Form 10-Q UNITED NATURAL FOODS For: Oct 31

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December 10, 2015 4:46 PM EST

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2015

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-21531

UNITED NATURAL FOODS, INC.

(Exact Name of Registrant as Specified in Its Charter)



Delaware		05-0376157
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)



313 Iron Horse Way, Providence, RI		02908
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (401) 528-8634

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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 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 ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer ý		Accelerated filer o

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

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

As of December 2, 2015 there were 50,320,813 shares of the registrant’s Common Stock, $0.01 par value per share, outstanding.

TABLE OF CONTENTS



Part I.	Financial Information

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets (unaudited)	3

	Condensed Consolidated Statements of Income (unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income (unaudited)	5

	Condensed Consolidated Statement of Stockholders’ Equity (unaudited)	6

	Condensed Consolidated Statements of Cash Flows (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4.	Controls and Procedures	22

Part II.	Other Information

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	22

Item 4.	Mine Safety Disclosures	22

Item 5.	Other Information	22

Item 6.	Exhibits	23

	Signatures	24

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

UNITED NATURAL FOODS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(In thousands, except per share amounts)



	October 31, 2015			August 1, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	12,293		$	17,380
Accounts receivable, net of allowance of $10,181 and $7,489, respectively	491,221			474,494
Inventories	1,082,979			982,559
Prepaid expenses and other current assets	40,779			46,976
Deferred income taxes	32,333			32,333
Total current assets	1,659,605			1,553,742
Property & equipment, net	566,522			572,452
Goodwill	266,660			266,640
Intangible assets, net of accumulated amortization of $27,578 and $25,717, respectively	123,990			125,830
Other assets	33,408			31,526
Total assets	$	2,650,185		$	2,550,190

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	495,648		$	390,134
Accrued expenses and other current liabilities	140,027			129,113
Current portion of long-term debt	11,632			11,613
Total current liabilities	647,307			530,860
Notes payable	316,060			362,993
Long-term debt, excluding current portion	171,871			174,780
Deferred income taxes	64,983			65,644
Other long-term liabilities	29,497			30,380
Total liabilities	1,229,718			1,164,657
Commitments and contingencies	—			—
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 5,000 shares; none issued or outstanding	—			—
Common stock, $0.01 par value, authorized 100,000 shares; 50,315 issued and outstanding shares at October 31, 2015; 50,096 issued and outstanding shares at August 1, 2015	503			501
Additional paid-in capital	426,314			420,584
Accumulated other comprehensive loss	(20,372		)	(19,443		)
Retained earnings	1,014,022			983,891
Total stockholders’ equity	1,420,467			1,385,533
Total liabilities and stockholders’ equity	$	2,650,185		$	2,550,190

The accompanying notes are an integral part of the condensed consolidated financial statements.

UNITED NATURAL FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(In thousands, except per share data amounts)



	Three months ended
	October 31, 2015			November 1, 2014
Net sales	$	2,076,649		$	1,992,476
Cost of sales	1,762,712			1,673,480
Gross profit	313,937			318,996
Operating expenses	257,224			260,048
Restructuring and asset impairment expenses	2,809			555
Total operating expenses	260,033			260,603
Operating income	53,904			58,393
Other expense (income):
Interest expense	3,748			3,255
Interest income	(152		)	(93		)
Other, net	173			616
Total other expense, net	3,769			3,778
Income before income taxes	50,135			54,615
Provision for income taxes	20,004			21,573
Net income	$	30,131		$	33,042
Basic per share data:
Net income	$	0.60		$	0.66
Weighted average basic shares of common stock outstanding	50,194			49,889
Diluted per share data:
Net income	$	0.60		$	0.66
Weighted average diluted shares of common stock outstanding	50,313			50,113

The accompanying notes are an integral part of the condensed consolidated financial statements.

UNITED NATURAL FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(In thousands)



	Three months ended
	October 31, 2015			November 1, 2014
Net income	$	30,131		$	33,042
Other comprehensive income (loss), net of tax:
Change in fair value of swap agreements	(990		)	—
Foreign currency translation adjustments	61			(2,562		)
Total other comprehensive income (loss), net of tax	(929		)	(2,562		)
Total comprehensive income	$	29,202		$	30,480

The accompanying notes are an integral part of the condensed consolidated financial statements.

UNITED NATURAL FOODS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (unaudited)

(In thousands)



	Common Stock			Additional Paid in Capital			Accumulated Other Comprehensive (Loss) Income			Retained Earnings		Total Stockholders’ Equity
	Shares	Amount		Additional Paid in Capital			Accumulated Other Comprehensive (Loss) Income			Retained Earnings		Total Stockholders’ Equity
Balances at August 1, 2015	50,096	$	501	$	420,584		$	(19,443	)	$	983,891	$	1,385,533
Stock option exercises and restricted stock vestings, net of tax	219	2		(657		)						(655		)
Share-based compensation				5,973								5,973
Tax benefit associated with stock plans				414								414
Fair value of swap agreements, net of tax							(990		)			(990		)
Foreign currency translation							61					61
Net income										30,131		30,131
Balances at October 31, 2015	50,315	$	503	$	426,314		$	(20,372	)	$	1,014,022	1,420,467

The accompanying notes are an integral part of the condensed consolidated financial statements.

UNITED NATURAL FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)



	Three months ended
(In thousands)	October 31, 2015			November 1, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	30,131		$	33,042
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	16,704			14,158
Share-based compensation	5,973			5,962
Loss on disposals of property and equipment	194			32
Excess tax benefits from share-based payment arrangements	(414		)	(1,659		)
Restructuring and asset impairment	—			555
Deferred income taxes	—			(6,052		)
Provision for doubtful accounts	3,207			1,196
Non-cash interest (income) expense	(102		)	134
Changes in assets and liabilities, net of acquired businesses:
Accounts receivable	(19,866		)	(42,079		)
Inventories	(100,387		)	(150,761		)
Prepaid expenses and other assets	4,455			4,586
Accounts payable	58,395			50,878
Accrued expenses and other liabilities	7,202			(8,735		)
Net cash provided by (used in) operating activities	5,492			(98,743		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(7,588		)	(27,372		)
Purchases of acquired businesses, net of cash acquired	(17		)	(7,734		)
Long-term investment	—			(3,000		)
Net cash used in investing activities	(7,605		)	(38,106		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of long-term debt	—			150,000
Repayments of long-term debt	(2,890		)	(2,902		)
Proceeds from borrowings under revolving credit line	122,650			127,962
Repayments of borrowings under revolving credit line	(169,591		)	(176,614		)
Increase in bank overdraft	47,084			40,674
Proceeds from exercise of stock options	921			523
Payment of employee restricted stock tax withholdings	(1,576		)	(2,089		)
Excess tax benefits from share-based payment arrangements	414			1,659
Capitalized debt issuance costs	—			(954		)
Net cash (used in) provided by financing activities	(2,988		)	138,259
EFFECT OF EXCHANGE RATE CHANGES ON CASH	14			38
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(5,087		)	1,448
Cash and cash equivalents at beginning of period	17,380			16,116
Cash and cash equivalents at end of period	$	12,293		$	17,564
Supplemental disclosures of cash flow information:
Cash paid for interest	$	4,354		$	3,190
Cash paid for federal and state income taxes, net of refunds	$	1,768		$	11,032

The accompanying notes are an integral part of the condensed consolidated financial statements.

UNITED NATURAL FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2015 (unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES

(a) Nature of Business

United Natural Foods, Inc. and its subsidiaries (the “Company”) is a leading distributor and retailer of natural, organic and specialty products. The Company sells its products primarily throughout the United States and Canada.

(b) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for interim periods, however, may not be indicative of the results that may be expected for a full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 1, 2015.

Net sales consist primarily of sales of natural, organic and specialty products to retailers, adjusted for customer volume discounts, returns and allowances. Net sales also include amounts charged by the Company to customers for shipping and handling and fuel surcharges. The principal components of cost of sales include the amounts paid to manufacturers and growers for product sold, plus the cost of transportation necessary to bring the product to the Company’s distribution facilities. Cost of sales also includes amounts incurred by the Company’s manufacturing subsidiary, United Natural Trading LLC, which does business as Woodstock Farms Manufacturing, for inbound transportation costs and depreciation of manufacturing equipment offset by consideration received from suppliers in connection with the purchase or promotion of the suppliers’ products. Operating expenses include salaries and wages, employee benefits (including payments under the Company’s Employee Stock Ownership Plan), warehousing and delivery, selling, occupancy, insurance, administrative, share-based compensation and amortization expense. Operating expenses also include depreciation expense related to the wholesale and retail divisions. Other expense (income) includes interest on outstanding indebtedness, interest income and miscellaneous income and expenses.

As noted above, the Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound freight are generally recorded in cost of sales, whereas shipping and handling costs for selecting, quality assurance, and outbound transportation are recorded in operating expenses. Outbound shipping and handling costs, including allocated employee benefit expenses, totaled $114.5 million and $112.0 million for the three months ended October 31, 2015 and November 1, 2014, respectively.

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires entities with a classified balance sheet to present all deferred tax assets and liabilities as noncurrent. The new pronouncement is effective for public companies with annual periods, and interim periods within those periods, beginning after December 15, 2016, which for the Company will be the first quarter of the fiscal year ending July 28, 2018. Early adoption at the beginning of an interim or annual period is permitted. We are in the process of evaluating the impact that this new guidance will have on the Company's consolidated financial statements.

In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, (Topic 606): Deferral of the Effective Date deferring the adoption of previously issued guidance published in May 2014, ASU No. 2014-09, Revenue from Contracts with Customers, (Topic 606). The core principle of the new guidance is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new pronouncement is effective for public companies with annual periods, and interim periods within those periods, beginning after December 15, 2017, which for the Company will be the first quarter of the fiscal year ending August 3, 2019. We are in the process of evaluating the impact that this new guidance will have on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) ("ASU 2015-03"), which simplifies the presentation of debt issuance costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with the presentation of debt discounts. ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, which for the Company will be the first quarter of the fiscal year ending July 29, 2017, with early adoption permitted and retrospective application required. If the Company had adopted this standard in the first quarter of fiscal 2016, the result would have been the reclassification of $4.0 million and $4.2 million as of October 31, 2015 and August 1, 2015, respectively, from deferred financing costs to long-term debt in our condensed consolidated balance sheets.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new guidance requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures as appropriate. The new pronouncement is effective for public companies with annual periods ending after December 15, 2016, and interim periods thereafter. We do not expect the adoption of this guidance to have a significant impact on the Company’s consolidated financial statements.

3. RESTRUCTURING ACTIVITIES AND ASSET IMPAIRMENTS

2016 cost-saving measures

During the fourth quarter of fiscal 2015, the Company announced that its contract as a distributor to Albertsons Companies, Inc., which includes the Albertsons, Safeway and Eastern Supermarket chains, terminated on September 20, 2015 rather than upon the original contract end date of July 31, 2016. In the first quarter of fiscal 2016, the Company implemented company-wide cost-saving measures in response to this lost business.

The various cost-saving measures implemented in the first quarter of fiscal 2016 resulted in restructuring costs of $2.8 million that were recorded during the three months ended October 31, 2015. These initiatives resulted in a reduction of employees, the majority of which were terminated by October 31, 2015, across the Company. The total work-force reduction charge of $2.3 million during the three months ended October 31, 2015 was primarily related to severance and fringe benefits. The Company also delayed filling vacant positions during the first quarter of fiscal 2016. In connection with these initiatives, we expect to incur additional costs of $1.2 million to $2.2 million related to severance and fringe benefits in the remainder of fiscal 2016. In addition to workforce reduction charges, the Company also recorded $0.5 million for an early lease termination charge and operational transfer costs associated with these initiatives in the first quarter of fiscal 2016.

The following is a summary of the restructuring costs the Company recorded in the first quarter of fiscal 2016, as well as the remaining liability as of October 31, 2015 (in thousands):



	Restructuring Costs		Cash Payments			Restructuring Cost Liability as of October 31, 2015
Severance	$	2,285	$	(732	)	$	1,553
Early lease termination	225		—			225
Operational transfer costs	299		(299		)	—
Total	$	2,809	$	(1,031	)	$	1,778

The Company anticipates that the remaining liability related to the workforce reduction will be substantially paid by the end of fiscal 2016. The early lease termination charge was paid in the second quarter of fiscal 2016, prior to the filing of this Quarterly Report.

Canadian facility closure

During fiscal 2015, the Company ceased operations at its Canadian facility located in Scotstown, Quebec which was acquired in 2010. In connection with this closure, the Company recognized an impairment of $0.6 million during the first quarter of fiscal 2015 representing the remaining unamortized balance of an intangible asset.

4. EARNINGS PER SHARE

The following is a reconciliation of the basic and diluted number of shares used in computing earnings per share (in thousands):



	Three months ended
	October 31, 2015	November 1, 2014
Basic weighted average shares outstanding	50,194	49,889
Net effect of dilutive stock awards based upon the treasury stock method	119	224
Diluted weighted average shares outstanding	50,313	50,113

For the three months ended October 31, 2015 and November 1, 2014, there were 50,453 and 14,047 anti-dilutive share-based awards outstanding, respectively. These anti-dilutive share-based awards were excluded from the calculation of diluted earnings per share.

5. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Interest Rate Swap Agreement

On January 23, 2015, the Company entered into a forward starting interest rate swap agreement with an effective date of August 3, 2015. The agreement provides for the Company to pay interest for a seven-year period at a fixed rate of 1.795% on an initial amortizing principal amount of $140.0 million while receiving interest for the same period at the one-month London Interbank Offered Rate ("LIBOR") on the same notional amount. The interest rate swap has been entered into as a hedge against LIBOR movements on the current variable rate related to the Company’s real-estate backed Term Loan Agreement entered into on August 14, 2014, explained in more detail in Note 7 "Long-Term Debt," to protect against rising interest rates. We expect that the interest rate swap will effectively fix the Company’s interest rate payments on the $140.0 million of debt. The swap agreement qualifies as an “effective” hedge under FASB Accounting Standards Codification ("ASC") 815, Derivatives and Hedging (“ASC 815”).

Interest rate swap agreements are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company’s interest rate swap agreement is designated as a cash flow hedge at October 31, 2015 and is reflected at fair value in the Condensed Consolidated Balance Sheet.

The Company uses the “Hypothetical Derivative Method” described in ASC 815 for quarterly prospective and retrospective assessments of hedge effectiveness, as well as for measurements of hedge ineffectiveness. Under this method, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. The effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings in interest income when the hedged transactions affect earnings. Ineffectiveness resulting from the hedge is recorded as a gain or loss in the condensed consolidated statement of income as part of other income. The Company did not have any hedge ineffectiveness recognized in earnings during the three months ended October 31, 2015. The Company also monitors the risk of counterparty default on an ongoing basis.

Fuel Supply Agreements

The Company is party to several fixed price fuel supply agreements. As of the first quarter of fiscal 2016, the Company had entered into an agreement which requires it to purchase a portion of its diesel fuel each month at fixed prices through December 2016. These fixed price fuel agreements qualify for, and the Company has elected to utilize, the “normal purchase” exception under ASC 815 as physical deliveries will occur rather than net settlements, and therefore the fuel purchases under these contracts are expensed as incurred and included within operating expenses. During the three months ended November 1, 2014, the Company was a party to several similar agreements which required it to purchase a portion of its diesel fuel each month at fixed prices through December 2015 and which also qualified and were accounted for using the “normal purchase” exception under ASC 815, and therefore the fuel purchases under those contracts were also expensed as incurred and included within operating expenses.

Financial Instruments

The following table provides the fair value hierarchy for financial assets and liabilities measured on a recurring basis as of October 31, 2015 and August 1, 2015:



	Fair Value at October 31, 2015					Fair Value at August 1, 2015
(In thousands)	Level 1	Level 2			Level 3	Level 1	Level 2			Level 3
Liabilities:
Interest Rate Swap	—	$	(2,378	)	—	—	$	(726	)	—

The fair value of the Company’s other financial instruments including cash, cash equivalents, accounts receivable, notes receivable, accounts payable and certain accrued expenses approximate carrying amounts due to the short-term nature of these instruments. The Company believes its credit risk is similar to the overall market and variable rates have not moved significantly since it initiated the underlying borrowings therefore the fair value of notes payable approximate carrying amounts.

The following estimated fair value amounts for long-term debt have been determined by the Company using available market information and appropriate valuation methodologies including the discounted cash flow method, taking into account the instruments’ interest rate, terms, maturity date and collateral, if any, in comparison to market rates for similar financial instruments and are, therefore, deemed Level 2 inputs. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.



	October 31, 2015				August 1, 2015
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt, including current portion	$	183,503	$	189,057	$	186,393	$	192,679

6. BUSINESS SEGMENTS

The Company has several operating divisions aggregated under the wholesale segment, which is the Company’s only reportable segment. These operating divisions have similar products and services, customer channels, distribution methods and historical margins. The wholesale segment is engaged in the national distribution of natural, organic and specialty foods, produce and related products in the United States and Canada. The Company has additional operating divisions that do not meet the quantitative thresholds for reportable segments and are therefore aggregated under the caption of “Other.” “Other” includes a retail division, which engages in the sale of natural foods and related products to the general public through retail storefronts on the east coast of the United States, a manufacturing division, which engages in importing, roasting, packaging, and distributing of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections, and the Company’s branded product lines. “Other” also includes certain corporate operating expenses that are not allocated to operating divisions and are necessary to operate the Company’s headquarters located in Providence, Rhode Island, which include depreciation, salaries, retainers, and other related expenses of officers, directors, corporate finance (including professional services), information technology, governance, legal, human resources and internal audit. As the Company continues to expand its business and serve its customers through a new national platform, these corporate expense amounts have increased, which is the primary driver behind the increasing operating losses within the “Other” category below. Non-operating expenses that are not allocated to the operating divisions are under the caption of “Unallocated Expenses.” The Company does not record its revenues for financial reporting purposes by product group, and it is therefore impracticable for the Company to report them accordingly.

