Exhibit 10.2
NASH-FINCH COMPANY
PERFORMANCE INCENTIVE PLAN
I. PURPOSE
A. General.
In an effort to maintain a position of leadership in
the industry in which Nash-Finch Company (the “
Company ”) competes, it is necessary to promote
financial interests of the Company and its Subsidiaries, including
its growth, by attracting and retaining certain highly qualified
employees possessing outstanding ability, motivating such employees
by means of performance related incentives, and providing incentive
compensation opportunities that are competitive with those of major
corporations. The Nash-Finch Company Performance Incentive Plan
(the “ Plan ”) hereinafter described is designed
to assist the Company in attaining these objectives.
B. Performance-Based
Compensation. With respect to Covered Awards, the
Plan is intended to constitute a qualified performance-based
compensation plan under Section 162(m)(4)(C) of the Code and
shall be construed and administered so as to ensure such
compliance.
C. Cash Bonus Plan.
The Plan is not intended to be (and shall not be
construed and administered as) an employee benefit plan within the
meaning of ERISA. Incentive Awards under this Plan are intended to
be discretionary and shall not constitute a part of an
employee’s regular rate of pay.
D.
Section 409A. The Plan is intended to be
exempt from the provisions of Section 409A of the Code and
Department of Treasury regulations and other interpretive guidance
issued there under (“ Section 409A
”).
II. PLAN
ADMINISTRATION
A. Plan
Administration. The Company or its delegate has the
authority and responsibility to manage and control the general
administration of the Plan, except as to matters expressly reserved
in this Plan to the Committee. This Plan is not intended to modify
or limit the powers, duties or responsibilities of either the Board
or the Committee as set forth under the Company’s Restated
Certificate of Incorporation, as amended. Determinations, decisions
and actions of the Company or, if applicable, the Committee, in
connection with the construction, interpretation, administration,
or application of the Plan will be final, conclusive, and binding
upon any Participant and any person claiming under or through the
Participant. No employee of an Employer, any member of the Board,
any delegate of the Board, or any member of the Committee will be
liable for any determination, decision, or action made in good
faith with respect to the Plan or any Incentive Award made under
the Plan.
B. Specific Authority of
the Committee. The Committee shall have the sole
authority and responsibility to review annually management’s
recommendations for the Selected Performance Objectives and
Selected Performance Factors under the Plan, to select the Selected
Performance Objectives and Selected Performance Factors for an
Award Year; and to otherwise administer Incentive Awards payable to
Officers, including under Covered Awards.
C.
Non-Assignability. A Participant’s rights
and interests in and to payment of any Incentive Award under the
Plan may not be assigned, transferred, encumbered or pledged other
than by will or the laws of descent and distribution; and are not
subject to attachment, garnishment, execution or other
creditor’s processes.
D. Amendment or
Termination; Term .
i. The Plan may at any time
be amended, modified, or terminated, as the Committee in its
discretion determines. Such amendment, modification, or termination
of the Plan will not require the consent, ratification, or approval
of any party, including any Participant. The Committee may amend
the Selected Performance Objectives and/or the Selected Performance
Factors as well as any Incentive Award (including increasing,
decreasing or eliminating any or all Incentive Awards for an Award
Year) prior to the payment of the Award (or the date payment would
have been made but for a Participant’s election to defer
receipt) to the extent it deems appropriate for any reason,
including compliance with applicable securities laws and local laws
outside the U.S. Notwithstanding the foregoing, to the extent
the Committee has expressly designated an Incentive Award as a
Covered Award, the Committee will not have any authority to amend
or modify the terms of any Covered Award in any manner that would
impair its deductibility under Section 162(m) of the
Code.
ii. Notwithstanding any
provision of the Plan to the contrary, in the event that the
Committee determines that an Incentive Award may be subject to
Section 409A, the Committee may reserve the right (without any
obligation to do so or to indemnify any Participant for failure to
do so) to adopt such amendments to the Plan and the applicable
agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or
take any other actions, that the Committee determines are necessary
or appropriate to (a) exempt the Incentive Award from
Section 409A and/or preserve the intended tax treatment of the
benefits provided with respect to the Incentive Award, or
(b) comply with the requirements of Section 409A and
thereby avoid the application of any penalty taxes under such
Section.
