Thank You for Your Investment in United Natural Foods, Inc
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November 5, 2019 DEAR FELLOW STOCKHOLDER: Thank you for your investment in United Natural Foods, Inc. and the trust you have placed in our Board of Directors to oversee our Company’s long-term success. Fiscal 2019 Highlights and Supervalu Acquisition Fiscal 2019 was a transformative year for UNFI. We completed the acquisition of SUPERVALU INC. in the first quarter of fiscal 2019, which accelerated our ‘‘Build Out the Store’’ strategy and transformed UNFI into North America’s premier grocery wholesaler. The new UNFI now provides an unmatched selection of products and services, greater scale, and enhanced technologies designed to enable all of our customers to better compete and succeed in a dynamic and ever-changing retail environment. Integration of the two companies continues, and we have realized synergies quicker than we expected. In July of 2019, we held our first National Expo since the Supervalu acquisition, which provided an opportunity for 6,000 customers and suppliers to get a first-hand view of the vast array of products and services we now offer. As we continue to integrate our systems and processes, optimize our distribution center operations, and educate customers on our expanded offerings, we are excited about where we are going. Our Continued Commitment to Sustainability Throughout this transformation, our commitment to doing things the right way remains steadfast. We have been committed to incorporating environmentally sustainable and socially responsible practices into our business activities from our roots. More recently, in fiscal 2019 we combined our existing charitable foundation with Supervalu’s foundation, to create a single platform for our philanthropy grants. The combined foundations awarded over $1.0 million to 69 organizations in 2019. We expect to release a Corporate Responsibility Report in the coming months, which will include more details on how we serve our communities, employees, and the environment. Enhancement of Our Corporate Governance Practices In fiscal 2019, we continued our objective to strengthen our corporate governance practices. We made revisions and enhancements to a number of our corporate policies and processes affecting our Board and executive officers, including a robust Board evaluation and refreshment process, which resulted in two new independent directors appointed to our Board; enhancements to the Stock Ownership Guidelines to require a higher level of stock ownership and to include senior employees; and further changes to our executive compensation program in response to stockholder feedback in our investor engagement meetings. I encourage you to review this proxy statement, and to vote your shares promptly. Instructions for voting your shares are set out in the proxy statement. On behalf of our Board of Directors, and everyone at UNFI, thank you for your continued support of our Company. Sincerely, Steven L. Spinner, Chairman of the Board and Chief Executive Officer PLEASE VOTE. STOCKHOLDERS MAY VOTE THROUGH THE INTERNET, BY TELEPHONE OR BY MAIL. PLEASE REFER TO YOUR PROXY CARD OR THE NOTICE OF PROXY AVAILABILITY DISTRIBUTED TO YOU ON OR ABOUT NOVEMBER 5, 2019 FOR INFORMATION ON HOW TO VOTE THROUGH THE INTERNET, BY TELEPHONE OR BY MAIL. NOTICE OF ANNUAL MEETING OF STOCKHOLDERS Meeting Information Wednesday, December 18, 2019, 4:00 p.m. EST, with log-in at 3:45 p.m. EST. You may attend the annual meeting via the Internet through a virtual web conference at www.virtualshareholdermeeting.com/unfi2019. The meeting will be a virtual-only meeting. Items to be Voted On 1. The election of ten nominees as directors to serve until the 2020 annual meeting of stockholders. 2. The ratification of the selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending August 1, 2020. 3. The approval, on an advisory basis, of our executive compensation. 4. The approval of the 2020 Equity Incentive Plan. 5. Consideration of such other matters as may properly come before the meeting or any adjournments or postponements thereof. Record Date Only stockholders of record on our books at the close of business on Monday, October 21, 2019, will be entitled to vote at the annual meeting and any adjournments or postponements of the annual meeting. Proxy Voting Your vote is important. If you do not attend the annual meeting, we encourage you to vote your shares via the Internet, by telephone or by completing, dating, signing and promptly returning your proxy card to us in the envelope provided. The proxy materials provide you with details on how to vote by these