The following table reflects business segment information for the periods indicated (in thousands):



	Wholesale		Other			Eliminations			Unallocated			Consolidated
Three months ended October 31, 2015:
Net sales	$	2,059,622	$	57,807		$	(40,780	)	$	—		$	2,076,649
Restructuring and asset impairment expenses	2,809		—			—			—			2,809
Operating income (loss)	62,065		(6,672		)	(1,489		)	—			53,904
Interest expense	—		—			—			3,748			3,748
Interest income	—		—			—			(152		)	(152		)
Other, net	—		—			—			173			173
Income before income taxes												50,135
Depreciation and amortization	16,083		621			—			—			16,704
Capital expenditures	7,122		466			—			—			7,588
Goodwill	248,929		17,731			—			—			266,660
Total assets	2,485,086		189,442			(24,343		)	—			2,650,185

Three months ended November 1, 2014:
Net sales	$	1,970,719	$	59,570		$	(37,813	)	$	—		$	1,992,476
Restructuring and asset impairment expenses	555		—			—			—			$	555
Operating income (loss)	66,709		(7,599		)	(717		)	—			58,393
Interest expense	—		—			—			3,255			3,255
Interest income	—		—			—			(93		)	(93		)
Other, net	—		—			—			616			616
Income before income taxes												54,615
Depreciation and amortization	12,409		1,749			—			—			14,158
Capital expenditures	26,937		435			—			—			27,372
Goodwill	256,185		17,731			—			—			273,916
Total assets	2,351,321		176,624			(17,879		)	—			2,510,066

7. LONG-TERM DEBT

On August 14, 2014, the Company entered into a real-estate backed Term Loan Agreement (the “Term Loan Agreement”) by and among the Company, its wholly-owned subsidiary Albert’s Organics, Inc. (“Albert's,” and together with the Company, the “Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “Lenders”), Bank of America, N.A. as administrative agent for the Lenders (the “Administrative Agent”) and the other parties thereto. The total initial borrowings under the Term Loan Agreement were $150.0 million. Borrowings under the Term Loan Agreement are guaranteed by most of the Company's wholly-owned subsidiaries who are not also Borrowers. The Borrowers are required to make $2.5 million principal payments quarterly, which began on November 1, 2014. The Term Loan Agreement will terminate on the earlier of (a) August 14, 2022 and (b) the date that is ninety days prior to the termination date of the Company’s amended and restated revolving credit agreement, as amended. Under the Term Loan Agreement, the Borrowers at their option may request the establishment of one or more new term loan commitments in increments of at least $10.0 million, but not to exceed $50.0 million in total, subject to the approval of the Lenders electing to participate in such incremental loans and the satisfaction of the conditions required by the Term Loan Agreement. The Borrowers will be required to make quarterly principal payments on these incremental borrowings in accordance with the terms of the Term Loan Agreement.

Borrowings under the Term Loan Agreement bear interest at rates that, at the Company's option, can be either: (1) a base rate generally defined as the sum of (i) the highest of (x) the Administrative Agent's prime rate, (y) the average overnight federal funds effective rate plus 0.50% and (z) one-month LIBOR plus one percent (1%) per annum and (ii) a margin of 1.50%; or, (2) a LIBOR rate generally defined as the sum of (i) LIBOR (as published by Reuters or other commercially available sources) for one, two, three or six months or, if approved by all affected lenders, nine months (all as selected by the Company), and (ii) a margin of 2.50%. Interest accrued on borrowings under the Term Loan Agreement is payable in arrears. Interest accrued on any LIBOR loan is payable on the last day of the interest period applicable to the loan and, with respect to any LIBOR loan of more than three (3) months, on the last day of every three (3) months of such interest period. Interest accrued on base rate loans is payable on the first day of every month. The Company is also required to pay certain customary fees to the Administrative Agent. The Borrowers' obligations under the Term Loan Agreement are secured by certain parcels of the Borrowers' real property.

As of October 31, 2015, the Company had borrowings of $137.5 million under the Term Loan Agreement which is included in "Long-term debt" on the Condensed Consolidated Balance Sheet.

During the second quarter of fiscal 2015, the Company entered into an amendment to an existing lease agreement for the office space utilized as the Company's corporate headquarters in Providence, Rhode Island. The amendment provides for additional office space to be utilized by the Company and extends the lease term for an additional 10 years. The lease qualifies for capital lease treatment pursuant to FASB ASC 840, Leases, and the estimated fair value of the building was initially recorded on the Condensed Consolidated Balance Sheet at lease inception, with the capital lease obligation included in "Long-term debt." A portion of each lease payment reduces the amount of the lease obligation, and a portion is recorded as interest expense at an effective rate of approximately 12.38%. The capital lease obligation as of October 31, 2015 was $13.7 million. The Company recorded $0.4 million of interest expense related to this lease during the three months ended October 31, 2015. The Company did not have this capital lease obligation during the three months ended November 1, 2014.

During the fiscal year ended July 28, 2012, the Company entered into a lease agreement for a new distribution facility in Aurora, Colorado. At the conclusion of the fiscal year ended August 3, 2013, actual construction costs exceeded the construction allowance as defined by the lease agreement, and therefore, the Company determined it met the criteria for continuing involvement pursuant to FASB ASC 840, Leases, and applied the financing method to account for this transaction during the fourth quarter of fiscal 2013. Under the financing method, the book value of the distribution facility and related accumulated depreciation remains on the balance sheet. The construction allowance is recorded as a financing obligation in "Long-term debt." A portion of each lease payment reduces the amount of the financing obligation, and a portion is recorded as interest expense at an effective rate of approximately 7.32%. The financing obligation as of October 31, 2015 was $32.3 million. The Company recorded $0.6 million of interest expense related to this lease during each of the three months ended October 31, 2015 and November 1, 2014, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. In some cases you can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plans,” “planned,” “seek,” “should,” “will,” and “would,” or similar words. Statements that contain these words should be read carefully because they discuss future expectations, contain projections of future results of operations or of financial positions or state other “forward-looking” information.

Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. You are cautioned not to place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to:

•our dependence on principal customers;

•our sensitivity to general economic conditions, including the current economic environment;

•changes in disposable income levels and consumer spending trends;


•	our ability to reduce our expenses in amounts sufficient to offset our increased focus on sales to conventional supermarkets and the shift in our product mix as a result of our acquisition of Tony's and the resulting lower gross margins on these sales;


•	our reliance on the continued growth in sales of natural and organic foods and non-food products in comparison to

conventional products;


•	our ability to timely and successfully deploy our warehouse management system throughout our distribution

centers and our transportation management system across our Company;

•the addition or loss of significant customers;

•volatility in fuel costs;


•	our ability to successfully consummate our expense reduction efforts in connection with the previously announced termination of a contractual customer relationship within the expected timeframe and cost estimates currently contemplated;

•our sensitivity to inflationary and deflationary pressures;

•the relatively low margins and economic sensitivity of our business;

•the potential for disruptions in our supply chain by circumstances beyond our control;

•the risk of interruption of supplies due to lack of long-term contracts, severe weather, work stoppages or otherwise;

•consumer demand for natural and organic products outpacing suppliers' ability to produce those products;

•decreased favorable buying opportunities;

•union-organizing activities that could cause labor relations difficulties and increased costs;


•	the ability to identify and successfully complete acquisitions of other natural, organic and specialty food and non-food products distributors;

•management’s allocation of capital and the timing of capital expenditures; and


•	our ability to successfully deploy our operational initiatives to achieve synergies from the acquisition of Tony's.

This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. You should carefully review the risks described under “Part I. Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended August 1, 2015 and any cautionary language in this Quarterly Report on Form 10-Q or our other reports filed with the SEC from time to time, as the occurrence of any of these events could have an adverse effect, which may be material, on our business, results of operations and financial condition.

Overview

We believe we are a leading distributor based on sales of natural, organic and specialty foods and non-food products in the United States and Canada and that our thirty-one distribution centers, representing approximately 7.7 million square feet of warehouse space, provide us with the largest capacity of any North American-based distributor in the natural, organic and specialty products industry. We offer more than 85,000 high-quality natural, organic and specialty foods and non-food products, consisting of national brands, regional brands, private label and master distribution products, in six product categories: grocery and general merchandise, produce, perishables and frozen foods, nutritional supplements and sports nutrition, bulk and food service products and personal care items. We serve more than 40,000 customer locations primarily located across the United States and Canada, the majority of which can be classified into one of the following categories: independently owned natural products retailers, which include buying clubs; supernatural chains, which consist solely of Whole Foods Market Inc. ("Whole Foods Market"); conventional supermarkets, which include mass market chains; and other which includes foodservice and international customers outside of Canada.

Our operations are comprised of three principal operating divisions. These operating divisions are:

•

our wholesale division, which includes our broadline natural, organic and specialty distribution business in the United States, UNFI Canada, Inc. ("UNFI Canada"), which is our natural, organic and specialty distribution business in Canada, Tony's, which is a leading distributor of a wide array of specialty protein, cheese, deli, food service and bakery goods, principally throughout the Western United States, Albert’s, which is a leading distributor of organically grown produce and non-produce perishable items within the United States, and Select Nutrition, which distributes vitamins, minerals and supplements;


•	our retail division, consisting of Earth Origins, which operates our thirteen natural products retail stores within the United States; and


•	our manufacturing division, consisting of Woodstock Farms Manufacturing, which specializes in the international importation, roasting, packaging and distribution of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items, and confections, and our Blue Marble Brands product lines.

In recent years, our sales to existing and new customers have increased through the continued growth of the natural and organic products industry in general; our efforts to increase the number of conventional supermarket customers to whom we distribute products; our high quality service and broader product selection, including specialty products, than many of our competitors; and the acquisition of, or merger with, natural, organic and specialty products distributors; the expansion of our existing distribution centers; the construction of new distribution centers; the introduction of new products and the development of our own line of natural and organic branded products. Through these efforts, we believe that we have been able to broaden our geographic penetration, expand our customer base and enhance and diversify our product selections and increase our market share. Beginning in fiscal 2009, our strategic plan has focused on increasing market share, particularly in our conventional supermarket channel. This channel typically generates lower gross margins than our independent retailer channel, but also typically has lower operating expenses. As part of our “one company” approach, we are in the process of rolling out a national warehouse management and procurement system to convert our existing facilities into a single warehouse management and supply chain platform ("WMS"). We have completed WMS system conversions at our Lancaster, Texas, Ridgefield, Washington, Auburn, Washington and Prescott, Wisconsin facilities. We have also implemented the WMS platform at our Sturtevant, Wisconsin, Montgomery, New York and Auburn, California facilities, and we expect to complete the roll-out to all existing facilities by the end of fiscal 2018. These steps and others are intended to promote operational efficiencies and further reduce our operating expenses as a percentage of net sales as we attempt to offset the lower gross margins we expect to generate by increased sales to the supernatural and conventional supermarket channels.

Inflation continues to impact our financial results. For the three months ended October 31, 2015, inflation in food prices was approximately 2.4% when compared to price levels in the three months ended November 1, 2014. Based on the recent trend, we believe that levels are stabilizing near 2% to 3%. Moderate levels of annual inflation, which we generally consider to be between 2% and 4%, are beneficial to our results as the majority of our pricing is on a cost plus structure, and price changes up to 4% are more easily passed through the supply chain. We believe the current trend of moderate inflation will continue over the next 12 months.

We have been the primary distributor to Whole Foods Market for more than seventeen years. We have, and continue to serve as, the primary distributor to Whole Foods Market in all of its regions in the United States pursuant to a distribution agreement that expires on September 28, 2025. Whole Foods Market accounted for approximately 34% and 33% of our net sales for the three months ended October 31, 2015 and November 1, 2014, respectively.

In July 2014, we completed the acquisition of all of the outstanding capital stock of Tony's, through our wholly-owned subsidiary UNFI West, Inc., for consideration of approximately $202.7 million. With the completion of the transaction, Tony's is now a wholly-owned subsidiary and continues to operate as Tony's Fine Foods. Founded in 1934 by the Ingoglia family,

Tony's is headquartered in West Sacramento, California and is a leading distributor of perishable food products, including a wide array of specialty protein, cheese, deli, food service and bakery goods to retail and specialty grocers, food service customers and other distribution companies principally located throughout the Western United States, as well as Alaska and Hawaii. We believe that the acquisition of Tony's accomplished certain of our strategic objectives as Tony’s has provided us with a platform for expanding both our high-growth perishable product offerings and our distribution footprint in the Western Region of the United States.

The ability to distribute specialty food items (including ethnic, kosher and gourmet) has accelerated our expansion into a number of high-growth business markets and allowed us to establish immediate market share in the fast-growing specialty foods market. We have now integrated specialty food products and natural and organic specialty non-food products into all of our broadline distribution centers across the United States and Canada. Due to our expansion into specialty foods, over the past several years we have been awarded new business with a number of conventional supermarkets that we previously had not done business with because we did not distribute specialty products. We believe that distribution of these products enhances our conventional supermarket business channel and that our complementary product lines continue to present opportunities for cross-selling.

To maintain our market leadership and improve our operating efficiencies, we seek to continually:


•	expand our marketing and customer service programs across regions;


•	expand our national purchasing opportunities;


•	offer a broader product selection than our competitors;


•	offer operational excellence with high service levels and a higher percentage of on-time deliveries than our competitors;


•	centralize general and administrative functions to reduce expenses;


•	consolidate systems applications among physical locations and regions;


•	increase our investment in people, facilities, equipment and technology;


•	integrate administrative and accounting functions; and


•	reduce the geographic overlap between regions.

Our continued growth has allowed us to expand our existing facilities and open new facilities in an effort to achieve increasing operating efficiencies. We have made significant capital expenditures and incurred considerable expenses in connection with the opening and expansion of our facilities. At October 31, 2015 our distribution capacity totaled approximately 7.7 million square feet. We have progressed in our multi-year expansion plan, which included new distribution centers in Racine, Wisconsin, Hudson Valley, New York, and Prescott, Wisconsin, from which we began operations in June 2014, September 2014 and April 2015, respectively, and we are currently constructing a new distribution center in Gilroy, California, from which we expect to begin operations in the third quarter of fiscal 2016.

Our net sales consist primarily of sales of natural, organic and specialty products to retailers, adjusted for customer volume discounts, returns and allowances. Net sales also consist of amounts charged by us to customers for shipping and handling and fuel surcharges. The principal components of our cost of sales include the amounts paid to manufacturers and growers for product sold, plus the cost of transportation necessary to bring the product to our distribution centers, offset by consideration received from suppliers in connection with the purchase or promotion of the suppliers' products. Cost of sales also includes amounts incurred by us at our manufacturing subsidiary, Woodstock Farms Manufacturing, for inbound transportation costs and for depreciation for manufacturing equipment. Our gross margin may not be comparable to other similar companies within our industry that may include all costs related to their distribution network in their costs of sales rather than as operating expenses as we include purchasing, receiving, selecting and outbound transportation expenses within our operating expenses rather than in our cost of sales. Total operating expenses include salaries and wages, employee benefits (including payments under our Employee Stock Ownership Plan), warehousing and delivery, selling, occupancy, insurance, administrative, share-based compensation, depreciation and amortization expense. Other expenses (income) include interest on our outstanding indebtedness, including the financing obligation related to our Aurora, Colorado distribution center and the lease for office space for our corporate headquarters in Providence, Rhode Island, interest income, foreign exchange gains or losses, and other miscellaneous income and expenses.

Critical Accounting Policies

The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The SEC has defined critical accounting policies as those that are both most important to the portrayal of our financial condition and results of operations and require our most difficult, complex or subjective judgments or estimates. Based on this definition and as further described in our Annual Report on Form 10-K for the year ended August 1, 2015, we believe our critical accounting policies include the following: (i) determining our allowance for doubtful accounts, (ii) determining our reserves for the self-insured portions of our workers’ compensation and automobile liabilities, (iii) valuing assets and liabilities acquired in business combinations, and (iv) valuing goodwill and intangible assets. For all financial statement periods presented, there have been no material modifications to the application of these critical accounting policies or estimates since our most recently filed Annual Report on Form 10-K.

