with its managed freight function to gain efficiencies and reduce costs, as well as drive growth in the brokerage business by maximizing backhaul opportunities and meeting supplier needs.

The Company’s distribution network is comprised of 19 distribution centers, which are utilized to service the Food Distribution and Military segments. The distribution centers provide for approximately 8.7 million total square feet of warehouse space. The Company has new and ongoing initiatives to improve the efficiency of its supply chain through innovation, investments in technology and automation.

The Company operates a fleet of approximately 500 over-the-road tractors, 450 dry vans, and 1,000 refrigerated trailers. Through routing optimization systems, the Company carefully manages the more than 64 million miles driven by its fleet and third party carriers annually servicing military commissaries, exchanges, independent retailers, national retailers and corporate owned retail stores. During 2017, the Company substantially completed the uniform branding of all of its tractors with the SpartanNash logo and tagline “ Taking Food Places.” In addition, the Company continues to add lift gates to its existing fleet in order to better service a more diverse group of customers.

Reporting Segment Financial Data and Products

Refer to the segment information in the notes to consolidated financial statements for additional information about the Company’s sales by type of similar products and services. All of the Company’s sales and assets are in the United States of America. Consolidated net sales include the net sales of its Food Distribution business, which exclude sales to corporate owned retail stores, the net sales of its Military segment, and the net sales of its corporate owned retail store and fuel centers in its Retail segment.

Discontinued Operations

Certain of the Company’s Food Distribution and Retail operations have been recorded as discontinued operations. Discontinued operations consist of certain locations that have been closed or sold.

Marketing and Merchandising

General. The Company continues to align its marketing and merchandising strategies with current consumer behaviors by delivering initiatives centered on personalization, value beyond price, affordable wellness, local focus and social responsibility – all designed to deliver a superior shopping experience for customers. During 2017, the Company refreshed its brand positioning for Family Fare , its primary Retail banner, to incorporate these areas of focus. These strategies seek to use consumer data and insights to deliver products, promotions, content and experiences to satisfy the consumer’s needs.

The Company believes that data from its “ yes ” loyalty program gives it competitive insight into consumer shopping behavior. This gives the Company the flexibility to adapt to rapidly changing conditions by making tactical and more effective adjustments to its marketing and merchandising programs. As investments are made to remodel and/or rebanner various stores, the Company continues to roll out the “ yes ” program to expand its knowledge of its customers and to provide its loyalty rewards in additional markets.

The Company’s investment to further strengthen its knowledge of the consumer has continued to drive process improvements in several areas: creation of a robust self-serve data tool that enables category managers to make consumer centric merchandising and marketing decisions; continuous refinement of Key Value Items (“KVI”) analyses that align pricing for the most price sensitive items with the most price sensitive customer segments; the development of a customer strategy that will be used to guide its internal business processes and go-to market strategy; and the evolution of its customer segmentation that takes it beyond the purchase and transactional behavior to lifestyle. These initiatives better position the Company to deliver a shopping experience that constantly responds to the ever-changing needs of its consumers.

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Th e Company has been building tools and capabilities to enable relevant, personalized content across its marketing channels and focusing on expanding its digital, social and mobile capabilities. New mobile apps specific to each Retail banner were recently la unched, providing consumers with the ability to view store ads, create shopping lists, shop via Fast Lane, clip coupons, and join virtual shopping clubs, all from their mobile device. This will help the Company further build longer-term customer loyalty th rough convenience and value, maintain efficient marketing spend and increase return on investment, improve its sales growth opportunities, and further strengthen its business position. As the Company continues to build these capabilities, along with its ot her strategies, the Company will continue to share its marketing and merchandising learnings and best practices across its wholesale customer base.

In addition to sharing the expertise gained in its Retail operations, the Company differentiates itself from its competitors by offering a full set of value added support services to its Food Distribution customers. These services, which are further described above, help the independent retailers to operate and compete effectively, and many of them are not offered by the Company’s competition.

As the Company works to better differentiate its Retail stores and roll out its refreshed brand positioning, the Company is selectively adding products and services to better meet customers’ changing needs. For instance, the Company is adding full service meat and seafood departments which include many items handmade in store, and has added produce preparation services, smokehouses, expanded beer and wine selections, and other offerings to certain stores to enhance the customers’ experience. The Company has been adding signage and improved displays in departments such as pet products, laundry, and snacks in order to improve foot traffic in these aisles and drive sales. The Company continues to add fuel centers and Starbucks Coffee or Caribou Coffee shops in certain corporate owned retail stores, and also provides consumers with fuel purchase discounts at fuel centers through its corporate owned retail stores or by partnering with third party fuel centers.

As consumers increasingly emphasize affordable wellness, the Company believes that it can be a provider and resource for products and services that will support their needs. In 2017, the Company continued to expand its offerings and partnerships and undertook the following key initiatives. First, the Company continued to expand its “Living Well” product offerings through in-line merchandising concepts. Second, the Company established partnerships with health systems and providers to provide wellness specialists-led store tours to help educate consumers to make healthier food choices. Third, the Company increased its retail product offering and assortment for organic, gluten-free, meat-free, non-GMO products and other healthier food options. Finally, the Company offers a best in class pharmacy program, including $4 and $10 generics and free diabetic and prenatal prescriptions.

In support of its commitment to local products and caring for the community and environment, the Company is proud to work with local farmers and vendors to provide locally grown produce and products in many of its stores. The Company offers a significant selection of local products in many of its stores, well in excess of most of its competitors’ offerings. In some of its stores the Company collects items from customers for recycling, and the Company has been recognized as a best in class recycler of its own waste. Also, in an effort to reduce costs and reduce its environmental footprint, the Company has many initiatives to reduce energy usage, including the installation of energy efficient lighting and refrigeration in its stores.

Private Brands. SpartanNash provides a best in class private brand program, offering a full line of proprietary and licensed private brands in its corporate owned retail stores and its independent retailer customers, as well as partnering with DeCA in the design and launch of its military private brands. SpartanNash believes that its private brand offerings are some of its most valuable strategic assets, demonstrated through customer loyalty and profitability. The Company continues to invest in improvements to its private brands by offering quality, value, and assortment, and believes the success of its private brands to be of vital importance. The Company’s products have been frequently recognized for excellence in packaging design and product development.

The Company continues to enhance its private brand programs for both independent customers and corporate owned retail stores, and in 2017, launched its Our Family ® private brand into its Michigan stores. The transition from the Spartan ™ brand to Our Family ® provides the Company with a system-wide, national brand equivalent or better quality program, as well as allows the Company to streamline its supply chain to deliver a larger variety of product offerings at a lower cost to consumers. The transition to Our Family ® as the Company’s primary private brand is expected to be completed in the first half of 2018. Also in 2017, the Company began incorporating its own fresh-cut fruits and vegetables into the Open Acres ™ private brand, which supports the Company’s living well offering. Additionally, Eternal Oceans ™ was launched as the Company’s sustainability initiative for seafood within the Open Acres ™ brand. SpartanNash also launched a product declaration “free from” initiative, with a goal of assigning brand specific bullets alerting consumers of certain undesirable ingredients that have been eliminated, creating a “cleaner” product offering. The Company expects this program to continue throughout 2018 and become core to the Company’s product development principles in all future development. The Company plans to introduce approximately 350 additional new items in 2018 throughout its private brand portfolio, which includes the rollout of the Good to Go ™ meal solutions program.

SpartanNash currently markets and distributes private brand items primarily under the following brands: Our Family ® (national brand equivalent or better grocery products); Open Acres ™ (fresh products); Top Care (health and beauty care); Tippy Toes (baby); Full Circle™ (organic and wellness); Culinary Tours ™ (premium quality foods); PAWS Premium (pet supplies); and Valu Time (value). SpartanNash is also the exclusive worldwide distributor of DeCA’s private brands, Freedom’s Choice ® and Home Base ®.

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Competition

The Company’s Food Distribution, Military and Retail segments operate in a highly competitive industry, which typically results in low profit margins for the industry as a whole. The Company competes with, among others, regional and national grocery distributors, large chain stores that have integrated wholesale and retail operations, mass merchandisers, e-commerce providers, deep discount retailers, limited assortment stores and wholesale membership clubs, many of whom have greater resources than the Company. The Company also faces competition from rapidly growing alternative retail channels, such as dollar stores, discount supermarket chains, Internet-based retailers and meal-delivery services.

Food Distribution competes directly with a number of traditional and specialty grocery wholesalers and retailers that maintain or develop self-distribution systems for the business of independent grocery retailers. In addition, the Company’s independent customers face intense competition from supercenters, deep discounters, mass merchandisers, limited assortment stores, and e-commerce providers. The Company partners with its customers to help them compete effectively. The primary competitive factors in the Food Distribution business include price, service, product quality, variety and other value-added services. The Company believes its overall service level, which is defined as actual units shipped divided by actual units ordered, is among industry leaders in terms of performance.

The Company is one of ten or fewer distributors in the United States with annual sales to the DeCA commissary system in excess of $100 million that distributes products via the frequent delivery system. The remaining distributors that supply DeCA tend to be smaller regional and local providers. In addition, manufacturers contract with others to deliver certain products, such as baking supplies, produce, delicatessen items, soft drinks and snack items, directly to DeCA commissaries and service exchanges. Because of the narrow margins in this industry, it is of critical importance for distributors to achieve economies of scale, which is typically a function of the density or concentration of military bases within the geographic area(s) a distributor serves. As a result, no single distributor in this industry, by itself, has a nationwide presence. Rather, distributors tend to concentrate on specific regions, or areas within specific regions, where they can achieve critical mass and utilize warehouse and distribution facilities efficiently. In addition, distributors that operate larger non-military specific distribution businesses tend to compete for DeCA commissary business in areas where such business would enable them to more efficiently utilize the capacity of their existing distribution centers. The Company believes the principal competitive factors among distributors within this industry are customer service, price, operating efficiencies, reputation with DeCA and location of distribution centers. The Company believes its competitive position is strong with respect to all of these factors within the geographic areas where it competes.

Despite the ongoing commissary sales challenges, the Company has been working diligently to realize opportunities and has expanded vendor relationships to new military bases and continues to roll out the Company’s private brand product offerings. The Company believes that the private brand offering, when fully executed, will drive more traffic and business into the commissaries as a whole. By providing a combination of national and private brand products, the commissaries are offering one-stop shopping for military customers, which should benefit all of the constituents of the DeCA system.

The principal competitive factors in the retail grocery business include the location and image of the store; the price, quality and variety of the perishable products; and the quality, convenience and consistency of service. In addition to competing with traditional grocery stores, the Company competes with supercenters, deep discounters, mass merchandisers, limited assortment stores, and e-commerce providers. The Company believes it has developed and implemented strategies and processes that allow it to be competitive in its Retail segment by providing convenience, customer experience, and the assortment consumers want. The Company monitors planned competitor store openings and uses established proactive strategies to respond to new competition both before and after the competitive store opening. Strategies to react to competition vary based on many factors, such as the competitor’s format, strengths, weaknesses, pricing and sales focus. During the past three fiscal years, nine competitor supercenters opened in geographic areas in which the Company currently operates corporate owned retail stores with four additional openings expected to occur during 2018. As a result of these openings, the Company believes the majority of its supermarkets compete with one or more supercenters. The Company is also responding to growing competition from online and non-traditional retailers by adding new options and services such as Fast Lane, its new online ordering and curbside pick-up service, as well as home delivery.

Seasonality

In certain geographic areas, the Company’s sales and operating performance varies with seasonality. Many stores are dependent on tourism, and therefore, are most affected by seasons and weather patterns, including, but not limited to, the amount and timing of snowfall during the winter months and the range of temperature during the summer months. All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks and will generally include the Easter holiday. The fourth quarter includes the Thanksgiving and Christmas holidays, and depending on the fiscal year end, may include the New Year’s holiday.

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Suppliers

The Company purchases products from a large number of national, regional and local suppliers of name brand and private brand merchandise. The Company has not encountered any material difficulty in procuring or maintaining an adequate level of products to serve its customers. No single supplier accounts for more than 5% of the Company’s purchases. The Company continues to develop strategic relationships with key suppliers and believes this will prove valuable in the development of enhanced promotional programs and consumer value perceptions.

Intellectual Property

The Company owns valuable intellectual property, including trademarks, tradenames, and other proprietary information, some of which are of material importance to its business.

Technology

In 2017, the Company focused on the integration of systems relating to the Caito acquisition and the remaining systems for the merger with Nash-Finch. Additionally, there have been many projects to expand and update technologies in support of various business and operational needs, such as the design and initial development of a new promotion and ad planning system for use in both the Food Distribution and Retail businesses.

Supply Chain. During 2017, the Company continued to implement the standard order management system, which is expected to be completed in 2018. Standardization of the inventory management, distribution pricing and invoicing system was also initiated in 2017 with an anticipated completion date of 2019. The Company completed the implementation of a new environmental integrity monitoring system for the transportation fleet, implemented technology support associated with Food Safety Modernization Act requirements and has successfully converted more than half of the Company’s independent customers to state-of-the-art Business-to-Business technology.

Retail Systems. The Company implemented Fast Lane , a click-and-collect grocery ordering system, in approximately 40 corporate owned retail stores and is currently testing delivery in two locations. Fast Lane will continue to be deployed in additional stores in 2018. The Company enhanced its electronic payment system to support chip and pin/signature cards in all retail locations and also implemented a new back-end processing system. The Company also completed technology support for new Nutrition Labeling requirements, and is in the final testing phase of a major upgrade to its digital mobile application for customer use. The Company began the testing of a major upgrade and replacement of the computer-assisted ordering system used in the corporate retail locations, and also initiated preparations for testing a 2018 pilot of a major upgrade to the Point-of-Sale software.

Administrative Systems and Infrastructure. In the first quarter of 2017, the Company completed the consolidation of the accounts receivable system from the Nash-Finch merger. Additionally, the general ledger, fixed asset systems, EDI processing, payroll, labor management and human resources systems were standardized as part of the Caito integration. Additional upgrades to the infrastructure in the primary and back up data centers were also completed to improve the flexibility of disaster recovery and non-stop processing.

Associates

As of December 30, 2017, the Company employs approximately 14,800 associates, 9,100 on a full-time basis and 5,700 on a part-time basis. Approximately 1,200 associates, or 8% of the total workforce, were represented by unions under collective bargaining agreements. The collective bargaining agreements covering these associates will expire between January 2019 and February 2021. The Company considers its relations with its union and non-union associates to be good and has not had any material work stoppages in over twenty years.

Regulation

The Company is subject to federal, state and local laws and regulations concerning the conduct of its business, including those pertaining to the workforce and the purchase, handling, sale and transportation of its products. Many of the Company’s products are subject to federal Food and Drug Administration (“FDA”) and United States Department of Agriculture (“USDA) regulation. The Company believes that it is in substantial compliance in all material respects with the FDA, USDA and other federal, state and local laws and regulations governing its businesses.

Forward-Looking Statements

The matters discussed in this Item 1 include forward-looking statements. See “Forward-Looking Statements” at the beginning of this Annual Report on Form 10-K.

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Available Information

The address of the SpartanNash web site is www.spartannash.com. The inclusion of the Company’s website address in this Form 10-K does not include or incorporate by reference the information on or accessible through the Company’s website, and the information contained on or accessible through those websites should not be considered as part of this Form 10-K. The Company makes its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports (and amendments to those reports) filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 available on the Company’s web site as soon as reasonably practicable after the Company electronically files or furnishes such materials with the SEC. Interested persons can view such materials without charge by clicking on “For Investors” and then “SEC Filings” on the Company’s web site. SpartanNash is a “large accelerated filer” within the meaning of Rule 12b-2 under the Securities Exchange Act.

Item 1A. Risk Factors

The Company faces many risks. If any of the events or circumstances described in the following risk factors occur, the Company’s financial condition or results of operations may suffer, and the trading price of the Company’s common stock could decline. This discussion of risk factors should be read in conjunction with the other information in this Annual Report on Form 10-K. All of these forward-looking statements are affected by the risk factors discussed in this item and this discussion of risk factors should be read in conjunction with the discussion of forward-looking statements, which appears at the beginning of this report.

Business and Operational Risks

The Company operates in an extremely competitive industry. Many of the Company’s competitors are much larger and may be able to compete more effectively.

The Company’s Food Distribution and Retail segments have many competitors, including regional and national grocery distributors, large chain stores that have integrated wholesale and retail operations, mass merchandisers, e-commerce providers, deep discount retailers, limited assortment stores and wholesale membership clubs. The Company’s Military segment faces competition from large national and regional food distributors and smaller distributors. Many of the Company’s competitors have greater resources than the Company.

Industry consolidation, alternative store formats, nontraditional competitors and e-commerce have contributed to market share losses for traditional grocery stores. The Company’s Food Distribution, Military and Retail segments are primarily focused on traditional retail grocery trade, which faces competition from faster growing alternative retail channels, such as dollar stores, discount supermarket chains, Internet-based retailers and meal-delivery services. The Company expects these trends to continue. If the Company is not successful in competing with these alternative channels, or growing sales into such channels, its business or financial results may be adversely impacted.

The Company may not be able to successfully integrate the assets of Caito Foods Service (“Caito”) and Blue Ribbon Transport (“BRT”), and the Company may incur significant costs to integrate and support these and other assets it acquires.

In January 2017, the Company acquired the assets of Caito and its affiliate, BRT. The integration of acquired assets requires significant time and resources, and the Company may not manage these processes successfully. As part of this acquisition, the Company acquired a new Fresh Kitchen facility that was in the process of being constructed. The Fresh Kitchen had no history of operations, and the Company experienced delays in commencing its operation and achieving efficient levels of production volume. The Company expects that the Fresh Kitchen will not be profitable in the short-term, and there is no guarantee it will be profitable in the long-term. In addition, some grocery retailers previously serviced by Caito discontinued their purchases following the Company’s acquisition of the Caito assets. The Company is making investments of resources to support the acquired Caito and BRT businesses and replace lost volume, which will result in significant ongoing operating expenses and may divert resources and management attention from other areas of the business. If the Company fails to successfully integrate these assets and develop new business opportunities, it may not realize the benefits expected from the transaction and its business may not perform to expectations.

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The Company’s private brand program for U.S. military commissaries may not achieve the desired results .

In December 2016, the Defense Commissary Agency (“DeCA” or “the Agency”), which operates U.S. military commissaries worldwide, competitively awarded the Company the contract to support and supply products for the Agency’s new private brand product program. Private brand products have not previously been offered in the Agency’s commissaries. The Company has invested and will continue to invest significant resources as it partners with DeCA to develop the program, and there is no guarantee of its success. The Company expects that DeCA will face significant competition in each product category from national brands that are familiar to consumers. If the Agency is unable to drive traffic and business at the commissaries by offering one-stop shopping for military customers through a combination of both national and private brand offerings, then both DeCA and the Company may be unable to achieve expected returns from this program, which could have a material adverse effect on the Company’s business. The success of the program will depend in part on factors beyond the Company’s control, including the actions of the Agency.

The Company may not be able to implement its strategy of growth through acquisitions .

Part of the Company’s growth strategy involves selected acquisitions of additional distribution operations, and to a lesser extent, retail grocery stores. Given the recent consolidation activity and limited number of potential acquisition targets within the food industry, the Company may not be able to identify suitable targets for acquisition and may make acquisitions which do not achieve the desired level of profitability or sales. Additionally, because the Company operates in the Food Distribution business, future acquisitions of retail grocery stores could result in the Company competing with its independent retailers and could adversely affect existing business relationships with those customers. As a result, the Company may not be able to identify suitable acquisition candidates in the future, complete acquisitions or obtain the necessary financing and this may adversely affect the Company’s ability to grow profitably.

Substantial operating losses may occur if the customers to whom the Company extends credit or for whom the Company guarantees loans or lease obligations fail to repay the Company.

From time to time, the Company may advance funds, extend credit and lend money to certain independent retailers and guarantee loan or lease obligations of certain customers. The Company seeks to obtain security interest and other credit support in connection with these arrangements but the collateral may not be sufficient to cover the Company’s exposure. Greater than expected losses from existing or future credit extensions, loans, guarantee commitments or sublease arrangements could negatively and materially impact the Company’s operating results and financial condition.

Changes in relationships with the Company’s vendor base may adversely affect its business, margins, and profitability.

The Company sources the products it sells from a wide variety of vendors. The Company generally does not have long-term written contracts with its major suppliers that would require them to continue supplying it with merchandise. The Company depends on its vendors for appropriate allocation of merchandise, assortments of products, operation of vendor-focused shopping experiences within its stores, and funding for various forms of promotional allowances. There has been significant consolidation in the food industry, and this consolidation may continue to the Company’s commercial disadvantage. Such changes could have a material adverse impact on the Company’s revenues and profitability.

Disruptions to the Company’s information technology systems, including security breaches and cyber-attacks, could negatively affect the Company’s business.

The Company has complex information technology (“IT”) systems that are important to its business operations. The Company gathers and stores sensitive information, including personal information about its customers, vendors and associates, and other proprietary or sensitive information. The Company could incur significant losses due to disruptions in its systems and business if it were to experience difficulties accessing data stored in its IT systems or if the sensitive information stored is compromised by third parties.

Although the Company has implemented security programs and disaster recovery facilities and procedures, cyber threats evolve rapidly and are becoming more sophisticated. Despite the Company’s efforts to secure its information and systems, cyber attackers may defeat the security measures and compromise the personal information of customers, associates, vendors and other sensitive information. Associate error, faulty password management or other problems may compromise the security measures and result in a breach of the Company’s information systems, systems disruptions, data theft or other criminal activity. This could result in a loss of sales or profits or cause the Company to incur significant costs to restore its systems or to reimburse third parties for damages.

Threats to security or the occurrence of severe weather conditions, natural disasters or other unforeseen events could harm the Company’s business.

The Company’s business could be severely impacted by severe weather conditions, natural disasters, or other events that could affect the warehouse and transportation infrastructure used by the Company and its vendors to supply the Company’s corporate owned retail stores, and Food Distribution and Military customers. While the Company believes it has adopted commercially reasonable precautions, insurance programs, and contingency plans; the damage or destruction of Company facilities could compromise its ability to distribute products and generate sales. Unseasonable weather conditions that impact growing conditions and the availability of food could also adversely affect sales, profits and asset values.

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Impairment charges for goodwill or other long-lived assets could adversely affect th e Company’s financial condition and results of operations.

The Company is required to perform an annual impairment test for goodwill and other long-lived tangible and intangible assets in the fourth quarter of each year, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. Testing goodwill and other assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or – for goodwill – the Company’s stock price and market capitalization. Changes in these factors, or changes in actual performance compared with estimates of the Company’s future performance, may affect the fair value of goodwill or other assets. This could result in the Company recording a non-cash impairment charge for goodwill or other intangible assets in the period the determination of impairment is made. The Company cannot accurately predict the amount and timing of any impairment of assets. Should the value of goodwill or other assets become impaired, the Company’s financial condition and results of operations may be adversely affected.

It may be difficult for the Company to attract and retain well-qualified associates, which would adversely affect the Company’s profitability and growth.

Recent low levels of unemployment have made it increasingly difficult to attract and retain qualified associates, and have caused upward pressure on wages. If the Company is unable to attract and retain quality associates to meet its needs, the Company could be required to increase its compensation offering, reduce staffing below optimal levels, or rely more on higher-cost third-party providers, which could adversely affect the Company’s profitability and growth. The Company’s success depends to a significant degree upon the continued contributions of senior management. The loss of any key member of the Company’s management team may prevent it from implementing its business plans in a timely manner. The Company cannot assure that successors of comparable ability will be identified and appointed and that the Company’s business will not be adversely affected.

Legal, Regulatory and Legislative Risks

The Company’s Military segment is dependent upon domestic and international military operations. A change in the military commissary system, including its supply chain, or a change in the level of governmental funding, could negatively impact the Company’s results of operations and financial condition.

Because the Company’s Military segment sells and distributes grocery products to military commissaries and exchanges in the United States and overseas, any material changes in the commissary system, the level of governmental funding to DeCA, military staffing levels, or locations of bases, or DeCA’s supply chain may have a corresponding impact on the sales and operating performance of this segment. These changes could include privatization of some or all of the military commissary system, relocation or consolidation of commissaries and exchanges, base closings, troop redeployments or consolidations in the geographic areas containing commissaries and exchanges served by the Company, or a reduction in the number of persons having access to the commissaries and exchanges. Mandated reductions in the government expenditures, including those imposed as a result of a sequestration, may impact the level of funding to DeCA and could have a material impact on the Company’s operations. If DeCA were to make material changes to its supply chain model, for example by limiting distribution authorization, then the Company’s Military segment could be affected.

Product recalls or other safety concerns regarding the Company’s products could harm the Company’s business.

It is sometimes necessary for the Company to recall unsafe, contaminated or defective products. Recall costs can be material and the Company might not be able to recover costs from its suppliers. Concerns regarding the safety of food products sold by the Company could cause customers to avoid purchasing certain products from the Company, or to seek alternative sources of supply for some or all of their food needs, even if the basis for concern is outside of the Company’s control. Any loss of confidence on the part of the Company’s customers would be difficult and costly to overcome. Any real or perceived issue regarding the safety of any food or drug items sold by the Company, regardless of the cause, could have a substantial and adverse effect on the Company’s business.

The Company’s acquisition of Caito has expanded its food production capabilities and ability to offer fresh fruits and vegetables. The Company may need to recall such products if they become adulterated or if they are mislabeled, and the Company may be liable if the consumption of its products causes injury to consumers. A widespread product recall could result in significant losses due to the costs of a recall, the destruction of inventory, and lost sales. A significant product recall or product liability claim could also result in adverse publicity, damage to the Company’s reputation, and a loss of confidence in the safety and quality of its products.

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A number of the Company’s associates are covered by collective bargaining agreements, and unions may attempt to organize additional associates.

Approximately 29% and 12% of the Company’s associates in its Food Distribution and Military business segments, respectively, are covered by collective bargaining agreements (“CBAs”) which expire between January 2019 and February 2021. The Company expects that rising healthcare, pension and other employee benefit costs, among other issues, will continue to be important topics of negotiation with the labor unions. Upon the expiration of the Company’s CBAs, work stoppages by the affected workers could occur if the Company is unable to negotiate an acceptable contract with the labor unions. This could significantly disrupt the Company’s operations. Further, if the Company is unable to control healthcare and pension costs provided for in the CBAs, the Company may experience increased operating costs and an adverse impact on future results of operations.

While the Company believes that relations with its associates are good, the Company may continue to see additional union organizing campaigns. The potential for unionization could increase as any new related legislation or regulations are passed. The Company respects its associates’ right to unionize or not to unionize. However, the unionization of a significant portion of the Company’s workforce could increase the Company’s overall costs at the affected locations and adversely affect its flexibility to run its business in the most efficient manner to remain competitive or acquire new business and could adversely affect its results of operations by increasing its labor costs or otherwise restricting its ability to maximize the efficiency of its operations.

Costs related to multi-employer pension plans and other postretirement plans could increase.

The Company contributes to the Central States Southeast and Southwest Pension Fund (“Central States Plan” or “the Plan”), a multi-employer pension plan, based on obligations arising from its CBAs with Teamsters locals 406 and 908. SpartanNash does not administer or control this Plan, and the Company has relatively little control over the level of contributions the Company is required to make. Currently, the Central States Plan is underfunded and in critical and declining status, and as a result, contributions are scheduled to increase. The Company expects that contributions to this Plan will be subject to further increases. Benefit levels and related issues will continue to create collective bargaining challenges. The amount of any increase or decrease in its required contributions to this Plan will depend upon the outcome of collective bargaining, the actions taken by the trustees who manage the Plan, governmental regulations, actual return on investment of Plan assets, the continued viability and contributions of other contributing employers, and the potential payment of withdrawal liability should the Company choose to exit a geographic area, among other factors.

The Company also maintains defined benefit retirement plans for certain of its associates that do not participate in multi-employer pension plans. These plans are frozen. Expenses associated with the defined benefit plans may significantly increase due to changes to actuarial assumptions or investment returns on plan assets that are less favorable than projected. In addition, changes in the Company’s funding status could adversely affect the Company’s financial position.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The following table lists the locations and approximate square footage of the Company’s distribution centers used by its Food Distribution and Military segments as of December 30, 2017. The lease expiration dates for the distribution centers primarily servicing the Food Distribution segment range from February 2019 to July 2020, and for the Military segment range from August 2018 to January 2028. The Company believes that these facilities are generally well maintained and in good operating condition, have sufficient capacity, and are suitable and adequate to carry on its business for each of these segments.

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Distribution Centers
	Square Footage
Location	Leased		Owned		Total
Grand Rapids, Michigan (a)		77,000		1,179,582		1,256,582
Norfolk, Virginia (b)		188,093		545,073		733,166
Omaha, Nebraska (a)		4,384		686,783		691,167
Bellefontaine, Ohio (a)		—		666,045		666,045
Oklahoma City, Oklahoma (b)		—		608,543		608,543
Columbus, Georgia (c)		531,900		—		531,900
Lima, Ohio (a)		—		517,552		517,552
Bloomington, Indiana (b)		—		471,277		471,277
San Antonio, Texas (c)		—		461,544		461,544
St. Cloud, Minnesota (a)		82,869		329,046		411,915
Lumberton, North Carolina (a)		386,129		—		386,129
Landover, Maryland (b)		368,088		—		368,088
Pensacola, Florida (b)		—		355,900		355,900
Indianapolis, Indiana (a) (d)		—		309,699		309,699
Fargo, North Dakota (a)		—		288,824		288,824
Sioux Falls, South Dakota (a)		79,300		196,114		275,414
Bluefield, Virginia (a)		—		187,531		187,531
Minot, North Dakota (a)		—		185,250		185,250
Lakeland, Florida (a)		—		42,125		42,125
Total Square Footage		1,717,763		7,030,888		8,748,651

(a)	Distribution center services the Food Distribution segment.

(b)	Distribution center services the Military segment.

(c)

Distribution center services both the Food Distribution and Military segments. Based on utilization estimates at December 30, 2017, the Food Distribution segment utilizes 36,000 square feet and 33,365 square feet at the San Antonio and Columbus distribution centers, respectively. Also, the Columbus location requires periodic lease payments to the holder of the outstanding industrial revenue bond, which is held by the Company. Upon expiration of the lease terms, the Company will take title to the property upon redemption of the bond.

(d)	Distribution center includes vertically-integrated food processing operations at this location, including the Company’s Fresh Kitchen.

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The following table lists the Company’s retail stores, including the adjacent fuel centers of the related stores, by retail banner, number of stores, location and approximate square footage under each banner as of December 30, 2017.

Retail Segment
		Leased			Owned				Total
		Number	Square		Number		Square		Number	Square
Grocery Store Retail Banner	Location	of Stores	Feet		of Stores		Feet		of Stores	Feet
Family Fare Supermarkets	Michigan, Minnesota, Nebraska, North Dakota, South Dakota, Iowa	77		3,335,835	7			374,244	84		3,710,079
D&W Fresh Market	Michigan	9		437,860	2			84,458	11		522,318
VG’s Grocery	Michigan	8		365,366	1			37,223	9		402,589
Family Fresh Market	Minnesota, Nebraska, Wisconsin	1		32,650	5			247,223	6		279,873
Dan's Supermarket	North Dakota	6		278,477		—		—	6		278,477
Econofoods	Minnesota, Wisconsin	3		111,278	4			95,635	7		206,913
Sun Mart Foods	Minnesota, Nebraska	1		31,733	5			150,897	6		182,630
Valu Land	Michigan	5		112,908		—		—	5		112,908
Supermercado Nuestra Familia	Nebraska	1		22,540	2			83,279	3		105,819
No Frills Supermarkets	Iowa, Nebraska	3		61,060		—		—	3		61,060
Forest Hills Foods	Michigan	1		50,791		—		—	1		50,791
Pick ‘n Save	Ohio	1		45,608		—		—	1		45,608
Dillonvale IGA	Ohio	1		25,627		—		—	1		25,627
Fresh City Market	Indiana	1		21,622		—		—	1		21,622
Fresh Madison Market	Wisconsin	1		21,470		—		—	1		21,470
Total		119		4,954,825	26			1,072,959	145		6,027,784

The Company also owns one fuel center that is not reflected in the retail square footage above: a Family Fare Quick Stop in Michigan that is not included with a corporate owned retail store but is adjacent to the Company’s corporate headquarters. Also not reflected in the retail square footage above is one stand-alone pharmacy located in Clear Lake, Iowa.

The Company’s service centers are located in Grand Rapids, Michigan; Minneapolis, Minnesota; and Norfolk, Virginia; consisting of office space of approximately 286,100 square feet in Company-owned buildings and 33,000 square feet in leased facilities. The Company also leases two additional off-site storage facilities consisting of approximately 50,300 square feet. The Company owns and leases to independent retailers seven stores totaling approximately 370,000 square feet and owns and leases to a third party one warehouse of approximately 400,000 square feet.

Item 3. Legal Proceedings

From time-to-time, the Company is engaged in routine legal proceedings incidental to its business. The Company does not believe that these routine legal proceedings, taken as a whole, will have a material impact on its business or financial condition. Additionally, various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against the Company. While the ultimate effect of such actions, lawsuits and claims cannot be predicted with certainty, management believes that their outcome will not result in a material adverse effect on the Company’s consolidated financial position, operating results or liquidity. Legal proceedings, various lawsuits, claims, and other matters are more fully described in Note 9, Commitments and Contingencies, in the notes to consolidated financial statements, which is herein incorporated by reference.

Item 4. Mine Safety Disclosure

Not Applicable

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PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

SpartanNash common stock is traded on the NASDAQ Global Select Market under the trading symbol “SPTN.”

Stock sale prices are based on transactions reported on the NASDAQ Global Select Market. Information on quarterly high and low sales prices for SpartanNash common stock for each of the last two fiscal years is as follows:

	2017
	Full Year		4th Quarter		3rd Quarter		2nd Quarter		1st Quarter
	(52 Weeks)		(12 Weeks)		(12 Weeks)		(12 Weeks)		(16 Weeks)
Common stock price - High	$	40.33	$	26.99	$	27.74	$	37.80	$	40.33
Common stock price - Low		19.85		19.85		23.26		25.08		31.54

	2016
	Full Year		4th Quarter		3rd Quarter		2nd Quarter		1st Quarter
	(52 Weeks)		(12 Weeks)		(12 Weeks)		(12 Weeks)		(16 Weeks)
Common stock price - High	$	39.96	$	39.96	$	33.89	$	31.48	$	31.01
Common stock price - Low		17.66		27.27		27.96		25.29		17.66

At February 23, 2018, there were approximately 1,300 shareholders of record of SpartanNash common stock. The Company has paid a quarterly cash dividend every quarter since the fourth quarter of fiscal 2006.

The table below outlines quarterly dividends paid on SpartanNash common stock in each of the last three years:

Under its senior revolving credit facility, the Company is generally permitted to pay dividends in any fiscal year up to an amount such that all cash dividends, together with any cash distributions and share repurchases, do not exceed $35.0 million. Additionally, the Company is generally permitted to pay cash dividends and repurchase shares in excess of $35.0 million in any fiscal year so long as its Excess Availability, as defined in the senior revolving credit facility, is in excess of 10% of the Total Borrowing Base, as defined in the senior revolving credit facility, before and after giving effect to the repurchases and dividends.

Although the Company expects to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the Board of Directors (the “Board”) to declare future dividends. Each future dividend will be considered and declared by the Board at its discretion. Whether the Board continues to declare dividends and repurchase shares depends on a number of factors, including the Company’s future financial condition, anticipated profitability and cash flows, and compliance with the terms of its credit facilities. In May 2011, the Board authorized a five-year share repurchase program for up to $50 million of SpartanNash’s common stock that expired in May 2016, after the completion of the 2016 repurchases. During the first quarter of 2016, the Board authorized a new five-year share repurchase program for an additional $50 million of SpartanNash’s common stock. During the fourth quarter of 2017, the Board authorized an incremental $50 million share repurchase program expiring in 2022. After the 2017 repurchases were made, $65.0 million remains available under these programs.

			Average
	Total Number		Price Paid
Fiscal Period	of Shares Purchased		per Share
October 8 − November 4, 2017		—	$	—
November 5 − December 2, 2017		192,551		22.46
December 3 − 30, 2017		312,739		26.12
Total		505,290	$	24.73

During 2017, 2016 and 2015, the Company repurchased 1,367,432; 396,030; and 282,363 shares of common stock for approximately $35.0 million, $9.0 million, and $9.0 million, respectively.

The equity compensation plans table in Part III, Item 12 of this report is herein incorporated by reference.

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Performance Graph

Set forth below is a graph comparing the cumulative total shareholder return on SpartanNash common stock to that of the Russell 2000 Total Return Index and the NASDAQ Retail Trade Index, over a period beginning March 30, 2013 and ending on December 30, 2017.

Cumulative total return is measured by the sum of (1) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (2) the difference between the share price at the end and the beginning of the measurement period, divided by the share price at the beginning of the measurement period.

The dollar values for total shareholder return plotted above are shown in the table below:

	March 30,		December 28,		January 3,		January 2,		December 31,		December 30,
	2013		2013		2015		2016		2016		2017
SpartanNash	$	100.00	$	136.96	$	152.22	$	130.27	$	242.69	$	167.78
Russell 2000 Total Return Index		100.00		123.23		128.93		123.84		150.23		172.24
NASDAQ Retail Trade		100.00		118.85		132.07		138.06		139.64		148.54

The information set forth under the Heading “Performance Graph” shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act, except to the extent that the registrant specifically requests that such information be treated as soliciting material or specifically incorporates it by reference into a filing under the Securities Act or the Exchange Act.

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Item 6. Selected Financial Data

The following table provides selected historical consolidated financial information of SpartanNash for each of the five years and periods ended December 28, 2013 through December 30, 2017, all of which were 52 week years with the exception of 2014 which was a 53-week year and the 39-week transition year ended December 28, 2013.

	Year Ended											Period Ended
(In thousands, except per share data)	2017			2016		2015		2014		2013 (a)		2013 (a)
Statements of Operations Data:
Net sales	$	8,128,082		$	7,734,600	$	7,651,973	$	7,916,062	$	3,190,039	$	2,597,230
Gross profit		1,144,909			1,111,494		1,115,682		1,156,074		619,523		486,880
Selling, general and administrative expenses		1,014,665			963,652		975,572		1,022,387		546,100		433,450
Merger/acquisition and integration		8,101			6,959		8,433		12,675		20,993		20,993
Restructuring charges and asset impairment (b)		228,459			32,116		8,802		6,166		16,877		15,644
Operating (loss) earnings		(106,316	)		108,767		122,875		114,846		35,553		16,793
(Loss) earnings before income taxes and discontinued operations		(131,644	)		89,963		100,259		90,449		15,082		2,070
Income tax (benefit) expense (c)		(79,027	)		32,907		37,093		31,329		5,914		841
(Loss) earnings from continuing operations		(52,617	)		57,056		63,166		59,120		9,168		1,229
Net (loss) earnings	$	(52,845	)	$	56,828	$	62,710	$	58,596	$	8,443	$	741
Diluted (loss) earnings from continuing operations per share		(1.41	)		1.52		1.67		1.57		0.39		0.05
Diluted (loss) earnings per share		(1.41	)		1.51		1.66		1.55		0.36		0.03
Cash dividends declared per share		0.66			0.60		0.54		0.48		0.35		0.27
Balance Sheet Data:
Total assets (d)	$	2,055,797		$	1,930,336	$	1,917,263	$	1,923,455	$	1,973,366	$	1,973,366
Property and equipment, net		600,240			559,722		583,698		597,150		628,482		628,482
Working capital (d) (e)		509,705			387,507		396,263		455,694		418,076		418,076
Long-term debt and capital lease obligations (e)		740,755			413,675		467,793		541,683		588,034		588,034
Shareholders’ equity		721,950			825,407		790,779		747,253		706,873		706,873

(a)

The operating results of Nash-Finch are included in the consolidated statements of operations beginning on November 19, 2013. The Company’s fiscal year end was changed from the last Saturday in March beginning with the 39-week transition year ended December 28, 2013. For comparability purposes, the Company has also provided selected historical consolidated financial information for the 51-week year ended December 28, 2013 (unaudited).

(b)

In 2017, the Company recorded a $189.0 million goodwill impairment charge related to its Retail segment and $33.7 million of asset impairment charges primarily associated with long-lived assets in the Retail segment. See Note 5, Goodwill and Other Intangible Assets, and Note 6, Restructuring Charges and Asset Impairment, in the notes to consolidated financial statements for additional details.

(c)

In 2017, income taxes were impacted by the revaluation of deferred tax liabilities related to the corporate tax rate reduction enacted in the Tax Cuts and Jobs Act. Refer to Note 13, Income Tax, in the notes to consolidated financial statements for further explanation.

(d)

See Note 1, Summary of Significant Accounting Policies and Basis of Presentation, in the notes to consolidated financial statements. Due to the retrospective adoption of ASU 2015-03, “Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs” in 2016, debt issuance costs were reclassified from Other assets, net to Long-term liabilities for all periods presented. This resulted in a decrease in Total assets and Long-term debt and capital lease obligations of $8,185, $8,827 and $10,285 at January 2, 2016, January 3, 2015 and December 28, 2013, respectively.

(e)

See Note 1, Summary of Significant Accounting Policies and Basis of Presentation, in the notes to consolidated financial statements. Due to the retrospective adoption of ASU 2015-17, “Balance Sheet Classification of Deferred Taxes” in 2015, deferred income taxes were reclassified from Current liabilities to Long-term liabilities for all periods presented. Adoption of this standard resulted in an increase in Working capital of $22,494 and $19,909 at January 3, 2015 and December 28, 2013, respectively.

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Historical data is not necessarily indicative of the Company’s future results of operations or financial condition. See discussion of “Risk Factors” in Part I, Item 1A of this report; “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report; and the consolidated financial statements and notes thereto in Part II, Item 8 of this Annual Report on Form 10-K.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

About SpartanNash

SpartanNash, headquartered in Grand Rapids, Michigan, is a leading multi-regional grocery distributor and grocery retailer whose core businesses include distributing grocery products to independent grocery retailers (“independent retailers”), national retailers, its corporate owned retail stores, and U.S. military commissaries and exchanges. Through its Military segment, SpartanNash is a leading distributor of grocery products to military commissaries in the United States. The Company’s Retail segment operates neighborhood supermarkets that emphasize value beyond price, affordable wellness, commitment to local products and, as demonstrated throughout the organization, caring for their community and environment . The Company operates three reportable business segments: Food Distribution, Military and Retail.

The Company’s Food Distribution segment provides a wide variety of nationally branded and private brand grocery products and perishable food products to approximately 2,100 independent retailers, the Company’s corporate owned retail stores, food service distributors and various other customers. Through its Food Distribution segment, the Company also services national retailers, including Dollar General. Sales to Dollar General are made to more than 14,000 of its retail locations. The Food Distribution segment currently services customers in 47 states, primarily in the Midwest and Southeast regions of the United States.

The Company’s Military segment contracts with manufacturers to distribute a wide variety of grocery products, including dry groceries, beverages, meat, and frozen foods, primarily to military commissaries and exchanges located in the United States, the District of Columbia, Europe, Cuba, Puerto Rico, Italy, Bahrain, Djibouti and Egypt. The Company is also the DeCA exclusive worldwide supplier of private brand grocery and related products to U.S. military commissaries. The Company has over 40 years of experience acting as a distributor to U.S. military commissaries and exchanges.

The Company’s Retail segment operated 145 corporate owned retail stores in the Midwest region primarily under the banners of Family Fare Supermarkets, D&W Fresh Markets, VG’s Grocery, Dan’s Supermarket and Family Fresh Market as of December 30, 2017. The Company also offered pharmacy services in 87 of its corporate owned stores (of which 76 pharmacies are owned) and operated 31 fuel centers as of December 30, 2017. The retail stores have a “neighborhood market” strategy that focuses on value beyond price, affordable wellness, and commitment to local products.

The Company’s fiscal year end is the Saturday closest to December 31. The following discussion is as of and for the fiscal years ending or ended December 29, 2018 ("2018"), December 30, 2017 (“2017” or “current year”), December 31, 2016 (“2016” or “prior year”) and January 2, 2016 (“2015”), all of which include 52 weeks. All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks and will generally include the Easter holiday. The fourth quarter includes the Thanksgiving and Christmas holidays , and depending on the fiscal year end, may include the New Year’s holiday .

In certain geographic areas, the Company’s sales and operating performance may vary with seasonality. Many stores are dependent on tourism, and therefore, are most affected by seasons and weather patterns, including, but not limited to, the amount and timing of snowfall during the winter months and the range of temperature during the summer months.

Overview of 2017

In 2017, the Company continued to execute on its strategy to leverage its supply chain network to drive new and existing distribution business, invest in private brand offerings and customer convenience to provide a more differentiated product and service offering, and make targeted investments and strategic actions to enhance the Company’s retail store portfolio and overall profitability. Despite the challenging operating environment, the Company delivered against its initiatives, strengthened its foundation and core competencies, and has positioned itself for continued success.

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The Company’s 2017 accomplishments and developments include:

Food Distribution

•

The Company completed the Caito and BRT acquisition in the first quarter of 2017 and continues to make progress integrating operations. The acquired businesses contributed approximately 5% of net sales in 2017. The Company now offers its own fresh-cut fruits and vegetables to a number of different customers and corporate owned retail stores, and has also begun limited production at its new Fresh Kitchen facility. While the startup of the facility has been slower than anticipated, the Company remains confident in the value of the product offerings to its customers and in the long-term growth of the business.

•

The Company realized sales growth in its Food Distribution segment primarily due to contributions from the Caito and BRT acquisition and organic sales growth of 3.7% over the prior year. The Company continues to focus on new business prospects to drive sales and profits, including opportunities in alternative sales channels and those in areas which the Company has a competitive advantage to address complicated logistics issues. The Company’s Food Distribution segment grew sales in the fourth quarter of 2017, marking the 8th consecutive quarter of organic sales growth for the segment, while also making continued improvements to its supply chain to further optimize its network. In connection with the sales growth and continued focus to better service its customers, the Company further integrated its supply chain by servicing both Food Distribution and Military customers from combined warehouses in 2017, increasing asset utilization and providing more opportunities for the Company to expand these efforts in 2018.

Military

•

In December of 2016, the Company was selected by DeCA to be the exclusive worldwide supplier of private brand grocery and related products to U.S. military commissaries. In connection with the overall arrangement, the Company leveraged its private brand capabilities and expertise to help design and develop both of DeCA’s proprietary and commissary-specific private brands. The rollout of the private brand program began in the second quarter of 2017, and as of December 30, 2017, the Company had approximately 450 SKUs of private brand products in the DeCA system. The Company looks forward to continuing its partnership with DeCA and anticipates up to 1,400 SKUs will be added under the program in 2018.

•

In the third quarter of 2017, the Company entered into an agreement to obtain incremental distribution business from a DeCA provider exiting these operations in the Southwest United States. This new business, together with increasing contributions from the DeCA private brand program, helped reverse the negative sales trend experienced in the first half of 2017 and helped improve the earnings trend despite elevated costs associated with hurricane weather and inefficiencies resulting from the onboarding of significant new business.

Retail

•

The Company continues to make targeted capital investments by remodeling select retail stores in key geographies, including the conversion of certain stores to the Family Fare banner. The Company also continued its store rationalization program, and in connection with overall business strategies, sold four corporate owned retail stores to new and existing Food Distribution customers, suspended the operations of one store, and closed seven others in connection with lease expirations and store rationalization plans during the year. The Company was also able to negotiate favorable lease terminations at two of its previously closed retail stores during the year.

•

At the end of the second quarter, the Company introduced Fast Lane , its online ordering and curbside pick-up service, and offers the service at approximately 40 retail stores as of December 30, 2017. The Company believes Fast Lane is essential to increasing customer satisfaction through quality service and convenience, and accordingly, anticipates rolling out the service to up to 30 additional stores by the end of 2018. Furthermore, the Company began piloting home delivery services in the fourth quarter of 2017 and expects to expand the service throughout 2018 depending on customer demand.

•

The Company recorded non-cash goodwill and asset impairment charges resulting from lower-than-expected operating results in the Company’s Retail segment and the anticipation of a continued competitive retail environment. Despite the impairment charges, the Company is focused on improving recent trends through a number of initiatives aimed at enhancing the consumers’ experience through an expanded assortment of better for you products, convenient meal solutions and increased value offerings in private brands and produce. The Company expects these initiatives, including a number of other convenience and service offerings outlined below, will lead to increased customer satisfaction and loyalty as they are deployed over the next year.

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Other

•

The Company continues to enhance its private brand programs for both independent customers and corporate owned stores. In the third quarter, the Company launched the Our Family ® private brand in the Michigan region. The brand replaces the Company’s Spartan ™ brand and provides the Company with a system-wide, national brand equivalent or better quality product offering. The move to Our Family ® also allows the Company to streamline its supply chain to deliver a larger variety of product offerings at a lower cost to consumers. The Company has been pleased with customer acceptance of the brand as well as its transition, which has gone smoothly and is expected to continue into 2018. In the second quarter, the Company began incorporating its own fresh-cut fruits and vegetables into the Open Acres ™ private brand, and during the second half of 2017, continued to grow this initiative in volume and selection based on customer acceptance and demand. Lastly, the Company continues to expand its living well offering, which includes the natural and organic Full Circle ® private brand line, fresh products offered through the Caito acquisition, and a significant number of new SKUs across organic produce and healthier specialty items.

•

In the fourth quarter of 2017, the Company re-measured its deferred tax assets and liabilities to reflect a change in the federal statutory rate from 35% to 21%, effective January 1, 2018, resulting from the Tax Cuts and Jobs Act ("Tax Act") that was enacted on December 22, 2017. Prior to enactment, the Company implemented tax planning strategies aimed at maximizing certain tax benefits that could arise from changes in the tax code, including the acceleration of certain deductions. As a result of the Tax Act and related tax planning strategies, the Company realized a provisional deferred income tax benefit of $26.0 million in the fourth quarter in connection with the re-measurement of existing deferred tax balances.

