EXHIBIT 10.2
As Amended
Through
August 12, 2008
SPARTAN STORES,
INC.
ANNUAL EXECUTIVE INCENTIVE PLAN OF 2005
SECTION 1
ESTABLISHMENT AND PURPOSES OF PLAN
1.1
Establishment of Plan. Spartan Stores, Inc., a
Michigan corporation, hereby establishes the ANNUAL EXECUTIVE
INCENTIVE PLAN OF 2005 (the "Plan") for senior executive officers
of the Company and its Subsidiaries. The Plan permits the award of
incentive compensation in the form of performance-based incentive
awards.
1.2
Purposes of Plan. The purposes of the Plan are to
motivate Participants to achieve the Company's annual financial and
business objectives; to allow Participants to share appropriately
in the financial success of the Company; to provide a highly
competitive incentive compensation opportunity; to create a linkage
between Participant contribution and the Company's financial and
business objectives; and to assist in the attraction, retention and
motivation of senior executive officers of the Company and its
Subsidiaries. The Plan is further intended to provide flexibility
to the Company in structuring incentive compensation to best
promote the foregoing objectives. Within that context, the Plan is
intended to provide performance-based compensation under
Section 162(m) of the Code and shall be interpreted and
administered to achieve that purpose.
1.3
Plan Document. This instrument, as amended from
time to time, constitutes the governing document of the Plan.
1.4
Effective Date. The Plan is initially effective
as of May 11, 2005. Adoption of the Plan by the Board and payment
of Incentive Bonuses for Fiscal Year 2006 shall be contingent upon
approval by the shareholders at the 2005 Annual Meeting of
Shareholders or any adjournment thereof or at a Special Meeting of
the Shareholders. In the absence of such approval, this Plan shall
be void.
1.5
Incentive Compensation Plan. The Plan is an
annual incentive compensation program for Participants. Because the
Plan does not provide welfare benefits and does not provide for the
deferral of compensation until termination of employment, it is
established with the intent and understanding that it is not an
employee benefit plan within the meaning of the federal Employee
Retirement Income Security Act of 1974, as amended.
SECTION 2
DEFINITIONS
The following terms shall have the definitions stated,
unless the context plainly requires a different meaning. Other
defined terms shall have the meanings ascribed to them herein.
2.1
Annual Base Salary. "Annual Base Salary" means a
Participant's annual salary rate in effect at the end of a Fiscal
Year without regard to incentive compensation or bonuses or awards
under this Plan or other benefits or incentive compensation plans
maintained or provided by the Company.
2.2
Affiliate. "Affiliate" means any
organization controlling, controlled by or under common control
with the Company.
2.3
Beneficiary. "Beneficiary" means the individual,
trust or other entity designated by the Participant to receive any
amount payable with respect to the Participant under the Plan after
the Participant's death. A Participant may designate or change a
Beneficiary by filing a signed designation with the Committee in a
form approved by the Committee. A Participant's will or other
estate planning document is not effective for this purpose. If a
designation has not been completed properly and filed with the
Committee or is ineffective for any other reason, the Beneficiary
shall be the Participant's Surviving Spouse. If there is no
effective designation and the Participant does not have a Surviving
Spouse, the remaining benefits under this Plan, if any, shall be
paid to the Participant's estate.
2.4
Board. "Board" means the Board of Directors of
the Company.
2.5
Business Unit. "Business Unit" means any
Subsidiary, department, division, profit center or other
operational unit of the Company or any Subsidiary as to which the
Committee shall establish a Target Bonus under the Plan applicable
in a Fiscal Year.
2.6
Code. "Code" means the Internal Revenue Code of
1986, as amended.
2.7
Committee. "Committee" means the Compensation
Committee of the Board or such other committee as the Board
designates to administer this Plan. The Committee shall consist of
at least two persons, all of whom shall be "non-employee directors"
as defined in Rule 16b-3 under the Securities Exchange Act of
1934, as amended, and "outside directors" as defined in the
regulations issued under Section 162(m) of the Code.
2.8
Common Stock. "Common Stock" means the Company's
common stock, no par value.
2.9
Company. "Company" means Spartan Stores, Inc., a
Michigan corporation, and its successors and assigns.
2.10
Fiscal Year. "Fiscal Year" means the financial
reporting and taxable year of the Company as the Company may adopt
from time to time.
2.11
Incentive Bonus. "Incentive Bonus" means an
annual bonus awarded and paid to a Participant for services to the
Company or its Subsidiaries during a Fiscal Year that is based upon
achievement of pre-established performance objectives by the
Company, a Subsidiary, or a Business Unit.