Results of Operations

The following table presents, for the periods indicated, certain income and expense items expressed as a percentage of net sales:



	Three months ended
	October 31, 2015			November 1, 2014
Net sales	100.0	%		100.0	%
Cost of sales	84.9	%		84.0	%
Gross profit	15.1	%		16.0	%
Operating expenses	12.4	%		13.1	%
Restructuring and asset impairment expenses	0.1	%		—	%
Total operating expenses	12.5	%		13.1	%
Operating income	2.6	%		2.9	%
Other expense (income):
Interest expense	0.2	%		0.2	%
Interest income	—	%		—	%
Other, net	—	%		—	%
Total other expense, net	0.2	%		0.2	%
Income before income taxes	2.4	%		2.7	%
Provision for income taxes	1.0	%		1.1	%
Net income	1.5	%	*	1.7	%	*

* Total reflects rounding

Three Months Ended October 31, 2015 Compared To Three Months Ended November 1, 2014

Net Sales

Our net sales for the three months ended October 31, 2015 increased approximately 4.2%, or $84.2 million, to $2.1 billion from $2.0 billion for the three months ended November 1, 2014. The year-over-year quarterly increase in net sales was attributable to organic growth (sales growth excluding the impact of acquisitions) in our wholesale division from all of our channels other than our conventional supermarket channel, offset in part by lower sales in our conventional supermarket channel as a result of the termination of our distribution relationship with a large conventional supermarket customer in the first quarter of fiscal 2016. Our organic growth is due to the continued growth of the natural and organic products industry in general, value added services and the broader selection of products that we offer, including specialty foods. Net sales for the quarter ended October 31, 2015 also benefited from food price inflation of approximately 2.4% compared to price levels in the first quarter of the prior fiscal year.

Our net sales by customer type for the three months ended October 31, 2015 and November 1, 2014 were as follows (in millions):



	Net Sales for the Three Months Ended
Customer Type	October 31, 2015		% of Net Sales			November 1, 2014		% of Net Sales
Independently owned natural products retailers	$	675	33	%	*	$	653	33	%
Supernatural chains	713		34	%		665		33	%
Conventional supermarkets	518		25	%		536		27	%
Other	171		8	%		138		7	%
Total	$	2,077	100	%		$	1,992	100	%

* Total reflects rounding

Net sales to our independent retailer channel increased by approximately $22 million, or 3%, during the three months ended October 31, 2015 compared to the three months ended November 1, 2014, and accounted for 33% of our total net sales in each of the three month periods ended October 31, 2015 and November 1, 2014. The increase in net sales in this channel is primarily attributable to growth in our wholesale division.

Whole Foods Market is our only supernatural chain customer, and net sales to Whole Foods Market for the three months ended October 31, 2015 increased by approximately $48 million, or 7%, as compared to the three months ended November 1, 2014, and accounted for approximately 34% and 33% of our total net sales for the three months ended October 31, 2015 and November 1, 2014, respectively. The increase in net sales to Whole Foods Market is primarily due to increases in same-store sales as well as new store openings.

Net sales to conventional supermarkets for the three months ended October 31, 2015 decreased by approximately $18 million, or 3%, from the three months ended November 1, 2014, and represented approximately 25% and 27% of our total net sales in the three months ended October 31, 2015 and November 1, 2014, respectively. The decrease in net sales to conventional supermarkets is due to the termination of our distribution relationship with a large conventional supermarket customer in September 2015.

Other net sales, which include sales to foodservice customers and sales from the United States to other countries, as well as sales through our retail division, manufacturing division, and our branded product lines, increased by approximately $33 million, or 24%, for the three months ended October 31, 2015 compared to the three months ended November 1, 2014, and accounted for approximately 8% and 7% of our total net sales for the three months ended October 31, 2015 and November 1, 2014, respectively. The increase in other net sales is attributable to net sales from our Tony's business and expanded sales to our existing foodservice partners and our e-commerce business.

As we continue to pursue new customers and expand relationships with existing customers, we expect net sales for the remainder of fiscal 2016 to grow over net sales for the comparable period of fiscal 2015 although our expectation is that our net sales growth for fiscal 2016 will be lower on a percentage basis than our net sales growth in fiscal 2015 in each case when compared to the prior year. We believe that the integration of our specialty business into our national platform has allowed us to attract customers that we would not have been able to attract without that business and will continue to allow us to pursue a broader array of customers as many customers seek a single source for their natural, organic and specialty products. We also expect that our ability to add products that Tony's has historically sold to our selection of products in our other markets will contribute to an increase in net sales. We believe that our projected net sales growth will come from both sales to new customers (including as a result of acquisitions) and an increase in the number of products that we sell to existing customers. We expect that most of this net sales growth will occur in our lower gross margin supernatural and conventional supermarket channels. Although sales to these customers typically generate lower gross margins than sales to customers within our independent retailer channel, they also typically carry a lower average cost to serve than sales to our independent customers.

Cost of Sales and Gross Profit

Our gross profit decreased approximately 1.6%, or $5.1 million, to $313.9 million for the three months ended October 31, 2015, from $319.0 million for the three months ended November 1, 2014. Our gross profit as a percentage of net sales was 15.1% for the three months ended October 31, 2015 compared to 16.0% for the three months ended November 1, 2014. The decline in gross profit as a percentage of net sales between the first quarter of fiscal 2016 and the comparable period in fiscal 2015 was primarily due to the unfavorable impact of foreign exchange for the Company's Canadian business, a reduction in fuel surcharges, moderated supplier promotional activity, and a shift in the mix of sales towards lower margin sales channels.

Our gross profits are generally higher on net sales to independently owned retailers and foodservice customers and lower on net sales in the supernatural and conventional supermarket channels. For the three months ended October 31, 2015, approximately 56%, or $48 million, of our $84 million total net sales growth was from increased net sales in the supernatural channel.

We anticipate net sales growth in the supernatural and conventional supermarket channels, excluding the impact of the termination of a customer distribution contract, will continue to outpace growth in the independent retailer and other channels. We expect that our distribution relationship with Whole Foods Market as well as our opportunities in the conventional supermarket channel will continue to generate lower gross profit percentages than our historical rates. We will seek to fully offset these reductions in gross profit percentages by reducing our operating expenses as a percent of net sales primarily through improved efficiencies in our supply chain and improvements to our information technology infrastructure, including our ongoing WMS platform.

Operating Expenses

Our total operating expenses decreased approximately 0.2%, or $0.6 million, to $260.0 million for the three months ended October 31, 2015, from $260.6 million for the three months ended November 1, 2014. Total operating expenses for the first quarter of fiscal 2016 included approximately $2.8 million of severance and other transition costs due to our restructuring plan disclosed in the fourth quarter of fiscal 2015 as a result of the termination of our distribution agreement with a customer and $1.8 million of bad debt expense related to outstanding receivables for a customer who declared bankruptcy in the first quarter of fiscal 2016. The decline in fuel costs in the first quarter of fiscal 2016 compared to the first quarter of fiscal 2015 also contributed to the decrease in operating expenses. Total operating expenses for the first quarter of fiscal 2015 included non-recurring costs of approximately $1.0 million related to the start-up of the Company's Hudson Valley, New York facility, $0.6 million associated with the write-off of an intangible asset related to the Company's Canadian division, and approximately $0.3 million in costs related to the Company's acquisition of Tony's. Total operating expenses also included share-based compensation expense of $6.0 million, in each of the three months ended October 31, 2015 and November 1, 2014.

As a percentage of net sales, total operating expenses decreased to approximately 12.5% for the three months ended October 31, 2015, from approximately 13.1% for the three months ended November 1, 2014. The decrease in total operating expenses as a percentage of net sales was primarily attributable to the growth in the supernatural channel which generally has lower operating expenses and higher fixed cost coverage due to higher sales. We expect that we will be able to continue to reduce our operating expenses as a percentage of net sales as we continue the roll-out of our WMS platform. We have completed WMS system conversions at our Lancaster, Texas, Ridgefield, Washington and Auburn, Washington facilities. We have also implemented the WMS platform at our Sturtevant, Wisconsin, Montgomery, New York, Prescott, Wisconsin and Auburn, California facilities. We expect to complete the roll-out to all existing facilities by the end of fiscal 2018.

Operating Income

Reflecting the factors described above, operating income decreased approximately 7.7%, or $4.5 million, to $53.9 million for the three months ended October 31, 2015, from $58.4 million for the three months ended November 1, 2014. As a percentage of net sales, operating income was 2.6% for the three months ended October 31, 2015 compared to 2.9% for the three months ended November 1, 2014.

Other Expense (Income)

Other expense, net was approximately $3.8 million for each of the three month periods ended October 31, 2015 and November 1, 2014, respectively. Interest expense increased for the three months ended October 31, 2015 to $3.7 million compared to $3.3 million for the three months ended November 1, 2014 primarily due to $0.4 million of interest expense related to the capital lease of our Providence, Rhode Island headquarters as the lease agreement was amended during the second quarter of fiscal 2015. Interest income was $0.2 million and $0.1 million for the three months ended October 31, 2015 and November 1, 2014, respectively.

Provision for Income Taxes

Our effective income tax rate was 39.9% and 39.5% in the three months ended October 31, 2015 and November 1, 2014, respectively. The increase in the effective income tax rate for the first quarter of fiscal 2016 was primarily due to a federal solar tax credit that was claimed by the Company in fiscal 2015 for which the Company did not have eligible expenditures in fiscal 2016. Our effective income tax rate was also negatively impacted by an increase in state taxes resulting from the states in which we operate.

Net Income

Reflecting the factors described in more detail above, net income decreased $2.9 million to $30.1 million, or $0.60 per diluted share, for the three months ended October 31, 2015, compared to $33.0 million, or $0.66 per diluted share, for the three months ended November 1, 2014.

Liquidity and Capital Resources

We finance our day to day operations and growth primarily with cash flows from operations, borrowings under our amended and restated revolving credit facility and term loan facility, operating leases, a finance lease, capital lease, trade payables and bank indebtedness. In addition, from time to time, we may issue equity and debt securities to finance our operations and acquisitions. We believe that our cash on hand and available credit through our amended and restated revolving credit facility as discussed below is sufficient to finance our operations and planned capital expenditures over the next 12 months. The condensed consolidated statement of cash flows presents proceeds from borrowings and repayments of borrowings related to our amended and restated revolving credit facility and real-estate backed Term Loan Agreement on a gross basis. We expect to generate $80 million to $100 million in cash flow from operations for the 2016 fiscal year. We intend to continue to utilize this cash generated from operations to fund acquisitions, fund investments in working capital and capital expenditure needs, including expansion of our distribution facilities, and reduce our debt levels. We intend to manage capital expenditures in the range of approximately 0.6% to 0.7% of net sales for fiscal 2016 reflecting a decrease over levels experienced in fiscal 2014 and fiscal 2015. We expect to finance requirements with cash generated from operations and borrowings under our amended and restated revolving credit facility. Our planned capital projects in fiscal 2016 will be focused on the completion of our Gilroy, California distribution facility and continuing the implementation of our information technology projects across the Company that we believe will provide us with increased efficiency and the capacity to continue to support the growth of our customer base. Future investments and acquisitions may be financed through equity, long-term debt or borrowings under our amended and restated revolving credit facility.

The Company has not recorded a tax provision for U.S. tax purposes on UNFI Canada profits as they have no assessable profits arising in or derived from the United States and we intend to indefinitely reinvest accumulated earnings in the UNFI Canada operations.

In May 2014, we entered into an amendment to our amended and restated revolving credit facility (the "Amendment"), which increased the maximum borrowings under the amended and restated revolving credit facility to $600 million and extended the maturity date to May 21, 2019. Up to $550.0 million is available to our U.S. subsidiaries and up to $50.0 million is available to UNFI Canada. After giving effect to the Amendment, the amended and restated revolving credit facility provides a one-time option to increase the borrowing base by up to an additional $150 million (but in not less than $10.0 million increments) subject to certain customary conditions and the lenders committing to provide the increase in funding, and also permits us to enter into a real-estate backed term loan facility which shall not exceed $200.0 million. The borrowings of the U.S. portion of the amended and restated credit facility, prior to and after giving effect to the Amendment, accrue interest, at our option, at either (i) a base rate (generally defined as the highest of (x) the Bank of America Business Capital prime rate, (y) the average overnight federal funds effective rate plus one-half percent (0.50%) per annum and (z) one-month LIBOR plus one percent (1%) per annum) plus an initial margin of 0.50%, or (ii) the LIBOR for one, two, three or six months or, if approved by all affected lenders, nine months plus an initial margin of 1.50%. The borrowings on the Canadian portion of the credit facility for Canadian swing-line loans, Canadian overadvance loans or Canadian protective advances accrue interest, at our option, at either (i) a prime rate (generally defined as the highest of (x) 0.50% over 30-day Reuters Canadian Deposit Offering Rate ("CDOR") for bankers' acceptances, (y) the prime rate of Bank of America, N.A.'s Canada branch, and (z) a bankers' acceptance equivalent rate for a one month interest period plus 1.00%) plus an initial margin of 0.50%, or (ii) a bankers' acceptance equivalent rate of the rate of interest per annum equal to the annual rates applicable to Canadian Dollar bankers' acceptances on the "CDOR Page" of Reuter Monitor Money Rates Service, plus the CDOR rate, and an initial margin of 1.50%. All other borrowings on the Canadian portion of the amended and restated credit facility, prior to and after giving effect to the Amendment, must exclusively accrue interest under the CDOR rate plus the applicable margin. An annual commitment fee in the amount of 0.30% if the average daily balance of amounts actually used (other than swing-line loans) is less than 40% of the aggregate commitments, or 0.25% if such average daily balance is 40% or more of the aggregate commitments.

Our borrowing base under the amended and restated revolving credit facility is determined as the lesser of (1) $600.0 million or (2) the fixed percentages of our previous fiscal month-end eligible accounts receivable and inventory levels. As of October 31, 2015, our borrowing base, which was calculated based on our eligible accounts receivable and inventory levels, net of $2.6 million of reserves, was $582.7 million. As of October 31, 2015, we had $307.6 million of borrowings outstanding under our amended and restated revolving credit facility and $35.2 million in letter of credit commitments which reduced our available borrowing capacity under our amended and restated revolving credit facility on a dollar for dollar basis. Our resulting remaining availability was $239.8 million as of October 31, 2015.

The amended and restated revolving credit facility subjects us to a springing minimum fixed charge coverage ratio (as defined in the underlying credit agreement) of 1.0 to 1.0 calculated at the end of each of our fiscal quarters on a rolling four quarter basis when aggregate availability (as defined in the underlying credit agreement) is less than the greater of (i) $50.0 million and (ii) 10% of the aggregate borrowing base. We were not subject to the fixed charge coverage ratio covenant during the three months ended October 31, 2015.

On August 14, 2014, we entered into a real-estate backed Term Loan Agreement by and among us, our wholly-owned subsidiary Albert’s (together with the Company, the "Borrowers"), the financial institutions that are parties thereto as lenders (collectively, the “Lenders”), Bank of America, N.A. as administrative agent for the Lenders (the "Administrative Agent") and the other parties thereto. The total initial borrowings under the Term Loan Agreement were $150.0 million. We are required to make $2.5 million principal payments quarterly. The Term Loan Agreement will terminate on the earlier of (a) August 14, 2022 and (b) the date that is ninety days prior to the termination date of our amended and restated revolving credit facility, as amended. Under the Term Loan Agreement, we at our option may request the establishment of one or more new term loan commitments in increments of at least $10.0 million, but not to exceed $50.0 million in total, subject to the approval of the Lenders electing to participate in such incremental loans and the satisfaction of the conditions required by the Term Loan Agreement. We will be required to make quarterly principal payments on these incremental borrowings in accordance with the terms of the Term Loan Agreement. Proceeds from this Term Loan Agreement were used to pay down borrowings on our amended and restated revolving credit facility.

Borrowings under the Term Loan Agreement bear interest at rates that, at the Company's option, can be either: (1) a base rate generally defined as the sum of (i) the highest of (x) the Administrative Agent's prime rate, (y) the average overnight federal funds effective rate plus 0.50% and (z) one-month LIBOR plus one percent (1%) per annum and (ii) a margin of 1.50%; or, (2) a LIBOR rate generally defined as the sum of (i) LIBOR (as published by Reuters or other commercially available source) for one, two, three or six months or, if approved by all affected lenders, nine months (all as selected by the Company), and (ii) a margin of 2.50%. Interest accrued on borrowings under the Term Loan Agreement is payable in arrears. Interest accrued on any LIBOR loan is payable on the last day of the interest period applicable to the loan and, with respect to any LIBOR loan of more than three (3) months, on the last day of every three (3) months of such interest period. Interest accrued on base rate loans is payable on the first day of every month. The Company is also required to pay certain customary fees to the Administrative Agent. The Borrowers’ obligations under the Term Loan Agreement are secured by certain parcels of the Borrowers’ real property.

The Term Loan Agreement includes financial covenants that require (i) the ratio of our consolidated EBITDA (as defined in the Term Loan Agreement) minus the unfinanced portion of Capital Expenditures (as defined in the Term Loan Agreement) to our consolidated Fixed Charges (as defined in the Term Loan Agreement) to be at least 1.20 to 1.00 as of the end of any period of four fiscal quarters, (ii) the ratio of our Consolidated Funded Debt (as defined in the Term Loan Agreement) to our EBITDA for the four fiscal quarters most recently ended to be not more than 3.00 to 1.00 as of the end of any fiscal quarter and (iii) the ratio, expressed as a percentage, of our outstanding principal balance under the Loans (as defined in the Term Loan Agreement), divided by the Mortgaged Property Value (as defined in the Term Loan Agreement) to be not more than 75% at any time.

On January 23, 2015 we entered into a forward starting interest rate swap agreement with an effective date of August 3, 2015, which expires in August 2022 concurrent with the scheduled maturity of our Term Loan Agreement. This interest rate swap agreement has an initial notional amount of $140.0 million and provides for us to pay interest for a seven-year period at a fixed rate of 1.795% while receiving interest for the same period at the one-month LIBOR on the same notional principal amount. The interest rate swap agreement has an amortizing notional amount which adjusts down on the dates payments are due on the underlying term loan. The interest rate swap has been entered into as a hedge against LIBOR movements on $140.0 million of the variable rate indebtedness under the Term Loan Agreement at one-month LIBOR plus 1.00% and a margin of 1.50%, thereby fixing our effective rate on the notional amount at 4.295%. The swap agreement qualifies as an “effective” hedge under ASC 815, Derivatives and Hedging. During the three months ended October 31, 2015 the impact of our interest rate swap increased interest expense by $0.6 million.