The accomplishments above helped position the Company for future earnings growth, but the competitive landscape and recent developments also present challenges to the Company and potential changes in trends that could impact 2018. For fiscal 2018, the Company anticipates year-over-year sales growth to continue in the Food Distribution segment driven primarily by incremental sales to high-growth customers as well as contributions from Caito’s Fresh Kitchen facility. New military commissary business in the Southwest, which will benefit sales comparisons for the first half of 2018, and contributions from the ongoing expansion of the DeCA private brand program should continue to drive sales growth in the Military segment. The Company expects that its Retail stores’ comparable sales will improve to slightly negative to flat by the end of the year as the stores benefit from the Company’s new positioning of its offerings. The sales outlook takes into consideration the impact of the new revenue recognition standard, which upon adoption in the first quarter of 2018 will reduce fiscal 2017 net sales by approximately $160 million as certain Food Distribution contracts that are currently reported on a gross basis will be reported on a net basis as the Company concluded that it does not control the goods or services prior to transfer to the customer. While the retail environment remains challenging, the Company is focused on capitalizing on its growth opportunities and leveraging its differentiated business model to drive sales and profitability. The Company continues to take actions that it believes will enhance the convenience and value that it provides its customers and continues to see positive results from these investments. To enhance this momentum, the Company intends to invest approximately 50% of its tax reform savings in its associates and programs designed to improve the Company’s competitive position.

Results of Operations

The following table sets forth items from the Company’s consolidated statements of operations as a percentage of net sales and the percentage change from the preceding year:

	Percentage of Net Sales										Percentage Change
	2017				2016			2015			2017			2016
Net sales		100.0				100.0			100.0			5.1			1.1
Gross profit		14.1				14.4			14.6			3.0			(0.4	)
Selling, general and administrative expenses		12.5				12.5			12.8	*		5.3			(1.2	)
Merger/acquisition and integration		0.1				0.1			0.1			16.4			(17.5	)
Restructuring charges and goodwill/asset impairment		2.8				0.4			0.1			611.4			264.9
Operating (loss) earnings		(1.3	)			1.4			1.6			(197.7	)		(11.5	)
Other income and expenses		0.3				0.2			0.3			34.7			(16.9	)
(Loss) earnings before income taxes and discontinued operations		(1.6	)			1.2			1.3			(246.3	)		(10.3	)
Income tax (benefit) expense		(1.0	)			0.5	*		0.5			(340.2	)		(11.3	)
(Loss) earnings from continuing operations		(0.6	)			0.7			0.8			(192.2	)		(9.7	)
Loss from discontinued operations, net of taxes		(0.1	)	*		—			—			—			(50.0	)
Net (loss) earnings		(0.7	)			0.7			0.8			(193.0	)		(9.4	)

* Difference due to rounding

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Results of Continuing Operations for 2017 Compared to 2016

Net Sales

			Percentage of					Percentage of
			Total					Total						Percentage
(In thousands)	2017		Net Sales			2016		Net Sales			Variance			Change
Food Distribution	$	3,992,192		49.1	%	$	3,454,541		44.7	%	$	537,651			15.6
Military		2,144,022		26.4			2,197,014		28.4			(52,992	)		(2.4	)
Retail		1,991,868		24.5			2,083,045		26.9			(91,177	)		(4.4	)
Total net sales	$	8,128,082		100.0	%	$	7,734,600		100.0	%	$	393,482			5.1

Net sales increased $393.5 million, or 5.1%, to $8.13 billion in 2017 from $7.73 billion in 2016. The increase in net sales was primarily attributable to contributions from the Caito acquisition, organic growth of 3.7% in the Food Distribution segment, new military commissary business in the Southwest in the second half of the year and increased contributions from the DeCA private brand program, partly offset by lower comparable sales at DeCA operated locations and lower sales at Retail resulting from the closure and sale of retail stores and a decrease in comparable store sales.

Food Distribution net sales, after intercompany eliminations, increased $537.7 million, or 15.6%, to $3.99 billion in 2017 from $3.45 billion in the prior year. The increase was primarily due to contributions from the Caito acquisition and organic growth of 3.7% related to incremental sales volume to existing customers .

Military net sales decreased $53.0 million, or 2.4%, to $2.14 billion in 2017 from $2.20 billion in the prior year. The decrease was primarily due to lower sales at the DeCA-operated commissaries, partially offset by new business in the Southwest and contributions from the DeCA private brand program.

Retail net sales decreased $91.2 million, or 4.4%, to $1.99 billion in 2017 from $2.08 billion in the prior year. The decrease in net sales was primarily attributable to $60.8 million of lower sales resulting from the closures and sales of retail stores as well as negative comparable store sales, partially offset by the impact of higher fuel prices. Comparable store sales for the year, excluding fuel, were negative 2.4% in both years. The Company defines a retail store as comparable when it is in operation for 14 accounting periods (a period equals four weeks), regardless of remodels, expansions, or relocated stores. The Company’s definition of comparable store sales may differ from similarly titled measures at other companies.

Gross Profit – Gross profit represents net sales less cost of sales, which is described in further detail within Note 1, Summary of Significant Accounting Policies and Basis of Presentation, in the notes to the consolidated financial statements. Gross profit increased $33.4 million, or 3.0%, to $1.14 billion in 2017 compared to $1.11 billion in the prior year. As a percent of net sales, gross profit decreased from 14.4% to 14.1% due to several factors, most notably the increased mix of Food Distribution sales as a percentage of total sales. The rate was also impacted by margin investments at both Retail and Food Distribution, the cycling of a significant prior year LIFO benefit and lower fuel margins, partially offset by higher margin rates in the Military segment.

Selling, General and Administrative Expenses – Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and wages, employee benefits, warehousing costs, store occupancy costs, shipping and handling, utilities, equipment rental, depreciation (to the extent not included in Cost of Sales), out-bound freight and other administrative expenses. SG&A expenses increased $51.0 million, or 5.3%, to $1,014.7 million in 2017 from $963.7 million in the prior year, representing 12.5% of net sales in both years. The increase in SG&A expense was primarily attributable to higher operational expenses related to the Caito acquisition, increased healthcare costs and higher transportation and occupancy costs, partially offset by lower incentive compensation and other cost savings.

Merger/Acquisition and Integration Expenses – In 2017, $8.1 million of merger/acquisition and integration expenses were incurred mainly associated with the Caito and BRT acquisition, and to a lesser extent, other acquisition-related and ongoing merger activities. Prior year results included $7.0 million of merger/acquisition and integration expenses primarily associated with the Nash-Finch merger, particularly system upgrades and implementations , as well as costs incurred in connection with 2016 and 2015 acquisitions.

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Restructuring Charges and Asset Impairment, Including Goodwill Impairment – In 2017, $228.5 million of net restructuring and asset impairment charges were incurred, predominantly associated with goodwill and asset impai rment charges. The Company recorded a non-cash goodwill impairment charge of $189.0 million related to the Retail segment. The impairment was driven by significantly lower than expected Retail operating results due to an increasingly competitive retail env ironment and the related pricing pressures that are anticipated to negatively impact gross margin, operating profit, and future cash flows. The Company also recorded $35.6 million of asset impairment and restructuring charges primarily associated with the underlying performance of Company’s retail store base and the execution of its store rationalization program. Prior year results included $32.1 million of restructuring and asset impairment charges that consisted primarily of impairment charges related to four underperforming retail stores and restructuring charges primarily related to three retail stores and two food distribution centers. The facilities were closed as part of the Company’s retail store and warehouse rationalization plan.

Operating Earnings (Loss)

																Change in
				Percentage of						Percentage of						Percentage of
(In thousands)	2017			Net Sales				2016		Net Sales			Variance			Net Sales
Food Distribution	$	83,296			2.1		%	$	85,093		2.5	%	$	(1,797	)		(0.4	)
Military		7,014			0.3				12,160		0.6			(5,146	)		(0.2	)
Retail		(196,626	)		(9.9	)			11,514		0.6			(208,140	)		(10.4	)
Operating (loss) earnings	$	(106,316	)		(1.3	)	%	$	108,767		1.4	%	$	(215,083	)		(2.7	)

The Company reported an operating loss of ($106.3) million in 2017 compared to operating earnings of $108.8 million in the prior year. The decrease of $215.1 million was primarily attributable to current year non-cash goodwill and asset impairment charges of $222.7 million, predominantly related to the Retail segment, higher costs associated with Caito operations and Fresh Kitchen start-up activities, as well as increased LIFO and health care expenses, partly offset by lower incentive compensation expense and various cost savings initiatives.

Food Distribution operating earnings decreased $1.8 million, or 2.1%, to $83.3 million in 2017 from $85.1 million in the prior year. The decrease was primarily attributable to Caito operations and Fresh Kitchen start-up activities and higher LIFO expense, partially offset by net sales growth from new and existing customers, lower incentive compensation and lower operating expenses associated with various cost savings initiatives.

Military operating earnings decreased $5.1 million to $7.0 million in 2017 from $12.2 million in the prior year. The decrease was primarily due to lower sales at the DeCA-operated commissaries, higher supply chain costs associated with industry-wide transportation cost challenges, onboarding and ramping up new and high-growth lines of business and increased healthcare and LIFO expense, partially offset by growth from the new military commissary business in the Southwest and the DeCA private brand program, as well as lower incentive compensation and margin improvements.

Retail reported an operating loss of ($196.6) million in 2017 compared to operating earnings of $11.5 million in the prior year. The decrease was primarily due to goodwill and higher asset impairment charges, lower comparable store sales, investments in margin and store labor, and higher occupancy and healthcare costs, partly offset by lower costs related to incentive compensation, depreciation, merger/acquisition and integration and closed stores.

Interest Expense – Interest expense increased $6.2 million, or 32.8%, to $25.3 million in 2017 from $19.1 million in the prior year primarily due to increased borrowings related to the Caito and BRT acquisition and the timing of working capital requirements.

Debt Extinguishment – A loss on debt extinguishment of $0.4 million was incurred in 2017 in connection with the pay down of the term loan component of the senior secured credit facility. A loss on debt extinguishment of $0.2 million was incurred in 2016 in connection with the amendment of the senior secured credit facility.

Income Taxes – The effective income tax rates were 60.0% and 36.6% for 2017 and 2016, respectively. In the fourth quarter of 2017, the Company re-measured its deferred tax assets and liabilities to reflect a change in the federal statutory rate from 35% to 21%, effective January 1, 2018, resulting from the Tax Act that was enacted on December 22, 2017. As a result, the Company realized a provisional deferred income tax benefit of $26.0 million. The Company’s 2018 tax provision will be recorded at an effective rate that contemplates the new lower statutory rate, and is currently anticipated to be between 23% and 24%, depending on levels of profitability overall and between jurisdictions. Refer to Note 13, Income Tax, within the notes to the consolidated financial statements for additional information regarding the Tax Act.

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Differences from the federal statutory rate are primarily due to the re-measurement of deferred taxes mentioned previously, state taxes, tax benefits related to stock -based compensation and charitable product donations in the current year and state taxes in the prior year. The Company’s effective tax rate was impacted by the stock-based compensation benefits recognized resulting from the adoption of ASU 2016-09. The ta x impacts of stock-based compensation are primarily generated in the first quarter due to the timing o f awards and vesting schedules.

Results of Continuing Operations for 2016 Compared to 2015

Net Sales

			Percentage of					Percentage of
			Total					Total						Percentage
(In thousands)	2016		Net Sales			2015		Net Sales			Variance			Change
Food Distribution	$	3,454,541		44.7	%	$	3,305,094		43.2	%	$	149,447			4.5
Military		2,197,014		28.4			2,207,161		28.8			(10,147	)		(0.5	)
Retail		2,083,045		26.9			2,139,718		28.0			(56,673	)		(2.6	)
Total net sales	$	7,734,600		100.0	%	$	7,651,973		100.0	%	$	82,627			1.1

Net sales for 2016 increased $82.6 million, or 1.1%, to $7.73 billion from $7.65 billion in 2015. The increase was primarily driven by business gains from new and existing customers in the Food Distribution and Military segments, which more than offset the negative impact of food deflation on all segments; lower sales at the DeCA-operated commissaries; and lower sales attributable to both the decrease in comparable retail store sales and the closure of retail stores.

Food Distribution net sales, after intercompany eliminations, increased $149.4 million, or 4.5%, to $3.45 billion in 2016 from $3.31 billion in 2015. The increase was primarily due to business gains from new and existing customers, which more than offset the negative impact of deflation.

Military net sales decreased $10.1 million, or 0.5%, to $2.20 billion in 2016 from $2.21 billion in 2015. The decrease was primarily due to lower sales at the DeCA-operated commissaries, partially offset by new business gains associated with the distribution of fresh products.

Retail net sales decreased $56.7 million, or 2.6%, to $2.08 billion in 2016 from $2.14 billion in 2015. Comparable store sales for the year, excluding fuel, improved to -2.4 percent from -2.9 percent in 2015. Despite four consecutive quarters of improved comparable store sales trends over the course of fiscal 2016, the ongoing deflationary environment and continued challenging economic conditions, particularly in certain western geographies, contributed to the lower sales at Retail. Specifically, the decrease in net sales was attributable to the negative comparable store sales and $40.0 million of lower sales due to the closure of retail stores and a fuel center, partially offset by $40.0 million of full-year net sales contributions from stores acquired in 2015. The Company defines a retail store as comparable when it is in operation for 14 accounting periods (a period equals four weeks), regardless of remodels, expansions, or relocated stores. The Company’s definition of comparable store sales may differ from similarly titled measures at other companies.

SG&A expenses decreased $11.9 million, or 0.4%, to $963.7 million in 2016 from $975.6 million in 2015, and were 12.5% of net sales in 2016 compared to 12.8% in 2015. The decrease was due primarily to benefits from merger synergies and cost reduction efforts, lower depreciation associated with fully depreciated assets, and the impact of retail store closures, partially offset by higher health care and other benefit costs. The decrease in the rate to net sales was primarily due to the factors mentioned previously.

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Merger/Acquisition and Integration Expenses – Merger int egration and acquisition expenses consist of costs to integrate operations following the merger with Nash-Finch as well as costs incurred in connection with 2016 and 2015 acquisitions. Merger integration and acquisition expenses decreased in 2016 as a resu lt of completing various merger integration activities and despite acquisition-related costs associated with the Caito and BRT acquisition.

Restructuring Charges and Asset Impairment – In 2016, $32.1 million in charges were recognized primarily related to the closure of four retail stores and two distribution centers, which were part of the Company’s warehouse and retail store rationalization plan, as well as asset impairment charges associated with certain underperforming retail stores. In 2015, charges of $8.8 million were recognized related to the closures of six retail stores and one distribution center, as well as asset impairment charges associated with certain underperforming retail stores.

Operating Earnings

														Change in
			Percentage of					Percentage of						Percentage of
(In thousands)	2016		Net Sales			2015		Net Sales			Variance			Net Sales
Food Distribution	$	85,093		2.5	%	$	78,841		2.4	%	$	6,252			0.1
Military		12,160		0.6			17,059		0.8			(4,899	)		(0.2	)
Retail		11,514		0.6			26,975		1.3			(15,461	)		(0.7	)
Operating earnings	$	108,767		1.4	%	$	122,875		1.6	%	$	(14,108	)		(0.2	)

Operating earnings decreased $14.1 million, or 11.5%, to $108.8 million in 2016 from $122.9 million in 2015. The decrease was primarily due to higher restructuring and asset impairment charges of $23.3 million and the impact of food deflation, which more than offset the sales growth at Food Distribution and lower operating expenses due in part to lower depreciation and productivity and efficiency initiatives.

Food Distribution operating earnings increased $6.3 million, or 7.9%, to $85.1 million in 2016 from $78.8 million in 2015. The increase was driven by sales growth from new and existing business, and lower operating expenses associated with supply chain improvements and lower depreciation, partially offset by higher costs for warehouse closings and health care benefits, as well as the negative impact of deflation.

Military operating earnings decreased $4.9 million, or 28.7%, to $12.2 million in 2016 from $17.1 million in 2015. The decrease was primarily due to lower sales at the DeCA-operated commissaries and the negative impact of deflation, which more than offset new business gains associated with the distribution of fresh products as well as lower restructuring and asset impairment charges that did not recur in 2016.

Retail operating earnings decreased $15.5 million, or 57.4%, to $11.5 million in 2016 from $27.0 million in 2015. The decrease was primarily due to higher restructuring and impairment charges and a decrease in comparable stores sales, partially offset by favorable rebate programs, higher fuel margins, and lower occupancy costs.

Interest Expense – Interest expense decreased $2.7 million, or 12.5%, to $19.1 million in 2016 from $21.8 million in 2015. The decrease in interest expense was primarily due to lower debt levels and lower interest rates primarily due the prepayment of $50.0 million of Senior Notes in 2015.

Debt Extinguishment – A loss on debt extinguishment of $0.2 million was incurred in 2016 in connection with the amendment of the senior secured credit facility. A loss of debt extinguishment of $1.2 million was incurred in 2015 in connection with the prepayment of the Senior Notes (see Debt Management under “Liquidity and Capital Resources”).

Income Taxes – The effective income tax rates were 36.6% and 37.0% for 2016 and 2015, respectively. The difference from the federal statutory rate in both 2016 and 2015 were primarily due to state income taxes.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, the Company also provides information regarding adjusted operating earnings, adjusted earnings from continuing operations, and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”). These are non-GAAP financial measures, as defined below, and are used by management to allocate resources, assess performance against its peers and evaluate overall performance. The Company believes these measures provide useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its financial results in these adjusted formats.

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Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude start-up costs associated with the new Fresh Kitchen operation, expenses ( incentive compensation and professional fees ) associated with tax planning strategies related to the 2017 Tax Cuts and Jobs Act, and an executive retirement stock compensation award. The Fresh Kitchen is a newly constructed facility that provides the Company with the ability to process, cook, and package fresh protein-based foods and complete meal solutions. Given the Fresh Kitchen represents a new line of business for the Company, the start-up activities associat ed with testing, training, and preparing the Fresh Kitchen for production, as well as incorporating the related operations into the business, are considered “non-operational” or “non-core” in nature. The Tax Cuts and Jobs Act was enacted in 2017 and result ed in a significant tax benefit to the Company due to the re-measurement of deferred taxes. The Company also incurred expenses related to tax planning strategies aimed at maximizing the tax benefit associated with the change in federal tax legislation. These items are not expected to recur in the foreseeable future and are considered “non-operational” or “non-core” in nature. The retirement stock compensation award represents incremental compensation expense in connection with an executive retirement that is also considered “non-operational” or “non-core” in nature.

Adjusted Operating Earnings

Adjusted operating earnings is a non-GAAP operating financial measure that the Company defines as operating earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

The Company believes that adjusted operating earnings provide a meaningful representation of its operating performance for the Company as a whole and for its operating segments. The Company considers adjusted operating earnings as an additional way to measure operating performance on an ongoing basis. Adjusted operating earnings is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because adjusted operating earnings and adjusted operating earnings by segment are performance measures that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in an adjusted operating earnings format.

Adjusted operating earnings and adjusted operating earnings by segment are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”), and should not be considered as a substitute for operating earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definitions of adjusted operating earnings and adjusted operating earnings by segment may not be identical to similarly titled measures reported by other companies.

Following is a reconciliation of operating (loss) earnings to adjusted operating earnings for 2017, 2016 and 2015.

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(In tho usands)	2017			2016			2015
Operating (loss) earnings	$	(106,316	)	$	108,767		$	122,875
Adjustments:
Merger/acquisition and integration		8,101			6,959			8,433
Restructuring charges and goodwill/asset impairment		228,459			32,116			8,802
Expenses associated with tax planning strategies		3,798			—			569
Fresh Kitchen start-up costs		8,082			—			—
Stock compensation associated with executive retirement		1,172			—			—
Severance associated with cost reduction initiatives		368			859			549
Adjusted operating earnings	$	143,664		$	148,701		$	141,228
Reconciliation of operating earnings (loss) to adjusted operating earnings by segment:
Food Distribution:
Operating earnings	$	83,296		$	85,093		$	78,841
Adjustments:
Merger/acquisition and integration		6,244			3,703			2,037
Restructuring charges (gains) and asset impairment		1,317			5,068			(216	)
Fresh Kitchen start-up costs		8,082			—			—
Stock compensation associated with executive retirement		591			—			—
Expenses associated with tax planning strategies		1,744			—			282
Severance associated with cost reduction initiatives		342			229			150
Adjusted operating earnings	$	101,616		$	94,093		$	81,094
Military:
Operating earnings	$	7,014		$	12,160		$	17,059
Adjustments:
Merger/acquisition and integration		1,522			1			—
Restructuring charges (gains) and asset impairment		500			(473	)		1,048
Stock compensation associated with executive retirement		147			—			—
Expenses associated with tax planning strategies		593			—			75
Severance associated with cost reduction initiatives		7			245			125
Adjusted operating earnings	$	9,783		$	11,933		$	18,307
Retail:
Operating (loss) earnings	$	(196,626	)	$	11,514		$	26,975
Adjustments:
Merger/acquisition and integration		335			3,255			6,396
Restructuring charges and goodwill/asset impairment		226,642			27,521			7,970
Stock compensation associated with executive retirement		434			—			—
Expenses associated with tax planning strategies		1,461			—			212
Severance associated with cost reduction initiatives		19			385			274
Adjusted operating earnings	$	32,265		$	42,675		$	41,827

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Adjusted Earnings from Continuing Operations

Adjusted earnings from continuing operations is a non-GAAP operating financial measure that the Company defines as earnings from continuing operations plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

The Company believes that adjusted earnings from continuing operations provide a meaningful representation of its operating performance for the Company. The Company considers adjusted earnings from continuing operations as an additional way to measure operating performance on an ongoing basis. Adjusted earnings from continuing operations is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because adjusted earnings from continuing operations is a performance measure that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in adjusted earnings from continuing operations format.

Adjusted earnings from continuing operations is not a measure of performance under accounting principles generally accepted in the United States of America, and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definition of adjusted earnings from continuing operations may not be identical to similarly titled measures reported by other companies.

Following is a reconciliation of (loss) earnings from continuing operations to adjusted earnings from continuing operations for 2017, 2016 and 2015.

	2017						2016					2015
				per diluted						per diluted					per diluted
(In thousands, except per share data)	Earnings			share			Earnings			share		Earnings			share
(Loss) earnings from continuing operations	$	(52,617	)	$	(1.41	)	$	57,056		$	1.52	$	63,166		$	1.67
Adjustments:
Merger/acquisition and integration		8,101						6,959					8,433
Restructuring charges and goodwill/asset impairment		228,459						32,116					8,802
Expenses associated with tax planning strategies		3,798						—					569
Fresh Kitchen start-up costs		8,082						—					—
Stock compensation associated with executive retirement		1,172						—					—
Severance associated with cost reduction initiatives		368						859					549
Loss on debt extinguishment		—						247					1,171
Total adjustments		249,980						40,181					19,524
Income tax effect on adjustments (a)		(92,767	)					(15,071	)				(7,374	)
Impact of Tax Cuts and Jobs Act (b)		(25,992	)					—					—
Tax planning strategies		—						—					(730	)
Total adjustments, net of taxes		131,221			3.51			25,110			0.67		11,420			0.31	*
Adjusted earnings from continuing operations	$	78,604		$	2.10		$	82,166		$	2.19	$	74,586		$	1.98

*Includes rounding

(a) The income tax effect on adjustments is computed by applying the applicable tax rate to the adjustments.

(b) Includes a $ 4.8 million tax benefit attributable to tax planning strategies.

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Adjusted EBITDA

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”) is a non-GAAP operating financial measure that the Company defines as net earnings plus interest, discontinued operations, depreciation and amortization, and other non-cash items including deferred (stock) compensation, the LIFO provision, as well as adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

The Company believes that adjusted EBITDA provides a meaningful representation of its operating performance for the Company as a whole and for its operating segments. The Company considers adjusted EBITDA as an additional way to measure operating performance on an ongoing basis. Adjusted EBITDA is meant to reflect the ongoing operating performance of all of its distribution and retail operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because adjusted EBITDA and adjusted EBITDA by segment are performance measures that management uses to allocate resources, assess performance against its peers and evaluate overall performance, the Company believes it provides useful information for both management and its investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its operating financial results in an adjusted EBITDA format.

Adjusted EBITDA and adjusted EBITDA by segment are not measures of performance under accounting principles generally accepted in the United States of America, and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definitions of adjusted EBITDA and adjusted EBITDA by segment may not be identical to similarly titled measures reported by other companies.

Following is a reconciliation of net (loss) earnings to adjusted EBITDA for 2017, 2016 and 2015.

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(In thousands)	2017			2016			2015
Net (loss) earnings	$	(52,845	)	$	56,828		$	62,710
Loss from discontinued operations, net of tax		228			228			456
Income tax (benefit) expense		(79,027	)		32,907			37,093
Other expenses, net		25,328			18,804			22,616
Operating (loss) earnings		(106,316	)		108,767			122,875
Adjustments:
LIFO expense (benefit)		2,898			(1,919	)		(1,201	)
Depreciation and amortization		82,243			77,246			83,334
Merger/acquisition and integration		8,101			6,959			8,433
Restructuring charges and goodwill/asset impairment		228,459			32,116			8,802
Expenses associated with tax planning strategies		3,798			—			569
Fresh Kitchen start-up costs		8,082			—			—
Stock-based compensation		9,611			7,936			7,240
Other non-cash gains		(515	)		(148	)		(530	)
Adjusted EBITDA	$	236,361		$	230,957		$	229,522
Reconciliation of operating earnings (loss) to adjusted EBITDA by segment:
Food Distribution:
Operating earnings	$	83,296		$	85,093		$	78,841
Adjustments:
LIFO expense (benefit)		2,036			(1,128	)		(1,634	)
Depreciation and amortization		29,258			21,397			26,127
Merger/acquisition and integration		6,244			3,703			2,037
Restructuring charges (gains) and asset impairment		1,317			5,068			(216	)
Expenses associated with tax planning strategies		1,744			—			282
Fresh Kitchen start-up costs		8,082			—			—
Stock-based compensation		4,457			3,491			3,337
Other non-cash charges		310			152			49
Adjusted EBITDA	$	136,744		$	117,776		$	108,823
Military:
Operating earnings	$	7,014		$	12,160		$	17,059
Adjustments:
LIFO expense (benefit)		394			(331	)		108
Depreciation and amortization		11,626			11,484			12,081
Merger/acquisition and integration		1,522			1			—
Restructuring charges (gains) and asset impairment		500			(473	)		1,048
Expenses associated with tax planning strategies		593			—			75
Stock-based compensation		1,491			1,347			1,137
Other non-cash (gains) charges		(20	)		261			235
Adjusted EBITDA	$	23,120		$	24,449		$	31,743
Retail:
Operating (loss) earnings	$	(196,626	)	$	11,514		$	26,975
Adjustments:
LIFO expense (benefit)		468			(460	)		325
Depreciation and amortization		41,359			44,365			45,126
Merger/acquisition and integration		335			3,255			6,396
Restructuring charges and goodwill/asset impairment		226,642			27,521			7,970
Expenses associated with tax planning strategies		1,461			—			212
Stock-based compensation		3,663			3,098			2,766
Other non-cash gains		(805	)		(561	)		(814	)
Adjusted EBITDA	$	76,497		$	88,732		$	88,956

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Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to bad debts, inventories, intangible assets, assets held for sale, long-lived assets, income taxes, self-insurance reserves, restructuring costs, retirement benefits, stock-based compensation, contingencies and litigation. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Based on the Company’s ongoing review, the Company makes adjustments it considers appropriate under the facts and circumstances. This discussion and analysis of the Company’s financial condition and results of operations is based upon the Company’s consolidated financial statements. The Company believes these accounting policies and others set forth in Note 1, Summary of Significant Accounting Policies and Basis of Presentation, in the notes to the consolidated financial statements should be reviewed as they are integral to understanding the Company’s financial condition and results of operations. The Company has discussed the development, selection and disclosure of these accounting policies with the Audit Committee of the Board of Directors.

An accounting policy is considered critical if: a) it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and b) different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the Company’s consolidated financial statements. The Company considers the following accounting policies to represent the more critical estimates and assumptions used in the preparation of its consolidated financial statements:

Inventories

Inventories are valued at the lower of cost or market, with approximately 86.9% of the Company’s inventories valued using the last-in, first-out (“LIFO”) method. The remaining inventories are valued on the first-in, first-out (“FIFO”) method. The Company accounts for its Food Distribution and Military inventory using a perpetual system and utilizes the retail inventory method (“RIM”) to value inventory for center store products in the Retail segment. Under the RIM, inventory is stated at cost with cost of sales and gross margin calculated by applying a cost ratio to the retail value of inventories. RIM is an averaging method that has been widely used in the retail industry. Inherent in the RIM calculations are certain significant management judgments and estimates, including inventory shortages and cost-to-retail ratios, which impact the ending inventory valuation at cost, as well as the resulting gross profit. Management consistently applies its RIM valuations by product category and believes that the Company’s RIM provides an inventory valuation that reasonably approximates cost.

Fresh, pharmacy and fuel products are accounted for at cost in the Retail segment. The Company evaluates inventory shortages throughout the year based on actual physical counts in its facilities. The Company records allowances for inventory shortages based on the results of recent physical counts to provide for estimated shortages from the last physical count to the financial statement date. The estimates and assumptions used in valuing inventories, including those used in past calculations, are reviewed and applied consistently, and as a result, the Company believes the estimates and assumptions are both reasonable and accurate. The Company does not anticipate future changes to the estimates or assumptions used in valuing inventories, but it does anticipate that inflation and/or deflation will continue to have a significant impact on the Company’s LIFO reserve as price changes represent a significant driver of the calculation.

Vendor Funds, Allowances and Credits

The Company receives funds from many of its vendors when purchasing products to sell to its corporate owned retail stores and independent retailers. Given the highly promotional nature of the retail supermarket industry, vendor allowances are generally intended to help defray the costs of promotion, advertising and selling the vendor’s products. Vendor allowances that relate to the Company’s buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for the Company’s merchandising costs such as setting up warehouse infrastructure. The proper recognition and timing of accounting for these items are significant to the reporting of the results of the Company’s operations. Vendor allowances are recognized as a reduction in cost of sales when the related product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms. The amount and timing of recognition of vendor funds as well as the amount of vendor funds to be recognized as a reduction to ending inventory requires management judgment and estimates. Management determines these amounts based on estimates of current year purchase volume using forecast and historical data and review of average inventory turnover data. These judgments and estimates impact the Company’s reported gross profit, operating earnings (loss) and inventory amounts. The Company believes its historical estimates and use of this methodology have been reliable in the past and will continue to be reliable in the future.

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Customer Exposure and Credit Risk

Allowance for Doubtful Accounts. The Company evaluates the collectability of its accounts and notes receivable based on a combination of factors. In most circumstances when the Company becomes aware of factors that may indicate a deterioration in a specific customer’s ability to meet its financial obligations (e.g., reductions of product purchases, deteriorating store conditions, changes in payment patterns), the Company records a specific reserve to reduce the receivable to an amount the Company reasonably believes will be collected. In determining the adequacy of the reserves, the Company analyzes factors such as the value of any collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the collectability based on information considered and further deterioration of accounts. If circumstances change (e.g., further evidence of material adverse creditworthiness, additional accounts become credit risks, store closures), the Company’s estimates of the recoverability of amounts due could be reduced by a material amount, including to zero.

Funds Advanced to Independent Retailers. From time to time, the Company may advance funds to independent retailers which are earned by the retailers primarily through achieving specified purchase volume requirements, as outlined in their supply agreements with the Company, or in limited instances, for remaining a SpartanNash customer for a specified time period. These advances must be repaid if the purchase volume requirements are not met or if the retailer does not remain a customer for the specified time period. In the event these retailers are unable to repay these advances or otherwise experience an event of default, the Company may be unable to recover the unearned portion of the funds advanced to these independent retailers. The Company evaluates the recoverability of these advances based on a number of factors, including anticipated and historical purchase volume, the value of any collateral, customer financial statements and other economic and industry factors, and establishes a reserve for the advances as necessary. As of December 30, 2017, the Company has unearned advanced funds of approximately $80.8 million, and has established a reserve of $4.9 million for these advances.

Guarantees of Debt and Lease Obligations of Others. The Company may guarantee debt and lease obligations of independent retailers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of their debt and lease obligations, which would be due in accordance with the underlying agreements.

The Company has guaranteed the outstanding lease obligations of certain independent retailers and the bank debt of one independent retailer. These guarantees, which are secured by certain business assets and personal guarantees of the respective independent retailers, represent the maximum undiscounted payments the Company would be required to make in the event of default. The Company believes these independent retailers will be able to perform under the lease agreements and that no payments will be required and no loss will be incurred under the guarantees. A liability representing the fair value of the obligations assumed under the guarantees is included in the accompanying consolidated financial statements.

The Company also subleases and assigns various leases to third parties. In circumstances when the Company becomes aware of factors that indicate deterioration in a third party’s ability to meet its financial obligations guaranteed or assigned by SpartanNash, the Company records a specific reserve in the amount the Company reasonably believes it will be obligated to pay on the third party’s behalf, net of any anticipated recoveries from the third party. In determining the adequacy of these reserves, the Company analyzes factors such as those described above in “Allowance for Doubtful Accounts – Methodology” and “Lease Commitments.” It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the obligations based on information considered and further deterioration of accounts, with the potential for a corresponding adverse effect on operating results and cash flows. Triggering these guarantees or obligations under assigned leases would not, however, result in cross default of the Company’s debt, but could restrict resources available for general business initiatives. Refer to Note 15, Concentration of Credit Risk, in the notes to the consolidated financial statements for additional information regarding customer exposure and credit risk.

Business Combinations

The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at their estimated fair values as of the acquisition date, with any excess purchase price over the estimated fair values of the net assets acquired being recorded as goodwill.

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Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by the Company but are inhere ntly uncertain. Also, determining the estimated useful life of an intangible asset requires judgment based on the Company’s expected use of the asset, as different types of intangible assets will have different useful lives and certain assets may even be c onsidered to have indefinite useful lives. The Company typically utilizes the income method to estimate the fair value of intangible assets, which discounts the projected future cash flows attributable to the respective assets. Significant estimates and as sumptions inherent in the valuation reflect a consideration of other marketplace competition and include the amount and timing of future cash flows (including expected growth rates and profitability) and the discount rate applied to the cash flows. Unantic ipated market or macroeconomic events and circumstances may occur that could affect the accuracy or validity of the estimates and assumptions.

Goodwill

Goodwill is tested for impairment on an annual basis (during the last quarter of the year), or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. For purposes of its goodwill impairment testing, the Company maintains three reporting units, which are the same as the Company’s reportable segments; however, there is no goodwill recorded within the Military segment, and after the goodwill impairment charge taken in the third quarter of 2017, as discussed below, there is also no recorded goodwill within the Retail segment. Fair values are determined based on the discounted cash flows and comparable market values of each reporting segment. If the fair value of the reporting unit is less than its carrying value, the fair value of the implied goodwill is calculated as the difference between the fair value of the reporting unit and the fair value of the underlying assets and liabilities, excluding goodwill. An impairment charge is recorded for any excess of the carrying value over the implied fair value. The Company’s goodwill impairment analysis also includes a comparison of the aggregate estimated fair value of each reporting unit to the Company’s total market capitalization. Therefore, a significant and sustained decline in the Company’s stock price could result in goodwill impairment charges. During times of financial market volatility, significant judgment is given to determine the underlying cause of the decline and whether stock price declines are short-term in nature or indicative of an event or change in circumstances. When testing goodwill for impairment, the Company’s corporate owned retail stores represent components of its Retail segment. Stores have been aggregated and deemed a single reporting unit as they have similar economic characteristics.

Determining market values using a discounted cash flow method requires that the Company make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. The Company’s judgments are based on the perspective of a market participant, historical experience, current market trends and other information. In estimating future cash flows, the Company utilizes internally generated three-year forecasts for sales and operating profits, including capital expenditures, and 3.0% and 2.5% long-term assumed growth rates of cash flows for periods after the three-year forecast for the Food Distribution and Retail segments, respectively. The future estimated cash flows were discounted using a rate of 10.7% and 9.2% for the Food Distribution and Retail segments, respectively. The discount rates were developed based upon the segments’ weighted average cost of capital, which incorporated current interest rates, equity risk premiums, and other market-based expectations regarding expected investment returns. The Company generally develops its forecasts based on recent sales data for existing operations and other factors. While the Company believes that the estimates and assumptions underlying the valuation methodology are reasonable, different assumptions could result in different outcomes.

In the third quarter of 2017, the Company recorded a non-cash goodwill impairment charge of $189.0 million related to the Retail segment. Refer to Note 5, Goodwill and Other Intangible Assets, in the notes to the consolidated financial statements for additional information related to the full impairment of Retail goodwill. As of the date of the most recent goodwill impairment test, which utilized data and assumptions as of October 7, 2017, the Food Distribution reporting unit had a fair value that was substantially in excess of its carrying value. The Company has sufficient available information, both current and historical, to support its assumptions, judgments and estimates used in the goodwill impairment test; however, if actual results for the Food Distribution segment are not consistent with the Company’s estimates, it could result in the Company recording a significant non-cash impairment charge.

Impairment of Long-Lived Assets Other Than Goodwill

Long-lived assets to be held and used are evaluated for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted future cash flows are not sufficient to recover an asset’s carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets are evaluated at the asset-group level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Impairments of long-lived assets were $33.2 million, $15.6 million and $4.2 million for 2017, 2016 and 2015, respectively.

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Estimates of future cash flows and expected sales prices are judgments based upon the Company’s experience and knowledge of operations. These estimates project cash flows several years into the future and are affected by changes in the economy, the competitive environment, real estate market conditions and inflation.

Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less cost to sell. Management determines fair values using independent appraisals, quotes or expected sales prices developed by internal real estate professionals. Estimates of expected sales prices are judgments based upon the Company’s experience, knowledge of market conditions and current offers received. Changes in market conditions, the economic environment and other factors, including the Company’s ability to effectively compete and react to competitor openings, can significantly impact these estimates. While the Company believes that the estimates and assumptions underlying the valuation methodology are reasonable, different assumptions could result in a different outcome.

Reserves for Closed Properties

The Company records reserves for closed properties that are subject to long-term lease commitments based upon the future minimum lease payments and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease rentals that could be reasonably expected to be obtained for the property. Future cash flows are based on contractual lease terms and knowledge of the geographic area in which the closed site is located. These estimates are subject to multiple factors, including inflation, ability to sublease the property and other economic conditions. Internally developed estimates of sublease rentals are based upon the geographic areas in which the properties are located, the results of previous efforts to sublease similar properties, and the current economic environment. Reserves may be adjusted in the future based upon the actual resolution of each of these factors At December 30, 2017, reserves for closed properties for distribution center and store lease and ancillary costs totaling $17.9 million are recorded net of $0.1 million of existing sublease rentals. Based upon the current economic environment, the Company does not believe that it is likely to obtain any additional sublease rentals. A 5% increase/decrease in future estimated ancillary costs would result in a $0.6 million increase/decrease in the restructuring charge liability

Insurance Reserves

SpartanNash is self-insured through self-insurance retentions or high deductible programs for workers’ compensation, general liability, and automobile liability, and is also self-insured for healthcare costs. Self-insurance liabilities are recorded based on claims filed and an estimate of claims incurred but not yet reported. Workers’ compensation, general liability and automobile liabilities are actuarially estimated based on available historical information on an undiscounted basis. The Company has purchased stop-loss coverage to limit its exposure on a per claim basis for its self-insurance retentions and high deductible programs. On a per claim basis, the Company’s exposure is up to $0.5 million for workers’ compensation, general liability and automobile liability, and $0.5 million for healthcare per covered life per year. Refer to Note 1, Summary of Significant Accounting Policies and Basis of Presentation, in the notes to the consolidated financial statements for additional information related to self-insurance reserves.

Any projection of losses concerning insurance reserves is subject to a degree of variability. Among the causes of variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, changing regulations, legal interpretations, benefit level changes and claim settlement patterns. Although the Company’s estimates of liabilities incurred do not anticipate significant changes in historical trends for these variables, such changes could have a material impact on future claim costs and currently recorded liabilities. The impact of many of these variables is difficult to estimate.

Pension

Accounting for defined benefit pension plans involves estimating the cost of benefits to be provided in the future, based on vested years of service, and attributing those costs over the time period each associate works. The significant factors affecting the Company’s pension costs are the fair values of plan assets and the selections of management’s key assumptions, including the expected return on plan assets and the discount rate used by the Company’s actuary to calculate its liability. The Company considers current market conditions, including changes in interest rates and investment returns, in selecting these assumptions. The discount rate is based on current investment yields on high quality fixed-income investments and projected cash flow obligations. Expected return on plan assets is based on projected returns by asset class on broad, publicly traded equity and fixed-income indices, as well as the Company’s target asset allocation, which is designed to meet the Company’s long-term pension requirements. While the Company believes the assumptions selected are reasonable, significant differences in its actual experience, plan amendments or significant changes in the fair value of its plan assets may materially affect its pension obligations and its future expense.

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Sensitivities to changes in the major assumptions for the SpartanNash Company Pension Plan and the SpartanNash Company Retiree Medical Plan as of December 30, 2017, are as foll ows:

	Percentage	Projected	2018
	Point	Benefit Obligation	Expense
(In millions, except percentages)	Change	Decrease / (Increase)	Decrease / (Increase)
Expected return on plan assets - SpartanNash Company Pension Plan	+/- 0.75	N/A	$0.6 / $(0.6)
Discount rate - SpartanNash Company Pension Plan	+/- 0.75	$4.1 / $(4.5)	N/A
Discount rate - SpartanNash Company Retiree Medical Plan	+/- 0.75	$0.9 / $(1.0)	N/A

Refer to Note 11, Associate Retirement Plans, in the notes to the consolidated financial statements for additional information related to the assumptions used to estimate the cost of benefits and for details related to changes in the funded status of the defined benefit pension plans.

Income Taxes

SpartanNash is subject to periodic audits by the Internal Revenue Service and other state and local taxing authorities. These audits may challenge certain of the Company’s tax positions, such as the timing and amount of income credits and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. These tax uncertainties are reviewed as facts and circumstances change and are adjusted accordingly. This requires significant management judgment in estimating final outcomes. Actual results could materially differ from these estimates and could significantly affect the Company’s effective income tax rate and cash flows in future years. The Company recognizes deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year in which it expects the differences to reverse. Refer to Note 13, Income Tax, in the notes to consolidated financial statements for additional information on income taxes.

Liquidity and Capital Resources

Cash Flow Information

The following table summarizes the Company’s consolidated statements of cash flows for 2017, 2016 and 2015:

(In thousands)	2017			2016			2015
Cash flow activities
Net cash provided by operating activities	$	52,843		$	157,191		$	223,523
Net cash used in investing activities		(315,393	)		(68,227	)		(95,300	)
Net cash provided by (used in) financing activities		254,003			(86,594	)		(111,730	)
Net cash used in discontinued operations		(137	)		(738	)		(217	)
Net (decrease) increase in cash and cash equivalents		(8,684	)		1,632			16,276
Cash and cash equivalents at beginning of year		24,351			22,719			6,443
Cash and cash equivalents at end of year	$	15,667		$	24,351		$	22,719

Net cash provided by operating activities. Net cash provided by operating activities decreased during 2017 over 2016 by approximately $104.3 million. The change was primarily due to the timing of working capital requirements, particularly higher accounts receivable and inventory balances associated with new distribution business and incremental sales to certain high-growth distribution customers. The timing of year-end payments impacting accounts payable balances also contributed to the change in cash flows, which was partly offset by lower customer advances compared to the prior year. Shortly after the fiscal year end, working capital improved as inventories and accounts payable balances began to return to more normalized levels.

Net cash provided by operating activities decreased during 2016 from 2015 by approximately $65.0 million. The decrease was primarily due to changes in working capital, which were largely the result of inventory management initiatives and the timing of payments in 2015.

During 2017, 2016 and 2015, the Company paid $10.7 million, $35.8 million and $23.5 million, respectively, in income tax net payments.

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Net cash used in investing activities. Net cash used in investing activities increased $247.2 million in 2017 compared t o 2016 primarily due to the Caito and BRT acquisition. In the fourth quarter of 2017, and in connection with securing a long-term supply arrangement, the Company invested $14.8 million in the purchase of real property and began leasing the related assets t o an independent retailer. The Company has classified this purchase as an Other Investing cash outflow based on the nature of the arrangement .

Net cash used in investing activities decreased $27.1 million in 2016 compared to 2015 primarily due to $41.5 million of payments for 2015 acquisitions, partially offset by $14.9 million of lower proceeds on the sales of assets of previously closed facilities compared to 2015.

The Food Distribution, Military and Retail segments utilized 36.7%, 9.1% and 54.2% of capital expenditures, respectively, for 2017. Expenditures for 2017 primarily related to retail store remodels and upgrades, which include five major store remodels, various equipment purchases, and various IT system upgrades and implementations to better streamline processes and meet the operational needs of the Company. The Company expects capital expenditures to range from $60 million to $70 million for 2018.

Net cash provided by (used in) financing activities. Net cash provided by (used in) financing activities increased $340.6 million during 2017 over 2016 primarily due to borrowings on the revolving credit facility to fund the Caito and BRT acquisition and timing of working capital requirements, partially offset by a $26.0 million increase in cash used for the repurchase of common stock.

Net cash used in financing activities decreased $23.8 million during 2016 over 2015 primarily due to the $50.0 million prepayment of the Senior Notes in 2015 and an additional $23.4 million of payments on the senior secured credit facility in 2016.

Net cash used in discontinued operations. Net cash used in discontinued operations contains the net cash flows of the Company’s Food Distribution and Retail discontinued operations and is primarily composed of facility maintenance expenditures.

Debt Management

Total debt, including capital lease obligations and current maturities, increased $318.9 million to $750.0 million as of December 30, 2017 from $431.1 million at December 31, 2016. The increase in total debt was driven by drawdowns on the credit facility to finance the Caito and BRT acquisition.

In December 2016, SpartanNash Company and certain of its subsidiaries amended its senior secured credit facility (the “Credit Agreement”). The principal changes of the amendment were to reduce the number of tiers in the pricing grid from three to two, reset the advance rate on real estate to 75%, provide the ability to increase the size of the term loan by $33 million, and extend the maturity date of the agreement, which was set to expire on January 8, 2020, to December 20, 2021. The Credit Agreement provides for borrowings of $1.0 billion, consisting of three tranches: a $900 million secured revolving credit facility (Tranche A), a $40 million secured revolving credit facility (Tranche A-1), and a $60 million term loan (Tranche A-2). In the fourth quarter of 2017, the Company paid the outstanding balance on the Senior secured term loan of $52.5 million with proceeds from its Senior secured revolving credit facility, which is expected to reduce annual interest expense through a reduction of the average interest rates paid. The Company has the ability to increase the size of the Credit Agreement by an additional $400 million, subject to certain conditions in the Credit Agreement. The Company’s obligations under the related Credit Agreement are secured by substantially all of the Company’s personal and real property. The Company may repay all loans in whole or in part at any time without penalty.

Liquidity

The Company’s principal sources of liquidity are cash flows generated from operations and its senior secured credit facility, which has maximum available credit of $1.0 billion. As of December 30, 2017, the senior secured credit facility had outstanding borrowings of $707.5 million. Additional available borrowings under the Company’s $1.0 billion Credit Agreement are based on stipulated advance rates on eligible assets, as defined in the Credit Agreement. The Credit Agreement requires that the Company maintains Excess Availability of 10% of the borrowing base, as defined in the Credit Agreement. The Company had excess availability after the 10% requirement of $132.7 million at December 30, 2017. Payment of dividends and repurchases of outstanding shares are permitted, provided that certain levels of excess availability are maintained. The credit facility provides for the issuance of letters of credit, of which $9.2 million were outstanding as of December 30, 2017. The revolving credit facility matures December 20, 2021, and is secured by substantially all of the Company’s assets. The Company believes that cash generated from operating activities and available borrowings under the Credit Agreement will be sufficient to meet anticipated requirements for working capital, capital expenditures, dividend payments, and debt service obligations for the foreseeable future. However, there can be no assurance that the business will continue to generate cash flow at or above current levels or that the Company will maintain its ability to borrow under the Credit Agreement.

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The Company’s current ratio (current assets to current liabilities) was 2.03:1.00 at December 30, 2017 compared to 1.77:1.00 at December 31, 2016, and its investment in working capital was $509.7 million at December 30, 2017 compared to $387.5 million at December 31, 2016. Net debt to total capital ratio increased to 0.50:1.00 at December 30, 2017 from 0.33:1.00 at December 31, 2016.

Total net debt is a non-GAAP financial measure that is defined as long-term debt and capital lease obligations, plus current maturities of long-term debt and capital lease obligations, less cash and cash equivalents. The Company believes both management and its investors find the information useful because it reflects the amount of long-term debt obligations that are not covered by available cash and temporary investments. Total net debt is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.

Following is a reconciliation of long-term debt and capital lease obligations to total net long-term debt and capital lease obligations as of December 30, 2017 and December 31, 2016.

	December 30,			December 31,
(In thousands)	2017			2016
Current maturities of long-term debt and capital lease obligations	$	9,196		$	17,424
Long-term debt and capital lease obligations		740,755			413,675
Total debt		749,951			431,099
Cash and cash equivalents		(15,667	)		(24,351	)
Total net long-term debt	$	734,284		$	406,748

Contractual Obligations

The table below presents the Company’s significant contractual obligations as of December 30, 2017 (a) :

	Amount Committed By Period
	Total		Less						More
	Amount		than 1						than 5
(In thousands)	Committed		year		1-3 years		3-5 years		years
Long-term debt (b)	$	713,464	$	3,028	$	1,670	$	708,310	$	456
Estimated interest on long-term debt		75,615		21,662		43,128		10,814		11
Capital leases (c)		42,904		6,168		10,494		5,030		21,212
Interest on capital leases		19,315		3,030		4,855		3,780		7,650
Operating leases (c)		246,655		53,878		77,296		47,660		67,821
Lease and ancillary costs of closed sites		19,848		5,302		4,915		3,437		6,194
Purchase obligations (merchandise) (d)		100,673		36,390		56,204		5,813		2,266
Self-insurance liability		15,155		8,739		4,053		1,342		1,021
Total	$	1,233,629	$	138,197	$	202,615	$	786,186	$	106,631

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(a)

Excludes funding of pension and other postretirement benefit obligations. The Company expects to make contributions to its defined benefit pension plans in 2018. Also excludes contributions under various multi-employer pension and health and welfare plans, which totals $13.4 million and $14.1 million, respectively, for the year ended December 30, 2017. For additional information, refer to Note 11, Associate Retirement Plans, in the notes to the consolidated financial statements. Also excludes unrecognized tax liabilities, as the Company cannot reasonably estimate the timing of potential cash settlement. For additional information, refer to Note 13, Income Tax, in the notes to the consolidated financial statements.