three methods. If you decide to attend the annual meeting through the Internet, you may revoke your proxy and cast your vote during the meeting. Proxy Materials In accordance with rules approved by the Securities and Exchange Commission, we furnish proxy materials to our stockholders over the Internet. On or about November 5, 2019, we mailed to all stockholders of record as of the close of business on October 21, 2019, a notice containing instructions on how to access our Annual Report to Stockholders, which contains our audited consolidated financial statements for the fiscal year ended August 3, 2019; our proxy statement; proxy card; and other items of interest to stockholders on the Internet website indicated in our notice, at www.proxyvote.com, as well as instructions on how to vote your shares of common stock in connection with the annual meeting. That notice also provided instructions on how you can request a paper copy of our proxy materials and Annual Report to Stockholders if you desire. By Order of the Board of Directors, Jill E. Sutton, Esq. Chief Legal Officer, General Counsel and Corporate Secretary November 5, 2019 TABLE OF CONTENTS PROXY STATEMENT SUMMARY ................................................... .... 1 CORPORATE GOVERNANCE................................................... ........ 4 Governance Highlights. ................... 4 Director Independence . ................... 5 Lead Independent Director. ................. 5 Board Leadership Structure . ................ 6 Risk Oversight . ......................... 6 Compensation Risk. ...................... 7 Anti-Hedging and Insider Trading Policies. 7 Committees of the Board of Directors . .......... 7 Board Meetings . ........................ 9 Stockholder Engagement . ................. 9 Board Evaluation and Refreshment. ........... 9 Sustainability . ......................... 10 PROPOSAL 1—ELECTION OF DIRECTORS.............................................. 11 Directors and Nominees for Director . .......... 11 Majority Vote Standard for Election of Directors. 13 Nomination of Directors . 14 Stockholder Director Recommendations and Proxy Access. 15 Communication with the Board of Directors . 15 DIRECTOR COMPENSATION................................................... ........ 16 Non-Employee Director Compensation. 16 Compensation of Mr. Funk . 16 Deferred Compensation . 17 Director Compensation Table—Fiscal 2019 . 17 Stock Ownership Guidelines . 18 Compensation Committee Interlocks and Insider Participation . 18 Certain Relationships and Related Transactions . 18 AUDIT COMMITTEE REPORT................................................... ....... 20 EXECUTIVE OFFICERS OF THE COMPANY............................................. 21 EXECUTIVE COMPENSATION ................................................... ...... 23 Compensation Discussion and Analysis . 23 REPORT OF THE COMPENSATION COMMITTEE ....................................... 42 EXECUTIVE COMPENSATION TABLES ................................................. 43 Summary Compensation Table . 43 Grants of Plan-Based Awards in Fiscal 2019 . 44 Outstanding Equity Awards at Fiscal 2019 Year-End. 45 Option Exercises and Stock Vested—Fiscal 2019 . 46 Pension Benefits. ........................ 46 Nonqualified Deferred Compensation—Fiscal 2019 . 46 CEO Pay Ratio. .......................... 48 Potential Payments Upon Termination or Change-in-Control . 48 Securities Authorized for Issuance Under Equity Compensation Plans. 51 PROPOSAL 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ................................................... ............................ 52 Fees Paid to KPMG LLP. .................... 52 Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services. 53 PROPOSAL 3—ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION ............ 54 PROPOSAL 4—APPROVAL OF 2020 EQUITY INCENTIVE PLAN........................... 55 Background. ........................... 55 Summary of the 2020 Equity Incentive Plan . 55 Certain Federal Income Tax Consequences . 60 New Plan Benefits . ....................... 62 Shares Available and Outstanding Awards . 62 OTHER MATTERS ................................................... .................. 64 Stock Ownership of Certain Beneficial Owners and Management . 64 Stockholder Proposals for the 2020 Annual Meeting of Stockholders . 65 INFORMATION ABOUT THE MEETING ................................................. 66 Record Date and Share Ownership . 66 Submitting and Revoking Your Proxy. 66 How to Vote . ............................. 66 Broker Non-Votes and Proxy Solicitation . 67 Quorum. .............................. 67 Votes Required . ..