E. No Contract of
Employment. Neither the Plan, nor any Incentive
Award, constitutes a contract of employment, and participation in
the Plan will not give any employee the right to be retained in the
service of the Company or any Subsidiary or continue in any
position or at any level of compensation.
F. Controlling Law.
Except in connection with other matters of corporate
governance and authority (all of which shall be governed by the
laws of the Company’s jurisdiction of incorporation), the
validity, construction, interpretation, administration and effect
of the Plan and any rules, regulations and actions relating to the
Plan will be governed by and construed exclusively in accordance
with the laws of the State of Minnesota, notwithstanding the
conflicts of laws principles of any jurisdictions.
G. Compliance with
Section 162(m) of the Code. To the extent any
provision of the Plan or an Incentive Award or any action of the
Committee or the Company as it relates to a Covered Award may
result in the application of Section 162(m)(1) of the Code to
compensation payable to a Covered Employee, such provision or
action shall be deemed null and void to the extent permitted by law
and deemed advisable to the Committee.
H. Unfunded, Unsecured
Obligation. A Participant’s only interest
under the Plan shall be the right to receive a payment of either
cash or Stock or a combination of cash and Stock for an Incentive
Award pursuant to the terms of the Incentive Award and the Plan. No
portion of the amount payable to a Participant under this Plan
shall be held by the Company or any Subsidiary in trust or escrow
or any other form of asset segregation. To the extent that a
Participant acquires a right to receive a payment of cash and/or
Stock under the Plan, such right shall be no greater than the right
of any unsecured, general creditor of the Company, and no trust in
favor of any Participant will be implied.
III. DEFINITIONS
Unless the context requires
otherwise, the following terms when used with initial
capitalization have the following meanings:
A. Award Year
— The fiscal year for which Incentive Awards, if any,
are calculated under the Plan.
B.
Board — The Board of Directors of the
Company.
C. Code —
The Internal Revenue Code of 1986, as from time to time amended
including any related regulations.
D. Committee
— the Compensation and Management Development Committee
of the Board of Directors of the Company, comprised solely of two
or more outside directors meeting the requirements of
Section 162(m) of the Code.
E.
Company — Nash-Finch Company.
F.
Compensation — Compensation means a
Participant’s annual rate of base salary in effect at the
time eligibility for participation for an Award Year is determined
(but not later than 90 days following the beginning of such
Award Year), or, if participation under the Plan commences during
the Award Year, at such later commencement of participation, and
without regard to any salary reduction agreement to make pre-tax
elective contributions under any qualified Code Section 401(k)
Plan or Code Section 125 cafeteria plan (including any HMO
premium deductions).
G. Covered
Award — An Incentive Award (i) that will be
paid to a Covered Employee, (ii) that the Committee expressly
designates as performance-based compensation and intends to be
fully deductible under Section 162(m) of the Code, and
(iii) that will be paid following the shareholder approval
required by Section 162(m)(4)(C)(ii) of the Code.
H. Covered Employee
— An individual who is a “covered employee”
within the meaning of Section 162(m)(3) of the
Code.
I.
Employer — The Company and any Subsidiary that,
with the approval of the Chief Executive Officer of the Company,
has adopted this Plan.
J.
ERISA — The Employee Retirement Income Security
Act of 1974, as from time to time amended, including any related
regulations.
K. Fair Market Value
— The Fair Market Value of a share of Stock, as of any
date (or, if no shares were traded or quoted on such date, as of
the next preceding date on which there was such a trade or quote),
as determined by (a) the mean between the reported high and
low sale prices of the Stock during the regular trading session if
the Stock is listed, admitted to unlisted trading privileges or
reported on any foreign or national securities exchange or on the
Nasdaq Global Market or an equivalent foreign market on which sale
prices are reported; (b) if the Stock is not so listed,
admitted to unlisted trading privileges or reported, the closing
bid price as reported by the Nasdaq Capital Mar