(b)

Refer to Note 7, Long-Term Debt, in the notes to the consolidated financial statements for additional information.

(c)

Operating and capital lease obligations do not include common area maintenance, insurance or tax payments for which the Company is also obligated. These costs totaled approximately $16.0 million in 2017.

(d)

The amount of purchase obligations shown in this table represents the amount of product the Company is contractually obligated to purchase in order to earn $11.3 million in advanced contract monies that are receivable under the contracts. At December 30, 2017, $3.4 million in advanced contract monies has been received under these contracts where recognition has been deferred on the consolidated balance sheet. If the Company does not fulfill these purchase obligations, it would only be obligated to repay the unearned upfront contract monies. The amount shown here does not include the following: a) purchase obligations made in the normal course of business as those obligations involve purchase orders based on current Company needs that are typically cancelable and/or fulfilled by vendors within a very short period of time; b) agreements that are cancelable by the Company without significant penalty, including contracts for routine outsourced services; and c) contracts that do not contain minimum annual purchase commitments but include other standard contractual considerations that must be fulfilled in order to earn advanced contract monies that have been received.

The Company has also made certain commercial commitments that extend beyond December 30, 2017. These commitments include standby letters of credit and guarantees of certain Food Distribution customer lease obligations. The following summarizes these commitments as of December 30, 2017:

	Amount Committed By Period
	Total		Less						More
	Amount		than 1						than 5
(In thousands)	Committed		year		1-3 years		3-5 years		years
Standby Letters of Credit (a)	$	9,205	$	9,205	$	—	$	—	$	—
Guarantees (b)		1,616		329		657		630		—
Total Other Commercial Commitments	$	10,821	$	9,534	$	657	$	630	$	—

(a)

Letters of credit primarily support the Company’s self-insurance obligations.

(a)

Refer to Note 1, Summary of Significant Accounting Policies and Basis of Presentation, and Note 15, Concentration of Credit Risk, in the notes to the consolidated financial statements for additional information regarding debt guarantees, lease guarantees and assigned leases. The amounts shown here include interest.

Cash Dividends

The Company paid a quarterly cash dividend of $0.165, $0.15 and $0.135 per common share in each quarter of 2017, 2016, and 2015, respectively. Under the Credit Agreement, the Company is generally permitted to pay dividends in any year up to an amount such that all cash dividends, together with any cash distributions and share repurchases, do not exceed $35.0 million. Additionally, the Company is generally permitted to pay cash dividends in excess of $35.0 million in any year so long as its Excess Availability, as defined in the Credit Agreement, is in excess of 10% of the Total Borrowing Base, as defined in the Credit Agreement, before and after giving effect to the repurchases and dividends. Although the Company currently expects to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the Board of Directors (the “Board”) to declare future dividends. Each future dividend will be considered and declared by the Board at its discretion. Whether the Board continues to declare dividends depends on a number of factors, including the Company’s future financial condition, anticipated profitability and cash flows and compliance with the terms of its credit facilities.

Recently Adopted Accounting Standards

Refer to Note 1, Summary of Significant Accounting Policies and Basis of Presentation, in the notes to the consolidated financial statements for additional information.

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Item 7A. Quantitative and Qualitative Disclosure About Market Risk

The Company is exposed to industry related price changes on several commodities, such as dairy, meat and produce that it buys and sells in all of its segments. These products are purchased for and sold from inventory in the ordinary course of business. The Company is also exposed to other general commodity price changes such as utilities, insurance and fuel costs.

The Company had $707.5 million of variable rate debt as of December 30, 2017. The weighted average interest rate on debt outstanding for the year ended December 30, 2017 was 3.70%.

At December 30, 2017 and December 31, 2016, the estimated fair value of the Company’s long-term debt, including current maturities, was higher than book value by approximately $1.6 million and $1.4 million, respectively. The estimated fair values were based on market quotes for instruments with similar terms and remaining maturities.

The following table sets forth the future principal payments of the Company’s outstanding debt and related weighted average interest rates for the outstanding instruments as of December 30, 2017:

	December 30, 2017					Aggregate Payments by Year
(In thousands, except rates)	Fair Value		Total			2018			2019			2020			2021			2022			Thereafter
Fixed rate debt
Principal payable	$	50,474	$	48,876		$	9,196		$	6,969		$	5,195		$	3,002		$	2,846		$	21,668
Average interest rate				6.49	%		6.89	%		7.25	%		7.56	%		7.77	%		7.84	%		8.16	%

Variable rate debt
Principal payable	$	707,492	$	707,492		$	—		$	—		$	—		$	707,492		$	—		$	—
Average interest rate				3.04	%		3.04	%		3.04	%		3.04	%		3.04	%		0.00	%		0.00	%

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Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

SpartanNash Company and Subsidiaries

Grand Rapids, Michigan

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of SpartanNash Company and subsidiaries (the "Company") as of December 30, 2017 and December 31, 2016, the related consolidated statements of operations, comprehensive (loss) income, shareholders' equity, and cash flows, for the fiscal years ended December 30, 2017, December 31, 2016 and January 2, 2016, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2017 and December 31, 2016, and the results of its operations and its cash flows for the fiscal years ended December 30, 2017, December 31, 2016 and January 2, 2016 in conformity with the accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 30, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2018, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP

Grand Rapids, Michigan

February 26, 2018

We have served as the Company’s auditor since at least 1970; however, the specific year has not been determined.

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CONSOLIDATED BALANCE SHEETS

SpartanNash Company and Subsidiaries

	December 30,			December 31,
(In thousands)	2017			2016
Assets
Current assets
Cash and cash equivalents	$	15,667		$	24,351
Accounts and notes receivable, net		344,057			291,568
Inventories, net		597,162			539,857
Prepaid expenses and other current assets		47,400			37,187
Property and equipment held for sale		—			521
Total current assets		1,004,286			893,484

Property and equipment, net		600,240			559,722
Goodwill		178,648			322,686
Intangible assets, net		134,430			60,202
Other assets, net		138,193			94,242

Total assets	$	2,055,797		$	1,930,336

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	376,977		$	372,432
Accrued payroll and benefits		65,156			75,333
Other accrued expenses		43,252			40,788
Current maturities of long-term debt and capital lease obligations		9,196			17,424
Total current liabilities		494,581			505,977

Long-term liabilities
Deferred income taxes		42,050			123,243
Postretirement benefits		15,687			16,266
Other long-term liabilities		40,774			45,768
Long-term debt and capital lease obligations		740,755			413,675
Total long-term liabilities		839,266			598,952

Commitments and contingencies (Note 9)

Shareholders’ equity
Common stock, voting, no par value; 100,000 shares authorized; 36,466 and 37,539 shares outstanding		497,093			521,984
Preferred stock, no par value, 10,000 shares authorized; no shares outstanding		—			—
Accumulated other comprehensive loss		(15,136	)		(11,437	)
Retained earnings		239,993			314,860
Total shareholders’ equity		721,950			825,407

Total liabilities and shareholders’ equity	$	2,055,797		$	1,930,336

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS

SpartanNash Company and Subsidiaries

(In thousands, except per share amounts)	2017				2016				2015
Net sales	$	8,128,082			$	7,734,600			$	7,651,973
Cost of sales		6,983,173				6,623,106				6,536,291
Gross profit		1,144,909				1,111,494				1,115,682

Operating expenses
Selling, general and administrative		1,014,665				963,652				975,572
Merger/acquisition and integration		8,101				6,959				8,433
Goodwill impairment		189,027				—				—
Restructuring charges and asset impairment		39,432				32,116				8,802
Total operating expenses		1,251,225				1,002,727				992,807

Operating (loss) earnings		(106,316	)			108,767				122,875

Other (income) and expenses
Interest expense		25,343				19,082				21,820
Loss on debt extinguishment		413				247				1,171
Other, net		(428	)			(525	)			(375	)
Total other expenses, net		25,328				18,804				22,616

(Loss) earnings before income taxes and discontinued operations		(131,644	)			89,963				100,259
Income taxes		(79,027	)			32,907				37,093
(Loss) earnings from continuing operations		(52,617	)			57,056				63,166

Loss from discontinued operations, net of taxes		(228	)			(228	)			(456	)
Net (loss) earnings	$	(52,845	)		$	56,828			$	62,710

Basic (loss) earnings per share:
(Loss) earnings from continuing operations	$	(1.41	)		$	1.52			$	1.68
Loss from discontinued operations		—		*		—		*		(0.01	)
Net (loss) earnings	$	(1.41	)		$	1.52			$	1.67

Diluted (loss) earnings per share:
(Loss) earnings from continuing operations	$	(1.41	)		$	1.52			$	1.67
Loss from discontinued operations		—		*		(0.01	)			(0.01	)
Net (loss) earnings	$	(1.41	)		$	1.51			$	1.66

* Includes rounding.

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

SpartanNash Company and Subsidiaries

(In thousands)	2017			2016			2015
Net (loss) earnings	$	(52,845	)	$	56,828		$	62,710

Other comprehensive (loss) income, before tax
Pension and postretirement liability adjustment		(1,649	)		14			429
Total other comprehensive (loss) income, before tax		(1,649	)		14			429

Income tax benefit (expense) related to items of other comprehensive income		632			(4	)		(221	)

Total other comprehensive (loss) income, after tax		(1,017	)		10			208
Comprehensive (loss) income	$	(53,862	)	$	56,838		$	62,918

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

SpartanNash Company and Subsidiaries

							Accumulated
							Other
	Shares			Common			Comprehensive			Retained
(In thousands)	Outstanding			Stock			Income (Loss)			Earnings			Total
Balance at January 3, 2015		37,524		$	520,791		$	(11,655	)	$	238,117		$	747,253
Net earnings		—			—			—			62,710			62,710
Other comprehensive income		—			—			208			—			208
Dividends - $0.54 per share		—			—			—			(20,299	)		(20,299	)
Share repurchase		(282	)		(9,000	)								(9,000	)
Stock-based employee compensation		—			7,240			—			—			7,240
Issuance of common stock and related tax benefit on stock option exercises and stock bonus plan and from deferred compensation plan		223			4,279			—			—			4,279
Issuance of restricted stock		315			1,114									1,114
Cancellations of stock-based awards		(180	)		(2,726	)		—			—			(2,726	)
Balance at January 2, 2016		37,600			521,698			(11,447	)		280,528			790,779
Net earnings		—			—			—			56,828			56,828
Other comprehensive income		—			—			10			—			10
Dividends - $0.60 per share		—			—			—			(22,496	)		(22,496	)
Share repurchase		(396	)		(9,000	)								(9,000	)
Stock-based employee compensation		—			7,936			—			—			7,936
Issuance of common stock and related tax benefit on stock option exercises and stock bonus plan		144			3,697			—			—			3,697
Issuance of restricted stock		315			(118	)								(118	)
Cancellations of stock-based awards		(124	)		(2,229	)		—			—			(2,229	)
Balance at December 31, 2016		37,539			521,984			(11,437	)		314,860			825,407
Net loss		—			—			—			(52,845	)		(52,845	)
Other comprehensive loss		—			—			(1,017	)		—			(1,017	)
Reclassification of stranded tax effects in AOCI (Note 1)		—			—			(2,682	)		2,682			—
Dividends - $0.66 per share		—			—			—			(24,704	)		(24,704	)
Share repurchase		(1,367	)		(34,995	)		—			—			(34,995	)
Stock-based employee compensation		—			9,611			—			—			9,611
Issuance of common stock on stock option exercises and stock bonus plan		172			3,697			—			—			3,697
Issuance of restricted stock		296			—			—			—			—
Cancellations of stock-based awards		(174	)		(3,204	)		—			—			(3,204	)
Balance at December 30, 2017		36,466		$	497,093		$	(15,136	)	$	239,993		$	721,950

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENT S OF CASH FLOWS

SpartanNash Company and Subsidiaries

(In thousands)	2017			2016			2015
Cash flows from operating activities
Net (loss) earnings	$	(52,845	)	$	56,828		$	62,710
Loss from discontinued operations, net of tax		228			228			456
(Loss) earnings from continuing operations		(52,617	)		57,056			63,166
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Non-cash restructuring, goodwill/asset impairment and other charges		227,847			32,191			9,755
Loss on debt extinguishment		413			247			1,171
Depreciation and amortization		84,390			79,183			84,905
LIFO expense (income)		2,898			(1,919	)		(1,201	)
Postretirement benefits expense (income)		1,347			1,780			(41	)
Deferred taxes on income		(79,921	)		6,761			2,512
Stock-based compensation expense		9,611			7,936			7,240
Other, net		(160	)		(254	)		(22	)
Changes in operating assets and liabilities:
Accounts receivable		(25,276	)		30,537			(33,063	)
Inventories		(48,478	)		(18,456	)		59,473
Prepaid expenses and other assets		(8,418	)		(45,506	)		(545	)
Accounts payable		(24,477	)		21,946			30,250
Accrued payroll and benefits		(17,253	)		1,193			823
Other accrued expenses and other liabilities		(17,063	)		(15,504	)		(900	)
Net cash provided by operating activities		52,843			157,191			223,523
Cash flows from investing activities
Purchases of property and equipment		(70,906	)		(73,429	)		(79,394	)
Net proceeds from the sale of assets		4,024			5,989			20,928
Acquisitions, net of cash acquired		(226,939	)		—			(41,517	)
Loans to customers		(10,328	)		(1,962	)		(1,450	)
Payments from customers on loans		3,948			2,183			1,733
Proceeds from company owned life insurance		—			—			5,004
Other		(15,192	)		(1,008	)		(604	)
Net cash used in investing activities		(315,393	)		(68,227	)		(95,300	)
Cash flows from financing activities
Proceeds from senior secured credit facility		1,461,902			1,341,215			1,089,979
Payments on senior secured credit facility		(1,140,491	)		(1,384,958	)		(1,110,344	)
Share repurchase		(34,995	)		(9,000	)		(9,000	)
Net payments related to stock-based award activities		(3,204	)		(2,229	)		(2,726	)
Prepayment of senior notes		—			—			(50,000	)
Debt extinguishment costs		—			—			(831	)
Repayment of other long-term debt		(7,456	)		(9,146	)		(10,157	)
Financing fees paid		(256	)		(2,498	)		(2,013	)
Proceeds from exercise of stock options		3,207			2,518			3,661
Dividends paid		(24,704	)		(22,496	)		(20,299	)
Net cash provided by (used in) financing activities		254,003			(86,594	)		(111,730	)
Cash flows from discontinued operations
Net cash used in operating activities		(137	)		(738	)		(740	)
Net cash provided by investing activities		—			—			523
Net cash used in discontinued operations		(137	)		(738	)		(217	)
Net (decrease) increase in cash and cash equivalents		(8,684	)		1,632			16,276
Cash and cash equivalents at beginning of year		24,351			22,719			6,443
Cash and cash equivalents at end of year	$	15,667		$	24,351		$	22,719

See notes to consolidated financial statements.

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SPARTANNASH COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Summary of Significant Accounting Policies and Basis of Presentation

Principles of Consolidation: The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SpartanNash Company and its subsidiaries (“SpartanNash” or “the Company”). Intercompany accounts and transactions have been eliminated.

Fiscal Year: The Company’s fiscal year end is the Saturday nearest to December 31. The following discussion is as of and for the fiscal years ending or ended December 29, 2018 ("2018"), December 30, 2017 (“2017” or “current year”), December 31, 2016 (“2016” or “prior year”) and January 2, 2016 (“2015”), all of which include 52 weeks. All fiscal quarters are 12 weeks, except for the Company’s first quarter, which is 16 weeks.

Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods might differ from those estimates.

Revenue Recognition: The Company recognizes revenue when the sales price is fixed or determinable, collectability is reasonably assured, and the customer takes possession of the merchandise. The Military segment recognizes revenues upon the delivery of the product to the commissary or commissaries designated by the Defense Commissary Agency (DeCA), or in the case of overseas commissaries, when the product is delivered to the port designated by DeCA, which is when DeCA takes possession of the merchandise and bears the responsibility for shipping the product to the commissary or overseas warehouse. Revenues from consignment sales are included in the Company’s reported sales on a net basis. The Food Distribution segment recognizes revenues when products are delivered or ancillary services are provided. Sales and excise taxes are excluded from revenue. The Retail segment recognizes revenues from the sale of products at the point of sale. Based upon the nature of the products the Company sells, its customers have limited rights of return which are immaterial. Discounts provided by the Company to customers at the time of sale are recognized as a reduction in sales as the products are sold. The Company does not recognize a sale when it awards customer loyalty points or sells gift cards and gift certificates; rather, a sale is recognized when the customer loyalty points, gift card or gift certificate are redeemed to purchase product. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes.

Cost of Sales: Cost of sales represents the cost of inventory sold during the period, which for all non-production operations includes purchase costs, in-bound freight, physical inventory adjustments, markdowns and promotional allowances and excludes warehousing costs, depreciation and other administrative expenses. For the Company’s food processing operations, cost of sales includes direct product and production costs, inbound freight, purchasing and receiving costs, utilities, depreciation, and other indirect production costs and excludes out-bound freight and other administrative expenses. As a result, the Company’s cost of sales and gross profit may not be identical to similarly titled measures reported by other companies. Vendor allowances and credits that relate to the Company’s buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for the Company’s merchandising costs such as setting up warehouse infrastructure. Vendor allowances are recognized as a reduction in cost of sales when the related product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms. The distribution segments include shipping and handling costs in the selling, general and administrative section of operating expenses on the consolidated statement of operations.

Cash and Cash Equivalents: Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase.

Accounts and Notes Receivable: Accounts and notes receivable are shown net of allowances for credit losses of $2.0 million and $6.7 million as of December 30, 2017 and December 31, 2016, respectively. The Company evaluates the adequacy of its allowances by analyzing the aging of receivables, customer financial condition, historical collection experience, the value of collateral and other economic and industry factors. Actual collections may differ from historical experience, and if economic, business or customer conditions deteriorate significantly, adjustments to these reserves may be required. When the Company becomes aware of factors that indicate a change in a specific customer’s ability to meet its financial obligations, the Company records a specific reserve for credit losses. Operating results include bad debt expense of $1.5 million, $1.4 million and $2.1 million for 2017, 2016 and 2015, respectively.

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Inventory Valuation: Inventories are valued at the lower of cost or market. Approximately 86.9 % and 86.7% of the Company’s inventories were valued on the last-in, first-out (LIFO) method at December 30, 2017 and December 31, 2016, respectively. If replace ment cost had been used, inventories would have been $ 50.4 million and $47.6 million higher at December 30, 2017 and December 31, 2016, respectively. The replacement cost method utilizes the most current unit purchase cost to calculate the value of invento ries. During 2017, 2016 and 2015, certain inventory quantities were reduced. The reductions resulted in liquidation of LIFO inventory carried at lower costs prevailing in prior years, the effect of which decreased the LIFO provision in 2017, 2016 and 2015 by $ 0.2 million, $0.2 million and $0.6 million, respectively. The Company accounts for its Food Distribution and Military inventory using a perpetual system and utilizes the retail inventory method (“RIM”) to value inventory for center store products in th e Retail segment. Under RIM, inventory is stated at cost with cost of sales and gross margin calculated by applying a cost ratio to the retail value of inventories. Fresh, pharmacy and fuel products are accounted for at cost in the Retail segment. The Comp any evaluates inventory shortages throughout the year based on actual physical counts in its facilities. The Company records allowances for inventory shortages based on the results of recent physical counts to provide for estimated shortages from the last physical count to the financial statement date.

Goodwill and Intangible Assets: Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in business combinations after amounts have been allocated to intangible assets. Goodwill is not amortized, but is reviewed for impairment during the last quarter of each year, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, using a discounted cash flow model and comparable market values of each reporting segment. Measuring the fair value of reporting units is a Level 3 measurement under the fair value hierarchy. See Note 8, Fair Value Measurements, for a discussion of levels.

Intangible assets primarily consist of trade names, customer relationships, favorable lease agreements, pharmacy prescription lists, franchise agreements and fees, non-compete agreements and liquor licenses. The following assets are amortized on a straight-line basis over the period of time in which their expected benefits will be realized: favorable leases (related lease terms), prescription lists and customer relationships (period of expected benefit reflecting the pattern in which the economic benefits are consumed), non-compete agreements and franchise fees (length of agreements), and trade names with definite lives (expected life of the assets). Indefinite-lived trade names are not amortized but are tested at least annually for impairment, and liquor licenses are also not amortized as they have indefinite lives. Intangible assets are included in “Other Assets, net” in the consolidated balance sheets.

Property and Equipment: Property and equipment are recorded at cost. Expenditures which improve or extend the life of the respective assets are capitalized, whereas expenditures for normal repairs and maintenance are charged to operations as incurred. Depreciation expense on land improvements, buildings and improvements, and equipment is computed using the straight-line method as follows:

Land improvements	15 years
Buildings and improvements	15 to 40 years
Equipment	3 to 15 years

Property under capital leases and leasehold improvements are amortized on a straight-line basis over the shorter of the remaining terms of the leases or the estimated useful lives of the assets. Internal use software is included in property and equipment and amounted to $30.7 million and $32.9 million as of December 30, 2017 and December 31, 2016, respectively.

Impairment of Long-Lived Assets: The Company reviews and evaluates long-lived assets for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted expected future cash flows are not sufficient to recover an asset’s carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less the cost to sell. Fair values are determined by independent appraisals or expected sales prices based upon market participant data developed by third party professionals or by internal licensed real estate professionals. Estimates of future cash flows and expected sales prices are judgments based upon the Company’s experience and knowledge of operations. These estimates project cash flows several years into the future and are affected by changes in the economy, real estate market conditions and inflation.

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Reserves for Closed Properties: The Company records reserves for closed properties that are subject to long-term lease commitments based upon the future minimum lease payments and related ancillary c osts from the date of closure to the end of the remaining lease term, net of estimated sublease rentals that could be reasonably expected to be obtained for the property. Future cash flows are based on contractual lease terms and knowledge of the geographi c area in which the closed site is located. These estimates are subject to multiple factors, including inflation, ability to sublease the property and other economic conditions. Internally developed estimates of sublease rentals are based upon the geograph ic areas in which the properties are located, the results of previous efforts to sublease similar properties, and the current economic environment. The reserved expenses are paid over the remaining lease terms, which range from one to 11 years. Adjustments to closed property reserves primarily relate to changes in subtenant income or actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the changes become known. The current portion of the f uture lease obligations of stores is included in “Other accrued expenses,” and the long-term portion is included in “Other long-term liabilities” in the consolidated balance sheets.

Debt Issuance Costs : Debt issuance costs are amortized over the term of the related financing agreement and are included as a direct deduction from the carrying amount of the related debt liability in “Long-term debt and capital lease obligations” in the consolidated balance sheets.

Insurance Reserves: SpartanNash is self-insured through self-insurance retentions or high deductible programs for workers’ compensation, general liability, and automobile liability, and is also self-insured for healthcare costs. Self-insurance liabilities are recorded based on claims filed and an estimate of claims incurred but not yet reported. Workers’ compensation, general liability and automobile liabilities are actuarially estimated based on available historical information on an undiscounted basis. The Company has purchased stop-loss coverage to limit its exposure to any significant exposure on a per claim basis for its self-insurance retentions and high deductible programs. On a per claim basis, the Company’s exposure is up to $0.5 million for workers’ compensation, general liability and automobile liability and $0.5 million for healthcare per covered life per year.

A summary of changes in the Company’s self-insurance liability is as follows:

(In thousands)	2017			2016			2015
Balance at beginning of year	$	14,730		$	14,466		$	19,413
Expenses		54,748			49,560			43,851
Claim payments, net of employee contributions		(54,323	)		(49,296	)		(48,798	)
Balance at end of year	$	15,155		$	14,730		$	14,466

The current portion of the self-insurance liability was $8.7 million and $8.3 million as of December 30, 2017 and December 31, 2016, respectively, and is included in “Other accrued expenses” in the consolidated balance sheets. The long-term portion was $6.5 million and $6.4 million as of December 30, 2017 and December 31, 2016, respectively, and is included in “Other long-term liabilities” in the consolidated balance sheets.

Income Taxes: Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred and other tax assets and liabilities.

Earnings per share: Earnings per share (“EPS”) is computed using the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends and their respective participation rights in undistributed earnings. Participating securities include non-vested shares of restricted stock in which the participants have non-forfeitable rights to dividends during the performance period. Diluted EPS includes the effects of stock options.

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The following table sets forth the computation of basic and diluted EPS for continuing operations:

(In thousands, except per share amounts)	2017			2016			2015
Numerator:
(Loss) earnings from continuing operations	$	(52,617	)	$	57,056		$	63,166
Adjustment for loss (earnings) attributable to participating securities		908			(1,011	)		(1,098	)
(Loss) earnings from continuing operations used in calculating earnings per share	$	(51,709	)	$	56,045		$	62,068
Denominator:
Weighted average shares outstanding, including participating securities		37,419			37,483			37,612
Adjustment for participating securities		(646	)		(664	)		(654	)
Shares used in calculating basic earnings per share		36,773			36,819			36,958
Effect of dilutive stock options		—			73			106
Shares used in calculating diluted earnings per share		36,773			36,892			37,064
Basic (loss) earnings per share from continuing operations	$	(1.41	)	$	1.52		$	1.68
Diluted (loss) earnings per share from continuing operations	$	(1.41	)	$	1.52		$	1.67

Weighted average shares issuable upon the exercise of stock options that were not included in the EPS calculations because they were anti-dilutive were 75,159 for 2017. There were no anti-dilutive stock options in 2016 and 2015.

Stock-Based Compensation: All share-based payments to associates are recognized in the consolidated financial statements as compensation cost based on the fair value on the date of grant. The grant date closing price per share of SpartanNash stock is used to estimate the fair value of restricted stock awards and restricted stock units. The value of the portion of awards expected to vest is recognized as expense over the requisite service period.

Shareholders’ Equity: The Company’s restated articles of incorporation provide that the Board of Directors may at any time, and from time to time, provide for the issuance of up to 10 million shares of preferred stock in one or more series, each with such designations as determined by the Board of Directors. At December 30, 2017 and December 31, 2016, there were no shares of preferred stock outstanding.

Advertising Costs: The Company’s advertising costs are expensed as incurred and are included in Selling, general and administrative expenses. Advertising expenses were $43.4 million, $46.6 million and $47.7 in 2017, 2016 and 2015, respectively.

Accumulated Other Comprehensive Income (Loss)(“AOCI”): The Company reports comprehensive income (loss) that includes net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to expenses, gains and losses that are not included in net earnings, such as pension and other postretirement liability adjustments, but rather are recorded directly to shareholders’ equity. These amounts are also presented in the consolidated statements of comprehensive income. As of December 30, 2017 and December 31, 2016, AOCI relates to the pension and postretirement plans.

Discontinued operations: Certain of the Company’s Food Distribution and Retail operations have been recorded as discontinued operations. Results of discontinued operations are excluded from the accompanying notes to the consolidated financial statements for all periods presented, unless otherwise noted. Results of discontinued operations reported on the consolidated statements of operations are reported net of tax.

Adoption of New Accounting Standards and Recently Issued Accounting Standards

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, “Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, as further described in Note 13, Income Tax, lowered the U.S. federal corporate tax rate, resulting in a re-measurement of the deferred tax assets associated with AOCI. This new guidance allows the discrete tax impact of this re-measurement recorded in the consolidated statement of operations to be reclassified to properly reflect AOCI net of tax under the new statute. The Company early adopted this guidance upon its release. Retrospective application of the guidance resulted in a reclassification from AOCI to retained earnings of $2.7 million in 2017.

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In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment.” ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. If a reporting unit fails Step 1 of the goodwill impairment test, entities are no longer required to compute the implied fair value of goodwill following the same procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a repor ting unit with its carrying amount and to recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company early adopted this guidance as of the beginning of the third quarter of 2017 . R efer to Note 5, Goodwill and Other Intangible Assets , for further discussion of goodwill impairment testing .

In January 2017, the FASB issued ASU 2017-01, “Business Combinations – Clarifying the Definition of a Business.” ASU 2017-01 narrows the definition of a business and provides a screen to determine when a set of the three elements of a business – inputs, processes, and outputs – are not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. The new guidance is effective for the Company in 2018. The impact of adoption will depend on the facts and circumstances of future acquisitions, if any, and therefore the Company is unable to estimate the impact of adoption. Adoption will have no impact on the Company’s historical financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 provides for simplification of several aspects of the accounting for share-based payment transactions including income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The Company adopted the new standard in the first quarter of 2017. Accordingly, the tax benefits or deficiencies related to stock-based compensation are reflected in the consolidated statements of operations as a component of the provision for income taxes, whereas they previously were recognized in equity. As a result of the adoption, the Company recognized $1.3 million of tax benefits related to share-based payments in its provision for income taxes in 2017. Additionally, the Company’s consolidated statements of cash flows now include tax benefits as an operating activity, while cash paid on associates’ behalf related to shares withheld for tax purposes is classified as a financing activity. Retrospective application of the cash flow presentation resulted in $2.7 million and $4.0 million increases to both net cash provided by operating activities and net cash used in financing activities for 2016 and 2015, respectively. The Company’s stock compensation expense continues to reflect estimated forfeitures.

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In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 provides guidance for lease accounting and stipulates that lessees will need to recognize a right-of-use asset and a lease liability for substantially all leases (other tha n leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. Treatment in the consolidated statements of operations will be similar to the current treatment of operating and capital leases. T he new guidance is effective on a modified retrospective basis for the Company in the first quarter of its fiscal year ending December 2 9 , 2019. The adoption of this ASU will result in a significant increase to the Company’s consolidated balance sheets for lease liabilities and right-of-use assets . The Company is currently evaluating the other effects of adoption of this ASU on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The new guidance affects any reporting organization that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, “Deferral of the Effective Date,” which results in the guidance being effective for the Company in the first quarter of 2018. The adoption will include updates as provided under ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net);” ASU 2016-10, “Identifying Performance Obligations and Licensing;” and ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients.” Adoption is allowed by either the full retrospective or modified retrospective approach. The Company plans to adopt using a full retrospective approach beginning with the first quarter of 2018.

The Company has completed its evaluation of adopting the standard and its impact on the consolidated financial statements. From a principal versus agent considerations perspective, the Company has evaluated its significant arrangements and has determined that certain contracts in the Food Distribution segment that are currently reported on the gross basis will be reported on the net basis beginning in 2018. As a result, net sales for 2017 and 2016 will be restated to reflect a reduction of revenues of approximately $160 million and $170 million, respectively, and the corresponding cost of goods sold related to these revenues will be reduced by the same amounts. For these contracts, the Company determined that it did not control the related goods or services before they were transferred to the customers, which resulted in the change in gross to net presentation. As it pertains to the Food Distribution and Military segments, the Company determined that other than grocery products, the promised goods or services outlined in the contracts with customers are immaterial in the context of the contracts. As a result of this determination, the Company is not required to assess whether these promised goods or services are performance obligations, and therefore, revenue recognition practices will not change as there are no additional deliverables for which the transaction price will need to be allocated. Many of the Company’s contracts also include contingent amounts of variable consideration, and the Company concluded there would be no changes to the timing of revenue as the Company currently recognizes these amounts under the presumption that they are determinable and can be estimated. The Company concluded there were no significant changes to revenue recognition in its Retail segment based on how the Company currently records gift card breakage and loyalty rewards, which are immaterial to the consolidated financial statements.

In connection with adopting the standard, the Company has implemented key controls and processes related to the completeness and review of contracts, application of the guidance, tracking of performance obligations and other aspects of revenue recognition. In the first quarter of 2018, the Company will be required to make enhanced revenue disclosures, which will include relevant information about contracts with customers, disaggregated revenues, remaining performance obligations and other items requiring significant judgments and estimates used to recognize revenue. As a result, the Company has begun implementing disclosure controls and procedures related to these enhanced revenue disclosures.

Note 2 – Acquisitions

On January 6, 2017, the Company acquired certain assets and assumed certain liabilities of Caito Foods Service (“Caito”) and Blue Ribbon Transport (“BRT”) for $214.6 million in cash, net of $2.5 million of cash acquired. Acquired assets consist primarily of property and equipment of $76.7 million, intangible assets of $72.9 million, and working capital. Intangible assets are primarily composed of customer relationships, which will be amortized over fifteen years, and indefinite lived trade names. In connection with the purchase, the Company is providing certain earn-out opportunities that have the potential to pay the sellers an additional $27.4 million, collectively, if the business achieves certain performance targets during the first three years after acquisition. If certain performance targets are not met in the first year after acquisition, the Company will be reimbursed a portion of the initial purchase price at an amount not to exceed the sum of: a) $15.0 million, representing the funds paid into escrow, and b) any earn-out opportunities earned by the sellers. The reduction in purchase price, if applicable, will first be applied to funds paid into escrow and then as an offset against and a reduction to any payments owed on the various earn-out opportunities, with reimbursement made after the third-year anniversary of the acquisition date. The acquisition was funded with proceeds from the Company’s Credit Agreement. As of December 30, 2017, the Company has incurred $4.9 million of total acquisition-related costs associated with the transaction, of which $2.7 million was incurred in 2017 and is recorded in merger/acquisition and integration expense.

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Founded in Indianapolis in 1965, Caito is a leading supplier of fresh fruits and vegetables as well as value-added meal solutions to grocery retailers and food service distributors across 21 states in the Southeast, Midwest and Eastern United States. BRT offers temperature-controlled distribution and logistics services throughout North America. Caito and BRT service customers from facilities in Indiana and Florida. Caito also has a fresh- cut fruit and vegetable facility in Indianapolis and a new 118,000 square foot Fresh Kitchen facility, also in Indianapolis. The Fresh Kitchen pro vides the Company with the ability to process, cook, and package fresh protein-based foods and complete meal solutions. The Company has begun production in the Fresh Kitchen facility and is in the process of ramping up to full production. The Company acqui red Caito and BRT to strengthen its fresh product offerings to its existing customer base and to expand into fast-growing, value-added services, such as freshly-prepared centerplate and side dish categories.

The acquired assets and assumed liabilities were recorded at their estimated fair values based on appraised value and discounted cash flow analyses as of the acquisition date, based on preliminary estimates, and have since been finalized. The Company increased goodwill by $1.3 million as a result of certain measurement period adjustments primarily associated with updated valuations of certain acquired long-lived assets. The excess of the purchase price over the fair value of net assets acquired of $46.3 million was recorded as goodwill in the consolidated balance sheet and allocated to the Food Distribution segment. The goodwill recognized is attributable primarily to the assembled workforce of Caito and BRT and expected synergies. The Company expects that all goodwill attributable to the acquisition will be deductible for tax purposes.

On June 16, 2015, the Company acquired certain assets and assumed certain liabilities of Dan’s Super Market, Inc. (Dan’s) for a total purchase price of $32.6 million. Dan’s was a six-store chain serving Bismarck and Mandan, North Dakota, and was not a customer of the SpartanNash Food Distribution segment prior to the acquisition. The Company acquired the Dan’s stores to strengthen its offering in this region from both a retail and distribution perspective. During the measurement period, which ended June 15, 2016, there were no material adjustments made to the initial fair values of the assets acquired and liabilities assumed as part of the Dan’s acquisition.

Note 3 – Accounts and Notes Receivable

Accounts and notes receivable are comprised of the following:

	December 30,			December 31,
(In thousands)	2017			2016
Customer notes receivable	$	2,555		$	3,219
Customer accounts receivable		312,214			252,778
Other receivables		31,169			42,142
Allowance for doubtful accounts		(1,881	)		(6,571	)
Net current accounts and notes receivable	$	344,057		$	291,568
Long-term notes receivable		18,322			15,393
Allowance for doubtful accounts		(120	)		(139	)
Net long-term notes receivable	$	18,202		$	15,254

Note 4 – Property and Equipment

Property and equipment consists of the following:

	December 30,		December 31,
(In thousands)	2017		2016
Land and improvements	$	80,891	$	76,409
Buildings and improvements		534,835		483,687
Equipment		567,123		529,705
Total property and equipment		1,182,849		1,089,801
Less accumulated depreciation and amortization		582,609		530,079
Property and equipment, net	$	600,240	$	559,722

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Note 5 – Goodwill and Other Intangible Assets

The Company has three reportable segments; however, no goodwill has existed within the Military segment. Changes in the carrying amount of goodwill were as follows:

	Food
(In thousands)	Distribution		Retail				Total
Balance at January 2, 2016:	$	132,367		190,535		(a)	$	322,902		(a)
Other		—		(216	)			(216	)
Balance at December 31, 2016:		132,367		190,319		(a)		322,686		(a)
Acquisitions (Note 2)		46,281		—				46,281
Disposals		—		(1,292	)			(1,292	)
Impairment		—		(189,027	)			(189,027	)
Balance at December 30, 2017:	$	178,648	$	—		(b)	$	178,648		(b)

(a) Net of accumulated impairment charges of $86.6 million.

(b) Net of accumulated impairment charges of $275.6 million.

The Company reviews goodwill and other intangible assets for impairment annually, during the fourth quarter of each year, and more frequently if circumstances indicate the possibility of impairment. Testing goodwill and other intangible assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or the Company’s stock price and market capitalization. On the first day of the third quarter of 2017, the Company early adopted ASU 2017-04, which simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test.

In the third quarter of 2017, the Company experienced significantly lower than expected Retail operating results and, due to an increasingly competitive retail environment and the related pricing pressures that are anticipated to negatively impact gross margin, lower operating profit. As a result, the Company revised its future cash flow projections for the Retail reporting unit and performed Step 1 of the goodwill impairment test by calculating the fair value of the Retail reporting unit based on its discounted estimated future cash flows. The Company then benchmarked the calculated fair value against a market approach using the guideline public companies method. Given there had been a sustained decline in the market multiples of publicly traded peer companies, management considered this market information when assessing the reasonableness of the fair value of the reporting unit under both the income and market approaches.

Based on the factors outlined above, together with the results of the Step 1 goodwill impairment test, it was determined that the carrying value of the Retail segment exceeded its fair value. Consequently, the Company recorded a goodwill impairment charge of $189.0 million. The Company completed its impairment analysis in the fourth quarter, which did not result in any changes to the impairment recorded in the third quarter. The measurement of the fair value of the Retail segment required significant judgments and estimates regarding short- and long-term growth rates and profitability, as well as assumptions regarding the market valuation of the business. These represent Level 3 valuation inputs under the ASC 820 fair value hierarchy, as further described in Note 8, Fair Value Measurements. As of the date of the most recent goodwill impairment test, which utilized data and assumptions as of October 7, 2017, the Food Distribution reporting unit had a fair value that was substantially in excess of its carrying value.

The following table reflects the components of amortized intangible assets, included in “Intangible assets, net” on the consolidated balance sheets:

	December 30, 2017				December 31, 2016
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
(In thousands)	Amount		Amortization		Amount		Amortization
Non-compete agreements	$	3,408	$	397	$	1,244	$	978
Favorable leases		8,251		4,332		8,744		3,807
Pharmacy customer prescription lists		6,810		4,210		7,168		3,445
Customer relationships		57,937		4,173		17,633		2,187
Trade names		1,068		386		1,068		236
Franchise fees and other		1,047		381		929		270
Total	$	78,521	$	13,879	$	36,786	$	10,923

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The weighted average amortization periods for amortizable intangible assets as of December 30, 2017 are as follows:

Non-compete agreements

6.3 years

Favorable leases

16.4 years

Pharmacy customer prescription lists

7.5 years

Customer relationships

16.1 years

Trade names

7.0 years

Franchise fees and other

9.3 years

Amortization expense for intangible assets was $5.5 million, $3.0 million and $3.3 million for 2017, 2016 and 2015, respectively.

Estimated amortization expense for each of the five succeeding fiscal years is as follows:

(In thousands)	2018					2019					2020					2021					2022
Amortization expense	$		5,772			$		5,604			$		5,267			$		4,620			$		4,362

Indefinite-lived intangible assets that are not amortized, consisting primarily of trade names and licenses for the sale of alcoholic beverages, totaled $69.8 million and $34.3 million as of December 30, 2017 and December 31, 2016, respectively.

Note 6 – Restructuring Charges and Asset Impairment

The following table provides the activity of reserves for closed properties for 2017, 2016 and 2015. Reserves for closed properties recorded in the consolidated balance sheets are included in “Other accrued expenses” in Current liabilities and “Other long-term liabilities” in Long-term liabilities based on when the obligations are expected to be paid.

	Lease and
(In thousands)	Ancillary Costs			Severance			Total
Balance at January 3, 2015	$	13,988		$	80		$	14,068
Provision for closing charges		7,200			—			7,200
Provision for severance		—			395			395
Changes in estimates		(56	)		(80	)		(136	)
Lease termination adjustments		(1,745	)		—			(1,745	)
Accretion expense		592			—			592
Payments		(5,531	)		(395	)		(5,926	)
Balance at January 2, 2016		14,448			—			14,448
Provision for closing charges		13,925			—			13,925
Provision for severance		—			919			919
Changes in estimates		689			(40	)		649
Lease termination adjustments		(2,437	)		—			(2,437	)
Accretion expense		675			—			675
Payments		(5,368	)		(879	)		(6,247	)
Balance at December 31, 2016		21,932			—			21,932
Provision for closing charges		3,852			—			3,852
Provision for severance		—			624			624
Changes in estimates		1,191			(163	)		1,028
Lease termination adjustments		(2,600	)		—			(2,600	)
Accretion expense		526			—			526
Payments		(7,012	)		(458	)		(7,470	)
Balance at December 30, 2017	$	17,889		$	3		$	17,892

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Included in the liability are lease obligations recorded at the present value of future minimum lease payments and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease income, calculated using a risk-free interest rate.

Restructuring charges and asset impairment charges included in the consolidated statements of operations consisted of the following:

(In thousands)	2017			2016			2015
Asset impairment charges	$	33,679		$	15,586		$	4,220
Provision for closing charges		3,852			13,925			7,200
Loss (gain) on sales of assets related to closed facilities		998			(134	)		(2,997	)
Provision for severance		624			919			395
Other costs associated with distribution center and store closings		1,851			3,692			1,865
Changes in estimates		1,028			865			(136	)
Lease termination adjustments		(2,600	)		(2,737	)		(1,745	)
	$	39,432		$	32,116		$	8,802

Asset impairment charges were incurred on long-lived assets primarily in the Retail segment due to the economic and competitive environment of certain stores and in conjunction with the Company’s retail store rationalization plan. The changes in estimates primarily relate to revised estimates of lease turnover and ancillary costs and sublease income associated with previously closed locations, due to lost subtenants and deterioration of the condition of certain properties. The lease termination adjustments represent the benefits recognized in connection with lease buyouts negotiated related to previously closed stores.

Long-lived assets are analyzed for impairment whenever circumstances arise that could indicate the carrying value of long-lived assets may not be recoverable. If such circumstances exist, then estimates are made of future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized in the consolidated statements of earnings. Measurement of the impairment loss to be recorded is equal to the excess of the carrying amount of the assets over the discounted future cash flows. When analyzing the assets for impairment, assets are grouped at the lowest level of identifiable cash flows that are largely independent of the cash flows of other groups of assets.

Long-lived assets are measured at fair value on a nonrecurring basis using Level 3 inputs under the fair value hierarchy, as further described in Note 8, Fair Value Measurements. Assets consisting primarily of property and equipment with a book value of $48.6 million were measured at a fair value of $14.9 million, resulting in an impairment charge of $33.7 million in 2017. Fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, discounted using a risk-adjusted rate of interest. The Company estimates future cash flows based on historical results of operations, external factors expected to impact future performance, experience and knowledge of the geographic area in which the assets are located, and when necessary, uses real estate brokers.

Note 7 – Long-Term Debt

Long-term debt consists of the following:

	December 30,			December 31,
(In thousands)	2017			2016
Senior secured revolving credit facility, due December 2021	$	707,492		$	359,127
Senior secured term loan, due December 2021		—			26,954
Capital lease obligations (Note 10)		42,904			48,255
Other, 2.61% - 8.75%, due 2019 - 2024		5,972			5,028
Total debt - Principal		756,368			439,364
Unamortized debt issuance costs		(6,417	)		(8,265	)
Total debt		749,951			431,099
Less current portion		9,196			17,424
Total long-term debt	$	740,755		$	413,675

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In December 2016, SpartanNash Company and certain of its subsidiaries amended its senior secured credit facility (the “Credit Agreement”). The principal changes of the amendment were to reduce the number of tiers in the pricing grid from three to two, rese t the advance rate on real estate to 75%, provide the ability to increase the size of the term loan by $33 million, and extend the maturity date of the agreement, which was set to expire on January 8, 2020, to December 20, 2021. The Credit Agreement provid es for borrowings of $1.0 billion, consisting of three tranches: a $900 million secured revolving credit facility (Tranche A), a $40 million secured revolving credit facility (Tranche A-1), and a $60 million term loan (Tranche A-2). In the first quarter of 2017, the Company borrowed $35.5 million on the senior secured term loan (Tranche A-2) in accordance with the December 2016 amendment. In the fourth quarter of 2017, the Company paid the outstanding balance on the senior secured term loan (Tranche A-2) of $52. 5 million with proceeds from its senior secured revolving credit facilities , resulting in debt extinguishment costs of $0.4 million . T he Company has the ability to increase the size of the Credit Agreement by an additional $400 million, subject to cer tain conditions in the Credit Agreement. The Company’s obligations under the related Credit Agreement are secured by substantially all of the Company’s personal and real property. The Company may repay all loans in whole or in part at any time without pena lty.

Availability under the Credit Agreement is based upon advance rates on certain asset categories owned by the Company, including, but not limited to the following: inventory, accounts receivable, real estate, prescription lists, cigarette tax stamps, and rolling stock.

The Credit Agreement imposes certain requirements, including: limitations on dividends and investments, limitations on the Company’s ability to incur debt, make loans, acquire other companies, change the nature of the Company’s business, enter a merger or consolidation, or sell assets. These requirements can be more restrictive depending upon the Company’s Excess Availability, as defined under the Credit Agreement.

Borrowings under the three tranches of the credit facility bear interest at the Company’s option as either Eurodollar loans or Base Rate loans, subject to a grid based upon Excess Availability . The interest rate terms for the two remaining tranches are as follows:

Credit	Outstanding as of
Facility	December 30, 2017
Tranche	(In thousands)		Eurodollar Rate	Base Rate
Tranche A	$	668,093	LIBOR plus 1.25% to 1.50%	Greater of:	(i) the Federal Funds Rate plus 1.00% to 1.25%
					(ii) the Eurodollar Rate plus 1.25% to 1.50%
					(iii) the prime rate plus 0.25% to 0.50%
Tranche A-1	$	39,399	LIBOR plus 2.50% to 2.75%	Greater of:	(i) the Federal Funds Rate plus 2.00% to 2.25%
					(ii) the Eurodollar Rate plus 2.50% to 2.75%
					(iii) the prime rate plus 1.50% to 1.75%

The Company also incurs an unused line of credit fee on the unused portion of the loan commitments at a rate of 0.25%.

As of December 30, 2017 and December 31, 2016, total outstanding borrowings on the secured revolving credit facilities and term loan were $707.5 million and $386.1 million, respectively. The Credit Agreement requires that the Company maintain Excess Availability of 10% of the borrowing base, as defined in the Credit Agreement. The Company is in compliance with all financial covenants as of December 30, 2017 and had Excess Availability after the 10% requirement of $132.7 million and $415.8 million at December 30, 2017 and December 31, 2016, respectively. The Credit Agreement provides for the issuance of letters of credit, of which $9.2 million and $9.6 million were outstanding as of December 30, 2017 and December 31, 2016, respectively.

In November 2015, the Company called for redemption all of the outstanding $50.0 million aggregate principal amount of the 6.625% Senior Notes due December 2016 (the “Notes”). The Company redeemed the Notes for cash, using borrowings under its secured revolving credit facility on December 15, 2015. Notes called for redemption became due and payable on the redemption date at a cash redemption price of 101.65625% of the principal amount of the Notes, plus accrued and unpaid interest. A loss on debt extinguishment of $1.2 million was incurred consisting of the redemption premium and the write-off of unamortized issuance costs.

The weighted average interest rate for all borrowings, including loan fee amortization, was 3.70% for 2017.

At December 30, 2017, aggregate annual maturities and scheduled payments of long-term debt are as follows:

(In thousands)	2018					2019					2020					2021					2022					Thereafter					Total
Total borrowings	$		9,196			$		6,969			$		5,195			$		710,494			$		2,846			$		21,668			$		756,368

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Note 8 – Fair Value Measurements

Financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts payable approximate fair value because of the short-term maturities of these financial instruments. For discussion of the fair value measurements related to goodwill and long-lived asset impairment charges, refer to Note 5, Goodwill and Other Intangible Assets, and Note 6, Restructuring Charges and Asset Impairment. At December 30, 2017 and December 31, 2016, the book value and estimated fair value of the Company’s debt instruments, excluding debt financing costs, were as follows:

	December 30,		December 31,
(In thousands)	2017		2016
Book value of debt instruments, excluding debt financing costs:
Current maturities of long-term debt and capital lease obligations	$	9,196	$	17,424
Long-term debt and capital lease obligations		747,172		421,940
Total book value of debt instruments		756,368		439,364
Fair value of debt instruments, excluding debt financing costs		757,966		440,759
Excess of fair value over book value	$	1,598	$	1,395

The estimated fair value of debt is based on market quotes for instruments with similar terms and remaining maturities (Level 2 inputs and valuation techniques).

ASC 820 prioritizes the inputs to valuation techniques used to measure fair value into the following hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability, reflecting the reporting entity’s own assumptions about the assumptions that market participants would use in pricing.

Certain of the Company’s business combinations involve the potential for the receipt or payment of future contingent consideration upon the shortfall or achievement of various operating thresholds, respectively. The additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified EBITDA levels. An asset or liability is recorded for the estimated fair value of the contingent consideration at the acquisition date and is re-measured each reporting period, with changes in fair value recognized as income or expense within operating expenses in the consolidated statements of operations. The Company measures the asset and liability on a recurring basis using Level 3 inputs.

The fair value of contingent consideration is measured using a discounted cash flow model incorporating projected payment dates, discount rates, probabilities of payment, and projected EBITDA. Projected EBITDA amounts are based on initial deal model forecasts at the time of acquisition as well as the Company’s most recent internal operational budget, and include a probability weighted range of outcomes. Changes in projected EBITDA, probabilities of payment, discount rates, or projected payment dates may result in higher or lower fair value measurements. The recurring Level 3 fair value measurements of contingent consideration include the following significant unobservable inputs as of December 30, 2017:

Unobservable Input	Range
Discount rate	11.80%
Probability of payments	0% - 100%
Projected year(s) of payments	2017 - 2019

As of December 30, 2017, the fair value of contingent consideration receivable and payable associated with the Caito and BRT acquisition was $18.4 million and $3.4 million, respectively. The net receivable of $15 million was recorded in other assets, net in the consolidated balance sheets as there is a right of offset for the payable and receivable. Upon payment, the portion of the contingent consideration related to the acquisition date fair value is reported as a financing activity in the consolidated statements of cash flows. Amounts received or paid in excess of the acquisition date fair value are reported as an operating activity in the consolidated statements of cash flows.