2
2.12
Participant. "Participant" means a senior
executive officer of the Company or any Subsidiary designated by
the Committee to participate in this Plan for a Fiscal Year.
2.13
Performance. "Performance" means the level of
achievement by the Company or its Subsidiaries or Business Units of
the performance goals established by the Committee pursuant to
Section 5.
2.14
Retirement. "Retirement" means termination of
employment as a result of retirement on or after one or more of the
retirement dates specified in the Spartan Stores, Inc. Cash Balance
Pension Plan.
2.15
Subsidiary. "Subsidiary" means any corporation or
other entity of which fifty percent (50%) or more of the
outstanding voting stock or voting ownership interest is directly
or indirectly owned or controlled by the Company or by one or more
Subsidiaries of the Company, except that for purposes of this Plan,
the term "Subsidiary" does not include Spartan Insurance Company
Ltd. or SI Insurance Agency, Inc.
2.16
Surviving Spouse. "Surviving Spouse" means the
husband or wife of the Participant at the time of the Participant's
death who survives the Participant. If the Participant and the
spouse die under circumstances that make the order of their deaths
uncertain, it shall be presumed for purposes of this Plan that the
Participant survived the spouse.
2.17
Target Bonus. "Target Bonus" means the bonus goal
established by the Committee for each Participant under Section
5.1(a).
2.18
Total Disability. "Total Disability" or
"Disability" means the inability of a Participant to perform his or
her employment duties due to physical or mental disability for a
continuous period of one hundred eighty (180) days or longer and
the Participant is eligible for benefits under the Company's long
term disability policy.
SECTION 3
ADMINISTRATION OF PLAN
3.1
Plan Administration.
(a)
Power and Authority . The Plan shall be
administered by the Committee. Except as limited in the Plan, the
Committee shall have full power and authority to interpret the
provisions of the Plan and shall have full power and authority to
supervise the administration of the Plan. Action may be taken by a
written instrument signed by a majority of the members of the
Committee and any action so taken shall be as effective as if it
had been taken at a meeting. All determinations, interpretations
and selections made by the Committee regarding the Plan shall be
final and conclusive on all parties. To the extent it deems
3
necessary or appropriate, the Committee may
adopt rules, policies and forms for the administration,
interpretation and implementation of the Plan.
(b)
Delegation of Authority . The Committee may
delegate any, some or all of its record keeping, calculation,
payment and other ministerial or administrative authority and
responsibility from time to time to and among one or more
individuals, who may be members of the Committee or employees of
the Company or its Subsidiaries or Affiliates, but all actions
taken pursuant to delegated authority and responsibility shall be
subject to such review, change and approval by the Committee as the
Committee considers appropriate.
3.2
Grants or Awards to Participants. In accordance
with and subject to the provisions of the Plan, the Committee shall
have the authority to determine all matters as the Committee may
deem necessary or desirable and as are consistent with the terms of
the Plan, including, without limitation, the following: (a) the
persons who shall be selected as Participants and (b) the nature
and extent of the incentive awards granted to each Participant.
3.3
Indemnification. A member of the Committee or any
other individual or group to whom authority is delegated shall not
be personally liable for any act or omission in connection with the
performance of powers or duties or the exercise of discretion or
judgment in the administration and implementation of the Plan. The
Company shall hold harmless and indemnify each member of the
Committee, and any other individual or group exercising delegated
authority or responsibility with respect to the Plan, from any and
all liabilities, costs and expenses arising from any act or
omission related to the performance of duties or the exercise of
discretion and judgment with respect to the Plan. This Section 3.3
shall not be construed as limiting the Company's or any
Subsidiary's ability to terminate or otherwise alter the terms and
conditions of the employment of an individual or group exercising
delegated authority or responsibility with respect to the Plan, or
to discipline any such person. Each such individual shall be
justified in relying on information furnished in connection with
the Plan's administration by any appropriate person or persons.
SECTION 4
ELIGIBILITY
4.1
Participation. For each Fiscal Year, the
Committee shall designate the senior executive officers of the
Company or any Subsidiary who shall be Participants for that Fiscal
Year. Senior executive officers designated as Participants after
the first 90 days of any Fiscal Year shall not be eligible for any
Incentive Bonus paid with respect to such Fiscal Year under this
Plan. Participants shall be notified in writing and provided a
written summary of the Plan.
4.2
No Continuing Participation. Designation as a
Participant for a Fiscal Year will not continue in effect for any
subsequent Fiscal Year unless and until the Committee designates
the individual as a Participant in the subsequent Fiscal Year. The
Committee may termi