Net cash provided by operations was $5.5 million for the three months ended October 31, 2015, a change of $104.2 million from the $98.7 million used in operations for the three months ended November 1, 2014. The primary reasons for the net cash provided by operations for the three months ended October 31, 2015 were an increase in inventories of $100.4 million and an increase in accounts receivable of $19.9 million due to our sales growth during the first quarter of fiscal 2016, partially offset by an increase in accounts payable of $58.4 million and net income of $30.1 million. The primary reasons for the net cash used in operations for the three months ended November 1, 2014 were an increase in inventories of $150.8 million and an increase in accounts receivable of $42.1 million due to our sales growth during the first quarter of fiscal 2016, partially offset by an increase in accounts payable of $50.9 million and net income of $33.0 million. Days in inventory increased to 53 days at October 31, 2015, compared to 50 days at August 1, 2015, reflecting increased buying ahead of the holiday season. Days sales outstanding decreased slightly to 21 days at October 31, 2015 compared to 22 days at August 1, 2015. Working capital decreased by $10.6 million, or 1.0%, from $1.02 billion at August 1, 2015 to $1.01 billion at October 31, 2015.

Net cash used in investing activities decreased $30.5 million to $7.6 million for the three months ended October 31, 2015, compared to $38.1 million for the three months ended November 1, 2014. The decrease from the three months ended November 1, 2014 was primarily due to a reduction in cash paid for acquisitions compared to fiscal 2015 coupled with a $19.8 million reduction in capital spending.

Net cash used in financing activities was $3.0 million for the three months ended October 31, 2015. We present proceeds from borrowings and repayments of borrowings related to our amended and restated revolving credit facility and term loan on a gross basis. The net cash used in financing activities was primarily due to gross borrowings under our revolving credit line of $122.7 million as well as increases in bank overdrafts of $47.1 million, offset by repayments of our revolving credit line and long-term debt of $169.6 million and $2.9 million, respectively. Net cash provided by financing activities was $138.3 million for the three months ended November 1, 2014, primarily due to gross borrowings under our revolving credit line and long-term debt of $128.0 million and $150.0 million, respectively, and increases in bank overdrafts of $40.7 million, offset by repayments of our revolving credit line and long-term debt of $176.6 million and $2.9 million, respectively.

From time-to-time, we enter into fixed price fuel supply agreements. As of October 31, 2015, we had entered into agreements which require us to purchase a total of approximately 3.6 million gallons of diesel fuel at prices ranging from $2.59 to $3.18 per gallon through December 2016. As of November 1, 2014, we had entered into agreements which required us to purchase a total of approximately 7.4 million gallons of diesel fuel at prices ranging from $3.20 to $3.92 per gallon through December 2015. All of these fixed price fuel agreements qualify and are accounted for using the “normal purchase” exception under ASC 815, Derivatives and Hedging, as physical deliveries will occur rather than net settlements, and therefore the fuel purchases under these contracts have been and will be expensed as incurred and included within operating expenses.

Contractual Obligations

There have been no material changes to our contractual obligations and commercial commitments during the three months ended October 31, 2015 from those disclosed in our Annual Report on Form 10-K for the year ended August 1, 2015.

Seasonality

While we have historically seen an increase in our inventory during the first quarter of our fiscal year, generally, we do not experience any material seasonality. However, our sales and operating results may vary significantly from quarter to quarter due to factors such as changes in our operating expenses, management’s ability to execute our operating and growth strategies, personnel changes, demand for natural products, supply shortages and general economic conditions.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk results primarily from fluctuations in interest rates on our borrowings and price increases in diesel fuel. As discussed in more detail in Note 5 of the condensed consolidated financial statements, we have entered into an interest rate swap agreement to fix our effective interest rate for a portion of the borrowings under our term loan. In addition, from time to time we have used fixed price purchase contracts to lock the pricing on a portion of our expected diesel fuel usage. There have been no material changes to our exposure to market risks from those disclosed in our Annual Report on Form 10-K for the year ended August 1, 2015.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report on Form 10-Q (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

(b) Changes in internal controls. There has been no change in our internal control over financial reporting that occurred during the first quarter of fiscal 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time we are involved in routine litigation that arises in the ordinary course of our business. In the opinion of management, the outcome of pending litigation is not expected to have a material adverse effect on our results of operations or financial condition.

Item 1A. Risk Factors

There have been no material changes to our risk factors contained in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended August 1, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Index



Exhibit No.		Description
3.1		Second Amended and Restated Bylaws of United Natural Foods, Inc., effective October 23, 2015 (incorporated by reference to the Company’s Current Report on Form 8-K, filed on October 29, 2015).
10.1* **		Offer Letter, dated August 7, 2015, between Michael P. Zechmeister, Senior Vice President and Chief Financial Officer, and the Company.
10.2* **		Terms and Conditions of Grant of Non-Statutory Stock Options to Employee, pursuant to the 2012 Equity Plan, effective September 17, 2015, between Michael P. Zechmeister, Senior Vice President and Chief Financial Officer, and the Company.
10.3* **		Terms and Conditions of Grant of Restricted Share Units to Employee, pursuant to the 2012 Equity Plan, effective September 17, 2015, between Michael P. Zechmeister, Senior Vice President and Chief Financial Officer, and the Company.
10.4*+		Agreement for Distribution of Products, effective September 28, 2015, between Whole Foods Market Distribution, Inc., and the Company.
31.1*		Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*		The following materials from the United Natural Foods, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended October 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statement of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.

______________________________________________

* Filed herewith.

** Denotes a management contract or compensatory plan or arrangement.


+	Confidential treatment has been requested with respect to certain portions of this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Omitted portions have been filed separately with the United States Securities and Exchange Commission.

* * *

We would be pleased to furnish a copy of this Form 10-Q to any stockholder who requests it by writing to:

United Natural Foods, Inc.

Investor Relations

313 Iron Horse Way

Providence, RI 02908

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	UNITED NATURAL FOODS, INC.

	/s/ Michael P. Zechmeister
	Michael P. Zechmeister
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Dated: December 10, 2015

Exhibit 10.1

August 7, 2015

Dear Mike,

I am pleased to extend this employment opportunity as Chief Financial Officer and Senior Vice President, reporting directly to Steven Spinner, Chief Executive Officer. Your first day of employment with United Natural Foods, Inc. (“UNFI” or the “Company”), and the effective date of this letter will be on or about October 5, 2015. This offer is contingent upon the successful completion of a pre-employment background check, drug screen, and form I-9.

The following information outlines the details of your new position with the Company:

•

You will be paid an annual salary of $450,000.00 (USD) annually ($ 17307.69 bi-weekly). Your salary will be paid on a bi-weekly basis in accordance with the Company’s payroll practices. Pay dates occur every other Friday. In addition you will receive a one-time restricted stock grant equal to the value of your unvested equity at your current employer. A copy of this estimated award is attached for your review along with a term sheet outlining how the actual award will be calculated.


•	Our annual performance review cycle coincides with our fiscal year and is from August 1 to July 31. Your total compensation will be determined by the company’s board of directors compensation committee utilizing market data, performance and peer group studies reviewed by our CEO and independent compensation consultants.

•

Your effective date for insurance coverage (medical, dental, vision, life, accidental death/dismemberment, short term disability, and long term disability) will coincide with your date of hire. Most UNFI associates have a 30 day waiting period before being eligible for healthcare benefits. Since you are in a classification with no waiting period for medical and dental coverage, special tax rules apply. Upon enrolling in the medical and/or dental plan, an amount equal to the company contribution to these plans for the first 30 days of employment will be included in your taxable income. The amount of this imputed income will be reflected in the first paycheck following your benefit enrollment.


•	You will be eligible to participate in UNFI’s Annual Incentive Plan (AIP) targeted at 75% of your base salary based on achievement of certain fiscal year goals and objectives. Your participation in UNFI’s AIP will begin with the 2016 fiscal year beginning on August 1, 2015 and ending on July

31, 2016. This annual incentive will be payable in conjunction with all year-end incentive payments and will be prorated based on your date of hire.


•	You will be eligible to participate in the Company’s LTI equity awards program in FY17 for the year ending July 31, 2016.


•	You will be eligible to participate in the Company’s 401(k) as of your six month anniversary. The Company matches 50% of the first 8% of eligible compensation contributed to the Company’s 401(k) Plan per pay period. The plan has a four year graded vesting schedule which applies to company matching contributions and begins on your date of hire.


•	You will be eligible to participate in the Company’s non-qualified deferred compensation plan as of your date of hire. You will have 30 days from your date of hire to enroll in the plan for current plan year. Annual enrollment for each future plan year is held in December.

•

You will begin accruing Paid Time Off (PTO) after your first 90 days in role at a rate of 6.77 hours per pay period (biweekly); PTO accruals are available for scheduling in the pay period following the completion of 90 days of employment. PTO provides paid time away from work that can be used for vacation, personal time, holidays other than official Company holidays, sick time or personal/family illness, etc. UNFI also offers six (6) paid holidays pursuant to Company policy.

•

We are pleased to provide you with a relocation package up to a maximum of $100,000 for certain incurred moving expenses that will help with your move to the Providence, RI area. Moving expenses one year prior to the date of transfer (to be determined) are reimbursable provided that you follow the requirements of the program. As part of this offer, you will be required to sign the Relocation Payback Agreement if you decide to leave the employment of UNFI within twenty-four (24) months from the effective date your location transfer. Generally, this allowance is intended to cover home closing costs and expenses directly related to travel and moving.

•

As part of the relocation allowance, you will be provided reimbursement for temporary living reimbursement up to the maximum allowed under UNFI’s relocation policy which outlines that UNFI will reimburse reasonable lodging and meal expenses for you for a period of up to thirty (30) days for renters, and sixty (60) days for home owners. Receipts must be submitted and approved prior to reimbursement.


•	Attached is a term sheet summarizing our offer of compensation and benefits.

The Company is an equal opportunity employer and complies with all laws applicable to employers. The Company also is an “at will” employer. This means that your employment is for no definite period of time and may be terminated at any time by you or the company with or without cause for any lawful reason. The “at will” status of your employment can be modified only by a written individual contract signed by you and the Chair of the Board of Directors of the Company. This letter states the full terms of our offer of employment and supersedes all previous offers or other

communications by any representative of the company regarding the terms of your employment. Notwithstanding the foregoing, our offer of employment is contingent upon, and will not be binding upon the Company or you until, the satisfaction of the conditions set forth in the first paragraph of this letter and the commencement of your employment by the Company.

If you agree with the terms of employment described above, please execute and return to the undersigned a copy of this letter by 8/21/2014. We look forward to you joining the Company and are confident your skills and expertise will make an immediate contribution to the growth of our company.

UNFI uses an automated on-boarding system, called “Drive”. You will be granted access to the system upon acceptance of this offer of employment. Drive will deliver pre- hire and new hire tasks to you, as well as access to UNFI material and content intended solely for UNFI Associates. Your welcome email with your username and password will arrive shortly in your personal email box. We hope you find the system easy to use and informative, for assistance, please direct questions to your HR contact.

Sincerely,




Steven L. Spinner
President & CEO


/s/ Steven L. Spinner			8/5/15
Signature			Date

Associate Relocation Payback Agreement

In order to receive relocation benefits, the Associate Repayment Agreement must be completed and signed before any relocation related expenses are paid/reimbursed.

This is a Relocation Program Payback Agreement dated 8/x/2015 between United Natural Foods, Inc. (UNFI) and Michael Zechmeister (Associate). This policy applies to the divisions, subsidiaries, affiliates and related companies of UNFI. The associate hereby agrees and understands that in connection with acceptance of a new position or transfer with UNFI, the company has offered to reimburse the associate for certain relocation expenses up to a specific limit in accordance with the UNFI Relocation Program.

The associate hereby agrees and understands that if he/she voluntarily terminates employment with UNFI for any reason within twenty-four (24) months from the start date of your relocation-eligible position as determined by UNFI, the following repayment to UNFI will apply:

0-12 months - 100%

13-24 months - 50%

25+ months - 0%

The associate agrees to reimburse UNFI for all expenses incurred or paid by UNFI on the associate’s behalf in connection with the respective relocation. Such relocation expenses shall include items as stated in the Relocation Program, without limitation, all moving and transportation expenses, home sale and purchase assistance payments, travel and lodging, insurance charges, tax gross-up payments incurred or paid by UNFI. Expenses will not have to be refunded by the associate when the employment is terminated or if the position is eliminated.

I authorize UNFI to withhold in the maximum amount permitted by law, payment of any and all monies due me in the nature of wages, vacation pay, commissions, bonus, reimbursable business expenses or any other compensation due me, and may use all other available means to satisfy this obligation. I agree if the foregoing withholding is insufficient to liquidate this obligation, the balance shall become immediately due and payable without notice or demand. I also agree I will be responsible for paying any legal expenses including court costs or filing fees associated with the collection of this debt.

Nothing in this Agreement or otherwise to the contrary shall change the nature of the employee-at-will relationship between UNFI and the undersigned associate.

By signing below, the associate acknowledges having carefully reviewed the contents of the Relocation Program, this agreement and, with full and complete understanding of its terms, voluntarily accepts all of its terms and conditions.

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date first above written.



UNITED NATURAL FOODS, INC.				ASSOCIATE

<<unfi signature>>				Michael Zechmeister

Offer Parameters for Michael Zechmeister



Element	Description
Position	Senior Vice President and Chief Financial Officer
Start date	On or before October 5, 2015
Annual Salary	$450,000, paid consistent with the company’s regular payroll practices
Annual incentive	§	Target of 75% of salary, with range between 0% and 150% of salary based on performance
	§	Performance determined based on metrics consistent with other similarly-situated executives at the company (combination of corporate financial results and individual performance metrics)
	§	Amount pro-rated for time employed during FY16; first payment in September 2016
Long-term incentive	§ §	Target of 165% of salary (value of $742,500)
	§	Grant made consistent with similarly-situated executives at the company
	§	Eligible for annual grant in September 2016
	§	Current program contemplated for FY16 is:
		¡	50% time-based restricted stock units (RSUs), vesting 25% per year on anniversary of grant
		¡	50% performance units, based on EBIT and ROIC (current design being developed)
Other benefits	Eligible for benefit programs consistent with similarly-situated executives and/or standard company programs; summary below:
		¡	401(k): 50% match on first 8% of salary
		¡	Deferred compensation plan
		¡	Medical benefits, paid time off and related benefits consistent with standard company programs as described in UNFI associate guidebook
Termination Payments	Consistent with standard company program for similarly-situated executives
	§	Change in control: 2.99x salary and 3-year average annual incentive
	§	Severance for involuntary termination or voluntary termination with Good Reason: 1x annual base salary in effect at time of termination
Sign-on equity grant	§	Grant value of $2,020,000, split between 75% time-based RSUs and 25% stock options
		¡	Time-based RSUs vest 25% per year on anniversary of grant
		¡	Stock options vest 25% per year on anniversary of grant. Exercise price based on closing price on date of grant.
	§	Number of RSUs and stock options determined at time of grant; options will be determined based on an approximate 3:1 ratio with RSUs
	§	Unvested sign-on awards would vest in case of involuntary termination
Relocation	Up to $100,000 and reimbursement for temporary living expenses, per standard company policy

Exhibit 10.2

UNITED NATURAL FOODS, INC.

Terms and Conditions of Grant of Non-Statutory Stock Options to Employee

2012 Equity Incentive Plan

These Terms and Conditions of Grant of Non-Statutory Stock Options to Employee (these “Terms and Conditions”), shall apply to the grant by United Natural Foods, Inc., a Delaware corporation (the “Company”), to the Participant of an award of Options, pursuant to the Company's 2012 Equity Incentive Plan (as amended from time to time, the “Plan”). Except in the preceding sentence and where the context otherwise requires, the term “Company” shall include the Company and all present and future Subsidiaries. All capitalized terms that are used in these Terms and Conditions without definition shall have the meanings set forth in the Plan.

1.Definitions.

(a)Award Agreement has the meaning set forth in Section 2 of these Terms and Conditions.

(b)Communication of Award means the communication delivered by an authorized representative of the Company to the Participant identifying that an Award has been granted together with the details of the award (including the identity of the Participant, the Grant Date, the number of Options that were awarded to the Participant, and the Option Price per Share) set forth in the Award summary portion of the online award acceptance process used in connection with electronic administration of Awards under the Plan.

(c)Expiration Date means the tenth anniversary of the Grant Date.

(d)Grant Date means the date on which the Options were granted as set forth in the Communication of Award.

(e)Option means the option to purchase any one Share of the Company's common stock, par value $0.01 per share, from the Company during the period commencing on the Grant Date and ending on the Expiration Date at the Option Price Per Share.

(f)Option Price per Share means the Option Price per Share set forth in the Communication of Award.

(g)Participant, solely for purposes of the Award Agreement, means the individual identified in the Communication of Award.