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Note 9 – Commitments and Contingencies

The Company subleases property at certain locations and for 2017, 2016 and 2015, received rental income of $3.4 million, $4.8 million and $5.3 million, respectively. In the event of customer default, the Company would be responsible for fulfilling these lease obligations. Future payment obligations under these leases are disclosed in Note 10, Leases. Contingencies related to credit risk and collectability are disclosed in Note 15, Concentration of Credit Risk.

Unions represent approximately 8% of SpartanNash’s associates. These associates are covered by collective bargaining agreements (“CBAs”). The facilities covered by CBAs, the unions representing the covered associates and the expiration dates for each existing CBA are provided in the following table:

Distribution Center Locations	Union Locals	Expiration Dates
Lima, Ohio	IBT 908	January, 2019
Bellefontaine, Ohio GTL Truck Lines, Inc.	IBT 908	February, 2019
Bellefontaine, Ohio General Merchandise Service Division	IBT 908	February, 2019
Grand Rapids, Michigan	IBT 406	October, 2019
Landover, Maryland	IBT 639	February, 2021
Norfolk, Virginia	IBT 822	April, 2019
Columbus, Georgia	IBT 528	September, 2019

The Company is engaged from time-to-time in routine legal proceedings incidental to its business. The Company does not believe that these routine legal proceedings, taken as a whole, will have a material impact on its business or financial condition. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the Company’s consolidated financial position, operating results or liquidity.

The Company contributes to the Central States Southeast and Southwest Pension Fund (“Central States Plan” or “the Plan”), a multi-employer pension plan, based on obligations arising from its CBAs in Bellefontaine and Lima, Ohio and Grand Rapids, Michigan covering its supply chain associates at those locations. This Plan provides retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed by contributing employers and unions; however, SpartanNash is not a trustee. The trustees typically are responsible for determining the level of benefits to be provided to participants, as well as for such matters as the investment of the assets and the administration of the plan. The Company currently contributes to the Central States Plan under the terms outlined in the “Primary Schedule” of Central States’ Rehabilitation Plan or those outlined in the “Default Schedule.” Both the Primary and Default schedules require varying increases in employer contributions over the previous year’s contribution. Increases are set within the CBA and vary by location. The Plan continues to be in red zone status, and according to the Pension Protection Act (“PPA”), is considered to be in “critical and declining” zone status. Among other factors, plans in the “critical and declining” zone are generally less than 65% funded and are projected to become insolvent within the next 15 years (or 20 years depending on the ratio of active-to-inactive participants).

Based on the most recent information available to the Company, management believes that the present value of actuarial accrued liabilities in this multi-employer plan significantly exceeds the value of the assets held in trust to pay benefits. Because SpartanNash is one of a number of employers contributing to this plan, it is difficult to ascertain what the exact amount of the underfunding would be. Management is not aware of any significant change in funding levels since December 30, 2017. To reduce this underfunding, management expects meaningful increases in expense as a result of required incremental multi-employer pension plan contributions in future years. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably determined.

Note 10 – Leases

A substantial portion of the Company’s retail stores and warehouse properties are operated in leased facilities. The Company also leases small ancillary warehouse facilities, the majority of the tractors and trailers within its fleet, and certain other equipment. Most of the property leases contain renewal options of varying terms. Terms of certain leases contain provisions requiring payment of percentage rent based on sales and payment of executory costs such as property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premises. Terms of certain leases of transportation equipment contain provisions requiring payment of percentage rent based upon miles driven. Certain properties or portions thereof are subleased to others. Operating leases often contain renewal options. In those locations in which it makes economic sense to continue to operate, management expects that, in the normal course of business, leases that expire will be renewed or replaced by other leases.

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Rental expense, net of sublease income, under operating leas es consisted of the following:

(In thousands)	2017			2016			2015
Minimum rentals	$	55,159		$	57,478		$	57,625
Contingent rent (reductions) increases		(237	)		314			267
Sublease rental income		(3,407	)		(4,830	)		(5,311	)
Total	$	51,515		$	52,962		$	52,581

The Company’s total future lease commitments under operating and capital leases in effect at December 30, 2017 are as follows:

	Operating Leases
	Used in		Subleased				Capital
(In thousands)	Operations		to Others		Total		Leases
2018	$	52,613	$	1,265	$	53,878	$	9,198
2019		41,489		1,039		42,528		8,756
2020		33,951		817		34,768		6,593
2021		26,719		694		27,413		4,577
2022		19,779		468		20,247		4,233
Thereafter		67,317		504		67,821		28,862
Total	$	241,868	$	4,787	$	246,655		62,219
	Interest							(19,315	)
	Present value of minimum lease obligations							42,904
	Current maturities							6,168
	Long-term capital lease obligations						$	36,736

Assets held under capital leases consisted of the following:

	December 30,		December 31,
(In thousands)	2017		2016
Building and improvements	$	60,398	$	61,831
Equipment		3,727		3,403
Assets under capital leases		64,125		65,234
Less accumulated amortization and depreciation		29,518		25,163
Net assets under capital leases	$	34,607	$	40,071

Amortization expense for property under capital leases was $4.4 million, $5.2 million and $3.6 million in 2017, 2016 and 2015, respectively.

Certain retail store facilities, either owned or obtained through leasing arrangements, are leased to others. A majority of the leases provide for minimum and contingent rentals based upon stipulated sales volumes and contain renewal options. Certain of the leases contain escalation clauses.

Owned assets, included in property and equipment, which are leased to others are as follows:

	December 30,		December 31,
(In thousands)	2017		2016
Land and improvements	$	6,515	$	3,860
Buildings		24,236		13,948
Long-term debt and capital lease obligations		30,751		17,808
Less accumulated amortization and depreciation		8,123		7,625
Net property	$	22,628	$	10,183

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Future minimum rentals to be received under lease obligations in effect at December 30, 2017 are as follows:

(In thousands)	2018		2019		2020		2021		2022		Thereafter		Total
Owned property	$	4,194	$	4,044	$	3,635	$	3,359	$	2,973	$	16,768	$	34,973
Leased property		2,708		2,268		2,022		1,545		896		3,731		13,170
Total	$	6,902	$	6,312	$	5,657	$	4,904	$	3,869	$	20,499	$	48,143

Note 11 – Associate Retirement Plans

The Company’s retirement programs include pension plans providing non-contributory benefits and salary deferral defined contribution plans. Substantially all of the Company’s associates not covered by CBAs are covered by a frozen non-contributory pension plan, a defined contribution plan, or both. Associates covered by CBAs at the Company’s Columbus, Georgia; Norfolk, Virginia; and Landover, Maryland facilities all participate in the Company’s defined contribution plan; the remaining associates covered under CBAs participate in a multi-employer pension plan.

Defined Contribution Plans

Expense for employer matching and profit sharing contributions made to defined contribution plans totaled $7.9 million, $11.9 million and $21.1 million in 2017, 2016 and 2015, respectively.

Executive Compensation Plans

The Company has a deferred compensation plan for a select group of management personnel or highly compensated associates. The plan is unfunded and permits participants to defer receipt of a portion of their base salary, annual bonus, or long-term incentive compensation which would otherwise be paid to them. The deferred amounts, plus earnings, are distributed following the associate’s termination of employment. Earnings are based on the performance of hypothetical investments elected by the participant from a portfolio of investment options.

The Company holds variable universal life insurance policies on certain key associates intended to fund distributions under the deferred compensation plan referenced above. The net cash surrender value of approximately $4.3 million and $4.2 million at December 30, 2017 and December 31, 2016, respectively, is recorded in “Other assets, net” in the consolidated balance sheets. These policies have an aggregate amount of life insurance coverage of approximately $15.0 million.

The Company had two separate trusts established for the protection of cash balances owed to participants in its deferred compensation plans. The Company was required, as specified by the plan documents, to fund these trusts at the time of the merger with 125% of its pre-merger liability to plan participants. These trusts were subsequently terminated in 2015 and the Company received cash proceeds from the liquidation of corporate owned life insurance policies of $5.0 million.

Defined Benefit Plans

The Company sponsors the SpartanNash Company Pension Plan (the “Pension Plan”), a frozen defined benefit pension plan. The pension benefits are primarily based on years of service and compensation, with some differences resulting from the nature of how benefits were calculated under the Company’s legacy defined benefit plans, as described below. On December 31, 2014, the Retirement Plan for Employees of Super Food Services, Inc. (“Super Foods Plan”) was merged into the Spartan Stores, Inc. Cash Balance Pension Plan (“Cash Balance Pension Plan”) and renamed the SpartanNash Company Pension Plan. The merging of the plans resulted in lower administrative fees and reduced cash funding. Annual payments to the pension trust fund are determined in compliance with the Employee Retirement Income Security Act of 1976 (“ERISA”). Plan assets consist principally of U.S. government and corporate obligations and common stocks. The plan does not hold any SpartanNash stock.

The Cash Balance Pension Plan, a non-contributory cash balance pension plan, was frozen effective January 1, 2011. As a result of the freeze, no additional associates were eligible to participate in the plan after January 1, 2011, and additional service credits were no longer added to each participant’s account; however, interest credits continue to accrue. Prior to the plan freeze, the plan benefit formula utilized a cash balance approach whereby credits were added annually to a participant’s account based on compensation and years of vested service, with interest credits also added to the participant’s account at the Company’s discretion.

The Super Foods Plan, a qualified non-contributory pension plan offered by one of the Company’s subsidiaries, provides retirement income for certain eligible full-time associates who are not covered by a union retirement plan. Pension benefits under the plan are based on length of service and compensation, and contributions meet the minimum funding requirements. This plan was frozen effective January 1, 1998.

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If lump sum distributions are made in an amount exceeding annual interest cost, settlement accounting is triggered and the resulting settlement expense is recorded as a component of total pension expense (income). L ump sum distribu tions of $ 2.6 million and $2.8 million were made and resulting pension settlement charge s of $ 0.5 million and $0.7 million were incurred in 2017 and 2016, respectively .

Postretirement Medical Plans

SpartanNash Company and certain subsidiaries provide healthcare benefits to retired associates under the SpartanNash Company Retiree Medical Plan (the “Retiree Medical Plan”). Former Spartan Stores, Inc. associates hired prior to January 1, 2002 who were not covered by CBAs during their employment and who have at least 10 years of service and have attained age 55 upon retirement qualify as “covered associates.” Covered associates that retired prior to March 31, 1992 receive major medical insurance with deductible and coinsurance provisions until age 65 and Medicare supplemental benefits thereafter. Covered associates retiring after April 1, 1992 are eligible for monthly postretirement healthcare benefits of $5 multiplied by the associate’s years of service. This benefit is in the form of a credit against the monthly insurance premium. The retiree pays the balance of the premium.

The following tables set forth the actuarial present value of benefit obligations, funded status, changes in benefit obligations and plan assets, weighted average assumptions used in actuarial calculations and components of net periodic benefit costs for the Company’s significant pension and postretirement benefit plans, excluding multi-employer plans. The prepaid, current accrued, and noncurrent accrued benefit costs associated with pension and postretirement benefits are reported in “Other assets, net,” “Accrued payroll and benefits,” and “Postretirement benefits,” respectively, in the consolidated balance sheets.

	Pension Plan						Retiree Medical Plan
	December 30,			December 31,			December 30,			December 31,
(In thousands, except percentages)	2017			2016			2017			2016
Funded Status
Projected/Accumulated benefit obligation:
Balance at beginning of year	$	80,350		$	83,398		$	9,663		$	9,179
Service cost		—			—			184			187
Interest cost		2,345			2,977			345			345
Actuarial loss		4,662			1,598			303			213
Benefits paid		(7,204	)		(7,623	)		(296	)		(261	)
Balance at end of year	$	80,153		$	80,350		$	10,199		$	9,663

Fair value of plan assets:
Balance at beginning of year	$	81,982		$	84,753		$	—		$	—
Actual return on plan assets		6,477			4,852			—			—
Company contributions		—			—			296			261
Benefits paid		(7,204	)		(7,623	)		(296	)		(261	)
Balance at end of year	$	81,255		$	81,982		$	—		$	—
Funded (unfunded) status	$	1,102		$	1,632		$	(10,199	)	$	(9,663	)

Components of net amount recognized in consolidated balance sheets:
Noncurrent assets	$	1,102		$	1,632		$	—		$	—
Current liabilities		—			—			(417	)		(412	)
Noncurrent liabilities		—			—			(9,782	)		(9,251	)
Net asset (liability)	$	1,102		$	1,632		$	(10,199	)	$	(9,663	)

Amounts recognized in AOCI:
Net actuarial loss	$	18,205		$	16,938		$	1,678		$	1,434
Prior service credit		—			—			(250	)		(408	)
Accumulated other comprehensive loss	$	18,205		$	16,938		$	1,428		$	1,026

Weighted average assumptions at measurement date:
Discount rate	3.45%			3.82%			3.72%			4.26%
Ultimate health care cost trend rate	N/A			N/A			5.00%			5.00%

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	Pension Plan									Retiree Medical Plan
(In thousands, except percentages)	2017			2016			2015			2017			2016			2015
Components of net periodic benefit cost (income):
Service cost	$	—		$	—		$	—		$	184		$	187		$	231
Interest cost		2,345			2,977			3,325			345			345			404
Amortization of prior service cost		—			—			—			(158	)		(158	)		(158	)
Expected return on plan assets		(3,836	)		(4,269	)		(4,923	)		—			—			—
Recognized actuarial net loss		221			706			827			59			42			174
Net periodic benefit (income) expense	$	(1,270	)	$	(586	)	$	(771	)	$	430		$	416		$	651
Settlement expense		548			692			—			—			—			—
Total (income) expense	$	(722	)	$	106		$	(771	)	$	430		$	416		$	651

Weighted average assumptions used to determine net periodic benefit cost (income):
Discount rate	3.82%			4.04%			3.75%			4.26%			4.55%			4.15%
Expected return on plan assets	4.83%			5.05%			5.50%			N/A			N/A			N/A

The net actuarial loss and prior service cost included in AOCI and expected to be recognized in net periodic benefit cost in 2018 are as follows:

				Retiree
(In thousands)	Pension Plan			Medical Plan
Prior service credit	$	N/A		$	(158	)
Net actuarial loss			417		88

Prior service costs (credits) are amortized on a straight-line basis over the average remaining service period of active participants. Actuarial gains and losses for the Pension Plan are amortized over the average remaining life of all participants when the accumulation of such gains and losses exceeds 10% of the greater of the projected benefit obligation and the market-related value of plan assets.

Assumed healthcare cost trend rates have a significant effect on the amounts reported for the Retiree Medical Plan. Assumed current healthcare cost trend rates used to determine net periodic benefit cost (income) were as follows:

	2017	2016	2015
Pre-65	N/A	7.50%	7.75%
Post-65	8.40%	8.40%	6.85%

The effect of a one-percentage point increase or decrease in assumed healthcare cost trend rates on the total service and interest components and the post-retirement benefit obligations would be less than $0.1 million.

Expected Return on Assets and Investment Strategy

The Company has assumed an average long-term expected return on the Pension Plan assets of 4.84% as of December 30, 2017. The expected return assumption was modeled by third-party investment portfolio managers, based on asset allocations and the expected return and risk components of the various asset classes in the portfolio. Determining projected stock and bond returns and then applying these returns to the target asset allocations of the plan assets developed the expected return. Equity returns were based primarily on historical returns of the S&P 500 Index. Fixed-income projected returns were based primarily on historical returns for the broad U.S. bond market. This overall return assumption is believed to be reasonable over a longer-term period that is consistent with the liabilities.

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The Company has an investment policy for the Pension Plan with a long-term asset allocation mix designed to meet the long-term retirement obligations by investing in equity, fixed income and other securities to cover cash flow requirements of the plan and minimize long-term costs. The asset allocation mix is reviewed periodically and, on a regular basis, actual allocations are rebalanced to approximate th e prevailing targets. The following table summarizes both the targeted allocation of the Pension Plan’s asset allocation by asset category and actual allocations as of December 30, 2017 and December 31, 2016:

	Target			Actual
	December 30,			December 30,			December 31,
Asset Category	2017			2017			2016
Equity securities		20.0	%		19.3	%		20.8	%
Fixed income		80.0			79.4			76.9
Cash equivalents		—			1.3			2.3
Total		100.0	%		100.0	%		100.0	%

The investment policy emphasizes the following key objectives: (1) provide benefit security to participants by maximizing the return on plan assets at an acceptable risk level, (2) maintain adequate liquidity for current benefit payments, (3) avoid unexpected increases in pension expense, and (4) within the scope of the above objectives, minimize long term funding to the plan.

The fair values of the Pension Plan assets at December 30, 2017 and December 31, 2016, by asset category, are as follows:

	Fair Value of Assets as of December 30, 2017
(In thousands)	Total		Level 1		Level 2		Level 3		NAV (a)
Mutual funds	$	18,194	$	—	$	—	$	—	$	18,194
Pooled funds		48,133		—		—		—		48,133
Money market fund		1,037		—		1,037		—		—
Guaranteed annuity contract		13,891		—		—		13,891		—
Total fair value	$	81,255	$	—	$	1,037	$	13,891	$	66,327

	Fair Value of Assets as of December 31, 2016
(In thousands)	Total		Level 1		Level 2		Level 3		NAV (a)
Mutual funds	$	14,178	$	—	$	—	$	—	$	14,178
Pooled funds		50,506		—		—		—		50,506
Money market fund		1,872		—		1,872		—		—
Guaranteed annuity contract		15,426		—		—		15,426		—
Total fair value	$	81,982	$	—	$	1,872	$	15,426	$	64,684

(a)

Assets are measured at net asset value (“NAV”) (or its equivalent) on a non-active market, and therefore, have not been classified in the fair value hierarchy.

Level 3 assets consist of guaranteed annuity contracts. A reconciliation of the beginning and ending balances for Level 3 assets is as follows:

(In thousands)	December 30, 2017			December 31, 2016
Balance at beginning of year	$	15,426		$	16,198
Purchases, sales, issuances and settlements, net		(2,222	)		(1,733	)
Interest income		552			631
Unrealized gains		135			330
Balance at end of year	$	13,891		$	15,426

See Note 8 for a discussion of the levels of the fair value hierarchy. The above assets’ fair value measurement level is based on the lowest level of any input that is significant to the fair value measurement.

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The following is a description of the valuation methods used for the Pension Plan’s assets measured at fair value in the above tables:

Cash & money market funds: The carrying value approximates fair value. Money market funds are valued on a daily basis at NAV using the amortized cost of the securities held in the fund. Since amortized cost does not meet the criteria for an active market, money market funds are classified within Level 2 of the fair value hierarchy of ASC 820.

Mutual Funds: These investments are valued using NAV as a practical expedient to estimate fair value and are not classified in the fair value hierarchy. NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund’s liabilities, expressed on a per-share basis. Mutual funds held by the Pension Plan are open end mutual funds that are registered with the Securities and Exchange Commission (“SEC”). These funds are required to publish their daily NAV and to transact at that price. The mutual funds held by the Pension Plan are therefore deemed to be actively traded.

Pooled Funds: The plan holds units of various Aon Hewitt Group Trust Funds offered through a private placement. The units are valued daily using NAV as a practical expedient to estimate fair value. NAVs are based on the fair value of each fund’s underlying investments, and are not classified in the fair value hierarchy. The practical expedient is not used when it is determined to be probable that the investment will be sold for an amount different than the reported NAV.

Guaranteed Annuity Contracts: The guaranteed annuity contracts are immediate participation contracts held with insurance companies that act as custodian of the Pension Plan’s assets. The guaranteed annuity contracts are stated at contract values, which are determined by the custodians and approximate fair values. The Company evaluates the general financial condition of the custodians as a component of validating whether the calculated contract value is an accurate approximation of fair value. The review of the general financial condition of the custodians is considered obtainable/observable through the review of readily available financial information the custodians are required to file with the SEC. The group annuity contracts are classified within Level 3 of the valuation hierarchy of ASC 820.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuations methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement.

The Company expects to make contributions in 2018 of $0.4 million to the Retiree Medical Plan. Although no contributions are required, the Company expects to contribute approximately $2.0 million to the Pension Plan in 2018.

The following estimated benefit payments are expected to be paid in the following fiscal years:

(In thousands)	2018		2019		2020		2021		2022		2022 to 2026
Pension benefits	$	8,668	$	8,274	$	7,702	$	7,843	$	7,035	$	26,850
Post-retirement medical benefits		417		463		503		540		575		3,232

Multi-Employer Health and Welfare Plans

In addition to the plans described above, the Company participates in the Michigan Conference of Teamsters and Ohio Conference of Teamsters Health and Welfare plans. The Company contributes to these multi-employer plans under the terms contained in existing CBAs and in the amounts set forth within these agreements. The health and welfare plans provide medical, dental, pharmacy, vision, and other ancillary benefits to active associates and retirees, as determined by the trustees of the plan. The Company’s contributions largely benefit active associates, and as such, may not constitute contributions to a postretirement benefit plan. However, the Company is unable to separate contribution amounts for postretirement benefits from contribution amounts paid for active participants in the plan. These plans have a significant surplus of funds held in reserve in excess of claims incurred, and there is no potential withdrawal liability related to the Company’s participation in the plans. With respect to the Company’s participation in these plans, expense is recognized as contributions are funded. The Company contributed $14.1 million, $14.3 million and $15.1 million to these plans in 2017, 2016 and 2015, respectively.

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Multi-Employer Pension Plan

The Company also contributes to the Central States Plan, a multi-employer plan defined previously, under the terms of CBAs that cover its union-represented associates and in the amounts set forth within these agreements. The Company is party to four CBAs that require contributions to the Plan with expiration dates ranging from January 2019 to February 2021. These CBAs cover warehouse personnel and drivers in Grand Rapids, Michigan and Bellefontaine and Lima, Ohio. With respect to the Company’s participation in the Central States Plan (EIN 36-60442343 / Pension Plan Number 001), expense is recognized as contributions are funded. The Company contributed $13.4 million, $13.4 million and $12.9 million to this plan in 2017, 2016 and 2015, respectively. The contributions made by the Company represent less than five percent of the Plan’s total contributions in 2017.

The risk of participating in a multi-employer pension plan is different from the risk associated with single-employer plans in the following respects:

Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.

If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

If a company chooses to stop participating in a multi-employer plan, makes market exits such as closing a distribution center without opening another one in the same locale, or otherwise has participation in the plan drop below certain levels, the company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The PPA zone status of the Plan, which is based on information the Company received from the Plan and is certified by the Plan’s actuary, is “critical and declining” for the Plan’s two most recent fiscal years ending December 31, 2017 and 2016. Among other factors, plans in the “critical and declining” zone are generally less than 65% funded and projected to become insolvent within the next 15 years (or 20 years depending on the ratio of active-to-inactive participants). A rehabilitation plan has been implemented by the trustees of the Plan, and the CBAs that cover warehouse personnel and drivers in the Bellefontaine and Lima, Ohio distribution centers have permanent surcharges imposed due to the failure to adopt the trustee recommended rehabilitation plan. Refer to Note 9, Commitments and Contingencies, for further information regarding the Company’s participation in the Central States Plan. As of the date the consolidated financial statements were issued, Form 5500 was not available for the plan year ended December 31, 2017.

Note 12 – Accumulated Other Comprehensive Income or Loss

AOCI represents the cumulative balance of other comprehensive income (loss), net of tax, as of the end of the reporting period and relates to pension and other postretirement benefit obligation adjustments.

Changes in AOCI are as follows:

(In thousands)	2017			2016			2015
Balance at beginning of the year, net of tax	$	(11,437	)	$	(11,447	)	$	(11,655	)
Other comprehensive loss before reclassifications		(2,448	)		(643	)		(455	)
Income tax benefit		934			236			114
Other comprehensive loss, net of tax, before reclassifications		(1,514	)		(407	)		(341	)
Amortization of amounts included in net periodic benefit cost (a)		799			657			884
Income tax expense (b)		(302	)		(240	)		(335	)
Amounts reclassified out of AOCI, net of tax		497			417			549
Other comprehensive (loss) income, net of tax		(1,017	)		10			208
Reclassification of stranded tax effects (c)		(2,682	)		—			—
Balance at end of the year, net of tax	$	(15,136	)	$	(11,437	)	$	(11,447	)

(a)

Reclassified from AOCI into Selling, general and administrative expense. Amortization of amounts included in net periodic benefit cost includes amortization of prior service cost and amortization of net actuarial loss.

(b)

Reclassified from AOCI into Income taxes expense.

(c)

Refer to Note 1, Summary of Significant Accounting Policies and Basis of Presentation, for a discussion of the impact of early adoption of ASU 2018-02.

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Note 13 – Income Tax

The income tax provision for continuing operations is made up of the following components:

(In thousands)	2017			2016		2015
Current income tax expense:
Federal	$	366		$	22,936	$	31,437
State		528			3,210		3,144
Total current income tax expense		894			26,146		34,581
Deferred income tax (benefit) expense:
Federal		(72,842	)		6,509		3,255
State		(7,079	)		252		(743	)
Total deferred income tax (benefit) expense		(79,921	)		6,761		2,512
Total income tax (benefit) expense	$	(79,027	)	$	32,907	$	37,093

A reconciliation of the statutory federal rate to the effective rate is as follows:

	2017				2016				2015
Federal statutory income tax rate		35.0		%		35.0		%		35.0		%
Federal rate change effect on deferred taxes		19.7				—				—
State taxes, net of federal income tax benefit		3.1				2.5				1.6
Stock compensation		1.0				—				—
Other, net		0.8				(0.6	)			0.5
Charitable product donations		0.4				(0.5	)			(0.3	)
Tax credits		0.2				—				—
Domestic production activities deduction		0.1				(0.3	)			(0.2	)
Non-deductible expenses		(0.3	)			0.5				0.4
Effective income tax rate		60.0		%		36.6		%		37.0		%

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to reducing the U.S. federal corporate tax rate from 35 percent to 21 percent, effective January 1, 2018. Shortly after the Tax Act was enacted, the SEC issued accounting guidance, which provides a one-year measurement period during which a company may complete its accounting for the impacts of the Tax Act. To the extent a company’s accounting for certain income tax effects of the Tax Act is incomplete, the company may determine a reasonable estimate for those effects and record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply the provisions of the tax laws that were in effect immediately prior to the Tax Act being enacted.

In connection with initial analysis of the impact of the Tax Act, the Company recorded a discrete income tax benefit of $26.0 million in the period ending December 30, 2017 associated with the re-measurement of deferred tax assets and liabilities as a result of the reduction in the U.S. federal corporate tax rate. The Company has not completed its accounting for the income tax effects of certain elements of the Tax Act, but recorded provisional adjustments based on reasonable estimates. Those estimates may be impacted by the need for further analysis and future clarification and guidance regarding available tax accounting methods and elections, state tax conformity to federal tax changes and expected changes to U.S. Treasury regulations. The Company anticipates these estimates will be finalized on or before the due date of the federal return, which is October 15, 2018. The Company’s 2018 tax provision will be recorded at an effective rate that contemplates the new lower statutory rate, and is currently anticipated to be between 23% and 24%.

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Deferred tax assets and liabilities resulting from temporary differences as of December 30, 2017 and December 31, 2016 are as follows:

	December 30,		December 31,
(In thousands)	2017		2016
Deferred tax assets:
Employee benefits	$	19,311	$	30,626
Accrued workers' compensation		1,620		2,624
Allowance for doubtful accounts		1,974		2,945
Intangible assets		56		2,060
Restructuring		2,322		6,087
Deferred revenue		1,552		2,990
Accrued rent		3,853		3,555
Accrued insurance		921		1,279
All other		2,725		4,417
Total deferred tax assets		34,334		56,583

Deferred tax liabilities:
Property and equipment		34,199		52,401
Inventory		31,454		46,332
Goodwill		10,083		79,904
All other		648		1,189
Total deferred tax liabilities		76,384		179,826
Net deferred tax liability	$	42,050	$	123,243

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	December 30,			December 31,
(In thousands)	2017			2016
Balance at beginning of year	$	2,369		$	2,211
Gross increases - tax positions taken in prior years		213			184
Gross decreases - tax positions taken in prior years		(123	)		(2	)
Gross increases - tax positions taken in current year		872			718
Lapse of statute of limitations		(923	)		(742	)
Balance at end of year	$	2,408		$	2,369

Unrecognized tax benefits of $2.0 million are set to expire prior to December 29, 2018. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. The amount of unrecognized tax benefits, including interest and penalties, that would reduce the Company’s effective income tax rate if recognized in future periods was $1.4 million as of December 30, 2017.

SpartanNash or its subsidiaries file income tax returns with federal, state and local tax authorities within the United States. With few exceptions, SpartanNash is no longer subject to U.S. federal, state or local examinations by tax authorities for fiscal years before December 28, 2013. Income tax returns related to the former Nash-Finch Company, with few exceptions, are no longer subject to U.S. federal, state or local examinations by tax authorities.

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Note 14 – Stock-Based Compensation

The Company has a shareholder-approved 10-year stock incentive plan covering 2,500,000 shares of SpartanNash’s common stock. The SpartanNash Company Stock Incentive Plan of 2015 (the “2015 Plan”) provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, and other stock-based and stock-related awards to directors, officers and other key associates. Shares issued, as a result of stock option exercises, will be funded with the issuance of new shares. Holders of restricted stock and stock awards are entitled to participate in cash dividends and dividend equivalents. As of December 30, 2017, a total of 1,947,030 shares remained unissued under the 2015 Plan.

All outstanding unvested stock options and unvested shares of restricted stock vest immediately upon a “Change in Control,” as defined by the Plan. The Company has not issued any stock options since 2009 and all outstanding options are vested.

The following table summarizes stock option activity for 2017, 2016 and 2015:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Shares			Exercise		Contractual		Intrinsic Value
	Under Options			Price		Life Years		(in thousands)
Options outstanding and exercisable at January 3, 2015		494,483		$	20.61		3.30	$	2,772
Exercised		(185,627	)		19.72				1,543
Cancelled/Forfeited		(63	)		11.50
Options outstanding and exercisable at January 2, 2016		308,793			21.15		2.46		773
Exercised		(107,338	)		23.46				1,043
Cancelled/Forfeited		(938	)		14.36
Options outstanding and exercisable at December 31, 2016		200,517			19.94		1.65		3,929
Exercised		(152,589	)		21.02				1,832
Cancelled/Forfeited		—			—
Options outstanding and exercisable at December 30, 2017		47,928		$	16.52		1.07	$	487

Cash received from option exercises was $3.2 million, $2.5 million and $3.7 million in 2017, 2016 and 2015, respectively.

Restricted shares awarded to associates vest ratably over a four-year service period and over one year for grants to the Board of Directors. Awards are subject to forfeiture and certain transfer restrictions prior to vesting. Compensation expense, representing the fair value of the stock at the measurement date of the award, is recognized over the required service period.

The following table summarizes restricted stock activity for 2017, 2016 and 2015:

				Weighted Average
				Grant-Date
	Shares			Fair Value
Outstanding and nonvested at January 3, 2015		600,653		$	23.08
Granted		314,595			26.59
Vested		(265,737	)		23.19
Forfeited		(11,956	)		23.85
Outstanding and nonvested at January 2, 2016		637,555			24.75
Granted		314,944			28.34
Vested		(255,156	)		24.56
Forfeited		(37,200	)		25.80
Outstanding and nonvested at December 31, 2016		660,143			26.48
Granted		296,297			34.68
Vested		(258,183	)		25.90
Forfeited		(84,513	)		29.11
Outstanding and nonvested at December 30, 2017		613,744		$	30.32

The total fair value of shares vested was $9.3 million, $6.6 million and $7.6 million in 2017, 2016 and 2015, respectively.

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Stock-based compensation expense recognized and included in “Selling, general and administrative expenses” in the consolidated statements of operations, and related tax benefits were as follows:

(In thousands)	2017			2016			2015
Restricted stock	$	9,611		$	7,936		$	7,240
Tax benefits		(3,440	)		(2,976	)		(2,758	)
Stock-based compensation expense, net of tax	$	6,171		$	4,960		$	4,482

As of December 30, 2017, total unrecognized compensation cost related to non-vested share-based awards granted under the stock incentive plans was $4.0 million for restricted stock. The remaining compensation costs not yet recognized are expected to be recognized over a weighted average period of 2.3 years for restricted stock. All compensation costs related to stock options have been recognized.

The Company recognized tax deductions of $11.6 million, $8.0 million and $9.5 million related to the exercise of stock options and the vesting of restricted stock in 2017, 2016 and 2015, respectively.

The Company has a stock bonus plan covering 300,000 shares of SpartanNash common stock. Under the provisions of this plan, certain officers and key associates may elect to receive a portion of their annual bonus in common stock rather than cash and will be granted additional shares of common stock worth 20% of the portion of the bonus they elect to receive in stock. After the shares are issued, the holder is not able to sell or otherwise transfer the shares until the end of the holding period, which is currently 24 months. Compensation expense is recorded based upon the market price of the stock as of the measurement date. A total of 14,726 shares remained unissued under the stock bonus plan at December 30, 2017.

The Company also has an associate stock purchase plan covering 200,000 shares of SpartanNash common stock. The plan provides that associates of the Company may purchase shares at 95% of the fair market value. As of December 30, 2017, a total of 81,511 shares had been issued under the plan.

Note 15 – Concentration of Credit Risk

The Company may provide financial assistance in the form of loans to certain independent retailers for inventories, store fixtures and equipment and store improvements. Loans are generally secured by liens on real estate, inventory and/or equipment, personal guarantees and other types of collateral, and are generally repayable over a period of five to ten years. The Company establishes allowances for doubtful accounts based upon periodic assessments of the credit risk of specific customers, collateral value, historical trends and other information. The Company believes that adequate provisions have been recorded for any doubtful accounts. In addition, the Company may guarantee debt and lease obligations of independent retailers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of their debt and lease obligations, which would be due in accordance with the underlying agreements.

In the ordinary course of business, the Company may advance funds to certain independent retailers which are earned by the retailers primarily through achieving specified purchase volume requirements, as outlined in their supply agreements with the Company, or in limited instances, for remaining a SpartanNash customer for a specified time period. These advances must be repaid if the purchase volume requirements are not met or if the retailer no longer remains a customer for the specified time period. As of December 30, 2017, the Company has an unearned advanced amount to one independent retailer for an amount representing approximately two percent of the Company’s total assets. The Company’s collateral related to the advanced funds is a security interest in select business assets of the independent retailer’s stores, including select real property assets and other collateral, including a personal guarantee, from the shareholder. Despite the collateral, the Company may be unable to realize the entire unearned portion of the funds advanced to this independent retailer, and accordingly, has established a reserve of $4.9 million related to the advance. During the fourth quarter of 2017, and in the context of a state law receivership proceeding, the customer rationalized its retail store base and entered into a new supply agreement with the Company, and assumed the obligation of the original agreement. Based on the expected cash flows generated from sales to this customer and consideration of the previously mentioned collateral, the Company believes it is adequately reserved as of December 30, 2017. However, if the customer’s future performance and related cash flows are negatively impacted by changes in economic, industry or market conditions, including changes in the business climate and competition, the Company may be unable to realize the remaining unearned portion of the advanced funds. Given the uncertainty regarding the previously mentioned factors that could impact the customer’s future performance , the Company cannot reasonably estimate the additional amount of advanced funds, if any, that should be reserved. The Company estimates that the possible range of loss related to this customer, in excess of the amount currently reserved, is between zero and $25.0 million, depending on the circumstances discussed above.

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As of December 30, 2017, the Company has guaranteed bank debt for one independent retailer in the amount of $1.5 million. This guarantee, which is secured by certain business assets and personal guarantees of the retailer, represents the maximum undiscounted payments the Company would be required to make in the event of default. The Company believes this independent retailer will be able to perform under the loan agreement and that no payments will be required and no loss will be incurred under the guarantee. The fair value of the obligation assumed under the guarantee is not material. In the ordinary course of business, the Company also subleases and assigns various leases to third parties. As of December 30, 2017, the Company estimates the present value of its maximum potential obligations for subleases and assigned leases to be approximately $ 6.4 million and $1 3.8 million, respectively.

Note 16 – Supplemental Cash Flow Information

Supplemental cash flow information is as follows:

(In thousands)	2017		2016			2015
Non-cash financing activities:
Issuance of note payable as consideration for acquisition	$	2,460	$	—		$	2,000
Recognition of investment in direct financing lease		2,295		—			—
Recognition of capital lease obligations		588		3,536			3,236
Derecognition of capital lease obligations		—		(6,068	)		—
Deferred gain on derecognition of capital lease obligations		—		3,052			—
Non-cash investing activities:
Capital expenditures included in accounts payable		5,418		5,465			8,896
Derecognition of fixed assets under direct financing lease		2,295		—			—
Capital lease asset additions		588		3,536			3,236
Capital lease asset disposals		—		(3,016	)		—
Acquisition financed through issuance of note payable		2,460		—			2,000
Receipt of notes receivable on sale of assets		—		—			4,531
Other supplemental cash flow information:
Cash paid for interest		22,818		16,184			19,178
Cash paid for income taxes		10,657		35,836			23,531

Note 17 – Reporting Segment Information

SpartanNash sells and distributes products that are typically found in supermarkets and discount stores. The operating segments reflect the manner in which the business is managed and how the Company allocates resources and assesses performance internally. The Company’s chief operating decision maker is the Chief Executive Officer, who determines the allocation of resources and, through a regular review of financial information, assesses the performance of the operating segments. The business is classified by management into three reportable segments: Food Distribution, Military and Retail. These reportable segments are three distinct businesses, each with a different customer base, management structure, and basis for determining budgets, forecasts, and executive compensation. The Company reviews its reportable segments on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

The Company’s Food Distribution segment, consisting of 13 distribution centers as well as facilities to process fresh produce, proteins, and meal kits, supplies grocery products, including dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products and pharmacy primarily to a diverse group of independent retailers, national retailers, food service distributors and the Company’s corporate owned retail stores. The Company also offers certain back office services (e.g., accounting, payroll, marketing, etc.) to its independent retail customers. These services are not material to the Company’s financial statements. Sales to independent retailers and inter-segment sales are recorded based upon both a “cost plus” model and a “variable mark-up” model, which vary by commodity and servicing distribution center. To supply its wholesale customers, the Company operates a fleet of tractors, conventional trailers and refrigerated trailers and also provides managed freight solutions.

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The Military segment contracts with manufacturers and brokers to distribute a wide variety of grocery products, including dry groceries, beverages, meat, and frozen foods, primarily to U.S. military commissaries and exchanges from its 7 distribution centers, two of which are shared with the Food Distribution segment. The contracts typically specify the commissaries and exchanges to supply on behalf of the manufacturer, the manufacturer’ s products to be supplied, service and delivery requirements and pricing and payment terms. The Company is also the DeCA exclusive worldwide supplier of private brand grocery and related products to U.S. military commissaries. The Company procures the groc ery and related products from various manufacturers, and upon receiving customer orders from DeCA, either delivers the products to the U.S. military commissaries itself or partners with Coastal Pacific Food Distributors to deliver the products on its behal f.

The Retail segment operated 145 corporate owned retail stores and 31 fuel centers, predominantly in the Midwest region, as of December 30, 2017. The Company’s retail stores typically offer dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products and health and beauty care products. The Company also offered pharmacy services in 87 of its corporate owned retail stores as of December 30, 2017.

Identifiable assets represent total assets directly associated with the reporting segments. Eliminations in assets identified to segments include intercompany receivables, payables and investments.

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The following tables set forth information about the Company by reporting segment:

	Food
(In thousands)	Distribution			Military			Retail			Total
2017
Net sales to external customers	$	3,992,192		$	2,144,022		$	1,991,868		$	8,128,082
Inter-segment sales		885,872			—			—			885,872
Merger/acquisition and integration		6,244			1,522			335			8,101
Goodwill impairment		—			—			189,027			189,027
Restructuring charges and asset impairment		1,317			500			37,615			39,432
Depreciation and amortization		30,255			11,626			41,359			83,240
Operating earnings (loss)		83,296			7,014			(196,626	)		(106,316	)
Capital expenditures		25,990			6,482			38,434			70,906

2016
Net sales to external customers	$	3,454,541		$	2,197,014		$	2,083,045		$	7,734,600
Inter-segment sales		918,095			—			—			918,095
Merger/acquisition and integration		3,703			1			3,255			6,959
Restructuring charges (gains) and asset impairment		5,068			(473	)		27,521			32,116
Depreciation and amortization		21,397			11,484			44,365			77,246
Operating earnings		85,093			12,160			11,514			108,767
Capital expenditures		19,075			6,447			47,907			73,429

2015
Net sales to external customers	$	3,305,094		$	2,207,161		$	2,139,718		$	7,651,973
Inter-segment sales		973,512			—			—			973,512
Merger/acquisition and integration		2,037			—			6,396			8,433
Restructuring (gains) charges and asset impairment		(216	)		1,048			7,970			8,802
Depreciation and amortization		26,127			12,081			45,126			83,334
Operating earnings		78,841			17,059			26,975			122,875
Capital expenditures		17,967			3,768			57,659			79,394

							December 30,			December 31,
(In thousands)							2017			2016
Total Assets
Food Distribution							$	1,085,621		$	776,725
Military								432,818			395,737
Retail								533,912			754,625
Discontinued operations								3,446			3,249
Total							$	2,055,797		$	1,930,336

The Company offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel, and other items and services. The following table presents sales by type of similar product and services:

(In thousands, except percentages)	2017				2016				2015
Center store (a)	$	4,877,289	60.0	%	$	4,908,142	63.5	%	$	4,845,763	63.3	%
Fresh (b)		2,771,942	34.1			2,359,829	30.5			2,373,829	31.0
Pharmacy		352,177	4.3			356,010	4.6			310,377	4.1
Fuel		126,674	1.6			110,619	1.4			122,004	1.6
Consolidated net sales	$	8,128,082	100.0	%	$	7,734,600	100.0	%	$	7,651,973	100.0	%

(a)

Consists primarily of general merchandise, grocery, beverages, snacks, tobacco products and frozen foods .

(b)

Consists primarily of produce, meat, dairy, deli, bakery, prepared proteins, seafood and floral .

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Note 18- Quarterly Financial Information (Unaudited)

Earnings per share amounts for each quarter are required to be computed independently and may not equal the amount computed for the total year.

	2017
	Full Year			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
(In thousands, except per share amounts)	(52 Weeks)			(12 Weeks)			(12 Weeks)			(12 Weeks)			(16 Weeks)
Net sales	$	8,128,082		$	1,924,225		$	1,906,644		$	1,894,709		$	2,402,504
Gross profit		1,144,909			254,815			261,692			271,026			357,376
Merger/acquisition and integration		8,101			1,070			2,392			622			4,017
Goodwill impairment		189,027			—			189,027			—			—
Restructuring charges (gains) and asset impairment		39,432			2,799			35,626			(14	)		1,021
(Loss) earnings before income taxes and discontinued operations		(131,644	)		12,492			(199,897	)		33,327			22,434
(Loss) earnings from continuing operations		(52,617	)		34,710			(123,452	)		21,060			15,065
Loss from discontinued operations, net of taxes		(228	)		(103	)		(54	)		(31	)		(40	)
Net (loss) earnings	$	(52,845	)	$	34,607		$	(123,506	)	$	21,029		$	15,025
(Loss) earnings from continuing operations per share:
Basic	$	(1.41	)	$	0.94		$	(3.31	)	$	0.56		$	0.40
Diluted		(1.41	)		0.94			(3.31	)		0.56			0.40
Net (loss) earnings per share:
Basic	$	(1.41	)	$	0.94		$	(3.32	)	$	0.56		$	0.40
Diluted		(1.41	)		0.94			(3.32	)		0.56			0.40
Dividends	$	24,704		$	6,055		$	6,149		$	6,245		$	6,255

	2016
	Full Year			4th Quarter			3rd Quarter			2nd Quarter			1st Quarter
(In thousands, except per share amounts)	(52 Weeks)			(12 Weeks)			(12 Weeks)			(12 Weeks)			(16 Weeks)
Net sales	$	7,734,600		$	1,828,183		$	1,800,085		$	1,827,562		$	2,278,770
Gross profit		1,111,494			259,258			255,295			262,699			334,242
Merger/acquisition and integration		6,959			2,722			2,427			913			897
Restructuring charges and asset impairment		32,116			8,402			2,662			5,748			15,304
Earnings before income taxes and discontinued operations		89,963			20,079			25,594			28,303			15,987
Earnings from continuing operations		57,056			12,806			16,730			17,560			9,960
(Loss) earnings from discontinued operations, net of taxes		(228	)		39			(82	)		(76	)		(109	)
Net earnings	$	56,828		$	12,845		$	16,648		$	17,484		$	9,851
Earnings from continuing operations per share:
Basic	$	1.52		$	0.34		$	0.45		$	0.47		$	0.27
Diluted		1.52			0.34			0.45			0.47			0.27
Net earnings per share:
Basic	$	1.52		$	0.34		$	0.44		$	0.47		$	0.26
Diluted		1.51			0.34			0.44			0.47			0.26
Dividends	$	22,496		$	5,623		$	5,620		$	5,621		$	5,632

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of SpartanNash Company’s disclosure controls and procedures (as currently defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) was performed as of December 30, 2017 (the “Evaluation Date”). This evaluation was performed under the supervision and with the participation of SpartanNash Company’s management, including its Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and Chief Accounting Officer (“CAO”). As of the Evaluation Date, SpartanNash Company’s management, including the CEO, CFO and CAO, concluded that SpartanNash’s disclosure controls and procedures were effective as of the Evaluation Date to ensure that material information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to management, including its principal executive and principal financial officers as appropriate to allow for timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

The management of SpartanNash Company, including its Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. SpartanNash Company’s internal controls were designed by, or under the supervision of, the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of SpartanNash Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of SpartanNash Company are being made only in accordance with authorizations of management and directors of SpartanNash Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of SpartanNash Company’s assets that could have a material effect on the financial statements.

Management of SpartanNash Company conducted an evaluation of the effectiveness of its internal controls over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Through this evaluation, management did not identify any material weakness in the Company’s internal control. There are inherent limitations in the effectiveness of any system of internal control over financial reporting. Based on the evaluation, management has concluded that SpartanNash Company’s internal control over financial reporting was effective as of December 30, 2017.

Under guidelines established by the SEC, companies are allowed to exclude an acquired business from management's report on internal control over financial reporting for the first year subsequent to the acquisition while integrating the acquired operations. Accordingly, management has excluded the Caito Foods Service and Blue Ribbon Transport acquisition from its annual report on internal control over financial reporting as of December 30, 2017. Caito Foods Service and Blue Ribbon Transport represented 12%, 5%, and 22% of SpartanNash Company’s consolidated total assets, consolidated net sales, and consolidated net loss, respectively, as of and for the year ended December 30, 2017.

The independent registered public accounting firm that audited the consolidated financial statements included in this Form 10-K Annual Report has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 30, 2017 as stated in their report on the following page.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

SpartanNash Company and Subsidiaries

Grand Rapids, Michigan

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of SpartanNash Company and subsidiaries (the “Company”) as of December 30, 2017, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 30, 2017, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended December 30, 2017, of the Company and our report dated February 26, 2018, expressed an unqualified opinion on those consolidated financial statements.

As described in Management’s Report on Internal Controls over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Caito Foods Service and Blue Ribbon Transport, which was acquired on January 6, 2017 and whose financial statements constitute 12% of total assets, 5% of revenues, and 22% of net loss of the consolidated financial statement amounts as of and for the year ended December 30, 2017. Accordingly, our audit did not include the internal control over financial reporting at Caito Foods Service and Blue Ribbon Transport.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Grand Rapids, Michigan

February 26, 2018

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Changes in Internal Controls Over Financial Reporting

During the last fiscal quarter, there was no change in SpartanNash’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, SpartanNash’s internal control over financial reporting.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is here incorporated by reference from the sections titled “The Board of Directors,” “SpartanNash’s Executive Officers,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance Principles,” and “Transactions with Related Persons” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2018.

Item 11. Executive Compensation

The information required by this item is here incorporated by reference from the sections entitled “Executive Compensation,” “Potential Payments Upon Termination or Change in Control,” “Compensation of Directors,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2018.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is here incorporated by reference from the section titled “Ownership of SpartanNash Stock” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2018.

The following table provides information about SpartanNash’s equity compensation plans regarding the number of securities to be issued under these plans, the weighted-average exercise prices of options outstanding under these plans and the number of securities available for future issuance as of the end of fiscal 2017.

EQUITY COMPENSATION PLANS

					Number of securities remaining
	Number of securities to				available for future issuance
	be issued upon exercise		Weighted-average exercise		under equity compensation
	of outstanding options,		price of outstanding options,		plans (excluding securities
	warrants and rights		warrants and rights		reflected in column (1)
Plan Category	(1)		(2)		(3)
Equity compensation Plans approved by security holders (a)		47,928		16.52		1,947,030
Equity compensation plans not approved by security holders		—	Not applicable			—
Total		47,928		16.52		1,947,030

(a)

Consists of the Stock Incentive Plan of 2015. The numbers of shares reflected in column (3) in the table above with respect to the Stock Incentive Plan of 2015 represent shares that may be issued other than upon the exercise of an option, warrant or right. The plan contains customary anti-dilution provisions that are applicable in the event of a stock split or certain other changes in SpartanNash’s capitalization.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is here incorporated by reference from the section titled “Transactions with Related Persons” and the table captioned “Board of Directors Committee Membership” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2018.

Item 14. Principal Accountant Fees and Services

The information required by this item is here incorporated by reference from the section titled “Independent Auditors” in SpartanNash’s definitive proxy statement relating to its annual meeting of shareholders to be held in 2018.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)

The following documents are filed as part of this Report:

Financial Statements.

