EXHIBIT 10.31
UNITED NATURAL FOODS, INC.
260 LAKE ROAD
DAYVILLE, CT 06241
October 31, 1997
PERSONAL AND CONFIDENTIAL
Mr. Steven Townsend
169 Barrett Hill Road
Brooklyn, CT 06234
Dear Steve:
On behalf of United Natural Foods, Inc. (the "Company") and the other
members of its Board of Directors (the "Board"), and in acknowledgement of your
extraordinary efforts extended over your fourteen years of service to the
Company as well as your efforts in connection with the successful initial public
offering by the Company of its stock and the general business good fortunes of
the Company accomplished in no small part as a result of your efforts, and
consistent with your stated personal career objectives and your desire to
undertake new business opportunities outside of the wholesale distribution of
natural foods business, the Company is pleased to undertake the following:
1. You will remain employed by the Company and serve in your officer capacity
as Vice President-Finance and Administration and Chief Financial Officer
until December 1, 1997 or such earlier date as we mutually agree in the
event the Company has hired your successor. You agree that you will assist
the Company in retaining your successor.
2. Your compensation and benefits currently payable by the Company will
continue until December 1, 1997 or such earlier date as referenced in
Section 1 above.
3. The Company will provide a salary continuation benefit to you such that on
December 1, 1997, it will pay you $30,000, on March 1, 1998 it will pay you
$30,000 and on August 1, 1998 it will pay $60,000, all subject to necessary
withholdings. In addition, the Company will provide, at its expense, health
insurance benefits as are currently made available to you and your family
to August 31, 1998. You will pay your normal share of premiums for such
health insurance through August 31, 1998. Subsequent to August 31, 1998,
you will have the right to continue such insurance benefits under COBRA.
4. The Company anticipates granting Non-Statutory Stock Options to certain of
its employees as well as to those Board of Directors who are not employed
by the Company (the "Outside Directors") and for purposes of the 1997-1998
grant of non-statutory options under the Company Non-Statutory Stock Option
Plan, the Company will grant non-statutory to you to purchase 5,333 shares
of the Company common stock as of the date the Board of Directors takes
action to issue such options to its employees and to its Outside Directors,
it being agreed that such options when granted to you for such 5,333 shares
will be fully vested as of the date of the grant. If upon the expiration of
your current term as a Director of the Company you are re-elected as a
Director, then during your re-elected term or terms, you shall be granted
options for such number of shares as shall equal the number of shares it
will grant to its other Outside Directors. The Non-Statutory Stock Option
Agreement with respect to those options to be granted to you during you re-
elected term(s) shall provide for vesting at the rate of 1/3 of the amount
of the grant per year for three (3) years while you shall serve as
Director.
5. The Company will provide to potential future employers its letter of
recommendation in the form attached hereto and all inquiries from future
employers will be directed to the undersigned who will respond directly on
behalf of the Company.
6. Subsequent to December 1, 1997, you may be called upon by the Company to
render consulting services from time to time and the Company and you will
separately agree to mutual terms and conditions with respect thereto
including consulting fees.
7. You will continue to serve on the Board of Directors of the Company through
the remainder of your current elected term and, if requested by the Board,
will agree to stand for re-election at the end of that term.
8. You agree that will not without prior written consent of the Company
disclose to any other party any trade secrets or confidential and/or
proprietary information of the
Company obtained during your employment by the Company which trade secrets
and confidential information shall mean any and all confidential and
proprietary information not otherwise in the public domain including,
without limitation, financial information, projected budgets, marketing
strategies, customer lists, pricing policies, operational methods,
marketing plans and strategies, product development techniques or plans,
business acquisition plans, inventions and/or research projects and other
business affairs of the Company which are proprietary and are confidential.
You further agree that until August 31, 1998, you shall not at any time,
directly or indirectly, induce, persuade, solicit or attempt to induce,
persuade or solicit any employee of the Company or its subsidiaries to
terminate his or her employment by the Company or its subsidiaries or to
otherwise, directly or indirectly, or through any other person, firm or
entity induce, persuade or solicit or attempt to induce, persuade or
solicit any such employee to become employed by you, or any other firm,
person or entity with whom you may be affiliated.
Please confirm your understanding as to the foregoing be signing this and a copy
of this letter and returning the same to the undersigned.
All of the employees of the Company join me in wishing you nothing but the best
with regard to your future business undertakings.
Very truly yours,
UNITED NATURAL FOODS, INC.
By: /s/ Norman A. Cloutier
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Norman A. Cloutier
Chairman of the Board
Read and Agreed to as of
October 31, 1997
/s/ Steven Townsend
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Steven Townsend