2.Grant of Options. Effective on the Grant Date and subject to the provisions of the Plan and these Terms and Conditions, the Company has granted to the Participant the number of Options set forth in the Communication of Award. The information contained in the Communication of Award with respect to the Participant and the Options is incorporated herein by reference and together with these Terms and Conditions shall constitute an Award Agreement (the “Award Agreement”) for purposes of the Plan. By accepting the award of Options and acknowledging these Terms and Conditions, the Participant agrees to be bound by the provisions of the Plan and these Terms and Conditions with respect to the Options. Acceptance of the award of Options and acknowledgment of these Terms and Conditions may be made in a writing signed

by the Participant and delivered to the Company or through the online award acceptance process used in connection with electronic administration of awards under the Plan. The Options are not intended to qualify as incentive stock options within the meaning of Section 422 of the Code.

3.Exercise of Option and Provisions for Termination.

(a)Vesting Schedule. The Options shall vest with respect to twenty-five percent (25%) of the Shares subject to the Options on the first anniversary of the Grant Date and with respect to an additional twenty-five percent (25%) of such Shares on each succeeding anniversary of the Grant Date so as to be completely vested on the fourth anniversary of the Grant Date, conditioned on each such date on the Participant maintaining continuous employment with (or other service-providing capacity with) the Company since the Grant Date. Except as otherwise provided in these Terms and Conditions, the Options may not be exercised at any time on or after the Expiration Date.

(b)Exercise Procedure. Subject to these Terms and Conditions, the Options shall be exercised by the Participant's delivery of written notice of exercise to the Treasurer of the Company, specifying the number of Shares to be purchased and the purchase price to be paid therefor and accompanied by payment in full in accordance with Section 4 of these Terms and Conditions. Such exercise shall be effective upon receipt by the Treasurer of the Company of such written notice together with payment in full of the Option Price per Share. The Participant may purchase less than the number of Shares covered hereby, provided that no partial exercise of the Options may be for any fractional share or for fewer than ten whole Shares.

(c)Continued Employment Required. Except as otherwise provided in this Section 3, Options may not be exercised unless at the time of exercise the Participant is, and has been at all times since the Grant Date (or if later, the date on which the Participant first became an employee), employed by (or has other service-providing capacity with) the Company. If the Options shall be assumed or a new option substituted therefor in a transaction to which Section 424(a) of the Code applies, employment by or service to such assuming or substituting corporation shall be considered for all purposes of the Options to be employment by or service to the Company.

(d)Exercise Period Upon Termination of Employment. If the Participant's employment with or service to the Company or any Affiliate is terminated for any reason, then, except as provided in paragraphs (e), (f), (g) and (h) below, the Participant's right to exercise the Options shall terminate on the earlier to occur of 90 days after such termination or the Expiration Date; provided that unless otherwise determined by the Committee, the Options shall be exercisable only to the extent that the Participant was entitled to exercise such Options on the date of such termination. Notwithstanding the foregoing, if the Participant, prior to the Expiration Date, materially violates the non-competition or confidentiality provisions of any employment, confidentiality and nondisclosure, or other agreement between the Participant and the Company, the right to exercise the Options shall terminate immediately upon written notice to the Participant from the Company describing such violation.

(e)Exercise Period Upon Death or Disability. If the Participant dies or suffers a Disability prior to the Expiration Date while he or she is an employee of or providing service to

the Company, or if the Participant dies within 90 days after termination of the Participant's employment with or service to the Company (other than as the result of a discharge for Cause), the Options shall be exercisable at any time on or before the earlier to occur of the date that is one year after such termination or the Expiration Date, provided that the Options shall be exercisable only to the extent that the Options were exercisable by the Participant on the date of his or her death or Disability. Except as otherwise indicated by the context, the term “Participant”, as used in these Terms and Conditions, shall be deemed to include the estate of the Participant or any Person who acquires the right to exercise the Options by bequest or inheritance or otherwise by reason of the death of the Participant.

(f)Discharge for Cause. If, prior to the Expiration Date, the Participant's employment with or service to the Company terminates as a result of Cause, the right to exercise the Options shall terminate immediately upon such termination of employment or service. The Participant's employment with or service to the Company shall be considered to have been terminated for Cause if the Committee determines, within 30 days after the Participant's termination of employment or service, that discharge for Cause was warranted.

(g)Termination of Employment without Cause. If the Participant's employment with or service to the Company or any Affiliate is terminated by the Company or such Affiliate without Cause, all unvested Options shall become fully vested, and thereafter the Participant may exercise all the unexercised Options in full at any time within 90 days after such termination of employment or service.

(h)Termination of Employment after a Change in Control. Notwithstanding the provisions of paragraphs (d), (e) (f) and (g) above, if, within twelve months after the Company obtains actual knowledge that a Change in Control has occurred, the Participant's employment with or service to the Company or any Affiliate is terminated for any reason, all unvested Options shall become fully vested, and thereafter the Participant may exercise all the unexercised Options in full at any time within 90 days after such termination of employment or service.

4.Payment of Purchase Price. The payment of the purchase price for Shares purchased upon exercise of Options shall be made (i) in cash or cash equivalents, (ii) at the discretion of the Committee, by transfer, either actually or by attestation, of unencumbered Shares previously acquired by the Participant valued at the Fair Market Value of such Shares on the date of exercise of the Options (or the next succeeding trading date, if the exercise date is not a trading date), together with any Withholding Taxes (as defined below), (iii) by a combination of (i) or (ii), or (iv) by any other method approved or accepted by the Committee in its sole discretion, including, if the Committee so determines, (x) a cashless (broker-assisted) exercise that complies with applicable laws or (y) withholding Shares (net-exercise) otherwise deliverable to the Participant pursuant to the Option having an aggregate Fair Market Value at the time of exercise equal to the total Option Price for the number of Shares purchased, together with any applicable Withholding Taxes.

5.Delivery of Shares; Compliance with Securities Laws, Etc.

(a)General. The Company shall, upon payment of the Option Price for the number of Shares purchased and paid for, make prompt delivery of such Shares to the Participant (whether by delivery of certificates or book entry), provided that if any law or regulation requires the Company to take any action with respect to such Shares before the issuance thereof, then the date of delivery of such Shares shall be extended for the period necessary to complete such action.

(b)Listing, Qualification, Etc. The Options shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the Shares subject to the Award Agreement upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of Shares hereunder, the Options may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, disclosure or satisfaction of such other condition shall have been effected or obtained on terms acceptable to the Board of Directors of the Company. Nothing herein shall be deemed to require the Company to apply for, effect or obtain such listing, registration, qualification or disclosure, or to satisfy such other condition.

(c)Nontransferability of Option. Except as otherwise provided in the Plan, the Options and the Award Agreement shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant, except by will or the laws of descent and distribution. No transfer of the Options by will or by laws of descent and distribution shall be effective to bind the Company unless the Company has been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary or appropriate to establish the validity of the transfer. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Options otherwise than as permitted by the Plan and this Award Agreement shall, at the election of the Company, be null and void. Transfer of the Options for value is not permitted under the Plan or this Award Agreement.

6.Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any Shares which may be purchased by exercise of the Options (including, without limitation, voting rights and any rights to receive dividends or non-cash distributions with respect to such Shares) unless and until the Shares have been issued to Participant. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such Shares are issued.

7.Withholding. The Company's obligation to deliver the Shares upon the exercise of Options shall be subject to the Participant's satisfaction of any applicable federal, state, and foreign withholding obligations or withholding taxes (“Withholding Taxes”), including any employer minimum statutory withholding, and the Participant shall pay the amount of any such Withholding Taxes to the Company as set forth in this Section 7. The Participant may satisfy his or her obligation to pay the Withholding Taxes by (i) making a cash payment to the Company in an amount equal to the Withholding Taxes; (ii) having the Company withhold Shares otherwise

deliverable to the Participant in connection with the exercise of the Option; or (iii) delivering to the Company shares of Common Stock already owned by the Participant; provided that in the case of (ii) or (iii) the amount of such Shares withheld or shares of Common Stock delivered shall not exceed the amount necessary to satisfy the Withholding Taxes. The Participant acknowledges and agrees that the Company has the right to deduct from compensation or other amounts owing to the Participant an amount not to exceed the Withholding Taxes.

8.No Guarantee of Employment. Nothing in the Award Agreement or in the Plan shall confer upon the Participant any right to continue in the employ of the Company, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Participant at any time for any reason whatsoever, with or without Cause.

9.Amendment. Subject to the restrictions contained in the Plan, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, the Award Agreement and the Options, prospectively or retroactively in time (and in accordance with Section 409A of the Code with regard to awards subject thereto); provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of the Participant or any holder or beneficiary of the Options shall not to that extent be effective without the consent of the Participant, holder or beneficiary. The Committee is authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, the Award Agreement and the Options as set forth in the Plan.

10.Determinations by Committee. Except as otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or the Award Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons.

11.Provisions of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan with the Award Agreement and agrees to be bound by all the terms and provisions of the Plan. The Award Agreement is governed by the terms of the Plan, and in the case of any inconsistency between the Award Agreement and the terms of the Plan, the terms of the Plan shall govern.

12.Notices. Any notice required or permitted to be given to the Participant under the Award Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the United States mail with postage and fees prepaid. Any notice or communication required or permitted to be given to the Company under the Award Agreement shall be in writing and shall be deemed effective only upon receipt by the Secretary of the Company at the Company's principal office.

13.Waiver. The waiver by the Company of any provision of the Award Agreement at any time or for any purpose shall not operate as or be construed to be a waiver of the same or any other provision of the Award Agreement at any subsequent time or for any other purpose.

14.Governing Law. The validity, construction and effect of the Award Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to conflicts of laws principles.

15.Successors. The Award Agreement shall inure to the benefit of and be binding upon any successor to the Company and shall inure to the benefit of the Participant's legal representative. All obligations imposed upon the Participant and all rights granted to the Company under the Award Agreement shall be binding upon the Participant's heirs, executors, administrator and successors.

16.Electronic Communication. The Company may, in its sole discretion, decide to deliver any document related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

Exhibit 10.3

UNITED NATURAL FOODS, INC.

Terms and Conditions of Grant of Restricted Share Units to Employee

2012 Equity Incentive Plan

These Terms and Conditions of Grant of Restricted Share Units to Employee (these “Terms and Conditions”), shall apply to the grant by United Natural Foods, Inc., a Delaware corporation (the “Company”), to the Participant of an award of Restricted Share Units, pursuant to the Company's 2012 Equity Incentive Plan (as amended from time to time, the “Plan”). Except in the preceding sentence and where the context otherwise requires, the term “Company” shall include the Company and all present and future Subsidiaries. All capitalized terms that are used in these Terms and Conditions without definition shall have the meanings set forth in the Plan.

1.Definitions.

(a)Award Agreement has the meaning set forth in Section 2 of these Terms and Conditions.

(b)Communication of Award means the communication delivered by an authorized representative of the Company to the Participant identifying that an Award has been granted together with the details of the Award (including the identity of the Participant, the Grant Date, and the number of Restricted Share Units that were awarded to the Participant) set forth in the award summary portion of the online award acceptance process used in connection with electronic administration of Awards under the Plan.

(c)Grant Date means the date on which the Restricted Share Units were granted as set forth in the Communication of Award.

(d)Participant, solely for purposes of the Award Agreement, means the individual identified in the Communication of Award.

(e)Restricted Share Unit means a right to receive any one Share of the Company's common stock, par value $0.01 per share, from the Company following the expiration of the Restriction Period.

(f)Restriction Period with respect to the Restricted Share Units means the period commencing upon the Grant Date and ending on the dates provided under Section 3 of these Terms and Conditions.

2.Grant of Restricted Share Units. Effective on the Grant Date and subject to the provisions of the Plan and these Terms and Conditions, the Company has granted to the Participant the number of Restricted Share Units set forth in the Communication of Award. A Restricted Share Unit does not represent an equity interest in the Company and carries no voting or dividend rights. The information contained in the Communication of Award with respect to the Participant and the Restricted Share Units is incorporated herein by reference and together with these Terms and Conditions shall constitute an Award Agreement (the “Award Agreement”) for purposes of the Plan. By accepting the award of Restricted Share Units and acknowledging these Terms and Conditions, the Participant agrees to be bound by the provisions of the Plan and these

Terms and Conditions with respect to the Restricted Share Units. Acceptance of the award of Restricted Share Units and acknowledgment of these Terms and Conditions may be made in a writing signed by the Participant and delivered to the Company or through the online award acceptance process used in connection with electronic administration of awards under the Plan.

3.Restriction Period.

(a)The Restriction Period shall expire with respect to twenty-five percent (25%) of the Restricted Share Units on the first anniversary of the Grant Date and with respect to an additional twenty-five percent (25%) of such Restricted Share Units on each succeeding anniversary of the Grant Date so as to be expired with regard to all Restricted Share Units on the fourth anniversary of the Grant Date, conditioned on each such date on the Participant maintaining continuous employment with (or other service-providing capacity with) the Company since the Grant Date (or if later, the date on which the Participant first became an employee or service provider). Notwithstanding the foregoing, the Restriction Period shall expire with respect to all Restricted Share Units upon the death or Disability of the Participant.

(b)The Restriction Period shall be deemed to expire for all Restricted Share Units if, within twelve months after the Company obtains actual knowledge that a Change in Control has occurred, the Participant's employment with or service to the Company or any Affiliate of the Company is terminated for any reason.

(c)The Restricted Period shall be deemed to expire for all Restricted Share Units if the Participant’s employment with or service to the Company or any Affiliate of the Company is terminated by the Company or such Affiliate of the Company without Cause.

(d)If the Participant's employment with or service to the Company or any Affiliate is terminated, or the Participant otherwise separates from service under circumstances not described in Sections 3(a), 3(b) or 3(c), all Restricted Share Units as to which the Restriction Period has not expired shall be canceled immediately, and shall not be payable, except to the extent the Committee decides otherwise.

4.Payment. No later than 2½ months after the end of the calendar year in which the Restriction Period expires with respect to Restricted Share Units, the Company shall issue to the Participant (or the Participant's assignee or beneficiary if permitted by the Plan or the Committee) one Share for each Restricted Share Unit for which the Restriction Period expired.

5.Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to any Shares which may be issued upon expiration of the Restriction Period (including, without limitation, voting rights and any rights to receive dividends or non-cash distributions with respect to such Shares) unless and until the Restriction Period shall have expired. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such Restriction Period shall have expired.

6.Withholding. The Company's obligation to deliver the Shares upon the expiration of the Restriction Period shall be subject to the Participant's satisfaction of any applicable federal, state, and foreign withholding obligations or withholding taxes (“Withholding Taxes”), including any employer minimum statutory withholding, and the Participant shall pay the

amount of any such Withholding Taxes to the Company as set forth in this Section 5. The Participant may satisfy his or her obligation to pay the Withholding Taxes by (i) making a cash payment to the Company in an amount equal to the Withholding Taxes; (ii) having the Company withhold Shares otherwise deliverable to the Participant in connection with the expiration of the Restriction Period; or (iii) delivering to the Company shares of Common Stock already owned by the Participant; provided that in the case of (ii) or (iii) the amount of such Shares withheld or shares of Common Stock delivered shall not exceed the amount necessary to satisfy the Withholding Taxes. The Participant acknowledges and agrees that the Company has the right to deduct from compensation or other amounts owing to the Participant an amount not to exceed the Withholding Taxes.

7.No Guarantee of Employment. Nothing in the Award Agreement or in the Plan shall confer upon the Participant any right to continues in the employ of the Company, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Participant at any time for any reason whatsoever, with or without Cause.

8.Amendment. Subject to the restrictions contained in the Plan, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, this Award Agreement and the Restricted Share Units, prospectively or retroactively in time (and in accordance with Section 409A of the Code with regard to awards subject thereto); provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of the Participant or any holder or beneficiary of the Restricted Share Units shall not to that extent be effective without the consent of the Participant, holder or beneficiary. The Committee is authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, the Award Agreement and the Restricted Share Units as set forth in the Plan.

9.Determinations by Committee. Except as otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or the Award Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons.

10.Provisions of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan with the Award Agreement and agrees to be bound by all the terms and provisions of the Plan. The Award Agreement is governed by the terms of the Plan, and in the case of any inconsistency between the Award Agreement and the terms of the Plan, the terms of the Plan shall govern.

11.Nontransferability of Restricted Share Units. Except as otherwise provided in the Plan, the Restricted Share Units and this Award Agreement shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Share Units otherwise than as permitted by the Plan and this Award Agreement shall, at the election of the Company, be null and void. Transfer of the Restricted Share Units for value is not permitted under the Plan or this Award Agreement.

NOTE: A request for confidential treatment has been made with respect to the portions of the following document that are marked [*CONFIDENTIAL*]. The redacted portions have been filed separately with the SEC.

AGREEMENT FOR DISTRIBUTION OF PRODUCTS

This Agreement for Distribution of Products (the “Agreement”) is entered into October 30, 2015 between Whole Foods Market Distribution, Inc., a Delaware corporation (“WFM”), and United Natural Foods, Inc., a Delaware corporation (“UNFI”).

RECITALS

A. WFM and its affiliates and subsidiaries are primarily engaged in the sale of natural and organic products. Their operations include retail stores (“WFM Stores”), food production/repacking facilities and distribution centers (together, including WFM Stores, the “WFM Locations”). WFM and its affiliates and subsidiaries have WFM Locations in a number of separate regions which currently include the Florida Region, Mid-Atlantic Region, Mid-West Region, Pacific Northwest Region, Northern Atlantic Region, Northeast Region, Northern California Region, Rocky Mountain Region, South Region, Southern Pacific Region, and the Southwest Region (each a “WFM Region” and collectively the “WFM Regions”).