A. In Item 8 .

Reports of Independent Registered Public Accounting Firm of Deloitte & Touche LLP dated February 26, 2018

Consolidated Balance Sheets at December 30, 2017 and December 31, 2016

Consolidated Statements of Operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016

Consolidated Statements of Comprehensive (Loss) Income for the years ended December 30, 2017, December 31, 2016 and January 2, 2016

Consolidated Statements of Shareholders’ Equity for the years ended December 30, 2017, December 31, 2016 and January 2, 2016

Consolidated Statements of Cash Flows for the years ended December 30, 2017, December 31, 2016 and January 2, 2016

Notes to Consolidated Financial Statements

Financial Statement Schedules.

Schedules are omitted because the required information is either inapplicable or presented in the consolidated financial statements or related notes.

Exhibits.

The information required by this Section (a)(3) of Item 15 is set forth on the exhibit index that follows the Signatures page of this Form 10-K and is incorporated herein by reference.

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EXHIBIT INDEX

Exhibit Number		Document

2.1		Agreement and Plan of Merger by and among the Company, Nash-Finch Company, and SS Delaware, Inc. dated July 21, 2013 . Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on July 22, 2013. Incorporated herein by reference.

2.2		Asset Purchase Agreement dated as of November 3, 2016 by and among SpartanNash Company, Caito Foods Service, Inc., Blue Ribbon Transport, Inc., and Matthew Caito as Seller’s Representative . Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on January 9, 2017. Incorporated herein by reference.

2.3		Amendment to Asset Purchase Agreement dated as of January 6, 2017 by and among SpartanNash Company, Caito Foods Service, Inc., Blue Ribbon Transport, Inc., and Matthew Caito as Seller’s Representative . Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on January 9, 2017. Incorporated herein by reference.

3.1		Restated Articles of Incorporation of SpartanNash Company, as amended . Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 15, 2017. Incorporated herein by reference.

3.2		Bylaws of SpartanNash Company, as amended . Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed on March 1, 2017. Incorporated herein by reference.

10.1		Amended and Restated Loan and Security Agreement, among Spartan Stores, Inc. and certain of its subsidiaries, as borrowers, and Wells Fargo Capital Finance, LLC, as administrative agent, and certain lenders from time to time party thereto, dated November 19, 2013 . Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on November 19, 2013. Incorporated herein by reference.

10.2		Amendment No. 1 to Amended and Restated Loan and Security Agreement, dated January 9, 2015, among SpartanNash Company and certain of its subsidiaries, as borrowers, and Wells Fargo Capital Finance, LLC, as administrative agent, and certain lenders from time to time party thereto . Previously filed as an exhibit to the Company's Current Report on Form 8-K filed on January 12, 2015. Incorporated herein by reference.

10.3		Amendment No. 2 to Amended and Restated Loan and Security Agreement, dated December 20, 2016, among SpartanNash Company and certain of its subsidiaries, as borrowers, and Wells Fargo Capital Finance, LLC, as administrative agent, and certain lenders from time to time party thereto . Previously filed as an exhibit to the Company's Current Report on Form 8-K filed on December 21, 2016. Incorporated herein by reference.

10.4		Amendment No. 3 to Amended and Restated Loan and Security Agreement, dated November 21, 2017, among SpartanNash Company and certain of its subsidiaries, as borrowers, and Wells Fargo Capital Finance, LLC, as administrative agent, and certain lenders from time to time party thereto .

10.5*		Amended and Restated SpartanNash Company Executive Cash Incentive Plan of 2015 . Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on June 3, 2015. Incorporated herein by reference.

10.6*		Summary of 2017 Long-Term Cash Incentive Award . Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 22, 2017. Incorporated herein by reference.

10.7*		Summary of 2017 Annual Cash Incentive Award . Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 22, 2017. Incorporated herein by reference.

10.8*		Form of 2016 Long-Term Executive Incentive Plan Award . Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 23, 2016. Incorporated herein by reference.

10.9*		Form of 2015 Long-Term Executive Incentive Plan Award . Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 25, 2015. Incorporated herein by reference.

10.10*		SpartanNash Company Stock Incentive Plan of 2015 . Previously filed as an exhibit to the Company’s Form S-8 filed on June 4, 2015. Incorporated herein by reference.

10.11*		SpartanNash Company Supplemental Executive Retirement Plan, as amended . Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended March 27, 2010. Incorporated herein by reference.

10.12*		SpartanNash Company Supplemental Executive Savings Plan . Previously filed as an exhibit to the Company’s Form S-8 Registration Statement filed on December 21, 2001. Incorporated herein by reference.

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Exhibit Number		Document
10.13*		SpartanNash Company 2001 Stock Bonus Plan . Previously filed as an exhibit to the Company’s Transition Report on Form 10-K for the period ended December 28, 2013. Incorporated herein by reference.

10.14*		Form of Restricted Stock Award to Executive Officers . Previously filed as an exhibit to SpartanNash Company’s Quarterly Report on Form 10-Q for the quarter ending April 22, 2017. Incorporated herein by reference.

10.15*		Form of Restricted Stock Award to Non-Employee Directors . Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending April 22, 2017. Incorporated herein by reference.

10.16*		Form of Executive Employment Agreement between SpartanNash Company and certain executive officers, as amended .

10.17*		Form of Executive Employment Agreement between SpartanNash Company and certain executive officers .

10.18*		Form of Executive Severance Agreement between SpartanNash Company and certain executive officers, as amended .

10.19*		Form of Executive Severance Agreement between SpartanNash Company and certain executive officers .

10.20*		Form of Indemnification Agreement . Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the period ended January 2, 2016. Incorporated herein by reference.

10.21*		Description of Compensation Arrangements of Interim Chief Financial Officer . Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending July 15,. Incorporated herein by reference.

21		Subsidiaries of SpartanNash Company .

23		Consent of Independent Registered Public Accounting Firm .

24		Powers of Attorney .

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

31.3		Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

32.1		Certification pursuant to 18 U.S.C. § 1350. This exhibit is furnished, not filed, in accordance with SEC Release Number 33-8212 .

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE

*	These documents are management contracts or compensation plans or arrangements required to be filed as exhibits to this Form 10-K.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, SpartanNash Company (the Registrant) has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of SpartanNash Company and in the capacities and on the dates indicated.

February 26, 2018	By	*
		M. Shân Atkins Director

February 26, 2018	By	*
		Dennis Eidson Chairman and Director

February 26, 2018	By	*
		Mickey P. Foret Director

February 26, 2018	By	*
		Dr. Frank M. Gambino Director

February 26, 2018	By	*
		Douglas A. Hacker Director

February 26, 2018	By	*
		Yvonne R. Jackson Director

February 26, 2018	By	*
		Elizabeth A. Nickels Director

February 26, 2018	By	*
		Timothy J. O’Donovan Director

February 26, 2018	By	*
		Hawthorne Proctor Director

February 26, 2018	By	/s/ David M. Staples
		David M. Staples Chief Executive Officer and Director
		(Principal Executive Officer)

February 26, 2018	By	*
		William R. Voss Director

February 26, 2018	By	/s/ Mark E. Shamber
		Mark E. Shamber Executive Vice President and Chief Financial Officer (Principal Financial Officer)

February 26, 2018	By	/s/ Tammy R. Hurley
		Tammy R. Hurley Vice President, Finance and Chief Accounting Officer (Principal Accounting Officer)

February 26, 2018	*By	/s/ David M. Staples
		David M. Staples Attorney-in-Fact

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EXHIBIT 10.4

[Execution]

AMENDMENT NO. 3 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 3 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of November 21, 2017 (this “Amendment No. 3”), by and among SpartanNash Company, a Michigan corporation, formerly known as Spartan Stores, Inc. (“Parent”), Spartan Stores Distribution, LLC, a Michigan limited liability company (“Stores Distribution”), Market Development, LLC, a Michigan limited liability company (“MDC”), SpartanNash Associates, LLC, a Michigan limited liability company (“Associates”), Family Fare, LLC, a Michigan limited liability company (“Family Fare”), MSFC, LLC, a Michigan limited liability company (“MSFC”), Seaway Food Town, Inc., a Michigan corporation (“Seaway”), The Pharm of Michigan, Inc., a Michigan corporation (“Pharm”), Valley Farm Distributing Co., an Ohio corporation (“Valley Farm”), Gruber’s Real Estate, LLC, a Michigan limited liability company (“Gruber RE”), Prevo’s Family Markets, Inc., a Michigan corporation (“Prevo”), Custer Pharmacy, Inc., a Michigan corporation (“Custer”), Spartan Properties Management, Inc. (formerly known as Buckeye Real Estate Management Co.), an Ohio corporation (“SPM”), Spartan Stores Fuel, LLC, a Michigan limited liability company (“Spartan Fuel”), Nash-Finch Company, a Delaware corporation, as surviving corporation of the merger with SS Delaware, Inc. (“Nash-Finch”), Pique Brands, Inc., a Delaware corporation, formerly known as Nash Brothers Trading Company, a Delaware corporation (“Pique”), T.J. Morris Company, a Georgia corporation (“T.J. Morris”), Super Food Services, Inc., a Delaware corporation (“Super Food”), U Save Foods, Inc., a Nebraska corporation (“U Save”), Hinky Dinky Supermarkets, Inc., a Nebraska corporation (“Hinky Dinky”), GTL Truck Lines, Inc., a Nebraska corporation (“GTL”), Erickson’s Diversified Corporation, a Wisconsin corporation (“Erickson’s”), MDV SpartanNash, LLC, a Delaware limited liability company (“MDV”, and together with Parent, Stores Distribution, MDC, Associates, Family Fare, MSFC, Seaway, Pharm, Valley Farm, Gruber RE, Prevo, Custer, SPM, Spartan Fuel, Nash-Finch, Pique, T.J. Morris, Super Food, U Save, Hinky Dinky, GTL and Erickson’s, each individually a “Borrower” and collectively, “Borrowers”) and any Person that at any time becomes a party to the Loan Agreement as a guarantor (each individually a “Guarantor” and collectively, “Guarantors”), the parties to the Loan Agreement (as hereinafter defined) from time to time as lenders (each individually, a “Lender” and collectively, “Lenders”) and Wells Fargo Capital Finance, LLC, a Delaware limited liability company, in its capacity as agent for Lenders (in such capacity, “Administrative Agent”).

W I T N E S S E T H :

WHEREAS, Borrowers and Guarantors have entered into financing arrangements with Agent and Lenders pursuant to which Lenders (or Administrative Agent on behalf of Lenders) have made and may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Amended and Restated Loan and Security Agreement, dated as of November 19, 2013, by and among Borrowers, Guarantors, Agent and Lenders, as amended by Amendment No. 1 to Amended and Restated Loan and Security Agreement, dated January 9, 2015, and Amendment No. 2 to Amended and Restated Loan and Security Agreement, dated

December 20, 2016 (as the same now exists and is amended and supplemented pursuant hereto and may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”) and the other Financing Agreements; and

WHEREAS, Borrowers and Guarantors have requested that Administrative Agent and Lenders agree to certain amendments to the Loan Agreement, and Administrative Agent and Lenders are willing to agree to such amendments, subject to the terms and conditions herein; and

WHEREAS, by this Amendment No. 3, Borrowers, Guarantors, Administrative Agent and Lenders desire and intend to evidence such amendments;

NOW THEREFORE, in consideration of the foregoing, the mutual agreements and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions .

(a) Additional Definitions . The Loan Agreement and the other Financing Agreements are hereby amended to include, in addition and not in limitation, each of the following definitions:

(i) “Amendment No. 3” shall mean Amendment No. 3 to Amended and Restated Loan and Security Agreement, dated as of November 21, 2017, by and among Borrowers, Guarantors, Administrative Agent and Lenders, as amended, modified, supplemented, extended, renewed, restated or replaced.

(ii) “Investment Grade” means ratings of BBB- and Baa3 or better by Standard & Poor’s Rating Group and Moody’s Investors Service, Inc., respectively, of long-term non-enhanced senior unsecured debt.

(b) Amendments to Definitions .

(i) The definition of “Eligible Accounts” set forth in the Loan Agreement is hereby amended by deleting clause (m) thereof in its entirety and replacing it with the following:

“(m) (i) the aggregate amount of such Accounts owing by a single Account Debtor that is not an Investment Grade Account Debtor do not constitute more than twenty (20%) percent of the aggregate amount of all otherwise Eligible Accounts and Eligible Military Receivables of Borrowers, and (ii) the aggregate amount of such Accounts owing by a single Investment Grade Account Debtor do not constitute more than twenty-five (25%) percent of the aggregate amount of all otherwise Eligible Accounts and Eligible Military Receivables of Borrowers (but, in each case, the portion of such Accounts not in excess of the applicable percentages may be deemed Eligible Accounts);”

(ii) The definition of “Eligible Military Receivables” set forth in the Loan Agreement is hereby amended by deleting each of clauses (g) and (n) thereof in its entirety and replacing the respective clause with the following:

“(g) Military Receivables which are owed by any Affiliate of any Borrower or Guarantor;”

“(n) (i) Military Receivables due from an Account Debtor and its Affiliates that is not an Investment Grade Account Debtor, the aggregate of which Military Receivables and Non-Military Receivables due from such Account Debtor and its Affiliates represents more than twenty (20%) percent of all then outstanding Military Receivables and Non-Military Receivables owed to the Borrowers and (ii) Military Receivables due from a single Investment Grade Account Debtor and its Affiliates, the aggregate of which Military Receivables and Non-Military Receivables due from such Account Debtor and its Affiliates represents more than twenty-five (25%) percent of all then outstanding Military Receivables and Non-Military Receivables owed to the Borrowers (but, in each case, the portion of such Military Receivables of Borrowers not in excess of the applicable percentages may be deemed Eligible Military Receivables);”

(c) Interpretation . For purposes of this Amendment No. 3, unless otherwise defined herein, all capitalized terms used herein shall have the respective meanings assigned to such terms in the Loan Agreement.

2. Representations and Warranties . Each Borrower and Guarantor hereby represents and warrants to Administrative Agent and Lenders the following (which shall survive the execution and delivery of this Amendment No. 3), the truth and accuracy of which are a continuing condition of the making of Loans and providing Letter of Credit Accommodations to Borrowers:

(a) This Amendment No. 3 and each other agreement or instrument to be executed and delivered by the Borrowers and Guarantors pursuant hereto have been duly authorized, executed and delivered by all necessary action on the part of each of the Borrowers and Guarantors which is a party hereto and thereto and, if necessary, their respective stockholders, members and managers and is in full force and effect as of the date hereof, as the case may be, and the agreements and obligations of each of the Borrowers and Guarantors, as the case may be, contained herein and therein, constitute the legal, valid and binding obligations of each of the Borrowers and Guarantors, respectively, enforceable against them in accordance with their terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

(b) The execution, delivery and performance of this Amendment No. 3 (a) are all within each Borrower’s and Guarantor’s corporate or limited liability company powers and (b)

are not in contravention of law or the terms of any Borrower’s or Guarantor’s certificate or articles of incorporation, by laws, or other organizational documentation, or any indenture, agreement or undertaking to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor or its property are bound.

(c) All of the representations and warranties set forth in the Loan Agreement and the other Financing Agreements are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as if made on the date hereof, except to the extent any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such date.

(d) Each Borrower and each Guarantor, as debtor, grantor, pledgor, guarantor, assignor, or in any other similar capacity in which such Borrower or Guarantor grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Financing Agreements to which it is a party (after giving effect hereto) and (ii) to the extent such Borrower or Guarantor granted liens on or security interests in any of its property pursuant to any such Financing Agreement as security for or otherwise guaranteed the Obligations under or with respect to the Financing Agreements, ratifies and reaffirms such guarantee and grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby.

(e) No Default or Event of Default exists or has occurred and is continuing as of the date of this Amendment No. 3, or would result after giving effect thereto.

3. Condition Precedent . The amendments contained herein shall only be effective upon the satisfaction of each of the following conditions precedent in a manner satisfactory to Administrative Agent:

(a) receipt by Administrative Agent of counterparts of this Amendment No. 3, duly authorized, executed and delivered by the parties hereto (including all Lenders required for the amendments provided for herein);

(b) receipt by Administrative Agent of a true and correct copy of any consent, waiver or approval (if any) to or of this Amendment No. 3, which any Borrower is required to obtain from any other Person; and

(c) no Default or Event of Default shall exist or have occurred and be continuing as of the date of this Amendment No. 3, or would result after giving effect thereto.

4. Effect of this Amendment . Except as expressly amended pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied, and, in all other respects, the Financing Agreements are hereby specifically ratified, restated and confirmed by all

parties hereto as of the effective date hereof. To the extent that any provision of the Loan Agreement or any of the other Financing Agreements are inconsistent with the provisions of this Amendment No. 3, the provisions of this Amendment No. 3 shall control. By executing this Amendment No. 3, each Borrower and each Guarantor is deemed to execute the Loan Agreement and to be bound by the terms and conditions thereof.

5. Further Assurances . Borrowers and Guarantors shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Administrative Agent to effectuate the provisions and purposes of this Amendment No. 3.

6. Governing Law . The validity, interpretation and enforcement of this Amendment No. 3 and the other Financing Agreements (except as otherwise provided therein) and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of Illinois but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of Illinois.

7. Binding Effect . This Amendment No. 3 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

8. Headings . The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 3.

9. Counterparts . This Amendment No. 3 may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment No. 3 by telefacsimile or other electronic method of transmission shall have the same force and effect as the delivery of an original executed counterpart of this Amendment No. 3. Any party delivering an executed counterpart of this Amendment No. 3 by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed and delivered by their authorized officers as of the day and year first above written.

ADMINISTRATIVE AGENT

WELLS FARGO CAPITAL FINANCE, LLC, as Administrative Agent

By:__________________________________

Title:________________________________

BORROWERS

SPARTANNASH COMPANY, formerly known as Spartan Stores, Inc.

By: /s/Mark E. Shamber

Title: Executive Vice President and CFO

[Signature Page to Amendment No. 3 (Spartan)]

SPARTAN STORES DISTRIBUTION, LLC
MARKET DEVELOPMENT, LLC
SPARTANNASH ASSOCIATES, LLC
FAMILY FARE, LLC
MSFC, LLC
SEAWAY FOOD TOWN, INC.
THE PHARM OF MICHIGAN, INC.
VALLEY FARM DISTRIBUTING CO.
GRUBER’S REAL ESTATE, LLC
PREVO’S FAMILY MARKETS, INC.
CUSTER PHARMACY, INC.
SPARTAN PROPERTIES MANAGEMENT, INC.
SPARTAN STORES FUEL, LLC

By: /s/Mark E. Shamber

Title: Executive Vice President and CFO

NASH-FINCH COMPANY

PIQUE BRANDS, INC.

T.J. MORRIS COMPANY

SUPER FOOD SERVICES, INC.

U SAVE FOODS, INC.

HINKY DINKY SUPERMARKETS, INC.

GTL TRUCK LINES, INC.

ERICKSON’S DIVERSIFIED CORPORATION

MDV SPARTANNASH, LLC

By: /s/Mark E. Shamber

Title: Executive Vice President and CFO

[Signature Page to Amendment No. 3 (Spartan)]

LENDERS

WELLS FARGO CAPITAL FINANCE, LLC, as a Lender

By:__________________________________

Title:________________________________

[Signature Page to Amendment No. 3 (Spartan)]

BANK OF AMERICA, N.A.,
as a Lender

By:

Name:

Title:

[Signature Page to Amendment No. 3 (Spartan)]

PNC BANK, NATIONAL ASSOCIATION,
as a Lender

By:

Name:

Title:

[Signature Page to Amendment No. 3 (Spartan)]

BMO HARRIS BANK N.A.,
as a Lender

By:

Name:

Title:

[Signature Page to Amendment No. 3 (Spartan)]

FIFTH THIRD BANK,
as a Lender

By:

Name:

Title:

[Signature Page to Amendment No. 3 (Spartan)]

JPMORGAN CHASE BANK, N.A.,
as a Lender

By:

Name:

Title:

[Signature Page to Amendment No. 3 (Spartan)]

CITIZENS BUSINESS CAPITAL, A DIVISION OF CITIZENS BANK, N.A.,
as a Lender

By:

Name:

Title:

[Signature Page to Amendment No. 3 (Spartan)]

MUFG UNION BANK, N.A., as a Lender

By:

Name:

Title:

[Signature Page to Amendment No. 3 (Spartan)]

U.S. BANK NATIONAL ASSOCIATION,
as a Lender

By:

Name:

Title:

[Signature Page to Amendment No. 3 (Spartan)]

EXHIBIT 10.16

S CHEDULE TO N OTES IN F ORM OF E MPLOYMENT A GREEMENT


Note 1 (Name)		Note 2 (Title)

Dennis Eidson		President and Chief Executive Officer

David M. Staples		Executive Vice President and Chief Financial Officer

Theodore Adornato		Executive Vice President, Retail Operations

Explanatory note: this form of agreement includes amendments as of May 17, 2012.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is made by SPARTAN STORES, INC., a Michigan corporation (the “ Company ”), and [NOTE 1] (“ Executive ”). The parties agree as follows:

1. Effective Date and Term . This Agreement will take effect as of December 19, 2008 (“ Effective Date ”), and will remain in effect during Executive’s employment with the Company and thereafter as to those provisions that expressly state that they will remain in effect after termination of Executive’s employment.

2. Employment . Executive will serve as the Company’s [NOTE 2] , [for all officers except the Chief Executive Officer: “or in such other positions as an officer of Spartan Stores, Inc. (“ Officer ”)”] and such additional positions with the Company or an Affiliate as may be assigned by the Company (the “ Employment ”). Executive will perform the duties assigned from time to time to Executive’s position. The Employment will be full time and Executive’s entire business time and efforts will be devoted to the Employment, except as otherwise provided by written Company policy. Executive agrees to comply with Company policies, including but not limited to any applicable Company policy requiring Executive to own shares of common stock in the Company. As used in this Agreement, the term “ Affiliate ” includes any organization controlling, controlled by or under common control with the Company.

3. Term of Employment . The term of the Employment will be indefinite and will continue until terminated pursuant to this Agreement.

4. Compensation . Executive will be compensated during the Employment as follows:

(a) Salary . The Executive’s salary as of the Effective Date is $ per year (or a pro-rated weekly amount for any partial year), subject to normal payroll deductions and payable in accordance with the Company’s normal payroll practices. Executive’s salary will be reviewed annually by the Company and subject to the limitations in Section 5(b)(i) may be adjusted to reflect Company determinations of Executive’s performance, Company performance, or business or economic conditions.

(b) Bonus . Executive will be eligible to participate in any bonus programs designated by the Company from time to time for [“Officers occupying positions at the same level as Executive’s position” or, in the case of the Chief Executive Officer, “senior executive Officers”] in accordance with the terms of such programs, which are subject to change from time to time in the Company’s discretion.

(c) Benefits . Executive will be eligible to participate in fringe benefit programs covering the Company’s salaried employees as a group, and in any programs applicable under Company policy to [“Officers occupying positions at the same level as Executive’s position” or, in the case of the Chief Executive Officer, “senior executive Officers”]. The terms of applicable insurance policies and benefit plans in effect from time to time will govern with regard to specific issues of coverage and benefit eligibility. All benefit programs are subject to change from time to time in the Company’s discretion.

(d) Business Expenses . The Company will reimburse Executive for reasonable ordinary and necessary business expenses that are specifically authorized or authorized by Company policy, subject to Executive’s prompt submission of proper documentation for tax and accounting purposes. Such expenses shall be reimbursed within thirty (30) days after Executive requests reimbursement, but in no event later than two and one-half (2 ¹ / 2 ) months after the end of the year in which the expense is incurred.

Termination of Employment.

(a) Termination Without Severance Pay . Executive shall not be entitled to any further compensation from the Company or any Affiliate after termination of the Employment as permitted by this Section 5(a), except (A) unpaid salary installments through the end of the week in which the Employment terminates, and (B) any vested benefits accrued before the termination of Employment under the terms of any written Company policy or benefit program.

- 2 -

i. Death . The Employment will terminate automatically upon Executive’s death.

ii. Disability . If Executive is unable to perform Executive’s duties under this Agreement due to physical or mental disability for a continuous period of one hundred eighty (180) days or longer and Executive is eligible for benefits under the Company’s long-term disability insurance policy (“long-term disability benefits”), the Company may terminate the Employment under this Section 5(a)(ii). If the Company terminates the Employment as the result of Executive’s inability to perform Executive’s duties for less than one hundred eighty (180) days due to a disability, the termination of Employment will be deemed to be pursuant to Section 5(b)(ii) below.

iii. Termination by Company for Cause . The Company may terminate the Employment for “ Cause ,” defined as Executive’s: (A) breach of any provision of Sections 7, 8, or 9 of this Agreement; (B) willful continued failure to perform or willful poor performance of duties (other than due to disability) after warning and reasonable opportunity to meet reasonable required performance standards; (C) gross negligence causing or placing the Company at risk of significant damage or harm; (D) misappropriation of or intentional damage to Company property; (E) conviction of a felony (other than negligent vehicular homicide); or (F) intentional act or omission that Executive knows or should know is significantly detrimental to the interests of the Company.

If the Company becomes aware after termination of the Employment other than for Cause that Executive engaged before the termination of Employment in willful misconduct constituting Cause, the Company may recharacterize Executive’s termination as having been for Cause.

iv. Discretionary Termination by Executive . Executive may terminate the Employment at will, with at least thirty (30) days advance written notice. If Executive gives such notice of termination, the Company may (but need not) relieve Executive of some or all of Executive’s responsibilities for part or all of such notice period, provided that Executive’s pay and benefits are continued for the lesser of thirty (30) days or the remaining period of the Employment.

(b) Termination With Severance Pay . Executive shall not be entitled to any further compensation from the Company or any Affiliate after termination of the Employment as permitted by this Section 5(b), except (A) unpaid salary installments through the end of the week in which the Employment terminates, (B) any vested benefits accrued before the termination of Employment under the terms of any written Company policy or benefit program, and (C) any Severance Pay to which Executive is entitled under this Section 5(b).

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business motivated reduction accompanied by proportionate reductions in the salaries of all other Officers. Executive may not resign for Good Reason unless (A) Executive notifies the Company’s [“Chief Executive Officer” or, in the case of the Chief Executive Officer terminating Employment, the “Secretary”] in writing, within thirty (30) days after the act or omission in question, asserting that the act or omission in question constitutes Good Reason and explaining why, (B) the Company fails, within thirty (30) days after the notification, to take all reasonable steps to cure the breach, and (C) Executive resigns by written notice within thirty (30) days after expiration of the thirty (30) day period under Section 5(b)(i)(B). If Executive terminates the Employment for Good Reason, Executive will be entitled to Severance Pay as provided in and subject to Section 6. Executive’s failure to object to a material breach as provided above will not waive Executive’s right to resign with Good Reason after following the above procedure with regard to any subsequent material breach.

ii. Discretionary Termination by Company . The Company may terminate the Employment at will, but if the Company does so Executive will be entitled to Severance Pay as provided in and subject to Section 6. Any termination of Executive’s Employment by the Company under Section 5(a) that is found not to meet the standards of such Section will be considered to have been a termination under Section 5(b)(ii).

6. Severance Pay . The Company will pay and provide Executive with the payments and benefit continuation provided in this Section 6 (“ Severance Pay ”) upon Executive’s “separation from service” as that term is defined by Section 409A of the Internal Revenue Code (the “Code”), if Executive’s Employment is terminated as provided in Section 5(b) and the Executive contemporaneously or subsequently experiences a separation from service.

(a) Amount and Duration of Severance Pay . Subject to the other provisions of this Section, Severance Pay will consist of:

i. Cash Payment . A lump sum cash payment equal to fifty-two (52) weeks of Executive’s salary as of the date on which Executive’s separation from service occurs, payable as provided in Section 6(b), except that if the separation from service occurs during 2008 payment will be made by (A) continuing Executive’s then-current salary installments (in accordance with the Company’s normal pay practice) through December 31, 2008, and (B) payment to Executive as provided in Section 6(b) of a lump sum cash payment in an amount equal to the difference between fifty-two (52) weeks of Executive’s salary and the amount of salary continuation paid under (A). The lump sum cash payment will be considered wages allocated equally to each of the weeks covered by the payment for purposes of any applicable unemployment compensation or workers compensation laws, and any applicable disability insurance program, but will not be considered to extend Executive’s employment beyond the date of Executive’s separation from service under any Company qualified retirement plan or other Company benefit plan or program.

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ii. Health Coverage Reimbursement . Reimbursement to Executive by the Company of the COBRA continuation coverage premiums incurred and paid by Executive to continue Executive’s then current employee and dependent health, dental, and prescription drug coverage for fifty-two (52) weeks after the date of termination of the Employment, provided that (A) Executive elects and remains eligible for COBRA continuation coverage, (B) Executive continues to pay the normal employee contribution for such coverage, and (C) that the Company’s obligation to provide coverage will end if Executive becomes eligible for comparable coverage from a new employer. Reimbursement for each monthly premium paid by Executive will be made not later than thirty (30) days after Executive requests reimbursement, but in no event later than the end of the second year after that in which the Executive’s separation from service occurs. Reimbursements under this Section 6(a)(ii) will be reported as part of Executive’s W-2 compensation and will be subject to Federal income tax withholding.

iii. Outplacement Assistance . Up to $10,000 of outplacement assistance from an outplacement assistance firm selected by Executive and approved by the Company (whose approval shall not be unreasonably withheld). All costs under this Section 6(a)(iii) must be incurred during the period beginning with the date of Executive’s separation from service and ending not later than the last day of the year following that in which the Executive’s separation from service occurs, and will be paid not later than sixty (60) days after the expense is incurred and billed to the Company.

(b) Payment Terms . Any salary continuation payments for 2008 under Section 6(a)(i) will be made on the Company’s normal pay date for each payment. The lump sum cash payment under Section 6(a)(i) will be made on the Company’s first normal pay date after the release provided for in Section 6(c)(iii) becomes effective and after any 2008 salary continuation payments have been made, or earlier if required by this Section 6(b). In any event, no payments will be made under this Section until the Company’s first regular pay date after Executive has signed the release provided for in Section 6(c)(iii) and any revocation period provided for in the release has expired. In no event will the latest date for (A) signing of the release, and (B) expiration of any revocation period in the release, and (C) the completion of payments under Section 6(a)(i), be deferred beyond the fifteenth (15 ^th ) day of the third (3 ^rd ) month after the end of the year in which the Executive’s separation from service occurs.

Example: If Executive were terminated on November 1, 2008, salary continuation payments would be made for the balance of 2008, and the balance of fifty-two (52) weeks salary would be paid on the first payroll date in 2009, provided that no payments would be made until the release is signed and becomes effective, and provided further that all payments must be made at latest by March 15, 2009.

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2008 and such payments and any lump sum cash payment will be paid to Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary), and health coverage continuation under Section 6(a)(ii) will continue for Executive’s eligible dependants for the remainder of the fifty-two (52) week period subject to the conditions in Sections 6(a)(ii)(A) and (B). If Executive becomes eligible for long-term disability benefits, no further payments will be made under Section 6(a)(i) after the date that Executive is eligible to begin receiving such disability benefits.

(c) Conditions to Severance Pay . To be eligible for Severance Pay, Executive must meet the following conditions: (i) Executive must comply with Executive’s obligations under this Agreement that continue after termination of the Employment; (ii) Executive must not claim unemployment compensation for any week for which Executive receives payment under Section 6(a)(i) above; (iii) Executive must promptly sign and continue to honor a release, in form acceptable to the Company, of any and all claims arising out of or relating to Executive’s Employment or its termination and that Executive might otherwise have against the Company, the Company’s Affiliates, any of their officers, directors, employees and agents, provided that the release will not waive Executive’s right to any payments due under this Section or Section 5, or any right of Executive to liability insurance coverage under any liability insurance policy or to indemnification under the Company’s Articles of Incorporation or Bylaws or any written indemnification agreement; (iv) Executive must reaffirm in writing upon request by Company Executive’s obligations under Sections 7, 8 and 9 of this Agreement; (v) Executive must resign upon written request by Company from all positions with or representing the Company or any Affiliate, including but not limited to membership on boards of directors; and (vi) Executive must provide the Company for a period of ninety (90) days after the Employment termination date with consulting services regarding matters within the scope of Executive’s former duties, upon request by [“the Company’s Chief Executive Officer” or, in the case of the Chief Executive Officer, “the Company”]; Executive will only be required to provide those services by telephone at Executive’s reasonable convenience and without substantial interference with Executive’s other activities or commitments.

(d) Offsets to Severance Pay . The Severance Pay due to Executive under Section 6(a)(i) will be reduced (but not below 0) by: (i) any disability benefits to which Executive will be entitled for any portion of the fifty-two (52) week period covered by Section 6(a)(i) under any disability insurance policy or program of the Company or any Affiliate (including but not limited to worker’s disability compensation); (ii) any severance pay payable to Executive under any other agreement or Company policy; (iii) any payment due to Executive under the Federal Worker Adjustment and Retraining Notification Act or any comparable state statute or local ordinance; and (iv) any amount owing by Executive to the Company that the Company is legally entitled to set off against the Severance Pay under applicable law.

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Loyalty and Confidentiality; Certain Property and Information .

(a) Loyalty and Confidentiality . Executive will be loyal to the Company during the Employment and will forever hold in strictest confidence, and not use or disclose, any information regarding techniques, processes, developmental or experimental work, trade secrets, customer or prospect names or information, or proprietary or confidential information relating to the current or planned products, services, sales, pricing, costs, employees or business of the Company or any Affiliate, except as disclosure or use may be required in connection with Executive’s work for the Company or any Affiliate or as may be compelled pursuant to court order or subpoena. Executive will also keep the terms of this Agreement confidential. The Executive’s commitment not to use or disclose information does not apply to information that becomes publicly known without any breach of this Agreement by Executive.

(b) Certain Property and Information . Upon termination of the Employment, Executive will deliver to the Company any and all property owned or leased by the Company or any Affiliate and any and all materials and information (in whatever form) relating to the business of the Company or any Affiliate, including without limitation all customer lists and information, financial information, business notes, business plans, documents, keys, credit cards and other Company-provided equipment. All Company property will be returned promptly and in good condition except for normal wear.

Executive’s commitments in this Section will continue in effect after termination of the Employment. The parties agree that any breach of Executive’s covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

8. Ideas, Concepts, Inventions and Other Intellectual Property . All business ideas and concepts and all inventions, improvements, developments and other intellectual property made or conceived by Executive, either solely or in collaboration with others, during the Employment, whether or not during working hours, and relating to the business or any aspect of the business of the Company or any Affiliate or to any business or product the Company or any Affiliate is actively planning to enter or develop, shall become and remain the exclusive property of the Company, and the Company’s successors and assigns. Executive shall disclose promptly in writing to the Company all such inventions, improvements, developments and other intellectual property, and will cooperate in confirming, protecting, and obtaining legal protection of the Company’s ownership rights. Executive’s commitments in this Section will continue in effect after termination of the Employment as to ideas, concepts, inventions, improvements and developments and other intellectual property made or conceived in whole or in part before the date the Employment terminates. The parties agree that any breach of Executive’s covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

Executive represents and warrants that there are no ideas, concepts, inventions, improvements, developments or other intellectual property that Executive invented or conceived before becoming employed by the Company to which Executive, or any assignee of Executive, now claims title, and that would be covered by this Section if made or conceived by Employee during the Employment.

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Covenant Not to Compete.

(a) Executive’s Commitments . During the Employment Executive will not do or prepare to do, and for twelve (12) months after any termination of the Employment Executive will not do, any of the following:

i. directly or indirectly compete with the Company or any Affiliate; or

ii. be employed by, perform services for, advise or assist, own any interest in or loan or otherwise provide funds to, any other business that is engaged (or seeking Executive’s services with a view to becoming engaged) in any Competitive Business (as defined below); or

iii. solicit or suggest, or provide assistance to anyone else seeking to solicit or suggest, that any person having or contemplating a Covered Relationship (as defined below) with the Company or an Affiliate refrain from entering into or terminate the Covered Relationship, or enter into any similar relationship with anyone else instead of the Company or the Affiliate.

This Section 9 does not prohibit Executive from owning not more than two percent (2%) of any class of securities of a publicly traded entity, provided that Executive does not engage in other activity prohibited by this Section 9.

Executive’s commitments in this Section will continue in effect after termination of the Employment for the twelve (12) month period set forth above. The parties agree that any breach of Executive’s commitments in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

(b)

Definitions. As used in this Section 9:

“ Competitive Business ” means a business that

(A)

owns, or

(B)

operates, or

(C)

sells or supplies products similar to or that substitute for products supplied by the Company to,

any Covered Operation (as defined below) that is located in any state of the United States in which the Company owns, operates, sells or supplies products to, any Covered Operation; and

ii. “ Covered Operation ” means any grocery store, grocery superstore, mass merchandiser, wholesale club, supermarket, limited assortment store, convenience store, drug store, pharmacy or any other store that offers grocery or food products separate or in combination with pharmaceutical products, general merchandise or other nonfood products, or any grocery or convenience store product distribution facility; and

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iii. “ Covered Relationship ” means a customer relationship, a vendor relationship, an employment relationship, or any other contractual or independent contractor relationship.

10. Amendment and Waiver . No provisions of this Agreement may be amended, modified, waived or discharged unless the waiver, modification, or discharge is authorized by the Company’s Board of Directors, or a committee of the Board of Directors, and is agreed to in a writing signed by Executive and by the Chief Executive Officer [in the case of the Chief Executive Officer, “an authorized Officer”] of the Company. No waiver by either party at any time of any breach or non-performance of this Agreement by the other party shall be deemed a waiver of any prior or subsequent breach or non-performance.

11. Severability . The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect. If a court of competent jurisdiction ever determines that any provision of this Agreement (including, but not limited to, all or any part of the non-competition covenant in this Agreement) is unenforceable as written, the parties intend that the provision shall be deemed narrowed or revised in that jurisdiction (as to geographic scope, duration, or any other matter) to the extent necessary to allow enforcement of the provision. The revision shall thereafter govern in that jurisdiction, subject only to any allowable appeals of that court decision.

12. Entire Agreement . No agreements or representations, oral or otherwise, express or implied, with respect to Executive’s Employment with the Company or any of the subjects covered by this Agreement have been made by either party that are not set forth expressly in this Agreement and the Executive Severance Agreement between Executive and the Company (“ Executive Severance Agreement ”), and this Agreement supersedes any pre-existing employment agreements and any other agreements on the subjects covered by this Agreement, except the Executive Severance Agreement.

13.

Non-Contravention. Executive represents and warrants that:

(a) No Restrictive Agreement . Executive is not a party to or bound by any agreement that purports to prevent or restrict Executive from: (A) engaging in the Employment that Executive has been offered by the Company; (B) inducing any person to become an employee of the Company; (C) using any information and expertise that Executive possesses (other than information constituting a trade secret of another person under applicable law) for the benefit of the Company; or (D) performing any obligation under this Agreement.

(b) No Abuse of Confidential Information or Trade Secrets . Executive will not use in the course of Executive’s Employment with the Company, or disclose to the Company or its personnel, any information belonging to any other person that is subject to any confidentiality agreement with or constitutes a trade secret of another person.

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14.

Dispute Resolution.

(a) Arbitration . The Company and Executive agree that except as provided in Section 14(b) the sole and exclusive method for resolving any dispute between them arising out of or relating to this Agreement shall be arbitration under the procedures set forth in this Section, except that nothing in this Section prohibits a party from seeking preliminary or permanent judicial injunctive relief, or from seeking judicial enforcement of the arbitration award. The arbitrator shall be selected pursuant to the Rules for Commercial Arbitration of the American Arbitration Association. The arbitrator shall hold a hearing at which both parties may appear, with or without counsel, and present evidence and argument. Pre-hearing discovery shall be allowed in the discretion of and to the extent deemed appropriate by the arbitrator, and the arbitrator shall have subpoena power. The procedural rules for an arbitration hearing under this Section shall be the rules of the American Arbitration Association for Commercial Arbitration hearings and any rules as the arbitrator may determine. The hearing shall be completed within ninety (90) days after the arbitrator has been selected and the arbitrator shall issue a written decision within sixty (60) days after the close of the hearing. The hearing shall be held in Grand Rapids, Michigan. The award of the arbitrator shall be final and binding and may be enforced by and certified as a judgment of the Circuit Court for Kent County, Michigan or any other court of competent jurisdiction. One-half of the fees and expenses of the arbitrator shall be paid by the Company and one-half by Executive. The attorney fees and expenses incurred by the parties shall be paid by each party. Notwithstanding the foregoing, however, the Company will reimburse the Executive for Executive’s portion of the arbitrator’s fees and expenses, and the Executive’s reasonable attorney fees and expenses incurred in connection with the arbitration proceeding, if the Executive substantially prevails in the arbitration proceeding or, if the Executive prevails in part, then the Company will reimburse a proportionate part of such fees and expenses, with such proportion to represent the approximate portion of such fees and expenses relating to the issues on which the Executive prevailed. The decision as to whether the Executive has substantially prevailed, or prevailed in part, and on the amount to be reimbursed to the Executive under the standards in this Section, will be made by the arbitrator. Reimbursement of attorney fees and expenses called for by this Section must be made within sixty (60) days after receipt by the Company of the arbitrator’s award, but in no event after the last day of the year following that in which the expense being reimbursed was incurred.

(b) Section 14(a) shall be inapplicable to a dispute arising out of or relating to Sections 7, 8 or 9 of this Agreement.

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corporation or a division of that corporation, but the Company shall remain liable for any Severance Pay due under this Agreement and not paid by any assignee. The Company is not required to assign this Agreement but if the Agreement is assigned as provided above, Executive will be given notice and this Agreement will continue in effect.

16. Notices . Notices to a party under this Agreement must be personally delivered or sent by certified mail (return receipt requested) and will be deemed given upon post office delivery or attempted delivery to the recipient’s last known address. Notices to the Company must be sent to the attention of [“the Company’s Chief Executive Officer” or, if the Chief Executive Officer is giving notice, “the Company’s Secretary”].

17. Governing Law . The validity, interpretation, and construction of this Agreement are to be governed by Michigan laws, without regard to choice of law rules. The parties agree that any judicial action involving a dispute arising under this Agreement will be filed, heard and decided in either Kent County Circuit Court or the U.S. District Court for the Western District of Michigan. The parties agree that they will subject themselves to the personal jurisdiction and venue of either court, regardless of where Executive or the Company may be located at the time any action may be commenced. The parties agree that Kent County is a mutually convenient forum and that each of the parties conducts business in Kent County.

18. Counterparts . This Agreement may be signed in original or by fax in counterparts, each of which shall be deemed an original, and together the counterparts shall constitute one complete document.

19. Section 409A . This Agreement is intended to be exempt from Section 409A of the Code partially as a short-term deferral as that term is understood under Treasury Regulations Section 1.409A-1(b)(4) and partially as an involuntary separation pay plan as that term is understood under Treasury Regulation 1.409A-1(b)(9) and shall be interpreted and operated consistently with those intentions. Notwithstanding any other provision to the contrary, the total payments under this Agreement, other than the lump sum cash payment under Section 6(a)(i), are limited to the 409A Limit to avoid the application of Section 409A of the Code to this Agreement. “ 409A Limit ” means the lesser of (1) two times Executive’s annualized compensation as determined under Section 409A of the Code; or (2) two times the maximum amount that may be taken into account under a qualified retirement plan under Section 401(a)(17) of the Code for the year in which Executive experiences a separation from service ($460,000 for 2008, as adjusted for future years). If the benefits under this Agreement are required to be limited by the Section 409A Limit, the first benefit to be limited will be reimbursements otherwise called for by Section 14. If further limitation is required, the remaining benefits under this Agreement, disregarding the lump sum cash payment under Section 6(a)(i), shall be limited pro rata until the benefits payable under the Agreement do not exceed the 409A Limit.

[The Agreements with Mr. Eidson and Mr. Staples only contain the following additional provision, and subsequent sections are re-numbered accordingly:

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Sarbanes-Oxley Act Compliance . If obligated to reimburse the Company under Section 304(a) of the Sarbanes-Oxley Act of 2002, Executive will promptly reimburse the Company for any profit, any bonus or other incentive-based or equity-based compensation, or any other sums as required by Section 304(a), within thirty (30) days of the earlier of becoming aware of such obligation or receiving written notice of such obligation from the Company.]

20.

Coordination of This Agreement With Executive Severance Agreement.

(a) Circumstances Under Which Section 9 of This Agreement Will Lapse . If there is a termination of Executive’s Employment entitling Executive to Severance Benefits under Section 3 of the Executive Severance Agreement, then Section 9 of this Agreement (“Covenant Not to Compete”) will lapse and become void and of no further effect on the date of such termination of Employment.

(b) Coordination of Severance Pay Under This Agreement and Severance Benefits Under Executive Severance Agreement . If Executive receives Severance Benefits under Section 3 of the Executive Severance Agreement, Executive will not be entitled to Severance Pay under this Agreement. If Executive becomes entitled to receive Severance Benefits under Section 3 of the Executive Severance Agreement after receiving Severance Pay under this Agreement, the amount of Severance Benefits to which Executive is entitled under Section 3 of the Executive Severance Agreement will be reduced by the amount of Severance Pay received by Executive under this Agreement.

The parties have signed this Employment Agreement as of the Effective Date in Section 1.


SPARTAN STORES, INC.

By:
		[Name of Executive]
Its:		“Executive”
	“Company”

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EXHIBIT 10.17

Schedule to Notes in Form of Employment Agreement

Note (A)

Note (B)

Note (C)

Note (D)

Note (E)

KATHLEEN M. MAHONEY

December 2, 2013

Executive Vice President, General Counsel and Secretary

325,000

360,000

MARK SHAMBER

September 5, 2017

Executive Vice President, Chief Financial Officer

440,000

n/a

Christopher P Meyers

April 11, 2016

Executive Vice President Chief Financial Officer

450,000

n/a

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is made by SpartanNash Company, a Michigan corporation (the “ Company ”), and (A) (“ Executive ”). The parties agree as follows:

1. Effective Date and Term . This Agreement will take effect as of (B) (“ Effective Date ”), and will remain in effect during Executive’s Employment (as defined in Section 2) and thereafter as to those provisions that expressly state that they will remain in effect after termination of Executive’s employment.

2. Employment . Executive will serve as (C) of the Company or an Affiliate, or may be transferred to another management position with the Company or an Affiliate at the same or a different location and at the same or greater annual salary and bonus opportunity (except for economic or business motivated salary changes described in Section 5(b)(i) and changes to bonus opportunity), as may be assigned by the Company (the “ Employment ”). If Executive refuses a transfer permitted by the preceding sentence Executive will be deemed to have resigned from the Employment and will not be entitled to severance pay under Section 6 or otherwise. Executive will perform the duties assigned from time to time to Executive’s position. The Employment will be full time and Executive’s entire business time and efforts will be devoted to the Employment, except as otherwise provided by written Company policy. Executive agrees to comply with Company policies, including but not limited to any applicable Company policy requiring Executive to own shares of common stock in the Company. As used in this Agreement, the term “ Affiliate ” includes any organization controlling, controlled by or under common control with the Company.

3. Term of Employment . The term of the Employment will be indefinite and will continue until terminated pursuant to this Agreement.

4. Compensation . Executive will be compensated during the Employment as follows:

(a) Salary . The Executive’s salary as of the Effective Date is $ (D) per year (or a pro-rated weekly amount for any partial year), [to be increased to $ (E) effective December 29, 2013,] ¹ subject to normal payroll deductions and payable in accordance with the Company’s normal payroll practices. Executive’s salary will be reviewed annually by the Company and subject to the limitations in Section 5(b)(i) may be adjusted to reflect Company determinations of Executive’s performance, Company performance, or business or economic conditions.

(b) Bonus . Executive will be eligible to participate in any bonus programs designated by the Company from time to time for executives occupying positions at the same level as Executive’s position, in accordance with the terms of such programs, which are subject to change from time to time in the Company’s discretion.

¹	This language is omitted in the case of Mr. Shamber and Mr. Meyers.

(c) Benefits . Executive will be eligible to participate in fringe benefit programs covering the Company’s salaried employees as a group, and in any programs applicable under Company policy to executives occupying positions at the same level as Executive’s position. The terms of applicable insurance policies and benefit plans in effect from time to time will govern with regard to specific issues of coverage and benefit eligibility. All benefit programs are subject to change from time to time in the Company’s discretion.

(d) Relocation Assistance . Executive agrees to relocate to the Grand Rapids, Michigan area within nine months after the Effective Date. Executive will receive Company-paid relocation assistance pursuant to the Company’s relocation assistance policy and the Company’s offer letter to Executive. Executive agrees that if Executive resigns other than for Good Reason during the first twelve (12) months of Executive’s relocation to the Grand Rapids, Michigan area, Executive will repay the Company for all relocation expenses paid by the Company in connection with Executive’s relocation.

(e) Business Expenses . The Company will reimburse Executive for reasonable, ordinary and necessary business expenses that are specifically authorized or authorized by Company policy, subject to Executive’s prompt submission of proper documentation for tax and accounting purposes. Such expenses shall be reimbursed within thirty (30) days after Executive requests reimbursement, but in no event later than two and one-half (2 ¹ / ₂ ) months after the end of the year in which the expense is incurred.

5. Termination of Employment.

i. Death . The Employment will terminate automatically upon Executive’s death.

i. Termination by Executive for Good Reason . Executive may terminate the Employment for “ Good Reason ” if and only if the Company materially breaches the Company’s obligations to Executive under this Agreement, or materially reduces Executive’s salary other than an economic or business motivated reduction accompanied by proportionate reductions in the salaries of all other similarly situated executives [and the material breach or material reduction occurs on or after November 19, 2015] ³ . Executive may not resign for Good Reason unless (A) Executive notifies the Company’s Chief Executive Officer in writing, within thirty (30) days after the act or omission in question, asserting that the act or omission in question constitutes Good Reason and explaining why, (B) the Company fails, within thirty (30) days after the notification, to take all reasonable steps to cure the breach, and (C) Executive resigns by written notice within thirty (30) days after expiration of the thirty (30) day period under Section 5(b)(i)(B). If Executive terminates the Employment for Good Reason, Executive will be entitled to Severance Pay as provided in and subject to Section 6. Executive’s failure to object to a material breach as provided above will not waive Executive’s right to resign with Good Reason after following the above procedure with regard to any subsequent material breach.

ii. Discretionary Termination by Company . The Company may terminate the Employment at will, but if the Company does so [on or after November 19, 2015, then] ⁴ Executive will be entitled to Severance Pay as provided in and subject to Section 6. Any termination of Executive’s Employment by the Company under Section 5(a) that is found not to meet the standards of such Section will be considered to have been a termination under Section 5(b)(ii).

6. Severance Pay . The Company will pay and provide Executive with the payments and benefit continuation provided in this Section 6 (“ Severance Pay ”) upon Executive’s “separation from service” as that term is defined by Section 409A of the Internal Revenue Code (the “ Code ”), if Executive’s Employment is terminated as provided in Section 5(b) [on or after November 19, 2015] ⁵ , and the Executive contemporaneously or subsequently experiences a separation from service. [No Severance Pay will be paid under this Agreement under any circumstances if Executive’s Employment terminates before November 19, 2015.] ⁶

^{3, 4,5, 6}

This language is included only in the case of Ms. Mahoney.

(a) Amount and Duration of Severance Pay . Subject to the other provisions of this Section, Severance Pay will consist of:

i. Cash Payment. A lump sum cash payment equal to fifty-two (52) weeks of Executive’s salary as of the date on which Executive’s separation from service occurs, payable as provided in Section 6(b). The lump sum cash payment will be considered wages allocated equally to each of the weeks covered by the payment for purposes of any applicable unemployment compensation or workers compensation laws, and any applicable disability insurance program, but will not be considered to extend Executive’s employment beyond the date of Executive’s separation from service under any Company qualified retirement plan or other Company benefit plan or program.

iii. Outplacement Assistance . Up to six (6) months of outplacement assistance from an outplacement assistance firm approved by the Company. All costs under this Section 6(a)(iii) must be incurred during the period beginning with the date of Executive’s separation from service and ending not later than the last day of the year following that in which the Executive’s separation from service occurs, and will be paid not later than sixty (60) days after the expense is incurred and billed to the Company.

(b) Payment Terms. The lump sum cash payment under Section 6(a)(i) will be made on the Company’s first normal pay date after the release provided for in Section 6(c)(iii) becomes effective and any revocation period provided for in the release has expired. In no event will the latest date for (A) signing of the release, and (B) expiration of any revocation period in the release, and (C) the completion of payments under Section 6(a)(i), be deferred beyond the fifteenth (15th) day of the third (3rd) month after the end of the year in which the Executive’s separation from service occurs.

The Executive will receive the payments called for by Section 6(a)(i) notwithstanding any other earnings that Executive may have, and subject to offset only as provided in Section 6(d). If Executive dies before all payments under Section 6(a) have been made, the lump sum cash payment will be paid to Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary), and health coverage continuation under Section 6(a)(ii) will continue for Executive’s eligible dependents for the remainder of the fifty-two (52) week period subject to the conditions in Sections 6(a)(ii)(A) and (B). If Executive becomes eligible for long-term disability benefits , no further payments will be made under Section 6(a)(i) after the date that Executive is eligible to begin receiving such disability benefits.

indemnification agreement; (iv) Executive must reaffirm in writing upon request by Company Executive’s obligations under Sections 7, 8 and 9 of this Agreement; (v) Executive must resign upon written request by Company from all positions with or representing the Company or any Affiliate, including but not limited to membership on boards of directors; and (vi) Executive must provide the Company for a period of ninety (90) days after the Employment termination date with consulting services regarding matters within the scope of Executive’s former duties, upon request by the Company’s Chief Executive Officer; Executive will only be required to provide those services by telephone at Executive’s reasonable convenience and without substantial interference with Executive’s other activities or commitments. The Executive will receive the salary continuation provided in Section 6(a)(i) notwithstanding any other earnings that Executive may have, and subject to offset only as provided in Section 6(d). If Executive dies during the Severance Pay Period, salary continuation under Section 6(a)(i) will continue for the remainder of the Severance Pay Period for the benefit of Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary), and health coverage continuation under Section 6(a)(ii) will continue for Executive’s eligible dependents for the remainder of the Severance Pay Period subject to the conditions in Sections 6(a)(ii)(A) and (B). If Executive becomes eligible for long-term disability benefits during the Severance Pay Period, Severance Pay will end on the date that Executive is eligible to begin receiving such disability benefits.

(d) Offsets to Severance Pay . The Severance Pay due to Executive under Section 6(a)(i) will be reduced (but not below 0) by: (i) any disability benefits to which Executive i] entitled for any portion of the fifty-two (52) week period covered by Section 6(a)(i) under any disability insurance policy or program of the Company or any Affiliate (including but not limited to worker’s disability compensation); (ii) any severance pay payable to Executive under any other agreement or Company policy; (iii) any payment due to Executive under the Federal Worker Adjustment and Retraining Notification Act or any comparable state statute or local ordinance; and (iv) any amount owing by Executive to the Company that the Company is legally entitled to set off against the Severance Pay under applicable law.

7. Loyalty and Confidentiality; Certain Property and Information .

confirming, protecting, and obtaining legal protection of the Company’s ownership rights. Executive’s commitments in this Section will continue in effect after termination of the Employment as to ideas, concepts, inventions, improvements and developments and other intellectual property made or conceived in whole or in part before the date the Employment terminates. The parties agree that any breach of Executive’s covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

9. Covenant Not to Compete.

i. directly or indirectly compete with the Company or any Affiliate; or

(b) Definitions . As used in this Section 9:

i. “ Competitive Business ” means a business that:

(A) owns, operates or sells or supplies products similar to or that substitute for products supplied by the Company or an Affiliate to any Covered Operation (as defined below) that is located within fifteen (15) miles of any Covered Operation that the Company or an Affiliate owns or operates, or to which the Company or an Affiliate sells or supplies products; or

(B) provides food or other grocery products to any military commissary or exchange, within or outside the U.S., directly or under a subcontract.

iii. “ Covered Relationship ” means a customer relationship, a vendor relationship, an employment relationship, or any other contractual or independent contractor relationship.

committee of the Board of Directors, and is agreed to in a writing signed by Executive and by the Chief Executive Officer of the Company. No waiver by either party at any time of any breach or non-performance of this Agreement by the other party shall be deemed a waiver of any prior or subsequent breach or non-performance.

12. Entire Agreement . No agreements or representations, oral or otherwise, express or implied, with respect to Executive’s Employment with the Company or any Affiliate or any of the subjects covered by this Agreement have been made by either party that are not set forth expressly in this Agreement and the Executive Severance Agreement between Executive and the Company (“ Executive Severance Agreement ”), and this Agreement supersedes any pre-existing employment agreements *** ⁷ .

13. Non-Contravention . Executive represents and warrants that:

⁷	In the case of Ms. Mahoney, “with the Company, any Affiliate, or Nash-Finch Company or any Nash-Finch Company Subsidiary, and any other agreements on the subjects covered by this Agreement (including but not limited to Executive’s offer letter agreement with Nash-Finch Company dated November 19, 2009), except the Executive Severance Agreement, Executive’s Indemnification Agreement with Nash-Finch Company dated November 9, 2007, and Executive’s change in control letter agreement with Nash-Finch Company dated November 19, 2009, as amended (other than the non-competition restrictions in Section 3(iv) of Executive’s letter agreement with Nash-Finch Company dated November 19, 2009, as amended, which are superseded by the covenant not to compete in Section 9 of this Agreement).”

	In the case of Mr. Shamber and Mr. Meyers, “and any other agreements on the subjects covered by this Agreement, except the Executive Severance Agreement.”

14. Dispute Resolution .

(b) Section 14(a) shall be inapplicable to a dispute arising out of or relating to Sections 7, 8 or 9 of this Agreement.

15. Assignability . This Agreement contemplates personal services by Executive, and Executive may not transfer or assign Executive’s rights or obligations under this Agreement, except that Executive may designate beneficiaries for Severance Pay in the event of Executive’s death, and may designate beneficiaries for benefits as allowed by the Company’s benefit programs. This Agreement may be assigned by the Company to any subsidiary or parent corporation or a division of that corporation, but the Company shall remain liable for any Severance Pay due under this Agreement and not paid by any assignee. The Company is not required to assign this Agreement but if the Agreement is assigned as provided above, Executive will be given notice and this Agreement will continue in effect.

18. Counterparts . This Agreement may be signed in original or by fax in counterparts, each of which shall be deemed an original, and together the counterparts shall constitute one complete document.

19. Section 409A. This Agreement is intended to be exempt from Section 409A of the Code partially as a short-term deferral as that term is understood under Treasury Regulations Section 1.409A-1(b)(4) and partially as an involuntary separation pay plan as that term is understood under Treasury Regulation 1.409A-1(b)(9) and shall be interpreted and operated consistently with those intentions. Notwithstanding any other provision to the contrary, the total payments under this Agreement, other than the lump sum cash payment under Section 6(a)(i), are limited to the 409A Limit to avoid the application of Section 409A of the Code to this Agreement. “ 409A Limit ” means the lesser of (1) two times Executive’s annualized compensation as determined under Section 409A of the Code; or (2) two times the maximum amount that may be taken into account under a qualified retirement plan under Section 401(a)(17) of the Code for the year in which Executive experiences a separation from service. If the benefits under this Agreement are required to be limited by the Section 409A Limit, the first benefit to be limited will be reimbursements otherwise called for by Section 14. If further limitation is required, the remaining benefits under this Agreement, disregarding the lump sum cash payment under Section 6(a)(i), shall be limited pro rata until the benefits payable under the Agreement do not exceed the 409A Limit.

20. Coordination of Severance Pay Under This Agreement With Executive Severance Agreement . If Executive receives Severance Benefits under Section 3 of the Executive Severance Agreement, Executive will not be entitled to Severance Pay under this Agreement. If Executive becomes entitled to receive Severance Benefits under Section 3 of the Executive Severance Agreement after receiving Severance Pay under this Agreement, the amount of Severance Benefits to which Executive is entitled under Section 3 of the Executive Severance Agreement will be reduced by the amount of Severance Pay received by Executive under this Agreement.

The parties have signed this Employment Agreement as of the Effective Date in Section 1.

SPARTAN STORES, INC.

*Dennis Eidson in the case of Ms. Mahoney and Mr. Meyers; David Staples in the case of Mr. Shamber.

EXHIBIT 10.18

Explanatory note: the Company has entered into this form of Executive Severance Agreement with the following named executive officers:

Dennis Eidson (now Chairman)

David M. Staples (now President and CEO)

Theodore Adornato, Executive Vice President Retail Operations

This form of agreement includes all amendments through May 17, 2012.

EXECUTIVE SEVERANCE AGREEMENT

THIS AGREEMENT is entered into as of the 19th day of December, 2008 (the “ Effective Date ”), by and between SPARTAN STORES, INC., a Michigan corporation (“ Spartan Stores ”), and [name of Executive] (“ Executive ”).

W I T N E S S E T H:

WHEREAS, Executive currently serves as a key employee of Spartan Stores and/or its subsidiaries (the “ Company ”) and his services and knowledge are valuable to the Company in connection with the management of one or more of the Company’s principal operating facilities, divisions, or subsidiaries; and

WHEREAS, Spartan Stores considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its shareholders; and

WHEREAS, the Board has determined that it is in the best interests of Spartan Stores and its shareholders to secure Executive’s continued services and to ensure Executive’s continued dedication and objectivity in the event of any threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as hereafter defined) of Spartan Stores, without concern as to whether Executive might be hindered or distracted by personal uncertainties and risks created by any such possible Change in Control, and to encourage Executive’s full attention and dedication to Spartan Stores and/or its subsidiaries, the Board has authorized Spartan Stores to enter into this Agreement.

NOW, THEREFORE, COMPANY AND EXECUTIVE AGREE AS FOLLOWS:

1.	Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:

(a) “ Board ” means the Board of Directors of Spartan Stores.

(b) “ Cause ” means (1) the willful and continued failure by Executive to substantially perform his duties with the Company (other than any such failure resulting from Executive’s incapacity due to physical or mental injury or illness, or any such actual or anticipated failure resulting from Executive’s termination for Good Reason) after a demand for substantial performance is delivered to Executive by the Board (which demand shall specifically identify the manner in which the Board believes that Executive has not substantially performed Executive’s duties); or (2) the willful engaging by Executive in gross misconduct materially and demonstrably injurious to the Company. For purposes of this Section, no act or failure to act on the part of Executive shall be considered “willful” unless done or omitted to be done by Executive not in good faith and without reasonable belief that his action(s) or omission(s) was in the best interests of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until the Company provides Executive with a copy of a resolution adopted by an affirmative vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive, with counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Executive has been guilty of conduct set forth in subsections (1) or (2) above, setting forth the particulars in detail. A determination for Cause by the Board shall not be binding upon or entitled to deference by any finder of fact in the event of a dispute, it being the intent of the parties that such finder of fact shall make an independent determination of whether the termination was for “Cause” as defined in (1) or (2) above.

(c)

“ Change in Control ” means:

by the Company, (C) any acquisition by any corporation pursuant to a reorganization, merger, or consolidation involving the Company, if, immediately after such reorganization, merger, or consolidation, each of the conditions described in clauses (i), (ii), and (iii) of subsection (c)(3) shall be satisfied, or (D) any acquisition by the Executive or any group of persons including the Executive; and provided further that, for purposes of clause (A), if any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall become the beneficial owner of 20% or more of the Outstanding Company Common Stock or 20% or more of the Outstanding Company Voting Securities by reason of an acquisition by the Company and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Company Common Stock or any additional Outstanding Company Voting Securities, such additional beneficial ownership shall constitute a Change in Control;

(2) individuals who, as of the date hereof, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of such Board; provided, however, that any individual who becomes a director of Spartan Stores subsequent to the date hereof whose election, or nomination for election by the shareholders of Spartan Stores, was approved by the vote of at least two-thirds of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of Spartan Stores in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board; and provided further, that no individual who was initially elected as a director of Spartan Stores as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board, shall be deemed to have been a member of the Incumbent Board;

(3) the effective time and consummation of a reorganization, merger, or consolidation approved by the shareholders of Spartan Stores unless, in any such case, immediately after such reorganization, merger, or consolidation, (i) more than 50% of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, or consolidation and more than 50% of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such reorganization, merger, or consolidation and in substantially the same proportions relative to each other as their ownership, immediately prior to such reorganization, merger, or consolidation, of the Outstanding Company Common Stock and the Outstanding Company Voting

Securities, as the case may be, (ii) no Person (other than (A) the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or the corporation resulting from such reorganization, merger, or consolidation (or any corporation controlled by the Company), or (B) any Person which beneficially owned, immediately prior to such reorganization, merger, or consolidation, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of such corporation or 20% or more of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger, or consolidation; or

(4) the effective time and consummation of (i) a plan of complete liquidation or dissolution of Spartan Stores as approved by the shareholders of Spartan Stores or (ii) the sale or other disposition of all or substantially all of the assets of Spartan Stores as approved by the shareholders of Spartan Stores other than to a corporation with respect to which, immediately after such sale or other disposition, (A) more than 50% of the then outstanding shares of common stock thereof and more than 50% of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such sale or other disposition and in substantially the same proportions relative to each other as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (other than the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or such corporation (or any corporation controlled by the Company), or any Person which beneficially owned, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock thereof or 20% or more of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition.

Notwithstanding anything contained in this Agreement to the contrary, if Executive’s employment is terminated prior to a Change in Control and Executive reasonably demonstrates that such termination was at the request of or in response to a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control (a “ Third Party ”), and who subsequently effectuates a Change in Control, then for all purposes of this Agreement, the date of a Change in Control shall mean the date immediately prior to the date of such termination of Executive’s employment.

(d) “ Code ” means the Internal Revenue Code of 1986, as amended.

(e) “ Common Stock ” means the common stock of Spartan Stores, no par value per share.

(f) “ Date of Termination ” means the effective date on which Executive’s employment by the Company terminates as specified in a Notice of Termination by the Company or Executive, as the case may be, in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code. Notwithstanding the previous sentence, (i) if the Executive’s employment is terminated for Disability, as defined in Section 1(g), then such Date of Termination shall be no earlier than thirty (30) days following the date on which a Notice of Termination is received, and (ii) if the Executive’s employment is terminated by the Company other than for Cause, then such Date of Termination shall be no earlier than thirty (30) days following the date on which a Notice of Termination is received.

(g) “ Disability ” means Executive’s failure to be available to substantially perform his duties with the Company on a full-time basis for at least one hundred eighty (180) consecutive days as a result of Executive’s incapacity due to mental or physical illness.

(h) “ Good Reason ” means, without Executive’s express written consent, the occurrence of any of the following events after or in connection with a Change in Control:

(1) (i) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position(s), duties, responsibilities, or status with the Company immediately prior to such Change in Control, (ii) a material adverse change in Executive’s positions, reporting responsibilities, titles or offices with the Company as in effect immediately prior to such Change in Control, (iii) any removal or involuntary termination of Executive by the Company otherwise than as expressly permitted by this Agreement (including any purported termination of employment which is not effected by a Notice of Termination), or (iv) any failure to re-elect Executive to any position with the Company held by Executive immediately prior to such Change in Control;

(2) a reduction by the Company in Executive’s rate of annual base salary as in effect immediately prior to such Change in Control or as the same may be increased from time to time thereafter;

(3) any requirement of the Company that Executive (i) be based anywhere other than the facility where Executive is located at the time of the Change in Control or reasonably equivalent facilities within Kent County, Michigan or (ii) engage in business travel to an extent substantially more burdensome than the travel obligations of Executive immediately prior to such Change in Control;

(4) the failure of the Company to continue the Company’s executive incentive plans or bonus plans in which Executive is participating immediately prior to such Change in Control or a reduction of the Executive’s target incentive award opportunity under any such bonus plan, unless Executive is permitted to participate in other plans providing Executive with substantially comparable benefits or receives compensation as a substitute for such plans providing Executive with a substantially equivalent economic benefit;

(5) the failure of the Company to (i) continue in effect any employee benefit plan or compensation plan in which Executive is participating immediately prior to such Change in Control, unless Executive is permitted to participate in other plans providing Executive with substantially comparable benefits or receives compensation as a substitute for such plans providing Executive with a substantially equivalent after-tax economic benefit, or the taking of any action by the Company which would adversely affect Executive’s participation in or materially reduce Executive’s benefits under any such plan, (ii) provide Executive and Executive’s dependents with welfare benefits (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) in accordance with the most favorable plans, practices, programs, and policies of the Company in effect for Executive immediately prior to such Change in Control, (iii) provide other fringe benefits in accordance with the most favorable plans, practices, programs, and policies of the Company in effect for Executive immediately prior to such Change in Control, or (iv) provide Executive with paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company as in effect for Executive immediately prior to such Change in Control;

(6) the failure of the Company to pay any amounts owed Executive as salary, bonus, deferred compensation or other compensation;

(7) the failure of Spartan Stores to obtain any assumption agreement contemplated in Section 10(b);

(8) any purported termination of Executive’s employment which is not effected pursuant to a Notice of Termination which satisfies the requirements of a Notice of Termination; or

(9) any other material breach by Spartan Stores of its obligations under this Agreement.

For purposes of this Agreement, any good faith determination of Good Reason made by Executive shall be conclusive on the parties; except that an isolated and insubstantial action taken in good faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by Executive shall not constitute Good Reason. Any event or condition described in this Section 1(h) which occurs prior to a Change in Control, but which Executive reasonably demonstrates was at the request of or in response to a Third Party who effectuates a Change in Control or who has indicated an intention or taken steps reasonably calculated to effect a Change in Control, shall constitute Good Reason following a Change in Control for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control.

Executive may not terminate the employment for Good Reason unless:

(i) Executive notifies the Board in writing, within sixty (60) days after Executive becomes aware of the act or omission constituting Good Reason that the act or omission in question constitutes Good Reason and explaining why the Executive considers it to constitute Good Reason;

(ii) the Company fails, within ten (10) days after notice from Executive under (i) above, to revoke the action or correct the omission and make the Executive whole; and

(iii) Executive gives notice of termination within thirty (30) days after expiration of the ten (10) day period under (ii) above.

Executive’s failure to give notice as provided in (i) above will not waive Executive’s right to resign with Good Reason, provided that he follows the above procedure, with regard to any subsequent act or omission constituting Good Reason.

Executive need not fulfill the above conditions a second time if the Company repeats the act or omission constituting Good Reason.

(i) “ Mandatory Retirement ” means Executive’s involuntary retirement as required by a lawful Company policy requiring Executive to retire at or after age sixty-five (65), but only if such policy is adopted by the Company before a Change in Control and only if such policy was not adopted by the Company at the request of or in response to a Third Party who subsequently effectuates a Change in Control.

(j) “ Nonqualifying Termination ” means a termination of Executive’s employment (1) by the Company for Cause, (2) by Executive for any reason (including a voluntary retirement) other than for Good Reason with Notice of Termination, (3) as a result of Executive’s death, (4) by the Company due to Executive’s Disability, unless within thirty (30) days after Notice of Termination is provided to Executive, Executive shall have returned (or offered to return, if not permitted by the Company to do so) to substantial performance of Executive’s duties on a full-time basis, or (5) as a result of Executive’s Mandatory Retirement.

(k) “ Notice of Termination ” means a written notice by the Company or Executive, as the case may be, to the other, which (1) indicates the specific reason for Executive’s termination, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment, and (3) specifies the Date of Termination. The failure by Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(l) “ SERP ” means the Spartan Stores, Inc. Supplemental Executive Retirement Plan, as amended from time to time.

(m) “ Termination Period ” means the period of time beginning with a Change in Control and ending two (2) years following the Change in Control.

2.	Term of Agreement. This Agreement shall commence on the Effective Date and shall continue in effect until Spartan Stores has fulfilled all of its obligations under this Agreement following any termination of Executive’s employment with the Company.

Severance Benefits. If the employment of Executive with the Company shall terminate during the Termination Period in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code, other than by reason of a Nonqualifying Termination, then Executive shall receive the following severance benefits as compensation for services rendered:

(a) Lump Sum Cash Payment. On the tenth (10th) business day after the Date of Termination, Executive shall receive a lump sum cash payment in an amount equal to the sum of the following:

(1) Executive’s unpaid base salary from the Company through the Date of Termination at the rate in effect (without taking into account any reduction of base salary constituting Good Reason), just prior to the time a Notice of Termination is given plus any benefit awards (including both the cash and stock components) and bonus payments which pursuant to the terms of any plans have been earned and become payable, to the extent not theretofore paid.

(2) A bonus will be paid under the Company’s Annual Incentive Plan or any successor plan (“ Annual Plan ”) for the time Executive was employed by the Company in the fiscal year of termination, in an amount equal to the product of (i) the number of days Executive was employed by the Company prior to the Date of Termination in the year of termination divided by the number of days in the year, multiplied by (ii) 100% of the Executive’s current year target bonus (with such calculations to be made as though the target level has been achieved for each Performance Goal (as defined in the Annual Plan)).

(3) An amount equal to two (2) times the sum of (i) the higher of the Executive’s annual rate of base salary from the Company in effect on the Date of Termination or in effect on the day before the Change in Control; and (ii) the higher of (A) the Executive’s current year target bonus under the Annual Plan (with such calculations to be made as though the target level has been achieved for each performance goal (as defined in the Annual Plan)), or (B) the current-year forecasted bonus under the Annual Plan as of the Date of Termination.

(4) If Executive’s target bonus under the Annual Plan for the fiscal year in which the Date of Termination occurs has not been established by the Date of Termination, then the bonus amount under Section 3(a)(2)(ii) and the bonus amount under Section 3(a)(3)(ii) shall be the Executive’s target bonus under the Annual Plan for the fiscal year immediately preceding that in which the Date of Termination occurs (with such calculations to be made as though the target level has been achieved for each Performance Goal (as defined in the Annual Plan)).

(b) Benefits. The Company shall provide Executive with the benefits, payments and reimbursements set forth in subsections (1) to (3) below. The benefits provided for in this section are subject to the reimbursement or in-kind benefit conditions provided in Section 9 below.

(1) For the period beginning on the Date of Termination and ending on the earlier of (A) the end of the twenty-fourth (24th) month after the Date of Termination or (B) the date on which Executive receives a substantially equal benefit from a new employer, the Company will reimburse Executive for 100% of Executive’s cost to obtain health, dental and prescription drug benefits equal to those provided by the Company for the Executive and eligible dependents immediately before the Date of Termination. Such reimbursement shall consist of the COBRA continuation cost for any portion of the above period that Executive is entitled to elect COBRA continuation coverage. For any portion of the above period that Executive is not entitled to elect COBRA continuation coverage, such reimbursement shall be in the amount of the Executive’s cost to obtain equivalent coverage from another source. Reimbursements under this Section 3(b)(1) will be made no later than thirty (30) days after Executive requests reimbursement, but in no event after the year following that in which the Executive incurs such expense. Reimbursements under this Section 3(b)(1) will be reported as part of Executive’s W-2 compensation and will be subject to Federal income tax withholding.

(2) For the period beginning on the Date of Termination and ending on the earlier of (A) the end of the twelfth (12th) month after the Date of Termination or (B) the date on which Executive receives a substantially equal benefit from a new employer, the Company will continue the Executive’s tax and financial planning benefit, with reimbursement of any costs incurred by Executive to obtain such benefits to be made to the Executive within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs such costs.

(3) For the period beginning on the Date of Termination and ending on the earlier of (A) the end of the twenty-fourth (24th) month after the Date of Termination or (B) the date on which Executive receives a substantially equal benefit from a new employer, the Company will continue all of the Executive’s Company funded life insurance coverage, or, if the Company’s life insurance program does not permit such continued coverage, the Company will pay the Executive’s cost to replace such coverage, with reimbursement of any costs incurred by Executive to replace such coverage to be made to the Executive within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs such costs.

In addition to the payments called for by Section 3(b)(1), (2) and (3) the Company shall make payments to Executive in the amount necessary to eliminate the income tax cost to Executive resulting from any conversion of such benefits from non-taxable employee benefits to taxable benefits, payments or reimbursements. Such additional payments shall be made at the same time that the Company reimburses the Executive under this Section 3(b).

(c) Outplacement Services. The Company will provide the Executive with outplacement services through an outplacement services firm selected by the Company with the Executive’s approval, which shall not be withheld if the firm selected is reputable, at a cost not to exceed an amount equal to $25,000. The timing of outplacement services to be received shall be determined by the Executive, provided that all costs under this subsection must be incurred, and all applicable payments to the outplacement firm made, not later than the last day of the second year following that in which the Date of Termination occurred.

(d) Certain Reductions Disregarded . In computing the payments under subsections (a) through (c) above, any reduction in Executive’s base salary, bonus or fringe benefits shall be disregarded if such reduction constituted Good Reason as defined in Section 1(h) of this Agreement including the text before and in subsections (1) through (9) and the paragraph immediately following subsection (9), but excluding the remaining text of Section 1(h).

4.	Retirement Benefits.

(a) The Executive is a participant in the SERP. If the employment of Executive with the Company shall terminate during the Termination Period in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code, other than by reason of a Nonqualifying Termination, then Executive shall receive (as a lump sum, to be paid on the tenth (10th) business day after the Date of Termination) an amount equal to the difference between (i) the total amounts the Executive is eligible to receive as of the Date of Termination under the Spartan Stores, Inc. Cash Balance Pension Plan and any successor plan (the “ Pension Plan ”) and the SERP (assuming election by Executive of the lump sum payment options under the Pension Plan and SERP); and (ii) the total amounts the Executive would have been eligible to receive under the Pension Plan and SERP if the Executive were fully vested under the Pension Plan and the Executive had received additional age and years of service credits based on continued employment until the end of the twenty-fourth (24th) month following the month in which the Date of Termination occurs.

(b) The payments to Executive under this Section 4 shall be in addition to any payments under Section 3 of this Agreement and any payments under the Pension Plan and SERP.

(c) In computing the payment under subsection (a) above, any change to the SERP shall be disregarded if such change constituted Good Reason as defined in Section 1(h) of this Agreement including the text before and in subsections (1) through (9) and the paragraph immediately following subsection (9), but excluding the remaining text of Section 1(h).

Acceleration of Vesting Upon Change in Control. Effective at the time of a Change in Control, all unvested stock options and stock previously issued to Executive as to which rights of ownership are subject to forfeiture shall immediately vest; all risk of forfeiture of the ownership of stock or stock options and restrictions on the exercise of options shall lapse; and, Executive shall be entitled to exercise any or all options, such that the underlying shares will be considered outstanding at the time of the Change in Control.

Delay in Payment to a Specified Employee. Notwithstanding any other timing provision in this Agreement, if, at the time the payments would commence, Executive is a “Specified Employee” as defined by Section 409A of the Code, then no payment under this Agreement may be paid before the date that is six (6) months after Executive’s separation from service, except for payment of current compensation under Section 3(a)(1) and the acceleration of vesting under Section 5. Payments to which Executive would otherwise have been entitled during that six (6) months will be accumulated and paid on the first day after six (6) months following the date of Executive’s separation from service. All payments that would otherwise be made more than six (6) months following the date of Executive’s separation from service will be made in accordance with the general timing provisions described above. If the

six (6) month delay in payment to a Specified Employee applies and Executive dies before the end of the six (6) month period, the delay shall cease and payments shall begin upon Executive’s death. Payments to which Executive would otherwise have been entitled during the delay shall be accumulated and paid on the tenth business day after Executive’s death.

Certain Additional Payments by the Company. Anything in this Agreement to the contrary notwithstanding, the Company shall make a Gross-Up Payment to Executive as provided in this Section 7 if such a payment is called for by Section 7(a). If application of the Excise Tax (as defined in Section 7(a)) can be avoided by reduction of up to ten percent (10%) of the payments otherwise due to Executive under Sections 3 and 4, such reduction shall be made by first reducing the benefit under Section 3(c), then reducing if necessary the benefit under Section 3(b)(2), and finally by reducing if necessary the payment under Section 3(a)(3) and then if necessary the payment under Section 4. If a reduction of up to ten percent (10%) of the payments otherwise called for by Sections 3 and 4 as provided above is insufficient to avoid the application of the Excise Tax, then there shall be no reduction to the payments otherwise called for by Sections 3 and 4.

(a) Except as provided in the preceding paragraph, and notwithstanding any other provisions of this Agreement, if any payments or distributions by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (“ Payments ”)) trigger application of the excise tax imposed by Section 4999 of the Code, or any successor Code provision (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “ Excise Tax ”), or any interest or penalties are incurred by Executive with respect to Excise Tax on such amount, then Executive shall be entitled to receive an additional payment (a “ Gross-Up Payment ”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes) including, without limitation, any income and employment taxes (and any interest and penalties imposed with respect thereto) and any Excise Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments, it being the intent of this Section that the Executive shall be held harmless from all Excise Tax and interest and penalties on Excise Tax.

(b) Subject to the provisions of Section 7(c), all determinations required to be made under this Section 7, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “ Accounting Firm ”) which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company or Executive (collectively, the “ Determination ”). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change

in Control, Executive shall appoint another nationally recognized public accounting firm to make the Determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7, shall be paid by the Company to Executive within five (5) days of the receipt of the Determination, but in no case later than the end of the year after that in which Executive remits the Excise Tax, provided that in no event shall such payment be made until six (6) months following Executive’s separation from service, if at the time of such separation from service the Executive is a Specified Employee as defined by Section 409A of the Code. If the Accounting Firm determines that no Excise Taxes are payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. The Determination by the Accounting Firm shall be binding upon the Company and Executive; however, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“ Underpayment ”) consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 7(c) and Executive thereafter is required to make payment of any Excise Tax that qualifies for a Gross-Up Payment in accordance with this Section 7, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. If the six (6) month delay in payment to a Specified Employee applies and Executive dies before the end of the six (6) month period, the delay shall cease and payments shall begin upon Executive’s death. Payments to which Executive would otherwise have been entitled during the delay shall be accumulated and paid on the tenth business day after Executive’s death.

(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim;

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim; and

(iv) permit the Company to participate in any proceeding relating to such claim;

provided, however, that the Company shall reimburse Executive for all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income or employment tax (including interest and penalties with respect thereto) imposed as a result of such contest and payment of costs and expenses. Any reimbursement under this Section 7 must be made within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs the expense. Without limitation on the foregoing provisions of this Section 7(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a Determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided further, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income or employment tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 7, Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 7) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 7, a Determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such Determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

8.	Withholding Taxes. The Company may withhold from all payments due to Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local, or other law, the Company is required to withhold therefrom.

Reimbursement of Expenses. If any contest or dispute shall arise under or related to this Agreement involving termination of Executive’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse Executive, on a current basis, for all reasonable legal fees and expenses, if any, incurred by Executive in connection with such contest or dispute regardless of the result thereof. The reimbursement of an eligible amount must be made within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs such expense. Any reimbursement or in-kind benefit provided for under this Agreement shall comply with the conditions on such payments required by Treasury Regulation § 1.409A-3(i)(1)(iv) as follows:

(a) The expenses eligible for reimbursement, or the provision of the in-kind benefits, shall be provided on an objectively determinable nondiscretionary basis.

(b) The reimbursement of expenses incurred, or the provision of the in-kind benefits, shall be provided during an objectively and specifically prescribed period.

(c) The amount of expenses eligible for reimbursement, or in-kind benefits provided, during Executive’s taxable year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year. Expenses eligible for reimbursement or the provision of in-kind benefits shall be provided pro rata monthly over the period of the benefits and may not be prepaid or delayed in any way that would affect the benefits provided in any other taxable year.

(d) The reimbursement of an eligible expense shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred.

(e) The right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

10.	Successors; Binding Agreement.

(a) This Agreement shall not be terminated by any merger or consolidation of Spartan Stores whereby Spartan Stores is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of Spartan Stores. In the event of any such merger, consolidation, or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.

(b) Spartan Stores agrees that concurrently with any merger, consolidation or transfer of assets referred to in this Section 10, it will cause any successor or transferee unconditionally to assume, by written instrument delivered to Executive (or his beneficiary or estate), all of the obligations of the Company hereunder. Failure of Spartan Stores to obtain such assumption prior to the effectiveness of any such merger, consolidation, or transfer of assets shall be a breach of this Agreement and shall constitute Good Reason hereunder and shall entitle Executive to compensation and other benefits from the Company in the same amount and on the same terms as Executive would be entitled hereunder if Executive’s employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination. For purposes of implementing the foregoing, the date on which any such merger, consolidation, or transfer becomes effective shall be deemed the date Good Reason occurs, and shall be the Date of Termination if requested by Executive.

(c) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive shall die while any amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive’s estate.

11.

Notice. For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or received by facsimile transmission or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

[address of Executive]

If to Spartan Stores:

Spartan Stores, Inc.

850 76th Street, S.W.

P. O. Box 8700

Grand Rapids, Michigan 49518-8700

Attention: [“Secretary” for the Chief Executive Officer; “President & Chief Executive Officer” for all other officers]

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

12.	Full Settlement; Resolution of Disputes.

(a) The Company’s obligation to make any payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

(b) If there shall be any dispute between the Company and Executive in the event of any termination of Executive’s employment then, until there is a final, nonappealable, determination pursuant to arbitration declaring that such termination was for Cause, that the determination by Executive of the existence of Good Reason was not made in good faith, or that the Company is not otherwise obligated to pay any amount or provide any benefit to Executive and his dependents or other beneficiaries, as the case may be, under Sections 3 and 4, the Company shall pay all amounts, and provide all benefits, to Executive and his dependents or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Sections 3 and 4 as though such termination were by the Company without Cause or by Executive with Good Reason; except that the Company shall not be required to pay any disputed amounts pursuant to this Section 12 except upon receipt of an undertaking by or on behalf of Executive to repay all such amounts to which Executive is ultimately determined by the arbitrator not to be entitled.

(c) Arbitration. Any dispute or controversy under this Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan, in accordance with the rules of the American Arbitration Association then in effect, except that Executive shall be entitled to seek specific performance of his right to be paid pursuant to Section 12(b) during a dispute. Judgment may be entered on the arbitration award in any court having jurisdiction. The Company shall reimburse Executive for all reasonable costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 12(c). The reimbursement of an eligible amount must be made within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurred the expense.

13.

Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Michigan without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

14.

Establishment of Trust. Upon written request by Executive and except as provided below, immediately prior to a Change in Control, the Company shall establish and maintain a Trust in the form attached as Exhibit A. Upon the occurrence of a Change in Control the Company shall pay into the Trust the amounts called for under Exhibit A (to be determined as of the Change in Control), and shall thereafter make such additional payments as called for under Exhibit A. No payment to the Trust by the Company shall reduce the Company’s obligations to make payments to Executive under this Agreement. Notwithstanding the above, the Company shall not set aside, reserve or restrict (directly or indirectly) any assets to informally fund the Agreement, including, but not limited to, the Company’s obligation to establish and make payments to the Trust (but not the Company’s obligation to make payment to Executive when called for by this Agreement), if such action would result in inclusion of any amount in Executive’s taxable income under Section 409A(b) of the Code before such funds are paid to Executive

15.	Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

16.

Miscellaneous. No provision of this Agreement may be modified or waived unless such modification is agreed to in writing and signed by Executive and by a duly authorized officer of the Company, or such waiver is signed by the waiving party. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right Executive or the Company may have hereunder, including without limitation, the right of Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. The rights of, and benefits payable to, Executive, his estate, or his beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits payable to, Executive, his estate, or his beneficiaries under any other employee benefit plan or compensation program of the Company, except that no benefits pursuant to any other employee plan or compensation program that become payable or are paid in

accordance with this Agreement shall be duplicated by operation of this Agreement. No agreements or representations, oral or otherwise, express or implied, with regard to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

17.

409A Compliance . This Agreement is intended to comply with Section 409A and the regulations and guidance promulgated thereunder and shall be interpreted and operated consistently with those intentions. The time and schedule of payment under this Agreement may not be accelerated or delayed for any reason except as permitted by Section 409A. In addition to any other restriction in the Agreement, the Agreement may not be amended or terminated except in compliance with Section 409A.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of Spartan Stores. Executive has executed this Agreement as of the day and year first written above.

EXHIBIT A

SPARTAN STORES, INC.

EXECUTIVE SEVERANCE AGREEMENT

EXHIBIT A

EXECUTIVE BENEFIT TRUST

Dated: , 20

SPARTAN STORES, INC.

EXECUTIVE SEVERANCE AGREEMENT

EXHIBIT A

EXECUTIVE BENEFIT TRUST

This Agreement (the “Trust Agreement”) is made this day of , 20 , by and between Spartan Stores, Inc. (“Spartan Stores”), a Michigan corporation, and (“Trustee”).

Spartan Stores has entered into an Agreement dated , 20 (the “Agreement”) with .

Spartan Stores has established and maintains a Supplemental Executive Retirement Plan (“SERP”) and a Supplemental Executive Savings Plan (“SESP”) for a number of key executives, including the executives identified in Appendix A. Spartan Stores has entered into Executive Severance Agreements (each a “Severance Agreement” and collectively the “Severance Agreements”) with a number of key executives, including the executives identified in Appendix A. The SERP, the SESP and each Severance Agreement, together with each other designated plan, agreement or program providing for deferred compensation that is in effect as to any key executive identified in Appendix A at the time this Trust is created or funded, is an “Executive Compensation Plan” and collectively they are the “Executive Compensation Plans”. Each executive identified in Appendix A is an “Executive” and collectively they are the “Executives”.

Appendix A shall be deemed amended from time to time to reflect the addition of each new plan, agreement or program designated by Spartan Stores as an Executive Compensation Plan for purposes of this Trust Agreement, the removal of any existing or new Executive Compensation Plan that is terminated in accordance with its terms by Spartan Stores, the addition of a new executive designated by Spartan Stores as an Executive with respect to one or more Executive Compensation Plans and the removal of an individual as an Executive with respect to one or more Executive Compensation Plans upon the full satisfaction of all liabilities to that Executive under that plan.

The Executive Compensation Plans are maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended, and are provided only to a select group of management and highly compensated employees. Spartan Stores has incurred and expects in the future to incur liability under the Executive Compensation Plans with respect to one or more of the Executives or a beneficiary (“Beneficiary”) of a deceased Executive. Each Executive Compensation Plan provides for the creation of a trust to hold assets relating to that liability. Spartan Stores intends to establish this Trust (“Trust”) to satisfy its obligations to create a trust for the Executives and to facilitate meeting its obligations to the Executives under the respective Executive Compensation Plans. However, because this Trust does not extend to key executives other than the Executives identified in Appendix A, the creation of this Trust does not fulfill its obligations to those other key executives under the Executive Compensation Plans as they may apply to those other executives.

In connection with the Agreement, Spartan Stores wishes to establish this Trust and to contribute to the Trust assets to be held in the Trust, subject to the claims of Spartan Stores’ creditors in the event of Spartan Stores’ Insolvency, as defined in Section 3, until paid to the Executives or their beneficiaries in such manner and at such times as specified in the Executive Compensation Plans or otherwise disposed of as provided in this Trust Agreement.

The parties intend that this Trust shall constitute an unfunded arrangement that shall not affect the unfunded status of the Executive Compensation Plans. It is the intention of Spartan Stores to make contributions to this Trust to provide itself with a source of funds to assist it in meeting its liabilities under the Executive Compensation Plans, but the existence of this Trust will not in any way eliminate or decrease Spartan Stores’ liabilities to the Executives or Beneficiaries under the respective Executive Compensation Plans except to the extent assets of the Trust are actually used to pay benefits due to Executives.

Therefore, by this Trust Agreement the parties establish the Trust and agree that the Trust shall be comprised of the assets contributed to it and described in this Trust Agreement and shall be held, administered and disposed of as follows:

SECTION 1

Establishment of the Trust

1.1 Trust; Sub-Trusts.

Notwithstanding this creation of a single trust for the Executive Compensation Plans, the Trustee at all times shall maintain separate sub-trusts for each Executive or Beneficiary with respect to each of the Executive Compensation Plans under which the Executive or Beneficiary has rights (each a “Sub-Trust” and collectively the “Sub-Trusts”). The three Sub-Trusts for each current Executive based on the SERP, the SESP and the respective Severance Agreements are identified in Appendix A. Additional sub-trusts will be created as necessary as additional Executives acquire rights under an Executive Compensation Plan and as new Executive Compensation Plans are created.

Notwithstanding any other provision in this Trust Agreement, except as otherwise expressly specified in this Trust Agreement, the provisions of this Trust Agreement shall apply separately to each Sub-Trust maintained for each Executive or Beneficiary with respect to each Executive Compensation Plan, including but not limited to the accounting provisions of Section 5.4. Further, except as provided in Section 8.2(c), no assets of any Sub-Trust may be used for the benefit of any Executive or Beneficiary other than the Executive or Beneficiary with respect to whom the Sub-Trust is designated in Appendix A.

1.2 Spartan Stores Contributions.

No later than the effective time of a “Change in Control” of Spartan Stores, as defined in the Executive Severance Agreements (the “Effective Time”), or as soon thereafter as permitted by Section 1.8, Spartan Stores will make an initial irrevocable contribution to each Sub-Trust as specified in Appendix A that equals a reasonable, good faith estimate of 100% of the amount necessary to pay the Executive to whom the Sub-Trust relates the total amount due and potentially due to the Executive under the Executive Compensation Plan to which the Sub-Trust relates. Spartan Stores shall make the contributions in cash.

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In the event the value of the assets in a Sub-Trust, determined as of the last day of each Plan Year of the Executive Compensation Plan to which the Sub-Trust relates pursuant to the accounting procedures set forth in this Trust Agreement, is less than 100% of the amount necessary to pay the applicable Executive the amount the Executive could be entitled to under the applicable Executive Compensation Plan, determined as of such date by the Trustee, Spartan Stores shall deposit additional funds into each applicable Sub-Trust sufficient to bring the value of the assets in each Sub-Trust to that 100% threshold within 30 days after receiving notice from the Trustee that additional contributions are needed to attain the 100% level of funding for each Sub-Trust or as soon thereafter as permitted by Section 1.8.

Spartan Stores, in its sole discretion but subject to Section 1.8, at any time and from time to time, may make additional deposits in excess of the amounts provided above to one or more Sub-Trusts of cash or other property acceptable to the Trustee to augment the principal and to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement. Neither the Trustee nor any Executive or Beneficiary shall have any right to compel such additional deposits.

1.3 Irrevocable.

Prior to the Effective Time, the Trust shall be revocable by Spartan Stores. On and after the Effective Time, the Trust shall be irrevocable, except that each Sub-Trust shall be revocable with the written consent of Spartan Stores and the Executive for whom the Sub-Trust was created, and each Sub-Trust is subject to Sections 2.7 and 8.2(c).

1.4 Grantor Trust.

The Trust is intended to be a grantor trust, of which Spartan Stores is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be construed accordingly.

1.5 Limited Rights of Executive.

The principal and earnings of each Sub-Trust shall be held separate and apart from other funds of Spartan Stores and each other Sub-Trust and except as provided herein shall be used exclusively for the uses and purposes of the applicable Executive, Beneficiary and general creditors and for the payment of related fees and expenses as set forth herein. No Executive or Beneficiary shall have a preferred claim on, or a beneficial ownership interest in, any assets of the Trust or any Sub-Trust. The rights created under the Executive Compensation Plans and this Trust Agreement shall be mere unsecured contractual rights of each Executive and Beneficiary against Spartan Stores. Assets held in the Trust or Sub-Trust will be subject to the claims of Spartan Stores’ general creditors under federal and state law in the event of Insolvency, as defined in Section 3.1.

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1.6 Acceptance by Trustee.

The Trustee accepts its duties and obligations as Trustee under this Trust Agreement, agrees to accept funds delivered to it by Spartan Stores, and agrees to hold, manage, administer, and apply all Trust assets in accordance with the terms and conditions of this Trust Agreement.

1.7 Committee; Absence of Committee or Spartan Stores.

The Compensation Committee (“Committee”) of the Board of Directors of Spartan Stores, or another committee designated by the Board of Directors, shall have the powers, rights, and duties of the Committee described in this Trust Agreement. The highest ranking human resources officer of Spartan Stores will certify to the Trustee from time to time the names of the members of the Committee. The Trustee may rely on the most recent certificate without further inquiry or verification. The Trustee also may rely on minutes and other written communications, certified by the secretary or acting secretary of the Committee or the highest ranking human resources officer of Spartan Stores, as accurately setting forth any action or decision by the Committee.

If for any period there are no members of the Committee, or the Committee is unable to exercise its powers and duties under this Trust Agreement, the Board of Directors of Spartan Stores shall act on behalf of, and shall have all of the powers, rights, and duties otherwise reserved to, the Committee. Spartan Stores warrants that all directions and authorizations by the Committee, or by the Board of Directors, whether for the payment of money or otherwise, will comply with the provisions of each Executive Compensation Plan and this Trust Agreement.

In the event that Spartan Stores no longer exists and there is no successor to Spartan Stores, the Trustee shall have all of the powers and duties (other than any contribution requirement) of Spartan Stores and the Committee under this Trust Agreement and, in its sole discretion, shall determine and make all payments from Trust assets due Executives and Beneficiaries under the Executive Compensation Plans or due general creditors under Section 3.

1.8 Trust Funding Restrictions.

Notwithstanding the general rules of this Trust Agreement, including but not limited to the funding obligations of Section 1.2, Spartan Stores’ obligation to establish and make payments to the Trust (but not Spartan Stores’ obligations to make payment to an Executive or Beneficiary when called for by an Executive Compensation Plan) is subject to the restrictions of Section 409A(b) of the Code as follows:

(a) Covered Employees . The Trust will not be established or funded for a Covered Employee during a Restricted Period. This restriction shall not apply to funds contributed to the Trust before a Restricted Period.

(i) Covered Employee Defined . A “Covered Employee” means an “Applicable Covered Employee” as defined by Section 409A(b)(3)(D)(i) of the Code.

(ii) Restricted Period Defined . “Restricted Period” has the meaning provided in Section 409A(b)(3)(B) of the Code.

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(b) Offshore Trust. Notwithstanding anything else in this Trust Agreement, the Trust, including any assets of the Trust, may not be located or transferred outside the United States unless substantially all of the services to which the payments under the applicable Executive Compensation Plan relate are performed in such jurisdiction.

(c) Spartan Stores’ Financial Health. Notwithstanding anything else in this Trust Agreement, the Trust may not be established or funded if such establishment or funding will result in inclusion of trust funds in Executive’s taxable income under Section 409A(b)(2) of the Code before such funds are paid to Executive.

SECTION 2

Payments to Executives

2.1 Payment Schedule.

Spartan Stores shall deliver to the Trustee a schedule (the “Payment Schedule”) that indicates the amounts payable in respect of each Executive (and his or her Beneficiaries) or a formula or other instructions acceptable to the Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Executive Compensation Plans), and the time of commencement for payment of such amounts. Except as otherwise provided in this Trust Agreement, the Trustee shall make payments to the Executives and their Beneficiaries in accordance with the Payment Schedule, formula or payment instructions. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Executive Compensation Plans and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by Spartan Stores.

2.2 Right To Payment.

The entitlement of an Executive or Beneficiary to benefits under the applicable Executive Compensation Plan shall be determined by Spartan Stores or such party as it shall designate under the Executive Compensation Plans (other than any Executive or Beneficiary), and any claim for benefits shall be considered and reviewed under the procedures set forth in the applicable Executive Compensation Plan. However, notwithstanding that general rule, after the Effective Time, the dispute resolution procedure and arbitration provisions of the Executive’s Severance Agreement shall be substituted for the claims procedure set forth in each of the Executive Compensation Plans, subject to the limitations of Section 3. Further, in the event of a dispute between an Executive and Spartan Stores after the Effective Time involving any of the Executive Compensation Plans, the determinations of Spartan Stores (or any plan administrator) shall not be entitled to deference, it being the intent of the parties that there shall be independent determinations of any disputed fact or issue through the dispute resolution and arbitration procedures.

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2.3 Direct Payment by Spartan Stores.

Spartan Stores may make direct payments to each eligible Executive or Beneficiary as benefits become due under the terms of the applicable Executive Compensation Plan. Spartan Stores shall notify the Trustee in writing of its decision to make such payments directly prior to the time amounts are payable to Executives or their Beneficiaries. Subject to Section 3, Spartan Stores may direct the Trustee in writing to reimburse Spartan Stores from the Trust, and debit the applicable Sub-Trust of the applicable Executive, for amounts Spartan Stores paid directly to the Executive or Beneficiary on or after the date the funding obligations of Section 1.2 have been met. Subject to Section 3, the Trustee shall reimburse Spartan Stores for such payments promptly after the Trustee receives satisfactory written evidence that Spartan Stores has made the direct payments. In addition, if the principal of the Trust (including any Sub-Trust), and any earnings thereon, are not sufficient to pay any portion of any benefit in accordance with the terms of the Executive Compensation Plans, Spartan Stores shall make the balance of each such payment as it falls due. The Trustee shall notify Spartan Stores where principal and earnings are not sufficient.