B. UNFI and its affiliates, subsidiaries and related parties including but not limited to, all distribution arms of the foregoing parties (together with UNFI, the “UNFI Parties”) operate a group of distribution centers (individually a “UNFI DC” and collectively the “UNFI DCs”) that sell natural and organic products. For purposes of this Agreement UNFI Parties specifically excludes Tony’s Fine Foods and Albert’s Organics, Inc. and manufacturing arms and retail divisions of UNFI and its affiliates subsidiaries and related parties.

C. The parties are currently parties to an Agreement for the Distribution of Products dated as of September 26, 2006, as amended (the “Prior Agreement”). The parties desire to terminate the Prior Agreement and enter into this Agreement to set forth the terms upon which UNFI will continue to sell and distribute to WFM Locations and WFM Locations will continue to purchase certain goods and services from UNFI.

NOW, THEREFORE, the parties agree as follows:

1.Term. This Agreement shall have an initial term of ten years (the “Term”) commencing as of September 28, 2015 (the “Effective Date”) and expiring on September 28, 2025.

2. Scope. This Agreement applies to any product purchased by a WFM Location in the continental United States from the UNFI Parties (in any case a “Product” and collectively “Products”).

3. Distribution Arrangement.

(a) The pricing terms set forth in this Agreement will remain in effect as long as WFM uses UNFI as its “Primary Distributor.” WFM is deemed to have used UNFI as its Primary Distributor if the following three conditions are met:

(i) Starting September 26, 2016 (WFM’s Fiscal Year 2017), each WFM Region (excluding all WFM Stores outside of the continental United States) purchases from the

UNFI Parties, at a minimum, [*CONFIDENTIAL*] in Products as were purchased by [*CONFIDENTIAL*];

(ii) Starting September 26, 2017, the cost of Products purchased by each WFM Region (excluding all WFM Stores outside of the continental United States) from UNFI Parties, [*CONFIDENTIAL*] shall be, [*CONFIDENTIAL*]; and

(iii) the average cost per case of Product delivered in [*CONFIDENTIAL*] for the [*CONFIDENTIAL*] shall be, at a minimum, [*CONFIDENTIAL*]. Average cost per case is defined as [*CONFIDENTIAL*]. Items sold [*CONFIDENTIAL*].

For the avoidance of doubt, the above calculations will be made by UNFI at the end of each WFM Period, based upon that period and the prior twelve (12) WFM Periods, for a total of thirteen (13) WFM Periods.

The average cost of orders submitted to the UNFI Parties for Products that are out of stock (“OOS”) will be included in the calculation as purchases from UNFI Parties for determining whether both (a)(i) and (a)(ii) have been satisfied. The following purchases by WFM Stores are not considered to be purchases from a wholesale natural grocery distributor and therefore will not be included in determining the dollar amount of WFM Store product purchases for purposes of this Section 3(a)(ii): (A) purchases by WFM Stores from WFM or any of its affiliates or subsidiaries (collectively, the “WFM Parties”), including, but not limited to, purchases from a WFM distribution center, (B) purchases by WFM Store from the manufacturer of a product, (C) purchases by WFM Stores from non natural grocery distributors including, but not limited to, broad-line food service distributors, non-food distributors and specialty distributors such as but not limited to cheese, produce, meat, seafood, or alcoholic beverage distributors. If at any time UNFI believes that WFM has not satisfied the conditions set forth in Section 3(a)(i), 3(a)(ii) and/or 3(a)(iii), UNFI will notify WFM in writing. WFM will have 3 WFM Periods from receipt of such notice to adjust purchases to meet the requirements. If WFM fails to cure the noncompliance in 3 WFM Periods (calculated on a consecutive 13 WFM Period basis) from the receipt of notice, UNFI’s sole remedy ((except as set forth in Section 20(c)) will be to renegotiate the “Gross Profit Margin Percent” identified in Section 8(d) below.

(b) UNFI agrees to stock all new Products requested by WFM after the Effective Date if a majority of the WFM Stores (but in any case, not less than six WFM Stores or all the WFM Stores in a WFM Region if the WFM Region contains less than six WFM Stores) in the applicable WFM Region agree to purchase the new Product, including, but not limited to, Exclusives (defined in Section 5(b)), Private Label SKUs (defined in Section 6(a)) and Control Label SKUs (defined in Section 6(a)). All new Product vendors must meet UNFI’s reasonable requirements for new vendors. Any single WFM Store requests for a new Product will be reviewed on a case by case basis.

(c) The parties agree that if UNFI purchases the assets or equity and/or otherwise assumes the rights and/or obligations of any entity which, at the time of such purchase/assumption, is providing products directly to WFM and/or acting as a distributor of other parties’ products to WFM, then the following provisions shall apply during the remainder of the term of this Agreement: (i) if the products being supplied to WFM by such entity are the

same or similar to the Products currently being provided by UNFI to WFM, then WFM may choose to bring such products under the definition of Products and require UNFI to sell such products under the terms of this Agreement, including without limitation WFM’s purchase obligations set forth in Section 3(a) and UNFI’s pricing obligations set forth in Section 7(a) and (ii) if the products being supplied to WFM by such entity are not the same or similar to the Products currently being provided by UNFI to WFM, then UNFI and WFM may choose to negotiate in good faith to include such products under the terms of this Agreement, with such changes as may be necessary or appropriate due to the nature of the products being included.

4. Reports. At WFM’s reasonable request, UNFI will provide reports to WFM that include all information and data relevant to an evaluation of the WFM account and UNFI’s performance under this Agreement, including, but not limited to, the following reports: (i) all reports requested by WFM to demonstrate compliance with the terms of this Agreement; (ii) any reports of the type provided to WFM prior to the Effective Date; and (iii) all reports requested in this Agreement. In addition, WFM may submit requests to UNFI for additional information and data relating to WFM’s account and UNFI will prepare reports for WFM setting forth the requested information and data. UNFI will use commercially reasonable efforts to provide all such information and data in a timely manner and in the format requested by WFM. WFM may specify either a hard copy or electronic copy. For electronic copies, WFM may specific whether the report will be delivered in CSV, Excel or Word or another format reasonably acceptable to UNFI.

5. Branded Products.

(a) Quality Standards. WFM has a list of ingredients located at http://supplier.wholefoodsmarket.com/ (which the WFM Parties may modify from time to time) that WFM does not permit in any products sold at WFM Stores (the “Unacceptable Ingredient List”). UNFI agrees it will not knowingly sell WFM Products that contain ingredients listed on the Unacceptable Ingredient List.

(b) Limited Time Exclusives. From time to time, WFM and certain Product manufacturers or suppliers may agree that a Product provided by such manufacturer or supplier will be sold exclusively to all WFM Stores (“Exclusives”). If a new Exclusive Product meets the requirements in Section 3(b), UNFI will purchase and stock Exclusives in inventory and for a period specified by WFM (not to exceed four UNFI Pricing Periods per UNFI DC unless mutually agreed upon by the parties), UNFI will sell the Product only to WFM Locations. No WFM Region or group of regions may designate a Product as Exclusive except for the global Whole Body and Grocery teams; provided that the global Whole Body and Grocery teams may designate an Exclusive item to launch in one or more regions versus nationally. UNFI will not be obligated to carry more than [*CONFIDENTIAL*] Grocery Exclusive items and [*CONFIDENTIAL*] Whole Body Exclusive items. If at any time sales of any Exclusive are less than [*CONFIDENTIAL*] cases per month per UNFI DC, UNFI may upon written notice discontinue such Exclusive in which case WFM shall immediately buy all such Exclusive in UNFI’s inventory, provided that UNFI may, in the alternative, choose to make such Product non-exclusive.

6. Private Label and Control Label Products; Nationally Branded Products; Small Format 365 Stores.

(a) Inventory. “Private Label SKUs” will mean those Products that WFM Locations offer from time to time with packaging that includes WFM proprietary labels

including, but not limited to, “Whole Foods” “365 Everyday Value” “365 Organic Everyday Value” “Whole Kids Organic” “Whole Body” “Whole Pantry” and such other trade names or marks used by WFM Parties from time to time. In addition to Private Label SKUs, certain manufacturers or suppliers may agree from time to time to produce products for WFM that include manufacturer or supplier proprietary labels used exclusively on products sold to WFM Locations (“Control Label SKUs”). UNFI will purchase and stock the Private Label SKUs and the Control Label SKUs requested by WFM from time to time in the UNFI DCs designated by WFM. UNFI will provide WFM with a current list of individuals designated as contacts for Private Label SKU and Control Label SKU inventory matters and will keep WFM informed of any changes to contact information.

(b) Report. UNFI recognizes the importance of delivering all information regarding Private Label SKUs and Control Label SKUs in a clear, concise and complete manner. UNFI will continue to provide WFM with a report of UNFI’s Private Label SKU inventory and Control Label SKU inventory in a form mutually agreed upon by the parties once every WFM Period as identified on Exhibit A (the “Private Label Report”). The Private Label Report will be per UNFI DC and UNFI in total and will include information about usage, stock level, amount on order and how many times each Private Label SKU and Control Label SKU turned during a WFM Period (an “Inventory Minimum Turn Period”).

(i) All notices relating to a Product hold, stock recovery, withdrawal or recall of a Private Label SKU or Control Label SKU may be communicated to UNFI by a member of the WFM Private Label Team (a “Product Action Notice”). UNFI will cooperate fully with the WFM Private Label Team, respond promptly to any Product Action Notice and confirm receipt of any such notice by email as soon as possible but in every case, within 24 hours. UNFI shall keep the WFM Private Label Team informed of the status of UNFI inventory subject to a Product Action Notice and all actions performed by a UNFI Party in response to any such notice. If UNFI receives notice from anyone other than a WFM Private Label Team member that involves a Product hold, stock recovery, withdrawal or recall associated with a Private Label SKU or a Control Label SKU, UNFI will immediately notify a member of the WFM Private Label Team. The Private Label SKU or Control Label SKU involved in this notice may be placed on hold; however, no other action should be taken until a directive is received from the WFM Private Label Team.

(ii) Product subject to a Product hold, stock recovery, withdrawal or recall of a Private Label SKU or a Control Label SKU inventory whether due to a defect, damage, misbranding or quality issue is considered “Rejected Inventory.” UNFI will collect any credits owed UNFI as a result of Rejected Inventory directly from the Product supplier or manufacturer. WFM will not be required to pay or reimburse UNFI for any Rejected Inventory unless the Product becomes Rejected Inventory due to an act or omission of WFM. UNFI will indemnify

WFM for any losses incurred by the WFM Parties resulting from a UNFI Party’s failure to comply with a Product Action Notice.

(d) Product Sales. UNFI agrees to take commercially reasonable efforts to prevent any UNFI Party from selling or donating or otherwise distributing or conveying any Private Label SKU or any Control Label SKU to any distribution network, stores, entities or persons not approved in advance by a WFM Private Label Team Member. UNFI agrees to fully cooperate with WFM Private Label Team members and their representatives and designees in any investigation or litigation relating to any unauthorized sale. UNFI will [*CONFIDENTIAL*] unless UNFI has [*CONFIDENTIAL*]. If a UNFI Party breaches this section, UNFI agrees to pay WFM [*CONFIDENTIAL*] per breach.

(e) WFM Responsibility for Inventory.

(i) Termination of Private Label SKU or Control Label SKU. Except for (x) Rejected Inventory, (y) inventory that is out of date or damaged or in unacceptable condition due to UNFI’s acts or omissions including, but not limited to, improper storage, improper rotation, improper ordering, damage incurred during transportation by UNFI or its designees or (z) missing, short or lost Product (shrink), if WFM terminates a Private Label SKU or a Control Label SKU, WFM will be responsible for and will reimburse UNFI for the applicable Private Label SKU or Control Label SKU inventory held by UNFI not to exceed the greater of (i) a 90 day supply based upon the WFM Locations’ past purchasing practices, or, if a new Product, projections provided in writing by WFM, or (ii) the supplier’s minimum order quantity. If WFM instructs UNFI to destroy a Private Label SKU or a Control Label SKU held in inventory, UNFI will promptly arrange for the destruction of the applicable Products and will promptly provide WFM with a certificate of destruction covering all applicable Products.

(ii) Overstock and Short-Dated Private Label SKU or Control Label SKU. Subject to Section 6(e)(i) and UNFI’s compliance with the Code Date Policy, each party’s responsibility for overstocks and short-dated Private Label SKUs and Control Label SKUs is set forth on Exhibit F and is based on the amount of notice given to WFM and the level of inventory held by UNFI not to exceed the greater of (x) a 90 day supply based upon the WFM Locations’ past purchasing practices, or, if a new Product, projections provided in writing by WFM, or (y) the supplier’s minimum order quantity.

(f) Slow Moving Products. Private Label SKUs and Control Label SKUs will be priced for invoice purposes in the same manner as other Products purchased by WFM Locations from UNFI Parties except for the Products that qualify as slow moving Products (“Slow Moving Products”). If a UNFI DC sold less than [*CONFIDENTIAL*] but greater than or equal to [*CONFIDENTIAL*] cases of a Private Label SKU or a Control Label SKU during a UNFI Pricing Period, WFM will pay a Slow Moving Product up charge during the period following the subsequent UNFI Pricing Period equal to [*CONFIDENTIAL*]. If a UNFI DC sold less than [*CONFIDENTIAL*] cases of a Private Label SKU or a Control Label SKU during a WFM Period, WFM will pay a Slow Moving Product up charge during the period following the subsequent UNFI Pricing Period equal to [*CONFIDENTIAL*]. The Slow Moving Product up charge will be reflected in the invoice price. The first [*CONFIDENTIAL*] UNFI Pricing Period that a Private Label SKU or Control Label SKU is stocked at a UNFI DC will not be

included in any Slow Moving Product up charge. A UNFI Pricing Period must equal a minimum of [*CONFIDENTIAL*]. If any pallets in a UNFI DC contain a Private Label SKU or Control Label SKU that are older than [*CONFIDENTIAL*], WFM will pay a pallet charge to UNFI once per WFM Period equal to [*CONFIDENTIAL*] times [*CONFIDENTIAL*].

(g) Lumper Fees. The parties agree that the fees for “roll off” products, as defined in Exhibit H (“UNFI Unloading Policy”) for any WFM Private Label SKU and Control Label SKU will be assessed the same fees as all other Products received at UNFI. All items that require breakdown or “fingerprinting”, as defined in Exhibit H (“UNFI Unloading Policy”) will be assessed the same fees as all other items received at UNFI, pursuant to UNFI’s applicable fee schedules.

(h) Reserved Inventory. Each time WFM desires certain quantities of certain SKUs (but excluding Exclusives, Private Label SKUs and Control Label SKUs) be purchased or otherwise made available by UNFI for WFM in UNFI inventory for sale and availability only to WFM (“Reserved Inventory”), WFM shall provide to UNFI for UNFI’s acknowledgment a written document containing: (1) a list of Reserved Inventory by SKU and (2) the quantity requirements of each SKU for the reserve periods specified by WFM (the “Reserved Inventory Requirements”). If UNFI cannot obtain the quantities of any SKU of Reserved Inventory set forth in the Reserved Inventory Requirements due to circumstances beyond its control, UNFI shall advise WFM as soon as it becomes aware of such issue, and WFM may modify the Reserved Inventory Requirements with respect to such SKUs accordingly. Once such modification is accomplished by WFM and resubmitted to UNFI, subject to UNFI’s written acceptance, UNFI shall procure and reserve on behalf of WFM and sell the Reserved Inventory to WFM in accordance with the Reserved Inventory Requirements. By submitting the Reserved Inventory Requirements, WFM agrees to purchase all such Reserved Inventory in the quantities requested and upon the schedule set forth in the Reserved Inventory Requirements. Except for Reserved Inventory that is received from UNFI by WFM’s designated third party logistics provider in unacceptable condition due to UNFI’s acts or omissions including, but not limited to, improper storage, damage incurred during transportation by UNFI or its designees or (ii) documented at time of delivery as never received, i.e., missing or short, WFM’s obligations to purchase the Reserved Inventory, as adjusted as provided above, are irrevocable and not subject to negotiation. If WFM attempts to cancel or fails or refuses to accept any delivery of any Reserved Inventory for any reason other than as set forth above, then WFM shall remain responsible for paying for such inventory, as well as the cost for any freight to return to UNFI’s facility any Reserved Inventory which has already been shipped to WFM and otherwise make UNFI completely whole for any expenses, fees, damages or costs related to the Reserved Inventory at issue.

(i) 365 Stores. WFM intends to open a number of stores with a smaller footprint, bannered as “365” Stores Except as expressly set forth in this Agreement, all of the terms of this Agreement shall apply to the 365 Stores:

(i) Delivery Charge. For any order less than [*CONFIDENTIAL*], an additional charge (the “Delivery Charge”) will be added to the invoice as the difference between the Allowable Gross Margin on the invoice and the Allowable Gross Margin that would be charged on a [*CONFIDENTIAL*] order. For Example, assuming the current Allowable Gross

Margin is [*CONFIDENTIAL*] and the invoice is [*CONFIDENTIAL*], the Delivery Charge would be [*CONFIDENTIAL*].

Fill orders for a new store will be exempt from the Delivery Charge; therefore, invoices will not be subject to the Delivery Charge until the store is open.