2.4 Default Payment By Trustee.

Upon receipt of a written notice from an Executive or Beneficiary that a payment is due with respect to the Executive under an Executive Compensation Plan and that amounts due have not been paid, the Trustee shall notify Spartan Stores in writing that an Executive or Beneficiary has made a claim for benefits. Spartan Stores shall have ten (10) days from the receipt of such notice in which to provide the Trustee a written notice disputing the right to payment from the Trust. If Spartan Stores does not respond within the time specified in the preceding sentence and no Insolvency has occurred or any Insolvency is no longer continuing, the Trustee shall make the payment or payments due each Executive or Beneficiary in the required amount as due, subject to Section 2.6 below.

If Spartan Stores disputes the Executive’s or Beneficiary’s right to payment from the Trust, the Trustee, the Executive or Spartan Stores may initiate proceedings to settle the dispute. Notwithstanding the claims procedures governing the applicable Executive Compensation Plan, any such dispute under this Trust Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitration award in any court having jurisdiction.

Spartan Stores shall reimburse the Executive and the Trustee for all reasonable costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 2.4. The reimbursement of an eligible amount must be made within thirty (30) days after the Executive or the Trustee requests reimbursement, but in the case of an Executive in no event after the end of the year following that in which the Executive incurred the expense.

In the event of such a dispute involving a Severance Agreement, subject to the limitations of Section 3, until there is a final, nonappealable, determination pursuant to arbitration regarding the Executive’s or Beneficiary’s right to payment the Trustee shall pay all such disputed amounts and provide all benefits under the Severance Agreement to Executive or the Beneficiary; provided, however, the Trustee shall not make any such payments except upon receipt of an undertaking by or on behalf of Executive to repay all such amounts to which Executive or Beneficiary is ultimately determined by the arbitrator (or other final determination) not to be entitled.

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Spartan Stores waives all rights to contest any payment by the Trustee pursuant to this Section 2.4 except in the event of intentional misconduct by the Trustee or a violation of Section 3. Nothing in this Section 2.4 shall require the Trustee to undertake an independent determination or payment.

2.5 Payment Deductions.

Except as otherwise provided in this Trust Agreement, the Trustee shall make the payment or payments to each eligible Executive or Beneficiary and shall debit each payment from the applicable Sub-Trust.

2.6 Limit On Payments; Spartan Stores Obligation.

In no event shall a payment from the Trust to or with respect to an Executive under an Executive Compensation Plan exceed the amount allocated to the applicable Sub-Trust at the time of the payment. Spartan Stores shall be solely responsible for, and shall make as due, all required payments to or with respect to an Executive under the applicable Executive Compensation Plan that are not made from the Trust.

2.7 Missing Persons.

If the recipient entitled to any payment to be made by the Trustee from the Trust cannot be located directly by the Trustee through reasonable efforts, the Trustee shall notify the Committee of that fact. The Trustee shall then determine whether to continue to issue payments to or on behalf of the recipient, to discontinue payments pending the receipt of further information, or to terminate the Sub-Trust with regard to that recipient. The Trustee shall use reasonable efforts to determine the status of the recipient and may, but shall not be required to, seek a judicial determination of the recipient’s status or the action to be taken by the Trustee under this Section 2.7. The Trustee thereafter shall have no obligation to search for or ascertain the whereabouts of any payee under this Trust Agreement.

2.8 Documentation and Information for Trustee.

Spartan Stores at all times shall provide the Trustee with current copies of all Executive Compensation Plans for which the Trust is established and maintained from time to time, including amendments, and shall notify the Trustee when any Executive Compensation Plan is modified or terminated or a new Executive Compensation Plan is created. At least annually, Spartan Stores also shall provide the Trustee with updated information concerning the amounts payable with respect to each Executive under each Executive Compensation Plan and the underlying information necessary for calculating the amounts due.

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SECTION 3

Insolvency; Administration

3.1 Insolvency.

Notwithstanding any other provision of this Trust Agreement, the Trustee shall cease payment of benefits from the Trust to any Executive or Beneficiary, and shall cease any reimbursements to Spartan Stores, if Spartan Stores is Insolvent. Spartan Stores shall be considered “Insolvent” for purposes of this Trust Agreement if Spartan Stores is (a) unable to pay its debts as they become due, (b) subject to a pending proceeding as a debtor under the United States Bankruptcy Code or (c) determined to be insolvent by a governing federal or state regulatory agency.

3.2 Claims of General Creditors. At all times during the continuance of this Trust, the principal and income of the Trust shall be subject to claims of general creditors of Spartan Stores under federal and state law as set forth below.

(a) Duty to Inform; Notice. The Board of Directors and the highest ranking officer of Spartan Stores shall have the duty to inform the Trustee in writing of Spartan Stores’ Insolvency. If a person claiming to be a creditor of Spartan Stores alleges in writing to the Trustee that Spartan Stores has become Insolvent, the Trustee shall determine whether Spartan Stores is Insolvent and, pending such determination, the Trustee shall discontinue payments from the Trust to Executives and Beneficiaries and shall discontinue reimbursements to Spartan Stores.

(b) Duty to Inquire. Unless the Trustee has actual knowledge of Spartan Stores’ Insolvency, or has received notice from Spartan Stores or a person claiming to be a creditor alleging that Spartan Stores is Insolvent, the Trustee shall have no duty to inquire whether Spartan Stores is Insolvent. The Trustee may in all events rely on such evidence concerning Spartan Stores’ solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning Spartan Stores’ solvency.

(c) Payments. If at any time the Trustee has determined that Spartan Stores is Insolvent, the Trustee shall discontinue payments to Executives and Beneficiaries, shall discontinue reimbursements or Sub-Trust termination payments to Spartan Stores, and shall hold the assets of the Trust for the benefit of Spartan Stores’ general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of any Executive or Beneficiary to pursue rights as a general creditor of Spartan Stores with respect to benefits due under the applicable Executive Compensation Plan or otherwise. Any assets of the Trust used for the benefit of creditors as provided above shall be debited from each Sub-Trust in proportion to the assets of Sub-Trust relative to the assets of the Trust as a whole.

(d) Resumption. The Trustee shall resume payments from the Trust to Executives and Beneficiaries and reimbursements to Spartan Stores in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that Spartan Stores is not Insolvent or is no longer Insolvent.

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(e) Omitted Payments. Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to this Section 3.2 and subsequently resumes such payments, the first payments following such discontinuance shall include the aggregate amount of all payments due to Executives and Beneficiaries under the terms of the Executive Compensation Plans for the period of such discontinuance, plus interest at the applicable federal rate as published by the IRS for the applicable period, less the aggregate amount of any payments made by Spartan Stores in lieu of the payments provided for under this Trust Agreement during the period of discontinuance.

SECTION 4

Payments to Spartan Stores

4.1 General Limitation.

Except as otherwise provided in this Trust Agreement, after the Trust has become irrevocable, Spartan Stores shall not have any right or power to direct the Trustee to return to Spartan Stores or to divert to others any of the Trust assets before payment of all benefits has been made to the Executives and Beneficiaries pursuant to the terms of this Trust Agreement and the applicable Executive Compensation Plans.

4.2 Trust Income.

During the term of this Trust, except to the extent explicitly provided otherwise in this Trust Agreement, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested.

SECTION 5

Administration of Trust

5.1 In General.

The Trust and all Trust assets shall be administered by the Trustee pursuant to all of the express and implied duties and powers and subject to all express and implied conditions and limitations contained in or derived from the provisions of this Trust Agreement and conferred and imposed by applicable law. All rights associated with administration of the Trust and with Trust assets shall be exercised by the Trustee, the Committee, or Spartan Stores or a person designated by the Trustee, the Committee, or Spartan Stores, as provided in this Trust Agreement, and in no event shall such rights be exercisable by or rest with any Executive or Beneficiary, except to the extent that approval of an amendment of the Trust Agreement or removal of the Trustee and appointment of a successor Trustee is reserved to the Executive.

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5.2 Duties and Powers of Trustee.

In addition to the duties and powers set forth in other provisions of this Trust Agreement, and subject to all applicable conditions and limitations, the Trustee shall have the following duties and powers with respect to the Trust:

(a) Control, Manage, and Invest Assets. To the extent necessary to carry out the investment responsibilities in Section 6, to hold, manage, improve, repair, control and invest all assets forming part of the Trust;

(b) Records; Reports. To maintain records and to prepare and file reports required by law to be filed by the Trustee or required by agreement with Spartan Stores or by this Trust Agreement;

(c) Payments. To make payments and distributions from the fund as provided in this Trust Agreement, including benefits that have become payable under the applicable Executive Compensation Plan pursuant to Section 2 or that are required to be made to the general creditors of Spartan Stores as set forth in Section 3;

(d) Acquire and Dispose of Assets. To the extent necessary to carry out the investment responsibilities in Section 6, to purchase, sell, convey, exchange, lease, convert, transfer, divide, repair, partition, consent to partition, or otherwise acquire or dispose of any property at any time held in trust under this Trust Agreement by public or private transaction, for the consideration and upon the terms and conditions determined by the Trustee;

(e) Extend Due Dates. To the extent necessary to carry out the investment responsibilities in Section 6, to extend the time of payment of any investment obligation held by it;

(f) Voting Rights. To exercise all voting rights with respect to property held in the Trust directly or by proxy, with or without the power of substitution, and to delegate the Trustee’s powers and discretions with respect to such property to any such proxy;

(g) Exercise Other Rights. To the extent necessary to carry out the investment responsibilities in Section 6, to exchange securities, to sell or exercise subscription, conversion, and other rights and options, and make payments from the Trust in connection with that action, with respect to any property held in the Trust;

(h) Employ Agents and Advisors. To engage as reasonably necessary agents, attorneys, accountants, and other persons (who also may be employed by Spartan Stores or the Committee), to delegate duties and discretionary powers to such persons, and to reasonably rely upon information and advice furnished by such persons; provided that each delegation and acceptance of duties and powers shall be in writing; and provided further that the Trustee may not delegate its responsibilities for the management and control of the assets of the Trust;

(i) Insure Assets. To insure Trust assets when appropriate (as determined by the Trustee in its discretion) through a policy or contract of casualty insurance;

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(j) Custodian. To keep on deposit with a custodian in the United States any part of the Trust;

(k) Collection. To demand, collect, and receive the principal, dividends, interest, other income and all other money or property due the Trust;

(l) Registration and Holding of Trust Assets. To register investments in its own name or in the name of a nominee; to hold any investment in bearer form; and to combine certificates representing securities with certificates of the same issue held by it in other fiduciary capacities; to deposit or to arrange for the deposit of such securities with any depository or other securities clearing entity, even though, when so deposited, such securities may be held in the name of the nominee of such depository with other securities deposited therewith by other persons; or to deposit or to arrange for the deposit of any securities issued or guaranteed by the United States government, or any agency or instrumentality thereof, including securities evidenced by book entries rather than by certificates, with the United States Department of the Treasury or a Federal Reserve Bank, even though, when so deposited, such securities may not be held separate from securities deposited therein by other persons; provided, however, that no securities held in the Trust shall be deposited with the United States Department of the Treasury or a Federal Reserve Bank or other depository in the same account as any individual property of the Trustee, and provided, further, that the books and records of the Trustee shall at all times show that all such securities are part of the Trust;

(m) Claims. To settle, compromise or submit to arbitration any claims, debts or damages due or owing to or from the Trust, to commence or defend suits or legal proceedings to protect any interest of the Trust, and to represent the Trust in all suits or legal proceedings in any court or before any other body or tribunal; provided, however, that the Trustee shall not be required to take any such action unless it shall have been indemnified by Spartan Stores to its reasonable satisfaction against liability or expenses it may incur;

(n) Execute Documents. To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers granted in this Trust Agreement; and

(o) Other Acts. To perform all other acts the Trustee deems necessary, suitable, or desirable for the control and management of the Trust and discharge of its duties.

Notwithstanding the foregoing, the Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein.

5.3 Limitation on Duties and Powers of the Trustee.

Unless expressly provided for in this Trust Agreement or otherwise properly delegated and assumed by agreement of the Trustee, the Trustee shall not be required to exercise a duty or power of Spartan Stores, the Committee, or any other fiduciary under this instrument.

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If the Trustee appoints an investment manager to manage and invest some or all of the Trust assets (an “Investment Manager”), the Investment Manager shall have, and the Trustee shall not have, the express and implied duties and powers under this Trust Agreement with respect to investment of Trust assets subject to the Investment Manager’s control. The Trustee shall have no obligation or power to exercise discretionary authority or control with respect to investment of the assets managed by the Investment Manager, or to render advice regarding the investment of such assets. The Trustee shall not be liable for the investment performance of the assets managed by the Investment Manager, other than as provided in Section 6.2. The powers and duties of the Trustee with respect to such Trust assets shall be limited to the following:

(a) Custody and Protection. To act as custodian of the Trust assets not transferred to the custody of the Investment Manager or another custodian, and to protect the assets in its custody from loss by theft, fire, or other cause;

(b) Acquisitions. To acquire additional assets for the Trust in accordance with the direction of the Investment Manager;

(c) Dispositions. To sell or otherwise dispose of Trust assets in accordance with the direction of the Investment Manager;

(d) Accountings. To account for and render accountings with respect to the Trust, except for assets held by another custodian;

(e) Authorized Actions. To take authorized actions for and on behalf of the Trust in accordance with the direction of the Investment Manager; and

(f) Ministerial and Custodial Tasks. To perform other ministerial and custodial tasks in accordance with the direction of the Investment Manager.

If Trust assets are transferred to another custodian, that custodian shall have, and the Trustee shall not have, the duties and powers set forth under Section 5.2 with respect to those assets.

Except as provided in Section 6.2, the Trustee shall have no liability or responsibility for any loss resulting to the Trust by reason of the sale or purchase of any investment directed by an Investment Manager or by reason of the failure to take any action with respect to any investment that was acquired pursuant to any such direction in the absence of further directions of such Investment Manager. The Trustee may rely upon any order, certificate, notice, direction or other documentary confirmation purporting to have been issued by the Investment Manager which the Trustee believes to be genuine and to have been issued by the Investment Manager.

5.4 Accounting by Trustee.

(a) Records and Accounting. The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between Spartan Stores and Trustee. As soon as reasonably practicable following the close of each calendar year and each other valuation date agreed by Spartan Stores and the Trustee, and after the removal or resignation of the Trustee, the Trustee shall deliver to the Committee an account of its administration of the Trust during such year, or during the period from the close of the last valuation period to the date of the removal or resignation, setting forth all investments, receipts,

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disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or valuation period, or as of the date of such removal or resignation, as the case may be.

(b) Objection; Settlement. The Committee may object to an accounting within 180 days after it is furnished and require that it be settled by an audit by a qualified, independent certified public accountant. The auditor shall be chosen by the Trustee from a list of at least three such accountants furnished by the Committee at the time the audit is requested. Either the Committee or the Trustee may require that the account be settled by a court of competent jurisdiction, in lieu of or in conjunction with the audit. All expenses of any audit or court proceedings, including reasonable attorney fees, shall be allowed as administrative expenses of the Trust and paid by Spartan Stores.

(c) Revision. If the Committee does not object to an accounting within the time provided, the account shall be deemed settled and final for the period covered by it. Notwithstanding the preceding sentence, the Trustee agrees it will, at reasonable cost, revise any accounting if determined by Spartan Stores to be necessary due to a latent error or omission and will do so at no cost to the extent the error or omission was the fault of the Trustee.

(d) Sub-Trust Accounting. The Trustee shall maintain a recordkeeping account for each Sub-Trust that, pursuant to rules established by the Trustee, will reflect with respect to each Sub-Trust:

(i) Deposits . Deposits made by Spartan Stores to the Sub-Trust pursuant to Section 1 of this Trust Agreement;

(ii) Income . Income, losses, and appreciation or depreciation in the value of Sub-Trust assets resulting from investment of the assets;

(iii) Payments . Payments made from the Sub-Trust to the Executive or Beneficiary and to Spartan Stores; and

(iv) Other . Any other amounts charged to the Sub-Trust, including administrative and investment expenses as described in this Trust Agreement.

The accounting provisions of this Section 5.4 shall be applied separately to each Sub-Trust maintained for each Executive under each applicable Executive Compensation Plan.

(e) Compensation and Expenses. Spartan Stores shall pay directly reasonable compensation of the Trustee and all expenses reasonably incurred by the Trustee and the Committee in the administration of this Trust, including compensation of agents, actuaries, attorneys, accountants, and other persons employed by the Trustee or the Committee, and including indemnification costs described in Section 9.2, and including any other amounts owed to Trustee or expenses of the Trust under this Trust Agreement other than as provided in the following sentence. Expenses solely attributable to investment of the Trust assets, such as investment manager fees, load or other commission fees, brokerage, postage, express or insurance charges, and stock transfer stamps expense, shall be paid from the Trust to the extent not paid directly by Spartan Stores and shall be charged to each Sub-Trust in proportion to the assets in the Sub-Trust.

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To the extent such compensation and expenses remain unpaid forty-five (45) days after mailing of an invoice for the same by the Trustee to Spartan Stores, the Trustee may notify Spartan Stores of its intent to pay the amounts due from the Trust. If any amount remains unpaid thirty (30) days after mailing of the notice of intent to pay from the Trust, the Trustee may pay such compensation and expenses from the Trust. Expenses paid from the Trust shall be charged to each Sub-Trust in proportion to the assets in the Sub-Trust.

5.5 Carrying on a Business.

Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains from that business within the meaning of Section 301.7701-2 of the Treasury Regulations promulgated pursuant to the Code.

5.6 Fiduciary Duty of Trustee.

The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

SECTION 6

Investment and Investment Managers

6.1 Investment of Trust Assets.

(a) SERP and Severance Agreement Sub-Trust Investment Authority. The Trustee may only invest SERP and Severance Agreement Sub-Trust assets in investment grade debt securities as provided in this Section 6.1(a) and shall invest those assets with the goal of preserving principal and maintaining liquidity. SERP and Severance Agreement Sub-Trust assets may be invested and reinvested in any readily marketable investment grade debt securities, such as preferred stocks; corporate bonds; municipal bonds; notes; debentures; certificates of deposit or demand or time deposits, including any such deposits with the Trustee; and obligations of the United States. Notwithstanding these general rules, the Trustee shall not invest SERP or Severance Agreement Sub-Trust assets in any security (including stock or rights to acquire stock) issued by Spartan Stores or any affiliate other than a de minimis amount held in a mutual fund.

(b) SESP Sub-Trust Investment Authority. The “Investment Results” (as such term is defined in Section 2.19 of the SESP) of the SESP Accounts shall be determined in accordance with Section 4.5 of the SESP and amounts credited to an Executive’s SESP Sub-Trust shall be determined in accordance with those Investment Results. Notwithstanding the foregoing, and notwithstanding Sections 2.19 and 4.5 of the SESP, after the Effective Time the Plan Administrator of the SESP (as defined in Section 2.24 of the SESP) may determine that

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some or all of the investment funds will no longer be available to Executives participating in the SESP for purposes of determining the Investment Results to be credited to an Executive’s SESP Sub-Trust. If the SESP Plan Administrator makes such a determination, an Executive may choose among the remaining investment funds made periodically available by the SESP Plan Administrator for the purpose of determining the Investment Results credited to that Executive’s SESP Sub-Trust. Notwithstanding these general rules, after the Effective Time the Trustee shall not invest in any security (including stock or rights to acquire stock) or obligations issued by Spartan Stores or any affiliate other than a de minimis amount held in a mutual fund.

Notwithstanding anything to the contrary contained in this Section 6.1(b), however, the Trustee shall be under no obligation to make actual investments that correspond to the Executive’s investment elections, even though the Executive’s elections are used to determine the Investment Results on the Executive’s SESP Sub-Trust.

If at any time no investment funds are made available, the Trustee shall invest the SESP Sub-Trust assets as provided in Section 6.1(a), above, and the Investment Results of the SESP Accounts shall be determined based on the actual investment experience of the Trustee with respect to those SESP Sub-Trust assets.

The provisions of this Section 6.1(b) constitute an amendment of Sections 2.19 and 4.5 of the SESP in accordance with Section 8.2 of the SESP, effective at the Effective Time.

(c) Other Sub-Trust Investment Authority. Any additional sub-trusts created in accordance with Section 1.1 shall be invested as provided in Section 6.1(a).

(d) Short Term Investment Authority. Trust assets may be held uninvested only for such reasonable periods as are necessary to invest new assets deposited in Trust or to clear investment transactions and reinvest the proceeds. The Trustee may hold reasonable amounts of assets invested only in an appropriate daily or other short-term investment alternative for a reasonable period of time pending payment of benefits, payment of expenses or other distributions, or pending availability of other investments.

6.2 Investment Discretion.

Except as provided in Section 6.1, the Trustee shall have sole and absolute discretion in the management and investment of the fund and in exercising investment responsibility shall have all the duties and powers set forth under Section 5.2. Spartan Stores and the Committee shall not have any of the express or implied duties and powers contained in this Trust Agreement with respect to the control, management and investment of Trust assets and shall not have any power to approve or withhold approval of any action by the Trustee with respect to the control, management and investment of the Trust. The Trustee shall have the sole right to retain or discharge Investment Managers and related custodians, and to determine the terms of the engagement of any Investment Manager and related custodian.

The Trustee shall have the right, in its sole discretion, to delegate its investment responsibility to an Investment Manager, which may be an affiliate of the Trustee. In the event the Trustee appoints an affiliated Investment Manager, the Trustee shall remain, at all times, responsible for the acts of the affiliated Investment Manager. In all cases, the Trustee may not appoint an Investment Manager if the appointment will increase the cost or expense to be paid by Spartan Stores unless Spartan Stores consents to the appointment.

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SECTION 7

Resignation and Removal of Trustee

7.1 Resignation of Trustee.

The Trustee may resign at any time by written notice to Spartan Stores, which shall be effective 60 days after receipt of such notice unless Spartan Stores and the Trustee agree otherwise.

7.2 Removal of Trustee.

The Trustee may be removed by Spartan Stores only with the consent of a majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time.

7.3 Appointment of Successor.

Subject to Sections 7.1 and 7.2 of this Trust Agreement, if the Trustee resigns or is removed, a successor that is independent of Spartan Stores shall be appointed by Spartan Stores as provided in this Section 7.3. If a Trustee desires to resign or is removed, a successor Trustee, which shall be the trust department of a bank or trust company ranked among the 50 largest banks in size of total assets in the United States, shall be appointed by Spartan Stores with the consent of a majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time. In the event Spartan Stores does not appoint a successor Trustee, the Trustee may apply to a court of competent jurisdiction for appointment of a successor Trustee or for instructions. The appointment of the successor shall be effective when accepted in writing by the new Trustee or as of such later date or dates when Trust assets are delivered to the successor Trustee.

7.4 Duties of Predecessor Trustee and Successor Trustee.

Upon the resignation or removal of the Trustee and appointment of a successor Trustee, the resigning or removed Trustee shall transfer and deliver the assets of the Trust to such successor after reserving such reasonable amounts as it shall deem necessary to provide for any expenses, fees, or taxes then or thereafter chargeable against the Trust. The transfer shall be completed within 10 days after receipt of notice of resignation or removal, unless Spartan Stores extends the time limit. A Trustee that resigns or is removed shall promptly furnish to the Committee and the successor Trustee a final account of its administration of the Trust. A successor Trustee shall succeed to all rights in and ownership of the predecessor Trustee in the assets of the Trust and the predecessor Trustee shall deliver the property comprising the Trust to the successor Trustee together with any instruments of transfer, conveyance, assignment, and further assurances as the successor Trustee may reasonably require. Each successor Trustee shall have all the powers, rights, and duties conferred by this Trust Agreement as if named the initial Trustee. Subject to applicable law, no Trustee shall be personally liable for any act or failure to act of a predecessor or successor Trustee.

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7.5 Expenses.

All reasonable expenses of any resigning or removed Trustee, including the reasonable cost of any court proceeding deemed necessary by the resigning or removed Trustee, shall be administrative expenses paid by Spartan Stores.

SECTION 8

Amendment or Termination

8.1 Amendment.

(a) In General. This Trust Agreement as a whole or its provisions governing a particular Sub-Trust may be amended by a written instrument executed by the Trustee and Spartan Stores. If an amendment to the Trust Agreement as a whole could reasonably be anticipated to have an adverse impact on an Executive or Beneficiary (including but not limited to an impact on the amount, likelihood or timing of payment of any amount due or that may become due under an Executive Compensation Plan) or to affect an Executive’s or Beneficiary’s voting rights, then the amendment shall also require the written consent of the majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time who could reasonably be anticipated to be adversely impacted by the amendment.

If the amendment to a particular Sub-Trust could reasonably be anticipated to have an adverse impact on the Executive or Beneficiary as to whom the Sub-Trust relates (including but not limited to an impact on the amount, likelihood or timing of payment of any amount due or that may become due under an Executive Compensation Plan) or to affect an Executive’s or Beneficiary’s voting rights, then the amendment to the Sub-Trust shall also require the written consent of the Executive or Beneficiary to whom the Sub-Trust relates.

Notwithstanding the foregoing, no such amendment shall conflict with the terms of an Executive Compensation Plan or shall make the Trust revocable after it has become irrevocable in accordance with Section 1.2 of this Trust Agreement.

(b) Trustee; Investment Manager. The powers, duties and liabilities of the Trustee and any Investment Manager under this Trust Agreement cannot be changed without their mutual written consent.

8.2 Termination.

(a) Timing. Subject to the allocation of assets provided in Section 8.2(c), below, each Sub-Trust shall automatically terminate when an Executive and/or Beneficiary is no longer entitled to benefits pursuant to the terms of the applicable Executive Compensation Plan;

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provided, however, that if any Executive or Beneficiary has an outstanding claim against Spartan Stores regarding his or her benefits under an Executive Compensation Plan, the Sub-Trust shall not terminate until the claim has been finally resolved, until all assets held in the Sub-Trust have been properly distributed, or until the Executive agrees in writing to the termination. A Sub-Trust may also terminate with the written consent of the affected Executive or Beneficiary, as provided in Section 1.3. The entire Trust shall terminate upon the termination of all Sub-Trusts. Except as provided above, the Trust and each Sub-Trust shall not terminate with respect to an Executive or Beneficiary until the date on which such Executive and/or Beneficiary is no longer entitled to any benefits pursuant to the terms of any of the Executive Compensation Plans.

(b) Continuing Powers. Upon termination of this Trust or any Sub-Trust, the Trustee shall continue to have such of the powers provided in this Trust Agreement as are necessary or desirable for the orderly liquidation and distribution of the Trust or Sub-Trust assets.

(c) Assets. Upon termination of a Sub-Trust, all assets remaining in the Sub-Trust shall be allocated as provided in this Section 8.2(c). The Trustee shall not make any transfer to another Sub-Trust or pay any funds to Spartan Stores under this Section 8.2 prior to satisfaction of all benefit obligations to which the applicable Sub-Trust relates.

(i) Direct Assets to Executive’s Sub-Trusts . The Trustee shall transfer the assets from any terminated Sub-Trust to the other Sub-Trusts relating to the affected Executive, and allocate the assets among the Executive’s other Sub-Trusts proportionately based on the assets in the other Sub-Trusts, until such assets are fully allocated or such Sub-Trusts reach 100% of the amount necessary to pay the Executive the amount the Executive could be entitled to under the applicable Executive Compensation Plan. If assets remain after the application of the immediately preceding sentence, such assets shall be allocated pursuant to Section 8.2(c)(ii) below.

(ii) Direct Assets to Other Sub-Trusts. If there are assets remaining after the allocation provided for in Section 8.2(c)(i), above, the Trustee shall transfer the remaining assets from that Sub-Trust to the Sub-Trusts for all other Executives, and allocate the assets among the other Sub-Trusts proportionately based on the assets in the other Sub-Trusts, until such assets are fully allocated or such Sub-Trusts reach 100% of the amount necessary to pay the Executive the amount the Executive could be entitled to under the applicable Executive Compensation Plan.

(iii) Return to Spartan Stores. If assets remain after the application of Sections 8.2(c)(i) and (c)(ii), to the extent permitted by Section 3, such assets shall be returned to Spartan Stores.

(d) Trust. Upon termination of the entire Trust, all assets remaining in the Trust shall be returned to Spartan Stores.

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SECTION 9

Liability and Indemnification

9.1 Liabilities Mutually Exclusive.

Except as otherwise provided in this Trust Agreement or by applicable law, Spartan Stores, the Trustee, the Committee, the Board of Directors, and each member thereof and each Investment Manager shall be responsible only for its or their own acts or omissions.

9.2 Indemnification.

Spartan Stores hereby agrees to indemnify and hold harmless the Trustee and its directors, officers, employees and agents from and against all losses, damages, liabilities, claims, costs, and expenses, including reasonable attorneys’ fees, that the Trustee or its directors, officers, employees and agents may incur by reason of the negligence or willful misconduct of Spartan Stores or the Committee. In making any distributions and taking any other action under this Trust Agreement, the Trustee may rely upon and shall be fully protected in relying upon, any notice, certificate, or other paper or written document provided by Spartan Stores or the Committee that is reasonably believed to be genuine and consistent with this Trust Agreement and the Executive Compensation Plans.

All duties and responsibilities of the Trustee shall be exercised in its sole and absolute discretion and, except as provided below, the Trustee and its directors, officers, employees and agents shall be protected from any loss or liability in the good faith exercise of that discretion. Spartan Stores agrees that it will indemnify and hold harmless the Trustee and its directors, officers, employees and agents from and against all losses, damages, liabilities, claims, costs and expenses, including reasonable attorneys’ fees, that the Trustee may incur by reason of its good faith acts or omissions in the exercise of its discretion. However, indemnification shall not apply to grossly negligent acts or omissions, acts or omissions in bad faith or to willful misconduct.

The indemnification obligation described in this Section 9.2 shall survive and continue after the termination of the Trust or any Sub-Trust and may not be altered or amended with respect to any current or former Trustee without its written consent.

SECTION 10

General Provisions

10.1 Successor to Spartan Stores.

In the event Spartan Stores is succeeded by another entity, references to Spartan Stores in this Trust Agreement shall refer to the successor.

10.2 Merger of Trustee.

If the Trustee is merged or consolidated with, or shall sell or transfer all or substantially all of its assets and business to another entity, or shall be in any manner reorganized or reincorporated, then the successor corporation or other entity shall continue to be the Trustee pending subsequent resignation or removal as provided in Section 7.

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10.3 Nonalienation.

Benefits payable to Executives and their Beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. An interest in an amount promised shall not provide collateral or security for a debt of an Executive or Beneficiary or be subject to garnishment, execution, assignment, levy, or to another form of judicial or administrative process or to the claim of a creditor of an Executive or Beneficiary, through legal process or otherwise. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or to otherwise dispose of benefits payable, before actual receipt of the benefits, or a right to receive benefits, shall be void and shall not be recognized.

10.4 Severability.

Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

10.5 Governing Law.

This Trust Agreement shall be governed by and construed in accordance with the laws of the state of Michigan, to the extent not preempted by federal law.

10.6 Notices.

Notices pursuant to this Trust Agreement shall be given by first class or priority U.S. mail or by commercial express delivery and shall be addressed to:


Spartan Stores:		Spartan Stores, Inc. Attn: General Counsel 850 76th Street S.W. P.O. Box 8700 Grand Rapids, Michigan 49518

Trustee:
		Attn:

10.7 Counterparts.

This Trust Agreement and any amendment hereto may be executed in two or more counterparts.

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10.8 Gender and Number.

Except when otherwise indicated by the context, words denoting the masculine gender shall include the feminine, the singular shall include the plural, and the plural shall include the singular.

10.9 Scope of this Agreement.

This Trust Agreement will be binding on the Executives and all other persons entitled to any benefits hereunder and their respective heirs and legal representatives, and upon Spartan Stores, the Committee, the Trustee, and any Investment Managers, and their successors and assigns.

10.10 Statutory References.

Any references in this Trust Agreement to a section of the Code or any other statute or regulation shall include any comparable section or sections that amends, supplements, or supersedes that section.

10.11 Headings.

The headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge, or describe the scope or intent of the Trust Agreement or the construction of any provision thereof.

10.12 Section 409A.

This Trust is intended to comply with the trust funding restrictions of Section 409A(b) of the Code and shall be interpreted and operated consistently with those intentions.

IN WITNESS WHEREOF, this Trust Agreement is executed on behalf of Spartan Stores, and the Trustee by their respective authorized officers, as of the day and year set forth above.


SPARTAN STORES, INC.

By

Its

[TRUSTEE]

By

Its

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TABLE OF CONTENTS


		Page
SECTION 1	Establishment of the Trust		2
1.1	Trust; Sub-Trusts		2
1.2	Spartan Stores Contributions		2
1.3	Irrevocable		3
1.4	Grantor Trust		3
1.5	Limited Rights of Executive		3
1.6	Acceptance by Trustee		4
1.7	Committee; Absence of Committee or Spartan Stores		4
1.8	Trust Funding Restrictions		4
(a)	Covered Employees		4
(b)	Offshore Trust		5
(c)	Spartan Stores’ Financial Health		5
SECTION 2	Payments to Executives		5
2.1	Payment Schedule		5
2.2	Right To Payment		5
2.3	Direct Payment by Spartan Stores		6
2.4	Default Payment By Trustee		6
2.5	Payment Deductions		7
2.6	Limit On Payments; Spartan Stores Obligation		7
2.7	Missing Persons		7
2.8	Documentation and Information for Trustee		7
SECTION 3	Insolvency; Administration		8
3.1	Insolvency		8
3.2	Claims of General Creditors		8
	(a) Duty to Inform; Notice		8
	(b) Duty to Inquire		8
	(c) Payments		8
	(d) Resumption		8
	(e) Omitted Payments		9
SECTION 4	Payments to Spartan Stores		9
4.1	General Limitation		9
4.2	Trust Income		9
SECTION 5	Administration of Trust		9
5.1	In General		9
5.2	Duties and Powers of Trustee		10
	(a) Control, Manage, and Invest Assets		10
	(b) Records; Reports		10
	(c) Payments		10
	(d) Acquire and Dispose of Assets		10
	(e) Extend Due Dates		10
	(f) Voting Rights		10
	(g) Exercise Other Rights		10

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	(h) Employ Agents and Advisors	11
	(i) Insure Assets	11
	(j) Custodian	11
	(k) Collection	11
	(l) Registration and Holding of Trust Assets	11
	(m) Claims	11
	(n) Execute Documents	11
	(o) Other Acts	11
5.3	Limitation on Duties and Powers of the Trustee	11
	(a) Custody and Protection	12
	(b) Acquisitions	12
	(c) Dispositions	12
	(d) Accountings	12
	(e) Authorized Actions	12
	(f) Ministerial and Custodial Tasks	12
5.4	Accounting by Trustee	12
	(a) Records and Accounting	12
	(b) Objection; Settlement	13
	(c) Revision	13
	(d) Sub-Trust Accounting	13
	(e) Compensation and Expenses	13
5.5	Carrying on a Business	14
5.6	Fiduciary Duty of Trustee	14
SECTION 6	Investment and Investment Managers	14
6.1	Investment of Trust Assets	14
	(a) SERP and Severance Agreement Sub-Trust Investment Authority	14
	(b) SESP Sub-Trust Investment Authority	14
	(c) Other Sub-Trust Investment Authority	14
	(d) Short Term Investment Authority	14
6.2	Investment Discretion	14
SECTION 7	Resignation and Removal of Trustee	16
7.1	Resignation of Trustee	16
7.2	Removal of Trustee	16
7.3	Appointment of Successor	16
7.4	Duties of Predecessor Trustee and Successor Trustee	16
7.5	Expenses	17
SECTION 8	Amendment or Termination	17
8.1	Amendment	17
	(a) In General	17
	(b) Trustee; Investment Manager	17
8.2	Termination	17
	(a) Timing	17
	(b) Continuing Powers	18
	(c) Assets	18
	(d) Trust	18
SECTION 9	Liability and Indemnification	19

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9.1	Liabilities Mutually Exclusive	19
9.2	Indemnification	19
SECTION 10	General Provisions	19
10.1	Successor to Spartan Stores	19
10.2	Merger of Trustee	19
10.3	Nonalienation	20
10.4	Severability	20
10.5	Governing Law	20
10.6	Notices	20
10.7	Counterparts	20
10.8	Gender and Number	21
10.9	Scope of this Agreement	21
10.10	Statutory References	21
10.11	Headings	21
10.12	Section 409A	21

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Exhibit 10.19

Schedule to Notes in Form of Executive Severance Agreement


Note (A)		Note (B)
KATHLEEN M. MAHONEY		December 2, 2013
MARK SHAMBER		September 5, 2017
Christopher P. Meyers		April 11, 2016

EXECUTIVE SEVERANCE AGREEMENT

THIS AGREEMENT is entered into as of (B) (the “ Effective Date ” ), by and between SPARTANNASH COMPANY, a Michigan corporation (“ SpartanNash ”), and (A) (“ Executive ”).

W I T N E S S E T H:

WHEREAS, Executive currently serves as a key employee of SpartanNash and/or its subsidiaries (the “ Company ”) and his services and knowledge are valuable to the Company in connection with the management of one or more of the Company’s principal operating facilities, divisions, or subsidiaries; and

WHEREAS, the Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its shareholders; and

WHEREAS, the Board has determined that it is in the best interests of the Company and its shareholders to secure Executive’s continued services and to ensure Executive’s continued dedication and objectivity in the event of any threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as hereafter defined) of the Company, without concern as to whether Executive might be hindered or distracted by personal uncertainties and risks created by any such possible Change in Control, and to encourage Executive’s full attention and dedication to the Company and/or its subsidiaries, the Board has authorized the Company to enter into this Agreement.

NOW, THEREFORE, THE COMPANY AND EXECUTIVE AGREE AS FOLLOWS:

Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:

(a) “ Board ” means the Board of Directors of the Company.

Executive’s d uties); or (2) the willful engaging by Executive in gross misconduct materially and demonstrably injurious to the Company. For purposes of this Section, no act or failure to act on the part of Executive shall be considered “willful” unless done or omitted to be done by Executive not in good faith and without reasonable belief that his action(s) or omission(s) was in the best interests of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until the Company provides Executive with a copy of a resolution adopted by an affirmative vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive, with counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Executive has been guilty of conduct set forth in subsections (1) or (2) above, setting forth the particulars in detail. A determination for Cause by the Board shall not be binding upon or entitled to deference by any finder of fact in the event of a dispute, it being the intent of the parties that such finder of fact shall make an independent determination of whether the termination was for “Cause” as defined in (1) or (2) above.

(c)

“ Change in Control ” means:

(1) the acquisition by any individual, entity, or group (a “ Person ”), including any “person” within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of 20% or more of either (i) the then outstanding shares of common stock of the Company (the “ Outstanding Company Common Stock ”) or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “ Outstanding Company Voting Securities ”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the Company, (B) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any Person controlled by the Company, (C) any acquisition by any corporation pursuant to a reorganization, merger, or consolidation involving the Company, if, immediately after such reorganization, merger, or consolidation, each of the conditions described in clauses (i), (ii), and (iii) of subsection (c)(3) shall be satisfied, or (D) any acquisition by the Executive or any group of persons including the Executive; and provided further that, for purposes of clause (A), if any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall become the beneficial owner of 20% or more of the Outstanding Company Common Stock or 20% or more of the Outstanding Company Voting Securities by reason of an acquisition by the Company and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Company Common Stock or any additional Outstanding Company Voting Securities, such additional beneficial ownership shall constitute a Change in Control;

director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board; and provided further, that no individual who was initially elected as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board, shall be deemed to have been a member of the Incumbent Board;

(3) the effective time and consummation of a reorganization, merger, or consolidation approved by the shareholders of the Company unless, in any such case, immediately after such reorganization, merger, or consolidation, (i) more than 50% of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, or consolidation and more than 50% of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such reorganization, merger, or consolidation and in substantially the same proportions relative to each other as their ownership, immediately prior to such reorganization, merger, or consolidation, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (ii) no Person (other than (A) the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or the corporation resulting from such reorganization, merger, or consolidation (or any corporation controlled by the Company), or (B) any Person which beneficially owned, immediately prior to such reorganization, merger, or consolidation, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of such corporation or 20% or more of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger, or consolidation; or

(4) the effective time and consummation of (i) a plan of complete liquidation or dissolution of the Company as approved by the shareholders of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company as approved by the shareholders of the Company other than to a corporation with respect to which, immediately after such sale or other disposition, (A) more than 50% of the then outstanding shares of common stock thereof and more than 50% of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such sale or other disposition and in substantially the same proportions relative to each other as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (other than the Company, any employee benefit plan (or related trust) sponsored or maintained

by the Company or such corporation (or any corporation controlled by the Company), or any Person which beneficially owned, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock thereof or 20% or more of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition.

(d) “ Code ” means the Internal Revenue Code of 1986, as amended.

(e) “ Common Stock ” means the common stock of the Company, no par value per share.

(f) “ Date of Termination ” means the effective date on which Executive’s employment by the Company terminates as specified in a Notice of Termination by the Company or Executive, as the case may be , in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code. Notwithstanding the previous sentence, (i) if the Executive’s employment is terminated for Disability, as defined in Section 1(g), then such Date of Termination shall be no earlier than thirty (30) days following the date on which a Notice of Termination is received, and (ii) if the Executive’s employment is terminated by the Company other than for Cause, then such Date of Termination shall be no earlier than thirty (30) days following the date on which a Notice of Termination is received.

( g) “ Disability ” means Executive’s failure to be available to substantially perform his duties with the Company on a full-time basis for at least one hundred eighty (180) consecutive days as a result of Executive’s incapacity due to mental or physical illness.

( h ) “ Good Reason ” means, without Executive’s express written consent, the occurrence of any of the following events after or in connection with a Change in Control:

(2) a reduction by the Company in Executive’s rate of annual base salary as in effect immediately prior to such Change in Control or as the same may be increased from time to time thereafter;

(6) the failure of the Company to pay any amounts owed Executive as salary, bonus, deferred compensation or other compensation;

(7) the failure of the Company to obtain any assumption agreement contemplated in Section 9( b);

(8) any purported termination of Executive’s employment which is not effected pursuant to a Notice of Termination which satisfies the requirements of a Notice of Termination; or

(9) any other material breach by the Company of its obligations under this Agreement.

For purposes of this Agreement, any good faith determination of Good Reason made by Executive shall be conclusive on the parties; except that an isolated and insubstantial action

taken in good faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by Executive shall not constitute Good Reason. Any event or condition described in this Section 1( h ) which occurs prior to a Change in Control, but which Executive reasonably demonstrates was at the request of or in response to a Third Party who effectuates a Change in Control or who has indicated an intention or taken steps reasonably calculated to effect a Change in Control, shall constitute Good Reason following a Change in Control for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control.

Executive may not terminate the employment for Good Reason unless:

(ii) the Company fails, within ten (10) days after notice from Executive under (i) above, to revoke the action or correct the omission and make the Executive whole; and

(iii) Executive gives notice of termination within thirty (30) days after expiration of the ten (10) day period under (ii) above.

Executive need not fulfill the above conditions a second time if the Company repeats the act or omission constituting Good Reason.

(i) “ Mandatory Retirement ” means Executive’s involuntary retirement as required by a lawful Company policy requiring Executive to retire at or after age sixty‑five (65), but only if such policy is adopted by the Company before a Change in Control and only if such policy was not adopted by the Company at the request of or in response to a Third Party who subsequently effectuates a Change in Control.

(j) “ Nonqualifying Termination ” means a termination of Executive’s employment (1) by the Company for Cause, (2) by Executive for any reason (including a voluntary retirement) other than for Good Reason with Notice of Termination, (3) as a result of Executive’s death, ( 4) by the Company due to Executive’s Disability, unless within thirty (30) days after Notice of Termination is provided to Executive, Executive shall have returned (or offered to return, if not permitted by the Company to do so) to substantial performance of Executive’s duties on a full-time basis, or (5) as a result of Executive’s Mandatory Retirement.

( k) “ Notice of Termination ” means a written notice by the Company or Executive, as the case may be, to the other, which (1) indicates the specific reason for Executive’s termination, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment, and (3) specifies the Date of Termination. The failure by Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the

Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(l) “ Termination Period ” means the period of time beginning with a Change in Control and ending two (2) years following the Change in Control.

Term of Agreement. This Agreement shall commence on the Effective Date and shall continue in effect until the Company has fulfilled all of its obligations under this Agreement following any termination of Executive’s employment with the Company.

(a) Lump Sum Cash Payment. On the tenth ( 10th) business day after the Date of Termination, Executive shall receive a lump sum cash payment in an amount equal to the sum of the following:

(3) [If the Date of Termination occurs before November 19, 2015, an amount equal to one (1) times the sum of (i) and (ii) as follows, or if the Date of Termination occurs on or after November 19, 2015,] ¹ an amount equal to two (2) times the sum of [(i) and (ii) as follows] ¹ : (i) the higher of the Executive’s annual rate of base salary from the Company in effect on the Date of Termination or in effect on the day before the Change in Control; and (ii) the higher of (A) the Executive’s current year target bonus under the Annual Plan (with such calculations to be made as though the target level has been achieved for each performance goal (as defined in the Annual Plan)), or (B) the current ‑year forecasted bonus under the Annual Plan as of the Date of Termination.

¹	This text appears only in Ms. Mahoney’s agreement.

(1) For the period beginning on the Date of Termination and ending on the earlier of (A) the end of the twenty-fourth (24th) month after the Date of Termination or (B) the date on which Executive receives a substantially equal benefit from a new employer, the Company will reimburse Executive for 100% of Executive’s cost to obtain health, dental and prescription drug benefits equal to those provided by the Company for the Executive and eligible dependents immediately before the Date of Termination. Such reimbursement shall consist of the COBRA continuation cost for any portion of the above period that Executive is entitled to elect COBRA continuation coverage. For any portion of the above period that Executive is not entitled to elect COBRA continuation coverage, such reimbursement shall be in the amount of the Executive’s cost to obtain equivalent coverage from another source. Reimbursements under this Section 3(b)(1) will be made no later than thirty (30) days after Executive requests reimbursement, but in no event after the year following that in which the Executive incurs such expense. Reimbursements under this Section 3(b)(1) will be reported as part of Executive's W-2 compensation and will be subject to Federal income tax withholding.

(2) For the period beginning on the Date of Termination and ending on the earlier of (A) the end of the twelfth ( 12th) month after the Date of Termination or ( B) the date on which Executive receives a substantially equal benefit from a new employer , the Company will continue the Executive’s tax and financial planning benefit , with reimbursement of any costs incurred by Executive to obtain such benefits to be made to the Executive within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs such costs.

In addition to the payments called for by Section 3(b)(1), (2) and (3) the Company shall make payments to Executive in the amount necessary to eliminate the income tax cost to Executive

resulting from any conversion of such benefits from non ‑taxable employee benefits to taxable benefits, payments or reimbursements. Such additional payments shall be made at the same time that the Company reimburses the Executive under this Section 3(b).

(c) Outplacement Services. The Company will provide the Executive with outplacement services through an outplacement services firm selected by the Company with the Executive’s approval, which shall not be withheld if the firm selected is reputable , at a cost not to exceed an amount equal to $25,000. The timing of outplacement services to be received shall be determined by the Executive, provided that all costs under this subsection must be incurred, and all applicable payments to the outplacement firm made, not later than the last day of the second year following that in which the Date of Termination occurred.

(d) Certain Reductions Disregarded . In computing the payments under subsections (a) through ( c) above, any reduction in Executive’s base salary, bonus or fringe benefits shall be disregarded if such reduction constituted Good Reason as defined in Section 1(h) of this Agreement including the text before and in subsections (1) through (9) and the paragraph immediately following subsection (9), but excluding the remaining text of Section 1(h).

Delay in Payment to a Specified Employee. Notwithstanding any other timing provision in this Agreement, if, at the time the payments would commence, Executive is a “Specified Employee” as defined by Section 409A of the Code, then no payment under this Agreement may be paid before the date that is six (6) months after Executive’s separation from service, except for payment of current compensation under Section 3(a)(1) and the acceleration of vesting under Section 4. Payments to which Executive would otherwise have been entitled during that six (6) months will be accumulated and paid on the first day after six (6) months following the date of Executive’s separation from service. All payments that would otherwise be made more than six (6) months following the date of Executive’s separation from service will be made in accordance with the general timing provisions described above. If the six (6) month delay in payment to a Specified Employee applies and Executive dies before the end of the six (6) month period, the delay shall cease and payments shall begin upon Executive’s death. Payments to which Executive would otherwise have been entitled during the delay shall be accumulated and paid on the tenth business day after Executive’s death.

Parachute Payment Restrictions. Notwithstanding any other provisions of this Agreement, if any payments or distributions by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (“ Payments ”)) (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 6, would trigger application of the excise tax imposed by Section 4999 of the Code, or any successor Code provision (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “ Excise Tax ”), then Executive’s Payments shall be payable as provided in (a) below.

(a) Executive’s Payments shall be payable (i) in full (with Executive paying any excise taxes due), or (ii) in such lesser amount that would result in no portion of the Payments being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive, on an after-tax basis, of the greatest amount of Payments, notwithstanding that all or some portion of such Payments may be taxable under Section 4999 of the Code.

(b) If Executive’s Payments are to be reduced under Section 6(a)(ii), the Payments shall be reduced in the amount necessary to eliminate the Excise Tax in the following order: (i) the benefit under Section 3(c), (ii) the benefit under Section 3(b)(2), (iii) the payment under Section 3(a)(3), (iv) elimination of accelerated vesting under Section 4 (to be applied pro rata to all of Executive’s outstanding equity awards), and (v) the benefit under Section 3(b)(1).

(c) All determinations required to be made under this Section 6, including whether and when a reduction in the Payments is required under Section 6(a) and the amount of such reduction and the assumptions to be utilized in arriving at such determination, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “ Accounting Firm ”) which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of a request from the Company or Executive (collectively, the “ Determination ”). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change in Control, Executive shall appoint another nationally recognized public accounting firm to make the Determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Determination by the Accounting Firm shall be binding upon the Company and Executive; however, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Executive will have received amounts that should not have been paid (the “ Overpayments ”) or amounts were reduced that should have been paid (the “ Underpayments ”) under Section 6(a). If the Accounting Firm determines, based on an Internal Revenue Service assertion that the Accounting Firm believes has a high probability of success, that an Overpayment has been made, any such Overpayment shall be deemed for all purposes to be a loan to Executive made on the date that Executive received the Overpayment and Executive shall repay the Overpayment to the Company on demand (but not less than ten days after Executive receives a written demand for payment from the Company) together with interest on the Overpayment at the applicable federal rate prescribed pursuant to Section 1274(d)(1)(A) of the Code (the “ Applicable Federal Rate ”) from the date of Executive’s receipt of the Overpayment until the date the Overpayment is repaid. If the Accounting Firm, based on controlling precedent or substantial authority, determines that an Underpayment has been made, the Company will pay Executive an amount equal to the Underpayment in a lump sum within ten days of such determination together with interest on the Underpayment at the Applicable Federal Rate from the date such amount would have been paid to Executive until the date the Underpayment is paid.