(ii) Reserved Product Slots. At WFM’s prior written request, UNFI shall reserve not more than [*CONFIDENTIAL*] slots in each UNFI Distribution Center for Products unique to the 365 Stores. With respect to the application of Section 6(f) above, all charges will apply immediately. There shall be no “grace period” for the first four UNFI Pricing Periods.

(iii) Gross Profit Margin Percent; Fill Rate. Sales to 365 Stores shall be included in determining Total Sales for purposes of determining the Gross Profit Margin Percent set forth in Section 8(d), but they shall not be included for determining average drop size for purposes of determining the Gross Profit Margin Percent set forth in Section 8(d).

7. Invoicing Payment Terms.

(a) Product Invoices.

(i) Standard Invoices. Except for the EDLC Program (defined in Section 7(a)(iii)), UNFI will invoice WFM Locations for all Products purchased by WFM Locations consistent with practices in effect between WFM and UNFI prior to the Effective Date. The current practice applies to Products other than produce, wine and non-branded bulk items (“Standard Products”). For Standard Products, the price shown on the invoice to WFM (the “Standard Invoice Product Price”) will equal UNFI’s Cost (defined below) plus a [*CONFIDENTIAL*] markup or [*CONFIDENTIAL*] markup for Private Label SKUs and Control Label SKUs (the [*CONFIDENTIAL*] markup and [*CONFIDENTIAL*] markup collectively, the “Agreed Upon Markup”) plus a [*CONFIDENTIAL*] Delivery Up Charge (“Delivery Up Charge”). “Cost” equals the manufacturer’s list price (the “MLP”) to UNFI for the Product, plus the Freight Charge. The “Freight Charge” means either [*CONFIDENTIAL*]. The Freight Charge incurred through UNFI’s internal systems [*CONFIDENTIAL*]. A Freight Charge will not be applied to Products that include freight in the MLP (i.e. Products with delivered cost pricing). WFM may change the amount of [*CONFIDENTIAL*] at any time by [*CONFIDENTIAL*]. The foregoing change will be reflected in the next EDI cost files transmitted to WFM and the new [*CONFIDENTIAL*] becomes effective at the start of the next UNFI Pricing Period for such EDI cost files, not to exceed nine weeks.

(ii) Promotional Pricing. [*CONFIDENTIAL*]. Consistent with practices in effect between the parties prior to the Effective Date [*CONFIDENTIAL*]. UNFI agrees that [*CONFIDENTIAL*]. WFM Locations generally have two promotion cycles per WFM Period referred to as the “A Cycle” and the “B Cycle.” Products that are scheduled to be part of a promotion during either the A Cycle or the B Cycle (or both A and B Cycles) will be invoiced by UNFI at promotional prices beginning five business days prior to the first date of the A Cycle and shall continue to be invoiced by UNFI at promotional prices through the end of the B Cycle.

After the end of each WFM promotional buy-in period, UNFI will [*CONFIDENTIAL*]. All WFM Regions will [*CONFIDENTIAL*]. Promotional information will be sent to UNFI with a lead time that is acceptable to both parties.

(iii) EDLC Program. Certain Products will be included in a new program known as the WFM Everyday Low Cost Program (the “EDLC Program”). A Product will be included in the EDLC Program if WFM and the Product supplier or manufacturer agrees upon an every day low cost (an “EDLC Cost”) for a Product that is resold by UNFI to WFM Locations (“EDLC Products”). If a bulk Product meets the criteria set forth on Exhibit G, the bulk Product will be included in the EDLC Program. For EDLC Products, the invoice price (the “EDLC Invoice Price”) will equal (i) [*CONFIDENTIAL*] plus (ii) [*CONFIDENTIAL*] (if any), plus (iii) [*CONFIDENTIAL*] markup (“EDLC Markup”), plus (iv) [*CONFIDENTIAL*]. A Freight Charge will not be applied to Products that include freight in the EDLC Cost. UNFI will report to the supplier or manufacturer the applicable EDLC Product sales and deduct from or credit to the supplier or manufacturer the appropriate EDLC reconciliation amount (the “EDLC Reconciliation Amount”). The EDLC Reconciliation Amount will be equal to [*CONFIDENTIAL*]. The parties will work together to create forms and procedures to support the EDLC Program, including, but not limited to, a WFM EDLC Reconciliation Process and a WFM EDLC Program Form. WFM may change the amount of the [*CONFIDENTIAL*] at any time by giving UNFI written notice. The foregoing change will be reflected in the next EDI cost files transmitted to WFM and the new [*CONFIDENTIAL*] becomes effective at the start of the next UNFI Pricing Period for such EDI cost files, not to exceed nine weeks.

(iv) Cross-Dock Billing. UNFI will, from time to time, and based on UNFI space availability, ship pallets and shipper displays on a cross-dock basis for WFM at a rate of [*CONFIDENTIAL*] per pallet.

(v) [*CONFIDENTIAL*]. From time to time, WFM or UNFI, on WFM’s behalf, may negotiate [*CONFIDENTIAL*] from the manufacturer and/or supplier. The [*CONFIDENTIAL*] will be reflected as a reduction in the applicable invoice price. For example, [*CONFIDENTIAL*]. The parties will work together to create a list of manufacturers and suppliers that have agreed to provide WFM [*CONFIDENTIAL*]. UNFI Authorization forms for standing and one-time [*CONFIDENTIAL*] will be completed and submitted by WFM’s vendor or broker and submitted to UNFI designated personnel who will update and maintain this information and apply the specified reductions from the applicable invoice price. For any WFM specific [*CONFIDENTIAL*] UNFI will require manufacturer’s or supplier’s authorization. The foregoing WFM specific [*CONFIDENTIAL*] price will be reflected on the applicable invoice. Authorization will be submitted to UNFI with a minimum of to weeks lead time before desired delivery date.

(vi) Fuel Surcharge Program. If during a “WFM Fiscal Quarter” (set forth on Exhibit A) the average price per gallon of diesel fuel exceeds [*CONFIDENTIAL*] based on the U.S. weekly average from the U.S. Department of Energy’s Weekly Retail On-Highway Diesel Prices report found on the US Energy Information Administration website, www.eia.doe.gov, WFM will incur a “Fuel Surcharge” as set forth on Exhibit B. The foregoing government report is currently located at http://tonto.eia.doe.gov/oog/info/wohdp/diesel_detail_report.asp. The Fuel Surcharge, if any, is calculated each WFM Fiscal Quarter based on the sum of the U.S. weekly

average price per gallon, as found above, during the prior WFM Fiscal Quarter divided by the number of weeks in such prior WFM Fiscal Quarter, rounded to 2 decimal places using standard rounding procedures. The Fuel Surcharge, if any, shall be incurred for each delivery by UNFI fleet to a WFM Location. In accordance with current practices the Fuel Surcharge will be billed to each WFM Region per WFM Fiscal Quarter with supporting documentation reflecting the calculation of the Fuel Surcharge for each WFM Location.

(vii) Pallet Program. The parties will develop a mutually agreeable pallet exchange program under which UNFI may charge for pallets and WFM shall receive credit for pallets returned. Upon Product deliveries, WFM will use its commercially reasonable efforts to provide UNFI with the number of empty pallets equal to the number of loaded pallets delivered to WFM.

(viii) WFM’s Manufacturer/Supplier Relationship. UNFI agrees (i) to cooperate with WFM regarding any WFM arrangement with the Product manufacturer and/or supplier including, but not limited to, the EDLC Program, funding for new, remodeled and acquired WFM Stores, promotions and free or discounted Product and (ii) it will not attempt to circumvent any such arrangement including, but not limited to, the EDLC Cost

(ix) Electronic Cost & Invoice Files. Consistent with past practices, UNFI will provide electronic cost files daily and each UNFI Pricing Period. Further, in addition to paper invoices submitted to WFM Locations, UNFI will provide daily electronic invoice files in EDI format. During the term of this Agreement, WFM intends to cross check the Product prices on the invoice against the electronic cost files. If there is a discrepancy in the Product price, WFM may adjust the applicable payment. WFM agrees to work with UNFI to develop a commercially reasonable process for payment adjustments. WFM understand that [*CONFIDENTIAL*]; however, UNFI agrees that [*CONFIDENTIAL*].

(b) Payment Terms.

(i) Amounts due UNFI. WFM will send a wire transfer every [*CONFIDENTIAL*] with payment for all acceptable invoices received by WFM Locations [*CONFIDENTIAL*]. UNFI may impose a finance charge of 1% per WFM Period for any undisputed amounts that are not paid timely.

(ii) Amounts due WFM. Except as otherwise provided in this Agreement, any amount payable by UNFI to WFM will be due and payable within [*CONFIDENTIAL*] days from the beginning of the applicable WFM Period. WFM may impose a finance charge of 1% per WFM Period for any undisputed amounts that are not paid timely.

8. Period Rebate.

(a) Purpose. The parties acknowledge that UNFI may realize income from sales of Products to WFM Locations through various means including, but not limited to, (i) [*CONFIDENTIAL*] and (ii) [*CONFIDENTIAL*]. Notwithstanding the invoicing provisions set forth in Section 7 of this Agreement, it is the intent of WFM and UNFI that UNFI [*CONFIDENTIAL*]. If the [*CONFIDENTIAL*] UNFI will [*CONFIDENTIAL*].

(b) [*CONFIDENTIAL*]. On the 10th business day following [*CONFIDENTIAL*], UNFI will [*CONFIDENTIAL*]. The [*CONFIDENTIAL*]. UNFI will deliver to WFM [*CONFIDENTIAL*]. The [*CONFIDENTIAL*] provided to WFM [*CONFIDENTIAL*] shall provide [*CONFIDENTIAL*].

(c) Calculation of [*CONFIDENTIAL*]. The amount of [*CONFIDENTIAL*] will be equal to the [*CONFIDENTIAL*] calculated as follows.

(i) [*CONFIDENTIAL*]

(x) Definition of Total Sales: “Total Sales” means [*CONFIDENTIAL*]. The amount of Total Sales [*CONFIDENTIAL*].

(y) Definition of Total Cost of Goods Sold: “Total Cost of Goods Sold” means [*CONFIDENTIAL*]. The parties agree that in limited circumstances [*CONFIDENTIAL*]. “Average Cost” means [*CONFIDENTIAL*]. Average Cost will be calculated [*CONFIDENTIAL*]. “Laid In Cost” means [*CONFIDENTIAL*]. The invoice used to determine Laid In Cost will be [*CONFIDENTIAL*]. Laid In Cost [*CONFIDENTIAL*].

(ii) Calculation of [*CONFIDENTIAL*]. The [*CONFIDENTIAL*] will be calculated as follows: [*CONFIDENTIAL*]. For example, [*CONFIDENTIAL*].

(d) Change in [*CONFIDENTIAL*].

(i) [*CONFIDENTIAL*]; Changes.

(a) With respect to every invoice issued by UNFI after October 25, 2015, [*CONFIDENTIAL*]. Subject to further reduction as set forth below, with respect to every invoice issued by UNFI dated after July 31, 2016, [*CONFIDENTIAL*].

(b) If at any time Total Sales for the previous thirteen (13) WFM Periods equal or exceed [*CONFIDENTIAL*], and [*CONFIDENTIAL*], then with respect to every invoice issued by UNFI dated after the end of the most recent of the thirteen WFM Periods, [*CONFIDENTIAL*].

(c) If the requirements under subsection (b) are met, and the average sales for each UNFI delivery to each WFM Store (also known as “drop size”) during any WFM Period equals or exceeds [*CONFIDENTIAL*] and such average sales are maintained, then with respect to every invoice issued by UNFI after the end of the most recent WFM Period, [*CONFIDENTIAL*]. Sales to 365 Store shall not be part of this calculation.

(d) If the threshold set forth in subsection (c) is not met, in a subsequent WFM Period, [*CONFIDENTIAL*]. If the threshold set forth in subsection (b) is not met, [*CONFIDENTIAL*], whether or not the threshold set forth in subsection (c) is met.

(e) If after meeting any of the above thresholds, WFM falls below such thresholds, which would allow UNFI [*CONFIDENTIAL*]. If WFM fails to maintain

the threshold in subsection (c), [*CONFIDENTIAL*], and if WFM fails to maintain the threshold in subsection (b), [*CONFIDENTIAL*]. In other words, when calculating [*CONFIDENTIAL*].

(ii) The parties agree that if the dollar amount of WFM Private Label SKU and Control Label SKU sales exceeds [*CONFIDENTIAL*] for [*CONFIDENTIAL*] then [*CONFIDENTIAL*]. If WFM Private label SKU and Control Label SKU sales exceed [*CONFIDENTIAL*] for [*CONFIDENTIAL*] then [*CONFIDENTIAL*]. IF WFM Private Label SKU and Control Label SKU sales exceed [*CONFIDENTIAL*] for [*CONFIDENTIAL*], the parties agree [*CONFIDENTIAL*]. All UNFI Parties brands and Blue Marble Brands, including items packaged or manufactured by UNFI for WFM, will be excluded from the private label percentage calculation address herein.

(e) Accuracy of Information. In connection with the negotiation of this Agreement, UNFI has provided information to WFM relating to [*CONFIDENTIAL*]. UNFI acknowledges that WFM has relied upon this information in connection with the negotiation and execution of this Agreement. UNFI represents and warrants that all information provided to WFM during the negotiation of this Agreement is true and correct. If WFM determines that the above information is inaccurate, WFM may renegotiate [*CONFIDENTIAL*]. If WFM chooses to renegotiate a reduction in the [*CONFIDENTIAL*], UNFI agrees to negotiate in good faith.

(f) UNFI [*CONFIDENTIAL*]. If [*CONFIDENTIAL*], WFM will [*CONFIDENTIAL*].

9. Credits. UNFI’s Standard Credit Policy and UNFI’s Credit Allowance Policy are outlined on Exhibit C (“UNFI Credit Policy”). These policies set forth three separate procedures for providing credit for certain errors relating to Product orders including, but not limited to, Products which are billed but not received, wrong Product shipped, damaged Product, Products with less than agreed upon shelf life remaining, spoiled or infested Product, Product with defective packaging, consumer returns, withdrawn or recalled Products and pricing errors. Each WFM Region will select one of the three UNFI Credit Policy options. Each WFM Region may change its UNFI Credit Policy once per WFM Fiscal Year by giving UNFI 30 days written notice, such change to be effective beginning with the WFM Period following the 30 day notice.

10. [*CONFIDENTIAL*].

(a) [*CONFIDENTIAL*]. As set forth in Section 17(c), if the parties agree to [*CONFIDENTIAL*], UNFI will [*CONFIDENTIAL*]. The [*CONFIDENTIAL*] is payable on [*CONFIDENTIAL*]. The [*CONFIDENTIAL*] payment will be paid [*CONFIDENTIAL*]. UNFI will include a cover letter with [*CONFIDENTIAL*] that sets forth [*CONFIDENTIAL*].

(b) [*CONFIDENTIAL*]. UNFI acknowledges that [*CONFIDENTIAL*]. In connection therewith, UNFI shall [*CONFIDENTIAL*]. UNFI will [*CONFIDENTIAL*]. UNFI shall [*CONFIDENTIAL*]. WFM’s Fiscal Year consists of thirteen (13) WFM Periods. Beginning with the WFM Fiscal Year commencing September 29, 2015, and continuing for each WFM Fiscal Year during the term of this Agreement, UNFI shall retain [*CONFIDENTIAL*].

The [*CONFIDENTIAL*] shall be in effect for the WFM Fiscal Year ending September 25, 2016, and shall be adjusted for the next WFM Fiscal Year (and every subsequent WFM Fiscal Year) to reflect [*CONFIDENTIAL*]. For example, if [*CONFIDENTIAL*].

Examples of possible [*CONFIDENTIAL*] include [*CONFIDENTIAL*].

The [*CONFIDENTIAL*] as follows: If the [*CONFIDENTIAL*], UNFI shall [*CONFIDENTIAL*]. If the [*CONFIDENTIAL*], UNFI shall [*CONFIDENTIAL*]. For example, if the [*CONFIDENTIAL*], then UNFI shall [*CONFIDENTIAL*], and if the [*CONFIDENTIAL*], UNFI shall [*CONFIDENTIAL*].

Notwithstanding the foregoing, the parties agree that, in addition to [*CONFIDENTIAL*] as of the date of this Agreement, [*CONFIDENTIAL*]. The parties agree that [*CONFIDENTIAL*]. Any such [*CONFIDENTIAL*].

Within thirty (30) days of the execution of this Agreement, UNFI shall [*CONFIDENTIAL*].

(c) [*CONFIDENTIAL*]. UNFI is allowed to [*CONFIDENTIAL*] on the [*CONFIDENTIAL*]. Any amounts [*CONFIDENTIAL*]. If the amount [*CONFIDENTIAL*]; provided that WFM is not [*CONFIDENTIAL*].

For example, assume [*CONFIDENTIAL*]:

[*CONFIDENTIAL*]

UNFI shall pay [*CONFIDENTIAL*]. The [*CONFIDENTIAL*]. UNFI will include a cover letter with [*CONFIDENTIAL*]. This Section [*CONFIDENTIAL*].