7.	Withholding Taxes. The Company may withhold from all payments due to Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local, or other law, the Company is required to withhold therefrom.

8.	Reimbursement of Expenses. If any contest or dispute shall arise under or related to this Agreement involving termination of Executive’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the

Company shall reimburse Executive, on a current basis, for all reasonable legal fees and expenses, if any, incurred by Executive in connection with such contest or dispute regardless of the result thereof. The reimbursement of an eligible amount must be made within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs such expense. Any reimbursement or in-kind benefit provided for under this Agreement shall comply with the conditions on such payments required by Treasury Regulation § 1.409A-3(i)(1)(iv) as follows:

(a) The expenses eligible for reimbursement, or the provision of the in-kind benefits, shall be provided on an objectively determinable nondiscretionary basis.

(b) The reimbursement of expenses incurred, or the provision of the in-kind benefits, shall be provided during an objectively and specifically prescribed period.

(d) The reimbursement of an eligible expense shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred.

(e) The right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

Successors; Binding Agreement.

(a) This Agreement shall not be terminated by any merger or consolidation of the Company whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation, or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.

(b) The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in this Section 9, it will cause any successor or transferee unconditionally to assume, by written instrument delivered to Executive (or his beneficiary or estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such merger, consolidation, or transfer of assets shall be a breach of this Agreement and shall constitute Good Reason hereunder and shall entitle Executive to compensation and other benefits from the Company in the same amount and on the same terms as Executive would be entitled hereunder if Executive’s employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination. For purposes of implementing the foregoing, the date on which any such merger, consolidation, or transfer becomes effective shall be deemed the date Good Reason occurs, and shall be the Date of Termination if requested by Executive.

(c) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees,

devisees and legatees. If Executive shall die while any amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive’s estate.

10.

If to the Executive:

[Name]

[Address]

[City, State, Zip]

If to the Company:

SpartanNash Company

850 76th Street, S.W.

P. O. Box 8700

Grand Rapids, Michigan 49518 -8700

Attention: Chief Legal Officer

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

11.

Full Settlement; Resolution of Disputes.

(b) If there shall be any dispute between the Company and Executive in the event of any termination of Executive’s employment then, until there is a final, nonappealable, determination pursuant to arbitration declaring that such termination was for Cause, that the determination by Executive of the existence of Good Reason was not made in good faith, or that the Company is not otherwise obligated to pay any amount or provide any benefit to Executive and his dependents or other beneficiaries, as the case may be, under Section 3, the Company shall pay all amounts, and provide all benefits, to Executive and his dependents or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Section 3 as though such termination were by the Company without Cause or by Executive with Good Reason; except that the Company shall not be required to pay any disputed amounts pursuant to this Section 11 except upon receipt of an undertaking by or on behalf of

Executive to repay all such amounts to which Executive is ultimately determined by the arbitrator not to be entitled.

(c) Arbitration. Any dispute or controversy under this Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan, in accordance with the rules of the American Arbitration Association then in effect, except that Executive shall be entitled to seek specific performance of his right to be paid pursuant to Section 11(b) during a dispute. Judgment may be entered on the arbitration award in any court having jurisdiction. The Company shall reimburse Executive for all reasonable costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 11(c). The reimbursement of an eligible amount must be made within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurred the expense.

12.

13.

14.

Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

15.

program that become payable or are paid in accordance with this Agreement shall be duplicated by operation of this Agreement. No agreements or representations, oral or otherwise, express or implied, with regard to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

16.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company. Executive has executed this Agreement as of the day and year first written above.

/s/ (A)

“Executive”

SPARTANNASH COMPANY

By: /s/ *

Its President and Chief Executive Officer

“Company”

* Dennis Eidson in the case of Ms. Mahoney; David Staples in the case of Mr. Meyers and Mr. Shamber

Exhibit A

SPARTANNASH COMPANY

EXECUTIVE SEVERANCE AGREEMENT

EXHIBIT A

EXECUTIVE BENEFIT TRUST

Dated: __________, 20__

TABLE OF CONTENTS

Page

SECTION 1

Establishment of the Trust2

1.1

Trust; Sub-Trusts2

1.2

Company Contributions2

1.3

Irrevocable3

1.4

Grantor Trust3

1.5

Limited Rights of Executive3

1.6

Acceptance by Trustee4

1.7

Committee; Absence of Committee or the Company4

1.8

Trust Funding Restrictions4

(a)

Covered Employees4

(b)

Offshore Trust5

(c)

The Company's Financial Health5

SECTION 2

Payments to Executives5

2.1

Payment Schedule5

2.2

Right To Payment5

2.3

Direct Payment by the Company6

2.4

Default Payment By Trustee6

2.5

Payment Deductions7

2.6

Limit On Payments; Company Obligation7

2.7

Missing Persons7

2.8

Documentation and Information for Trustee8

SECTION 3

Insolvency; Administration8

3.1

Insolvency8

3.2

Claims of General Creditors8

(a)

Duty to Inform; Notice8

(b)

Duty to Inquire8

(c)

Payments9

(d)

Resumption9

(e)

Omitted Payments9

SECTION 4

Payments to the Company9

4.1

General Limitation9

4.2

Trust Income10

SECTION 5

Administration of Trust10

5.1

In General10

5.2

Duties and Powers of Trustee10

(a)

Control, Manage, and Invest Assets10

(b)

Records; Reports10

(c)

Payments10

(d)

Acquire and Dispose of Assets11

(e)

Extend Due Dates11

(f)

Voting Rights11

(g)

Exercise Other Rights11

(h)

Employ Agents and Advisors11

(i)

Insure Assets11

(j)

Custodian11

(k)

Collection11

(l)

Registration and Holding of Trust Assets12

(m)

Claims12

(n)

Execute Documents 12

(o)

Other Acts12

5.3

Limitation on Duties and Powers of the Trustee12

(a)

Custody and Protection13

(b)

Acquisitions13

(c)

Dispositions13

(d)

Accountings13

(e)

Authorized Actions13

(f)

Ministerial and Custodial Tasks13

5.4

Accounting by Trustee14

(a)

Records and Accounting14

(b)

Objection; Settlement14

(c)

Revision14

(d)

Sub-Trust Accounting15

(e)

Compensation and Expenses15

5.5

Carrying on a Business15

5.6

Fiduciary Duty of Trustee16

SECTION 6

Investment and Investment Managers16

6.1

Investment of Trust Assets16

(a)

SERP and Severance Agreement Sub-Trust Investment Authority16

(b)

SESP Sub-Trust Investment Authority16

(c)

Other Sub-Trust Investment Authority17

(d)

Short Term Investment Authority17

6.2

Investment Discretion17

SECTION 7

Resignation and Removal of Trustee18

7.1

Resignation of Trustee18

7.2

Removal of Trustee18

7.3

Appointment of Successor18

7.4

Duties of Predecessor Trustee and Successor Trustee18

7.5

Expenses19

SECTION 8

Amendment or Termination19

8.1

Amendment19

(a)

In General19

(b)

Trustee; Investment Manager19

8.2

Termination19

(a)

Timing20

(b)

Continuing Powers20

(c)

Assets20

(d)

Trust21

SECTION 9

Liability and Indemnification21

9.1

Liabilities Mutually Exclusive21

9.2

Indemnification21

SECTION 10

General Provisions22

10.1

Successor to the Company22

10.2

Merger of Trustee22

10.3

Nonalienation22

10.4

Severability22

10.5

Governing Law22

10.6

Notices23

10.7

Counterparts23

10.8

Gender and Number23

10.9

Scope of this Agreement 23

10.10

Statutory References23

10.11

Headings23

10.12

Section 409A24

iii

SPARTANNASH COMPANY

EXECUTIVE SEVERANCE AGREEMENT

EXHIBIT A

EXECUTIVE BENEFIT TRUST

This Agreement (the “Trust Agreement”) is made this ____ day of ________, 20__, by and between SpartanNash Company (the “Company”), a Michigan corporation, and _____________ (“Trustee”).

The Company has entered into an Agreement dated ____________, 20__ (the “Agreement”) with _____________________________.

The Company has established and maintains a Supplemental Executive Retirement Plan (“SERP”) and a Supplemental Executive Savings Plan (“SESP”) for a number of key executives, including the executives identified in Appendix A. The Company has entered into Executive Severance Agreements (each a “Severance Agreement” and collectively the “Severance Agreements”) with a number of key executives, including the executives identified in Appendix A. The SERP, the SESP and each Severance Agreement, together with each other designated plan, agreement or program providing for deferred compensation that is in effect as to any key executive identified in Appendix A at the time this Trust is created or funded, is an “Executive Compensation Plan” and collectively they are the “Executive Compensation Plans”. Each executive identified in Appendix A is an “Executive” and collectively they are the “Executives”.

Appendix A shall be deemed amended from time to time to reflect the addition of each new plan, agreement or program designated by the Company as an Executive Compensation Plan for purposes of this Trust Agreement, the removal of any existing or new Executive Compensation Plan that is terminated in accordance with its terms by the Company, the addition of a new executive designated by the Company as an Executive with respect to one or more Executive Compensation Plans and the removal of an individual as an Executive with respect to one or more Executive Compensation Plans upon the full satisfaction of all liabilities to that Executive under that plan.

The Executive Compensation Plans are maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended, and are provided only to a select group of management and highly compensated employees. The Company has incurred and expects in the future to incur liability under the Executive Compensation Plans with respect to one or more of the Executives or a beneficiary (“Beneficiary”) of a deceased Executive. Each Executive Compensation Plan provides for the creation of a trust to hold assets relating to that liability. The Company intends to establish this Trust (“Trust”) to satisfy its obligations to create a trust for the Executives and to facilitate meeting its obligations to the Executives under the respective Executive Compensation Plans. However, because this Trust does not extend to key executives other than the Executives identified in Appendix A, the creation of this Trust does not fulfill its obligations to those other key executives under the Executive Compensation Plans as they may apply to those other executives.

In connection with the Agreement, the Company wishes to establish this Trust and to contribute to the Trust assets to be held in the Trust, subject to the claims of the Company’s creditors in the event of the Company’s Insolvency, as defined in Section 3, until paid to the Executives or their beneficiaries in such manner and at such times as specified in the Executive Compensation Plans or otherwise disposed of as provided in this Trust Agreement.

The parties intend that this Trust shall constitute an unfunded arrangement that shall not affect the unfunded status of the Executive Compensation Plans. It is the intention of the Company to make contributions to this Trust to provide itself with a source of funds to assist it in meeting its liabilities under the Executive Compensation Plans, but the existence of this Trust will not in any way eliminate or decrease the Company’s liabilities to the Executives or Beneficiaries under the respective Executive Compensation Plans except to the extent assets of the Trust are actually used to pay benefits due to Executives.

SECTION 1

Establishment of the Trust

1.1 Trust; Sub-Trusts .

1.2 Company Contributions.

No later than the effective time of a “Change in Control” of the Company, as defined in the Executive Severance Agreements (the “Effective Time”), or as soon thereafter as permitted by Section 1.8, the Company will make an initial irrevocable contribution to each Sub-Trust as specified in Appendix A that equals a reasonable, good faith estimate of 100% of the amount necessary to pay the Executive to whom the Sub-Trust relates the total amount due and potentially due to the Executive under the Executive Compensation Plan to which the Sub-Trust relates. The Company shall make the contributions in cash.

In the event the value of the assets in a Sub-Trust, determined as of the last day of each Plan Year of the Executive Compensation Plan to which the Sub-Trust relates pursuant to the accounting procedures set forth in this Trust Agreement, is less than 100% of the amount necessary to pay the applicable Executive the amount the Executive could be entitled to under the applicable Executive Compensation Plan, determined as of such date by the Trustee, the Company shall deposit additional funds into each applicable Sub-Trust sufficient to bring the value of the assets in each Sub-Trust to that 100% threshold within 30 days after receiving notice from the Trustee that additional contributions are needed to attain the 100% level of funding for each Sub-Trust or as soon thereafter as permitted by Section 1.8.

The Company, in its sole discretion but subject to Section 1.8, at any time and from time to time, may make additional deposits in excess of the amounts provided above to one or more Sub ‑Trusts of cash or other property acceptable to the Trustee to augment the principal and to be held, administered, and disposed of by the Trustee as pro vided in this Trust Agreement. Neither the Trustee nor any Executive or Beneficiary shall have any right to compel such additional deposits.

1.3 Irrevocable .

Prior to the Effective Time, the Trust shall be revocable by the Company. On and after the Effective Time, the Trust shall be irrevocable, except that each Sub-Trust shall be revocable with the written consent of the Company and the Executive for whom the Sub-Trust was created, and each Sub-Trust is subject to Sections 2.7 and 8.2(c).

1.4 Grantor Trust .

The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be construed accordingly.

1.5 Limited Rights of Executive .

The principal and earnings of each Sub-Trust shall be held separate and apart from other funds of the Company and each other Sub-Trust and except as provided herein shall be used exclusively for the uses and purposes of the applicable Executive, Beneficiary and general creditors and for the payment of related fees and expenses as set forth herein. No Executive or Beneficiary shall have a preferred claim on, or a beneficial ownership interest in, any assets of the Trust or any Sub-Trust. The rights created under the Executive Compensation Plans and this Trust Agreement shall be mere unsecured contractual rights of each Executive and Beneficiary against the Company. Assets held in the Trust or Sub-Trust will be subject to the claims of the Company’s general creditors under federal and state law in the event of Insolvency, as defined in Section 3.1.

1.6 Acceptance by Trustee .

The Trustee accepts its duties and obligations as Trustee under this Trust Agreement, agrees to accept funds delivered to it by the Company, and agrees to hold, manage, administer, and apply all Trust assets in accordance with the terms and conditions of this Trust Agreement.

1.7 Committee; Absence of Committee or the Company .

The Compensation Committee (“Committee”) of the Board of Directors of the Company, or another committee designated by the Board of Directors, shall have the powers, rights, and duties of the Committee described in this Trust Agreement. The highest ranking human resources officer of the Company will certify to the Trustee from time to time the names of the members of the Committee. The Trustee may rely on the most recent certificate without further inquiry or verification. The Trustee also may rely on minutes and other written communications, certified by the secretary or acting secretary of the Committee or the highest ranking human resources officer of the Company, as accurately setting forth any action or decision by the Committee.

If for any period there are no members of the Committee, or the Committee is unable to exercise its powers and duties under this Trust Agreement, the Board of Directors of the Company shall act on behalf of, and shall have all of the powers, rights, and duties otherwise reserved to, the Committee. The

Company warrants that all dir ections and authorizations by the Committee, or by the Board of Directors, whether for the payment of money or otherwise, will comply with the provisions of each Executive Compensation Plan and this Trust Agreement.

In the event that the Company no longer exists and there is no successor to the Company, the Trustee shall have all of the powers and duties (other than any contribution requirement) of the Company and the Committee under this Trust Agreement and, in its sole discretion, shall determine and make all payments from Trust assets due Executives and Beneficiaries under the Executive Compensation Plans or due general creditors under Section 3.

1.8 Trust Funding Restrictions .

Notwithstanding the general rules of this Trust Agreement, including but not limited to the funding obligations of Section 1.2, the Company’s obligation to establish and make payments to the Trust (but not the Company’s obligations to make payment to an Executive or Beneficiary when called for by an Executive Compensation Plan) is subject to the restrictions of Section 409A(b) of the Code as follows:

(a) Covered Employees .

The Trust will not be established or funded for a Covered Employee during a Restricted Period. This restriction shall not apply to funds contributed to the Trust before a Restricted Period.

(i) Covered Employee Defined . A “Covered Employee” means an “Applicable Covered Employee” as defined by Section 409A(b)(3)(D)(i) of the Code.

(ii) Restricted Period Defined . “Restricted Period” has the meaning provided in Section 409A(b)(3)(B) of the Code.

(b) Offshore Trust .

Notwithstanding anything else in this Trust Agreement, the Trust, including any assets of the Trust, may not be located or transferred outside the United States unless substantially all of the services to which the payments under the applicable Executive Compensation Plan relate are performed in such jurisdiction.

Notwithstanding anything else in this Trust Agreement, the Trust may not be established or funded if such establishment or funding will result in inclusion of trust funds in Executive’s taxable income under Section 409A(b)(2) of the Code before such funds are paid to Executive.

SECTION 2

Payments to Executives

2.1 Payment Schedule .

The Company shall deliver to the Trustee a schedule (the “Payment Schedule”) that indicates the amounts payable in respect of each Executive (and his or her Beneficiaries) or a formula or other instructions acceptable to the Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Executive Compensation Plans), and the time of commencement for payment of such amounts. Except as otherwise provided in this Trust Agreement, the Trustee shall make payments to the Executives and their Beneficiaries in accordance with the Payment Schedule, formula or payment instructions. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the

payment of benefits pursuant to the terms of the Executive Compensation Plans and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Company.

2.2 Right To Payment .

The entitlement of an Executive or Beneficiary to benefits under the applicable Executive Compensation Plan shall be determined by the Company or such party as it shall designate under the Executive Compensation Plans (other than any Executive or Beneficiary), and any claim for benefits shall be considered and reviewed under the procedures set forth in the applicable Executive Compensation Plan. However, notwithstanding that general rule, after the Effective Time, the dispute resolution procedure and arbitration provisions of the Executive’s Severance Agreement shall be substituted for the claims procedure set forth in each of the Executive Compensation Plans, subject to the limitations of Section 3. Further, in the event of a dispute between an Executive and the Company after the Effective Time involving any of the Executive Compensation Plans, the determinations of the Company (or any plan administrator) shall not be entitled to deference, it being the intent of the parties that there shall be independent determinations of any disputed fact or issue through the dispute resolution and arbitration procedures.

2.3 Direct Payment by the Company .

The Company may make direct payments to each eligible Executive or Beneficiary as benefits become due under the terms of the applicable Executive Compensation Plan. The Company shall notify the Trustee in writing of its decision to make such payments directly prior to the time amounts are payable to Executives or their Beneficiaries. Subject to Section 3, the Company may direct the Trustee in writing to reimburse the Company from the Trust, and debit the applicable Sub-Trust of the applicable Executive, for amounts the Company paid directly to the Executive or Beneficiary on or after the date the funding obligations of Section 1.2 have been met. Subject to Section 3, the Trustee shall reimburse the Company for such payments promptly after the Trustee receives satisfactory written evidence that the Company has made the direct payments. In addition, if the principal of the Trust (including any Sub-Trust), and any earnings thereon, are not sufficient to pay any portion of any benefit in accordance with the terms of the Executive Compensation Plans, the Company shall make the balance of each such payment as it falls due. The Trustee shall notify the Company where principal and earnings are not sufficient.

2.4 Default Payment By Trustee .

Upon receipt of a written notice from an Executive or Beneficiary that a payment is due with respect to the Executive under an Executive Compensation Plan and that amounts due have not been paid, the Trustee shall notify the Company in writing that an Executive or Beneficiary has made a claim for benefits. The Company shall have ten (10) days from the receipt of such notice in which to provide the Trustee a written notice disputing the right to payment from the Trust. If the Company does not respond within the time specified in the preceding sentence and no Insolvency has occurred or any Insolvency is no longer continuing, the Trustee shall make the payment or payments due each Executive or Beneficiary in the required amount as due, subject to Section 2.6 below.

If the Company disputes the Executive’s or Beneficiary’s right to payment from the Trust, the Trustee, the Executive or the Company may initiate proceedings to settle the dispute. Notwithstanding the claims procedures governing the applicable Executive Compensation Plan, any such dispute under this Trust Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan, in accordance

with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitration award in any court having jurisdiction.

The Company shall reimburse the Executive and the Trustee for all reasonable costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 2.4. The reimbursement of an eligible amount must be made within thirty (30) days after the Executive or the Trustee requests reimbursement, but in the case of an Executive in no event after the end of the year following that in which the Executive incurred the expense.

The Company waives all rights to contest any payment by the Trustee pursuant to this Section 2.4 except in the event of intentional misconduct by the Trustee or a violation of Section 3. Nothing in this Section 2.4 shall require the Trustee to undertake an independent determination or payment.

2.5 Payment Deductions .

2.6 Limit On Payments; Company Obligation .

In no event shall a payment from the Trust to or with respect to an Executive under an Executive Compensation Plan exceed the amount allocated to the applicable Sub-Trust at the time of the payment. The Company shall be solely responsible for, and shall make as due, all required payments to or with respect to an Executive under the applicable Executive Compensation Plan that are not made from the Trust.

2.7 Missing Persons .

If the recipient entitled to any payment to be made by the Trustee from the Trust cannot be located directly by the Trustee through reasonable efforts, the Trustee shall notify the Committee of that fact. The Trustee shall then determine whether to continue to issue payments to or on behalf of the recipient, to discontinue payments pending the receipt of further information, or to terminate the Sub‑Trust with regard to that recipient. The Trustee shall use reasonable efforts to determine the status of the recipient and may, but shall not be required to, seek a judicial determination of the recipient’s status or the action to be taken by the Trustee under this Section 2.7. The Trustee thereafter shall have no obligation to search for or ascertain the whereabouts of any payee under this Trust Agreement.

2.8 Documentation and Information for Trustee .

The Company at all times shall provide the Trustee with current copies of all Executive Compensation Plans for which the Trust is established and maintained from time to time, including amendments, and shall notify the Trustee when any Executive Compensation Plan is modified or

terminated or a new Executive Compensation Plan is created. At least annually, the Company also shall provide the Trustee with updated information concerning the amounts payable with respect to each Executive under each Executive Compensation Plan and the underlying information necessary for calculating the amounts due.

SECTION 3

Insolvency; Administration

3.1 Insolvency .

Notwithstanding any other provision of this Trust Agreement, the Trustee shall cease payment of benefits from the Trust to any Executive or Beneficiary, and shall cease any reimbursements to the Company, if the Company is Insolvent. The Company shall be considered “Insolvent” for purposes of this Trust Agreement if the Company is (a) unable to pay its debts as they become due, (b) subject to a pending proceeding as a debtor under the United States Bankruptcy Code or (c) determined to be insolvent by a governing federal or state regulatory agency.

3.2 Claims of General Creditors .

At all times during the continuance of this Trust, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below.

(a) Duty to Inform; Notice .

The Board of Directors and the highest ranking officer of the Company shall have the duty to inform the Trustee in writing of the Company’s Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payments from the Trust to Executives and Beneficiaries and shall discontinue reimbursements to the Company.

(b) Duty to Inquire .

Unless the Trustee has actual knowledge of the Company’s Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company’s solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Company’s solvency.

If at any time the Trustee has determined that the Company is Insolvent, the Trustee shall discontinue payments to Executives and Beneficiaries, shall discontinue reimbursements or Sub-Trust termination payments to the Company, and shall hold the assets of the Trust for the benefit of the Company’s general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of any Executive or Beneficiary to pursue rights as a general creditor of the Company with respect to benefits due under the applicable Executive Compensation Plan or otherwise. Any assets of the Trust used for the benefit of creditors as provided above shall be debited from each Sub-Trust in proportion to the assets of Sub-Trust relative to the assets of the Trust as a whole.

(d) Resumption .

The Trustee shall resume payments from the Trust to Executives and Beneficiaries and reimbursements to the Company in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent or is no longer Insolvent.

(e) Omitted Payments .

Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to this Section 3.2 and subsequently resumes such payments, the first payments following such discontinuance shall include the aggregate amount of all payments due to Executives and Beneficiaries under the terms of the Executive Compensation Plans for the period of such discontinuance, plus interest at the applicable federal rate as published by the IRS for the applicable period, less the aggregate amount of any payments made by the Company in lieu of the payments provided for under this Trust Agreement during the period of discontinuance.

SECTION 4

Payments to the Company

4.1 General Limitation .

Except as otherwise provided in this Trust Agreement, after the Trust has become irrevocable, the Company shall not have any right or power to direct the Trustee to return to the Company or to divert to others any of the Trust assets before payment of all benefits has been made to the Executives and Beneficiaries pursuant to the terms of this Trust Agreement and the applicable Executive Compensation Plans.

4.2 Trust Income .

SECTION 5

Administration of Trust

5.1 In General .

The Trust and all Trust assets shall be administered by the Trustee pursuant to all of the express and implied duties and powers and subject to all express and implied conditions and limitations contained in or derived from the provisions of this Trust Agreement and conferred and imposed by applicable law. All rights associated with administration of the Trust and with Trust assets shall be exercised by the Trustee, the Committee, or the Company or a person designated by the Trustee, the Committee, or the Company, as provided in this Trust Agreement, and in no event shall such rights be exercisable by or rest with any Executive or Beneficiary, except to the extent that approval of an amendment of the Trust Agreement or removal of the Trustee and appointment of a successor Trustee is reserved to the Executive.

5.2 Duties and Powers of Trustee .

(a) Control, Manage, and Invest Assets .

To the extent necessary to carry out the investment responsibilities in Section 6, to hold, manage, improve, repair, control and invest all assets forming part of the Trust;

(b) Records; Reports .

To maintain records and to prepare and file reports required by law to be filed by the Trustee or required by agreement with the Company or by this Trust Agreement;

To make payments and distributions from the fund as provided in this Trust Agreement, including benefits that have become payable under the applicable Executive Compensation Plan pursuant to Section 2 or that are required to be made to the general creditors of the Company as set forth in Section 3;

(d) Acquire and Dispose of Assets .

To the extent necessary to carry out the investment responsibilities in Section 6, to purchase, sell, convey, exchange, lease, convert, transfer, divide, repair, partition, consent to partition, or otherwise acquire or dispose of any property at any time held in trust under this Trust Agreement by public or private transaction, for the consideration and upon the terms and conditions determined by the Trustee;

(e) Extend Due Dates .

To the extent necessary to carry out the investment responsibilities in Section 6, to extend the time of payment of any investment obligation held by it;

(f) Voting Rights .

To exercise all voting rights with respect to property held in the Trust directly or by proxy, with or without the power of substitution, and to delegate the Trustee’s powers and discretions with respect to such property to any such proxy;

(g) Exercise Other Rights .

To the extent necessary to carry out the investment responsibilities in Section 6, to exchange securities, to sell or exercise subscription, conversion, and other rights and options, and make payments from the Trust in connection with that action, with respect to any property held in the Trust;

(h) Employ Agents and Advisors .

To engage as reasonably necessary agents, attorneys, accountants, and other persons (who also may be employed by the Company or the Committee), to delegate duties and discretionary powers to such persons, and to reasonably rely upon information and advice furnished by such persons; provided that each delegation and acceptance of duties and powers shall be in writing; and provided further that the Trustee may not delegate its responsibilities for the management and control of the assets of the Trust;

(i) Insure Assets .

To insure Trust assets when appropriate (as determined by the Trustee in its discretion) through a policy or contract of casualty insurance;

(j) Custodian .

To keep on deposit with a custodian in the United States any part of the Trust;

(k) Collection .

To demand, collect, and receive the principal, dividends, interest, other income and all other money or property due the Trust;

(l) Registration and Holding of Trust Assets .

To register investments in its own name or in the name of a nominee; to hold any investment in bearer form; and to combine certificates representing securities with certificates of the same issue held by it in other fiduciary capacities; to deposit or to arrange for the deposit of such securities with any depository or other securities clearing entity, even though, when so deposited, such securities may be held in the name of the nominee of such depository with other securities deposited therewith by other persons; or to deposit or to arrange for the deposit of any securities issued or guaranteed by the United States government, or any agency or instrumentality thereof, including securities evidenced by book entries rather than by certificates, with the United States Department of the Treasury or a Federal Reserve Bank, even though, when so deposited,

such securities may not be held separate from securities deposited therein by other persons; provided, however, that no securities held in the Trust shall be deposited with the United States Department of the Treasury or a Federal Reserve Bank or other depository in the same account as any individual property of the Trustee, and provided, further, that the books and records of the Trustee shall at all times show that all such securities are part of the Trust;

(m) Claims .

To settle, compromise or submit to arbitration any claims, debts or damages due or owing to or from the Trust, to commence or defend suits or legal proceedings to protect any interest of the Trust, and to represent the Trust in all suits or legal proceedings in any court or before any other body or tribunal; provided, however, that the Trustee shall not be required to take any such action unless it shall have been indemnified by the Company to its reasonable satisfaction against liability or expenses it may incur;

(n) Execute Documents .

To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers granted in this Trust Agreement; and

(o) Other Acts .

To perform all other acts the Trustee deems necessary, suitable, or desirable for the control and management of the Trust and discharge of its duties.

Notwithstanding the foregoing, the Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein.

5.3 Limitation on Duties and Powers of the Trustee .

Unless expressly provided for in this Trust Agreement or otherwise properly delegated and assumed by agreement of the Trustee, the Trustee shall not be required to exercise a duty or power of the Company, the Committee, or any other fiduciary under this instrument.

(a) Custody and Protection .

To act as custodian of the Trust assets not transferred to the custody of the Investment Manager or another custodian, and to protect the assets in its custody from loss by theft, fire, or other cause;

(b) Acquisitions .

To acquire additional assets for the Trust in accordance with the direction of the Investment Manager;

To sell or otherwise dispose of Trust assets in accordance with the direction of the Investment Manager;

(d) Accountings .

To account for and render accountings with respect to the Trust, except for assets held by another custodian;

(e) Authorized Actions .

To take authorized actions for and on behalf of the Trust in accordance with the direction of the Investment Manager; and

(f) Ministerial and Custodial Tasks .

To perform other ministerial and custodial tasks in accordance with the direction of the Investment Manager.

If Trust assets are transferred to another custodian, that custodian shall have, and the Trustee shall not have, the duties and powers set forth under Section 5.2 with respect to those assets.

5.4 Accounting by Trustee .

(a) Records and Accounting .

The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and Trustee. As soon as reasonably practicable following the close of each calendar year and each other valuation date agreed by the Company and the Trustee, and after the removal or resignation of the Trustee, the Trustee shall deliver to the Committee an account of its administration of the Trust during such year, or during the period from the close of the last valuation period to the date of the removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or valuation period, or as of the date of such removal or resignation, as the case may be.

(b) Objection; Settlement .

The Committee may object to an accounting within 180 days after it is furnished and require that it be settled by an audit by a qualified, independent certified public accountant. The auditor shall be chosen by the Trustee from a list of at least three such accountants furnished by the Committee at the time the audit is requested. Either the Committee or the Trustee may require that the account be settled by a court of competent jurisdiction, in lieu of or in conjunction with the audit. All expenses of any audit or court proceedings, including reasonable attorney fees, shall be allowed as administrative expenses of the Trust and paid by the Company.

If the Committee does not object to an accounting within the time provided, the account shall be deemed settled and final for the period covered by it. Notwithstanding the preceding sentence, the Trustee agrees it will, at reasonable cost, revise any accounting if determined by the Company to be necessary due to a latent error or omission and will do so at no cost to the extent the error or omission was the fault of the Trustee.

(d) Sub-Trust Accounting .

The Trustee shall maintain a recordkeeping account for each Sub-Trust that, pursuant to rules established by the Trustee, will reflect with respect to each Sub-Trust:

(i) Deposits . Deposits made by the Company to the Sub-Trust pursuant to

Section 1 of this Trust Agreement;

(ii) Income . Income, losses, and appreciation or depreciation in the value of Sub‑Trust assets resulting from investment of the assets;

(iii) Payments . Payments made from the Sub-Trust to the Executive or Beneficiary and to the Company; and

(iv) Other . Any other amounts charged to the Sub-Trust, including administrative and investment expenses as described in this Trust Agreement.

The accounting provisions of this Section 5.4 shall be applied separately to each Sub‑Trust maintained for each Executive under each applicable Executive Compensation Plan.

(e) Compensation and Expenses .

The Company shall pay directly reasonable compensation of the Trustee and all expenses reasonably incurred by the Trustee and the Committee in the administration of this Trust, including compensation of agents, actuaries, attorneys, accountants, and other persons employed by the Trustee or the Committee, and including indemnification costs described in Section 9.2, and including any other amounts owed to Trustee or expenses of the Trust under this Trust Agreement other than as provided in the following sentence. Expenses solely attributable to investment of the Trust assets, such as investment manager fees, load or other commission fees, brokerage, postage, express or insurance charges, and stock transfer stamps expense, shall be paid from the Trust to the extent not paid directly by the Company and shall be charged to each Sub-Trust in proportion to the assets in the Sub-Trust.

To the extent such compensation and expenses remain unpaid forty-five (45) days after mailing of an invoice for the same by the Trustee to the Company, the Trustee may notify the Company of its intent to pay the amounts due from the Trust. If any amount remains unpaid thirty (30) days after mailing of the notice of intent to pay from the Trust, the Trustee may pay such compensation and expenses from the Trust. Expenses paid from the Trust shall be charged to each Sub-Trust in proportion to the assets in the Sub-Trust.

5.5 Carrying on a Business .

5.6 Fiduciary Duty of Trustee .

SECTION 6

Investment and Investment Managers

6.1 Investment of Trust Assets .

(a) SERP and Severance Agreement Sub-Trust Investment Authority .

The Trustee may only invest SERP and Severance Agreement Sub-Trust assets in investment grade debt securities as provided in this Section 6.1(a) and shall invest those assets with the goal of preserving principal and maintaining liquidity. SERP and Severance Agreement Sub-Trust assets may be invested and reinvested in any readily marketable investment grade debt securities, such as preferred stocks; corporate bonds; municipal bonds; notes; debentures; certificates of deposit or demand or time deposits, including any such deposits with the Trustee; and obligations of the United States. Notwithstanding these general rules, the Trustee shall not invest SERP or Severance Agreement Sub-Trust assets in any security (including stock or rights to acquire stock) issued by the Company or any affiliate other than a de minimis amount held in a mutual fund.

(b) SESP Sub-Trust Investment Authority. The "Investment Results” (as such term is defined in Section 2.19 of the SESP) of the SESP Accounts shall be determined in accordance with Section 4.5 of the SESP and amounts credited to an Executive's SESP Sub-Trust shall be determined in accordance with those Investment Results. Notwithstanding the foregoing, and notwithstanding Sections 2.19 and 4.5 of the SESP, after the Effective Time the Plan Administrator of the SESP (as defined in Section 2.24 of the SESP) may determine that some or all of the investment funds will no longer be available to Executives participating in the SESP for purposes of determining the Investment Results to be credited to an Executive's SESP Sub-Trust. If the SESP Plan Administrator makes such a determination, an Executive may choose among the remaining investment funds made periodically available by the SESP Plan Administrator for the purpose of determining the Investment Results credited to that Executive's SESP Sub-Trust. Notwithstanding these general rules, after the Effective Time the Trustee shall not invest in any security (including stock or rights to acquire stock) or obligations issued by the Company or any affiliate other than a de minimis amount held in a mutual fund.

Notwithstanding anything to the contrary contained in this Section 6.1(b), however, the Trustee shall be under no obligation to make actual investments that correspond to the Executive's investment elections, even though the Executive's elections are used to determine the Investment Results on the Executive's SESP Sub-Trust.

The provisions of this Section 6.1(b) constitute an amendment of Sections 2.19 and 4.5 of the SESP in accordance with Section 8.2 of the SESP, effective at the Effective Time.

(c) Other Sub-Trust Investment Authority . Any additional sub-trusts created in accordance with Section 1.1 shall be invested as provided in Section 6.1(a).

(d) Short Term Investment Authority .

Trust assets may be held uninvested only for such reasonable periods as are necessary to invest new assets deposited in Trust or to clear investment transactions and reinvest the proceeds. The Trustee may hold reasonable amounts of assets invested only in an appropriate daily or other short-term investment alternative for a reasonable period of time pending payment of benefits, payment of expenses or other distributions, or pending availability of other investments.

6.2 Investment Discretion .

Except as provided in Section 6.1, the Trustee shall have sole and absolute discretion in the management and investment of the fund and in exercising investment responsibility shall have all the duties and powers set forth under Section 5.2. The Company and the Committee shall not have any of the express or implied duties and powers contained in this Trust Agreement with respect to the control, management and investment of Trust assets and shall not have any power to approve or withhold approval of any action by the Trustee with respect to the control, management and investment of the Trust. The Trustee shall have the sole right to retain or discharge Investment Managers and related custodians, and to determine the terms of the engagement of any Investment Manager and related custodian.

The Trustee shall have the right, in its sole discretion, to delegate its investment responsibility to an Investment Manager, which may be an affiliate of the Trustee. In the event the Trustee appoints an affiliated Investment Manager, the Trustee shall remain, at all times, responsible for the acts of the affiliated Investment Manager. In all cases, the Trustee may not appoint an Investment Manager if the appointment will increase the cost or expense to be paid by the Company unless the Company consents to the appointment.

SECTION 7

Resignation and Removal of Trustee

7.1 Resignation of Trustee .

The Trustee may resign at any time by written notice to the Company, which shall be effective 60 days after receipt of such notice unless the Company and the Trustee agree otherwise.

7.2 Removal of Trustee .

The Trustee may be removed by the Company only with the consent of a majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time.

7.3 Appointment of Successor .

Subject to Sections 7.1 and 7.2 of this Trust Agreement, if the Trustee resigns or is removed, a successor that is independent of the Company shall be appointed by the Company as provided in this Section 7.3. If a Trustee desires to resign or is removed, a successor Trustee, which shall be the trust department of a bank or trust company ranked among the 50 largest banks in size of total assets in the United States, shall be appointed by the Company with the consent of a majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time. In the event the Company does not appoint a successor Trustee, the Trustee may apply to a court of competent jurisdiction for appointment of a successor Trustee or for instructions. The appointment of the successor shall be effective when accepted in writing by the new Trustee or as of such later date or dates when Trust assets are delivered to the successor Trustee.

7.4 Duties of Predecessor Trustee and Successor Trustee .

resigns or is removed shall promptly furnish to the Committee and the successor Trustee a final account of its administration of the Trust. A successor Trustee shall succeed to all rights in and ownership of the predecessor Trustee in the assets of the Trust and the predecessor Trustee shall deliver the property comprising the Trust to the successor Trustee together with any instruments of transfer, conveyance, assignment, and further assurances as the successor Trustee may reasonably require. Each successor Trustee shall have all the powers, rights, and duties con ferred by this Trust Agreement as if named the initial Trustee. Subject to applicable law, no Trustee shall be personally liable for any act or failure to act of a predecessor or successor Trustee.

7.5 Expenses .

SECTION 8

Amendment or Termination

8.1 Amendment .

(a) In General .

This Trust Agreement as a whole or its provisions governing a particular Sub-Trust may be amended by a written instrument executed by the Trustee and the Company. If an amendment to the Trust Agreement as a whole could reasonably be anticipated to have an adverse impact on an Executive or Beneficiary (including but not limited to an impact on the amount, likelihood or timing of payment of any amount due or that may become due under an Executive Compensation Plan) or to affect an Executive’s or Beneficiary’s voting rights, then the amendment shall also require the written consent of the majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time who could reasonably be anticipated to be adversely impacted by the amendment.

(b) Trustee; Investment Manager .

The powers, duties and liabilities of the Trustee and any Investment Manager under this Trust Agreement cannot be changed without their mutual written consent.

8.2 Termination .

(a) Timing .

Subject to the allocation of assets provided in Section 8.2(c), below, each Sub-Trust shall automatically terminate when an Executive and/or Beneficiary is no longer entitled

to benefits pursuant to the terms of the applicable Executive Compensation Plan; pro vided, however, that if any Executive or Beneficiary has an out standing claim against the Company regarding his or her benefits under an Executive Compensation Plan, the Sub-Trust shall not terminate until the claim has been finally resolved, until all assets held in the Sub-Trust have been properly distributed, or until the Executive agrees in writing to the termination. A Sub-Trust may also terminate with the written consent of the affected Executive or Beneficiary, as provided in Section 1.3. The entire Trust shall terminate upon the termination of all Sub-Trusts. Except as provided above, the Trust and each Sub-Trust shall not terminate with respect to an Executive or Beneficiary until the date on which such Executive and/or Beneficiary is no longer entitled to any benefits pursuant to the terms of any of the Executive Compensation Plans.

(b) Continuing Powers .

Upon termination of this Trust or any Sub-Trust, the Trustee shall continue to have such of the powers provided in this Trust Agreement as are necessary or desirable for the orderly liquidation and distribution of the Trust or Sub-Trust assets.

Upon termination of a Sub-Trust, all assets remaining in the Sub-Trust shall be allocated as provided in this Section 8.2(c). The Trustee shall not make any transfer to another Sub-Trust or pay any funds to the Company under this Section 8.2 prior to satisfaction of all benefit obligations to which the applicable Sub-Trust relates.

(ii) Direct Assets to Other Sub-Trusts. If there are assets remaining after the allocation provided for in Section 8.2(c)(i), above, the Trustee shall transfer the remaining assets from that Sub-Trust to the Sub-Trusts for all other Executives, and allocate the assets among the other Sub‑Trusts proportionately based on the assets in the other Sub-Trusts, until such assets are fully allocated or such Sub-Trusts reach 100% of the amount necessary to pay the Executive the amount the Executive could be entitled to under the applicable Executive Compensation Plan.

(iii) Return to the Company. If assets remain after the application of Sections 8.2(c)(i) and (c)(ii), to the extent permitted by Section 3, such assets shall be returned to the Company.

(d) Trust. Upon termination of the entire Trust, all assets remaining in the Trust shall be returned to the Company.

SECTION 9

Liability and Indemnification

9.1 Liabilities Mutually Exclusive .

Except as otherwise provided in this Trust Agreement or by applicable law, the Company, the Trustee, the Committee, the Board of Directors, and each member thereof and each Investment Manager shall be responsible only for its or their own acts or omissions.

9.2 Indemnification .

The Company hereby agrees to indemnify and hold harmless the Trustee and its directors, officers, employees and agents from and against all losses, damages, liabilities, claims, costs, and expenses, including reasonable attorneys’ fees, that the Trustee or its directors, officers, employees and agents may incur by reason of the negligence or willful misconduct of the Company or the Committee. In making any distributions and taking any other action under this Trust Agreement, the Trustee may rely upon and shall be fully protected in relying upon, any notice, certificate, or other paper or written document provided by the Company or the Committee that is reasonably believed to be genuine and consistent with this Trust Agreement and the Executive Compensation Plans.

All duties and responsibilities of the Trustee shall be exercised in its sole and absolute discretion and, except as provided below, the Trustee and its directors, officers, employees and agents shall be protected from any loss or liability in the good faith exercise of that discretion. The Company agrees that it will indemnify and hold harmless the Trustee and its directors, officers, employees and agents from and against all losses, damages, liabilities, claims, costs and expenses, including reasonable attorneys’ fees, that the Trustee may incur by reason of its good faith acts or omissions in the exercise of its discretion. However, indemnification shall not apply to grossly negligent acts or omissions, acts or omissions in bad faith or to willful misconduct.

SECTION 10

General Provisions

10.1 Successor to the Company .

In the event the Company is succeeded by another entity, references to the Company in this Trust Agreement shall refer to the successor.

10.2 Merger of Trustee .

10.3 Nonalienation .

10.4 Severability .

Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

10.5 Governing Law .

This Trust Agreement shall be governed by and construed in accordance with the laws of the state of Michigan, to the extent not preempted by federal law.

10.6 Notices .

Notices pursuant to this Trust Agreement shall be given by first class or priority U.S. mail or by commercial express delivery and shall be addressed to:

Company:

SpartanNash Company

Attn : General Counsel

850 76th Street S.W.

P.O. Box 8700

Grand Rapids, Michigan 49518

Trustee:

Attn :

10.7 Counterparts .

This Trust Agreement and any amendment hereto may be executed in two or more counterparts.

10.8 Gender and Number .

Except when otherwise indicated by the context, words denoting the masculine gender shall include the feminine, the singular shall include the plural, and the plural shall include the singular.

10.9 Scope of this Agreement .

This Trust Agreement will be binding on the Executives and all other persons entitled to any benefits hereunder and their respective heirs and legal representatives, and upon the Company, the Committee, the Trustee, and any Investment Managers, and their successors and assigns.

10.10 Statutory References .

10.11 Headings .

10.12 Section 409A .

This Trust is intended to comply with the trust funding restrictions of Section 409A(b) of the Code and shall be interpreted and operated consistently with those intentions.

IN WITNESS WHEREOF, this Trust Agreement is executed on behalf of the Company, and the Trustee by their respective authorized officers, as of the day and year set forth above.

SPARTANNASH COMPANY

Its

[TRUSTEE]

Its

EXHIBIT 21

LIST OF SUBSIDIARIES OF SPARTANNASH COMPANY

Name	Jurisdiction of Formation	Other Names Under Which Business is Conducted
Nash-Finch Company	Delaware	Dan's Supermarkets Econofoods Family Fare Family Fresh Market Family Thrift Center No Frills Supermarkets Pick ‘n Save SunMart Foods Supermercado Nuestra Familia
Caito Foods, LLC	Michigan
BRT SpartanNash, LLC	Michigan	Blue Ribbon Transport
Spartan Stores Distribution, LLC	Michigan
Market Development, LLC	Michigan	Jefferson Square (in IN) Market Street Plaza (in IN)
Seaway Food Town, Inc.	Michigan
SpartanNash Procurement, LLC	Michigan
Spartan Stores Fuel, LLC	Michigan	D&W Quick Stop Family Fare Quick Stop Forest Hill Fuel VG’s Quick Stop
SpartanNash Associates, LLC	Michigan
Family Fare, LLC	Michigan	D&W Fresh Market D&W Pharmacy Family Fare Pharmacy Family Fare Supermarkets Forest Hills Pharmacy Forest Hills Foods VG’s Food Center VG’s Pharmacy Valu Land
Prevo’s Family Markets, Inc.	Michigan	D&W Fresh Market D&W Pharmacy Family Fare Pharmacy Family Fare Supermarket
MSFC, LLC	Michigan
MDV SpartanNash LLC	Delaware	MDV
Erickson’s Diversified Corporation	Wisconsin
Fresh City Market LLC	Wisconsin
GTL Truck Lines, Inc.	Nebraska
Hinky Dinky Supermarkets	Nebraska
Pique Brands, Inc.	Delaware
Super Food Services, Inc.	Delaware
T.J. Morris Company	Georgia
U Save Foods, Inc.	Nebraska
The Pharm of Michigan, Inc.	Michigan
Spartan Properties Management, Inc.	Ohio
Valley Farm Distributing Co.	Ohio	VFD
Custer Pharmacy, Inc.	Michigan
Gruber’s Real Estate, LLC	Michigan

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-110593, 333-110952, 333-129156, 333-145432, 333-161742, 333-161745, 333-161749, 333-186683, 333-49448, 333-65802, 333-66430, 333-71774, 333-72010, 333-75810, 333-96615, 333-192713, 333-100794, 333-204725 on Form S-8, and Registration Statement No. 333-53672 on Form S-3 of our reports dated February 26, 2018, relating to the consolidated financial statements of SpartanNash Company and Subsidiaries (the “Company”), and the effectiveness of the Company’s internal control over financial reporting, appearing in the Annual Report on Form 10-K of the Company for the year ended December 30, 2017.

/s/ DELOITTE & TOUCHE LLP

Grand Rapids, MI

February 26, 2018

Exhibit 24

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of SpartanNash Company, does hereby appoint DAVID M. STAPLES and MARK E. SHAMBER or either of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of SpartanNash Company on Form 10-K for its fiscal year ended December 30, 2017, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ M. Shân Atkins	Signature:	/s/ Dennis Eidson
Print Name:	M. Shân Atkins	Print Name:	Dennis Eidson
Title:	Director	Title:	Chairman of the Board
Date:	February 22, 2018	Date:	February 22, 2018

Signature:	/s/ Mickey P. Foret	Signature:	/s/ Dr. Frank M. Gambino
Print Name:	Mickey P. Foret	Print Name:	Dr. Frank M. Gambino
Title:	Director	Title:	Director
Date:	February 22, 2018	Date:	February 23, 2018

Signature:	/s/ Douglas A. Hacker	Signature:	/s/ Yvonne R. Jackson
Print Name:	Douglas A. Hacker	Print Name:	Yvonne R. Jackson
Title:	Director	Title:	Director
Date:	February 23, 2018	Date:	February 23, 2018

Signature:	/s/ Elizabeth A. Nickels	Signature:	/s/ Timothy J. O’Donovan
Print Name:	Elizabeth A. Nickels	Print Name:	Timothy J. O’Donovan
Title:	Director	Title:	Director
Date:	February 22, 2018	Date:	February 22, 2018

Signature:	/s/ Hawthorne Proctor	Signature:	/s/ William R. Voss
Print Name:	Hawthorne Proctor	Print Name:	William R. Voss
Title:	Director	Title:	Director
Date:	February 23, 2018	Date:	February 23, 2018

Exhibit 31.1

CERTIFICATION

I, David M. Staples, certify that:

1. I have reviewed this Annual Report on Form 10-K of SpartanNash Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2018

/s/ David M. Staples

David M. Staples

President and Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Mark E. Shamber, certify that:

1. I have reviewed this Annual Report on Form 10-K of SpartanNash Company;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2018

/s/ Mark E. Shamber

Mark E. Shamber

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Exhibit 31.3

CERTIFICATION

I, Tammy R. Hurley, certify that:

1. I have reviewed this Annual Report on Form 10-K of SpartanNash Company;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2018

/s/ Tammy R. Hurley

Tammy R. Hurley

Vice President, Finance and Chief Accounting Officer

(Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. § 1350, each of the undersigned hereby certifies in his capacity as an officer of SpartanNash Company (the “Company”) that the Annual Report of the Company on Form 10-K for the accounting period ended December 30, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period.

This Certificate is given pursuant to 18 U.S.C. § 1350 and for no other purpose.

Dated: February 26, 2018		/s/ David M. Staples
		David M. Staples President and Chief Executive Officer (Principal Executive Officer)
Dated: February 26, 2018		/s/ Mark E. Shamber
		Mark E. Shamber Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Dated: February 26, 2018		/s/ Tammy R. Hurley
		Tammy R. Hurley Vice President, Finance and Chief Accounting Officer (Principal Accounting Officer)

A signed original of this written statement has been provided to SpartanNash Company and will be retained by SpartanNash Company and furnished to the Securities and Exchange Commission or its staff upon request.