11. New Product Slotting. WFM will submit a completed New Product Request Form (provided by UNFI) to request the addition of a new Product to UNFI’s inventory for sale to WFM Parties. The New Product Request Form will include a place to specify whether the new Product will be introduced by WFM on a national or regional basis. If the new Product will be introduced nationally, UNFI will purchase and slot the Product in all UNFI DCs for delivery to all WFM Locations. If the new Product will be introduced only in specific regions, UNFI will purchase and slot the new Product in the designated regions. UNFI will use commercially reasonable efforts to meet reasonable timelines requested by WFM for delivery of a new Product to WFM Locations. The parties agree that the following time frames are reasonable:

(a) if a supplier or manufacturer is new to any West or East division of UNFI, UNFI will submit purchase orders to the supplier or manufacturer within [*CONFIDENTIAL*] of the date WFM submits the New Product Request Form to UNFI (the “New Product Request Date”) and will use commercially reasonable efforts to deliver the requested new Product to WFM Locations within [*CONFIDENTIAL*] of the New Product Request Date;

(b) if the Product (but not the supplier or manufacturer) is new to any West or East division of UNFI, UNFI will submit purchase orders to the supplier or manufacturer within

[*CONFIDENTIAL*] of the New Product Request Date and will use commercially reasonable efforts to deliver the Product to the designated WFM Locations within [*CONFIDENTIAL*] of the New Product Request Date; and

(c) if UNFI has a Product number for a Product in the appropriate division requested by WFM, UNFI will submit all purchase orders for the new Product within [*CONFIDENTIAL*] of the New Product Request Date and will use commercially reasonable efforts to deliver the new Product to WFM Locations within [*CONFIDENTIAL*] of the New Product Request Date unless the supplier or manufacturer is not on a weekly ordering schedule, in which case, UNFI will submit the purchase order on the next possible order date and the timing of new Product delivery to WFM Locations will be adjusted accordingly.

(d) The parties acknowledge that supplier or manufacturer lead times, transportation schedules and other factors outside of UNFI’s control may affect the final WFM Location delivery timeline. WFM also acknowledges that a new Product orders involving an unusually large number of Product may require longer timelines.

12. Fill Rate and Inventory Allocation.

(a) The parties agree to work together to [*CONFIDENTIAL*]. The parties agree that it is their intent that a WFM region that [*CONFIDENTIAL*]. Until such time the following terms shall continue to apply.

(b) Existing Products. UNFI agrees to use commercially reasonable efforts to maintain a “fill rate” for each UNFI DC of at least [*CONFIDENTIAL*] meaning that [*CONFIDENTIAL*] or more of Products ordered by WFM Locations will be delivered on time and in good condition with the correct invoice and selection of Products. UNFI will provide a report to WFM once a week by UNFI DC of the actual dollar amount of Product filled and delivered on time by that UNFI DC and the dollar amount of the Products that would have been filled and delivered if that UNFI DC had a 100% fill rate. UNFI guarantees a “Minimum Fill Rate” of [*CONFIDENTIAL*] for each UNFI DC, excluding Products that are unable to be procured because of events outside UNFI and UNFI’s supplier’s reasonable control such as Acts of God, supplier strikes or national emergencies (“Applicable Products”). If any given UNFI DC fails to meet the Minimum Fill Rate for [*CONFIDENTIAL*] consecutive weeks, every week following until that UNFI DC meets the Minimum Fill Rate [*CONFIDENTIAL*], UNFI will pay each WFM Location affected (i.e. serviced by that UNFI DC) an amount equal to [*CONFIDENTIAL*] of the difference between the multiple of [*CONFIDENTIAL*] times the dollar amount of Products ordered that week and the dollar amount of the Products actually delivered pursuant to those orders (“Fill Rate Penalty Fee”) For example, if a UNFI DC fails to meet the Minimum Fill Rate for [*CONFIDENTIAL*] weeks in a row, each WFM Location that placed orders for Products from the UNFI DC that were due to be delivered during the [*CONFIDENTIAL*] week would be entitled to a payment calculated as follows. If the dollar amount of Applicable Products received by the WFM Location from the UNFI DC during week [*CONFIDENTIAL*] was [*CONFIDENTIAL*] and there were $100,000 of Products ordered in corresponding purchase orders that were due to be delivered that week, the resulting fill rate would be [*CONFIDENTIAL*] for that WFM Location for that week. The difference between the actual fill rate dollar amount that week [*CONFIDENTIAL*] and the Minimum Fill Rate

dollar amount [*CONFIDENTIAL*] is [*CONFIDENTIAL*]. UNFI would owe that WFM Location a payment equal to [*CONFIDENTIAL*].

(c) New Products. UNFI shall be subject to a separate fill rate obligation for a “launch” of new Products, (including new Products from new suppliers if the supplier has executed UNFI’s supplier agreement). Launch is defined as the first shipment of products to each WFM location. The minimum fill rate under this subsection (c) for each shipment of new Products shall be [*CONFIDENTIAL*] (“New Product Minimum Fill Rate”), excluding Products that are unable to be procured because of events outside UNFI and UNFI’s supplier’s reasonable control such as Acts of God, supplier strikes or national emergencies (the Products to be included for determining the New Product Minimum Fill Rate are hereinafter referred to as “Applicable New Products”). Without limiting the generality of the foregoing sentence, Applicable New Products do not include Products which are not available in sufficient quantities due to: (i) failure by WFM to provide a timely forecast and/or (ii) failure to allow for an [*CONFIDENTIAL*] week lead time between ordering and delivery. If any given shipment of Applicable New Products to a WFM Region [*CONFIDENTIAL*], UNFI will [*CONFIDENTIAL*]. For example, if a WFM Region [*CONFIDENTIAL*].

(d) This Section 12 shall apply to 365 Stores, but will exclude supplier out of stocks.

(e) Inventory Allocation. UNFI will [*CONFIDENTIAL*]. This is not intended to disrupt operations and will only apply to inventory on hand and ready for selection. Incorporation timeline is open but UNFI will use reasonable commercial means to integrate the technology. Once the system is implemented UNFI shall [*CONFIDENTIAL*].

13. Minimum Orders.

(a) Select Nutrition. If the total purchase price of Select Nutrition Product ordered (including OOS Products) meets the [*CONFIDENTIAL*] minimum order amount, UNFI will ship the Select Nutrition Products without a shipping fee. If WFM does not order the above minimum amount of Select Nutrition Products, WFM will be charged the cost of shipping to be a minimum of a [*CONFIDENTIAL*] fee.

(b) Other UNFI Parties. Except for the [*CONFIDENTIAL*] minimum purchase requirement for all WFM Locations, all WFM Locations in [*CONFIDENTIAL*] and outside of the U.S. are excluded from this Section 13(b). WFM will use reasonable commercial efforts to maintain a national average minimum order amount of [*CONFIDENTIAL*] for WFM Stores and [*CONFIDENTIAL*] for other WFM Locations. Any WFM Store ordering on average less than [*CONFIDENTIAL*] per order will make reasonable attempts towards increasing the WFM Store’s average order to at least [*CONFIDENTIAL*]. In no event will UNFI be required to deliver an order that is less than [*CONFIDENTIAL*]. Order amounts will be based upon the total purchase price of Product ordered including the [*CONFIDENTIAL*] and OOS Products. UNFI will not charge any fee for failure to satisfy the minimum order amount. If WFM fails to maintain a national average minimum order amount of [*CONFIDENTIAL*] for WFM Stores and [*CONFIDENTIAL*] for other WFM Locations, UNFI will notify WFM and WFM will take reasonable efforts to increase minimum order amounts.

14. Auditing.

(a) Support for WFM Audit. Notwithstanding any language to the contrary, UNFI agrees to assist WFM with [*CONFIDENTIAL*]. In addition, UNFI agrees to [*CONFIDENTIAL*].

(b) Records and Documentation and the Right to Inspect. UNFI will maintain books, records, reports and documentation relating to its performance of this Agreement including, but not limited to, [*CONFIDENTIAL*] for a period of time, but in any case, not less than three years. Upon 21 days written notice UNFI will provide WFM and its designees access to [*CONFIDENTIAL*] for inspection during UNFI’s normal working hours. UNFI agrees to provide copies of any of the foregoing if requested by WFM. Alternatively, upon 21 days written notice from WFM, UNFI will send [*CONFIDENTIAL*] to a location of WFM’s choice for inspection by WFM or its designees (or 60 days if the documentation is over twelve months old). Upon WFM’s satisfactory conclusion of the audit, WFM will return all copies of books, records, reports and documentation. In addition, UNFI will provide WFM and its designees with [*CONFIDENTIAL*]. Further, UNFI agrees to provide WFM with [*CONFIDENTIAL*]. The parties agree that within the six months following execution of this Agreement, UNFI will [*CONFIDENTIAL*].

(c) Payment. If, as a result of any WFM audit there is evidence that WFM was overcharged or did not receive any amount due, then UNFI will promptly pay WFM the amount thereof. In addition, UNFI will promptly pay a [*CONFIDENTIAL*]. If the amount payable to WFM exceeds 2% of the aggregate amount that WFM should have been charged or was due, UNFI will promptly pay the applicable reasonable audit expense.

(d) UNFI’s Annual Internal Audit Results. UNFI agrees to provide WFM documentation of [*CONFIDENTIAL*].

15. Personnel.

(a) National Account Manager and Channel Account Managers.

(i) UNFI will continue to provide [*CONFIDENTIAL*] a UNFI employee to serve as a National Account Manager for WFM’s account with UNFI. The primary responsibility for the National Account Manager is to be a liaison and singular point of contact between UNFI and WFM. The UNFI National Account Manager’s duties will be designated by UNFI but will all pertain to WFM’s account. The UNFI National Account Manager will reside in Austin, Texas and at WFM’s option, maintain an office at WFM Headquarters.

(ii) Channel Account Manager. UNFI will continue to provide [*CONFIDENTIAL*] the [*CONFIDENTIAL*] Channel Account Managers that are currently in place. The primary responsibility of the Channel Account Manager is to be a liaison and singular point of contact between UNFI and the WFM Regions. The UNFI Channel Account Manager’s duties will be designated by UNFI but will pertain to WFM’s account. UNFI shall [*CONFIDENTIAL*].

(b) National Promotions Coordinator. UNFI will designate a UNFI employee to serve as a WFM National Promotions Coordinator. The National Promotions Coordinator’s specific duties will be designated by UNFI but will all pertain to WFM’s account. The National Promotions Coordinator will draft WFM National Promotion Pre-orders subject to final approval by WFM and perform such other duties as the parties shall mutually agree. The Promotions Coordinator will reside in Austin, Texas and at WFM’s option, maintain an office at WFM Headquarters. UNFI has [*CONFIDENTIAL*] weeks from the Effective Date to hire a National Promotions Coordinator.

(c) Contract Manager. UNFI will designate a UNFI employee to serve as a WFM Contract Manager. The Contract Manager’s specific duties will be designed by UNFI but will pertain to WFM’s account. The Contract Manager will help ensure that UNFI is in compliance with this Agreement and act as the liaison to WFM for auditing purposes. Further, the Contract Manager will conduct continuous self-auditing.

(d) Appointment Criteria. The individuals filling the National Account Manager, Channel Account Manager and National Promotions Coordinator positions are subject to WFM’s reasonable satisfaction. If WFM requests the replacement of any UNFI personnel for any non-discriminatory reason, UNFI will use commercially reasonable efforts to promptly replace such individuals with new, competent personnel reasonably satisfactory to WFM.

(e) WFM Store Support. UNFI will [*CONFIDENTIAL*]. UNFI will continue to provide assistance for new and relocated WFM Stores as reasonably requested by WFM.

(f) Promotions Administration.

(i) Administration Activity. UNFI will administer the EDLC Program and the collection of scan-back charges and WFM advertising fees (the “Promotions Funds”). Each calendar month, WFM shall [*CONFIDENTIAL*]. UNFI shall [*CONFIDENTIAL*].

(ii) Administration Fee. WFM shall pay UNFI [*CONFIDENTIAL*] per calendar year for the collection of the Promotions Funds (the “Administration Fee”). The Administration Fee shall be paid each calendar month on a pro-rata basis as a deduction from the Promotion Funds payment. Beginning with calendar year 2016, the parties shall conduct an annual review of the volume and cost of UNFI’s administration activity set forth in this section and may increase or decrease the Administration Fee on an annual basis not to exceed [*CONFIDENTIAL*].

16. [*CONFIDENTIAL*].

17. UNFI Distribution Centers; Delivery Standards.

(a) Standards for Distribution Centers. UNFI represents and warrants that all UNFI DCs will be maintained and operated in accordance with all applicable laws, in compliance with industry standards (including industry sanitation standards), and in all material respects in accordance with UNFI’s warehousing and delivery standards, which will be available for review upon request by WFM. WFM may inspect the physical plant and inventory of any UNFI DC during normal business hours upon reasonable advance notice to the designated UNFI personnel,

but shall not impair or impede the business operations of the center. After 60 days prior notice and receipt of WFM’s consent, UNFI shall have the right to move service for WFM Stores from one UNFI DC to another. The proposed move shall not result in any increase in cost to WFM, and the parties will have had the opportunity to prepare and implement a plan for a transition to any new UNFI DC.

(b) Covenants for Delivery. UNFI shall, at UNFI’s election, transport Products on UNFI fleet or WFM-approved carriers to individual WFM Locations. UNFI shall comply with all applicable laws, including any regional or national limitations or guidelines regarding deliveries (e.g., municipal, residential or property owner imposed restrictions on delivery hours, parking of trucks, unacceptable levels of noise in residential areas, etc.).

(c) Delivery Time Windows. UNFI agrees to maintain the existing [*CONFIDENTIAL*] delivery time windows for delivery of Products to WFM Locations. With locations which have multiple deliveries in a day, this window only applies to the first delivery. [*CONFIDENTIAL*]. The parties agree that all deliveries are currently designated “AM” or “PM”. AM deliveries are defined as deliveries scheduled between [*CONFIDENTIAL*] AM and [*CONFIDENTIAL*] PM. PM deliveries are defined as deliveries scheduled between [*CONFIDENTIAL*] PM and [*CONFIDENTIAL*] AM. If a WFM Location requests a change in a delivery time window that UNFI is unable to meet, UNFI and WFM may negotiate [*CONFIDENTIAL*]. If the parties cannot agree on the amount of the [*CONFIDENTIAL*], UNFI agrees it will meet the new delivery time window the WFM Location requested. If changes are required by municipal, residential or property owners on delivery hours, parking of trucks, delivery routes, curfews, noise ordinances, lease covenants, neighborhood covenants and/or operating hours, then WFM and UNFI will work together to make the scheduling changes necessary to comply with such restrictions. The foregoing notwithstanding, if a WFM Location in any WFM Region requests a change from AM to PM, UNFI will attempt to make the requested change, but shall not be obligated to honor such change unless another WFM Location in the Region agrees to change from PM to AM. With respect to new WFM Locations in any WFM Region, if WFM chooses PM delivery for the new WFM Location, the next new WFM Location will be AM delivery. If UNFI [*CONFIDENTIAL*], UNFI shall [*CONFIDENTIAL*]. For example, if UNFI [*CONFIDENTIAL*], UNFI’s performance is [*CONFIDENTIAL*]. Had UNFI [*CONFIDENTIAL*]. Consequently, UNFI [*CONFIDENTIAL*]. This section shall not apply to [*CONFIDENTIAL*].

(d) Code Date Policy; Inventory Management. Products shall be distributed to WFM Locations in compliance with the Code Date Policy attached as Exhibit E related to the minimum number of days prior to expiration of the final code date, for Products, under which such Products will be accepted upon delivery to the WFM Locations. The Code Date Policy may be amended from time to time upon mutual agreement of the parties. Product delivered with less than the minimum code date shall be deemed OOS for purposes of Sections 3(a) and 12. UNFI agrees to deliver all Products on a FEFO inventory management basis, to ensure proper inventory turns and maximize available Product Code Dates. Receipt of short-coded Product at any WFM Location that is not sold or used within the code date will be fully credited to WFM in accordance with the Code Date Policy.

(e) Quality Standards. Products will be delivered palletized and shrink-wrapped and meet WFM’s quality standards and be free from damage including, but not limited to, temperature damage and be free from evidence of rodents or insects.

(f) Recalled Products. In the event that any Product is recalled or withdrawn (the “Recalled Product”), UNFI will use its personnel (or a third party retrieval service if UNFI reasonably believes the recall or withdrawal will be achieved faster, at less expense) to remove any Recalled Product from WFM Locations and shall dispose of or return any Recalled Products as required. In addition to the foregoing responsibilities, UNFI shall use its best efforts to cooperate with WFM in removing the Recalled Product and replenishing WFM Locations with replacement Products. UNFI shall [*CONFIDENTIAL*].

(g) Store Receiving. All Product shipments by UNFI to WFM Locations shall be evidenced by an invoice and signed by both parties. Shipments of Product shall be acknowledged as received by execution of the delivered invoice by a WFM employee at the WFM Location. A copy of each invoice shall be left with the WFM Location. In the event that UNFI computer system issues prevent UNFI from delivering WFM product with invoices, WFM agrees to accept a Bill of Lading for such delivery in lieu of an invoice.

(h) Passage of Title and Risk of Loss. Title and risk of loss for Products purchased pursuant to this Agreement shall pass upon delivery to WFM Locations when delivered by UNFI fleet or by independent carrier.

18. Indemnification; Insurance and Disaster Recovery and Business Continuity.

(a) UNFI Indemnity. UNFI shall indemnify, defend and hold harmless WFM and its parent, subsidiaries and affiliates, together with their stockholders, general and limited partners, members, managers, directors, officers, employees, agents, representatives, successors and assigns from and against any and all demands, claims, liabilities, losses, judgments, settlements, penalties, costs, expenses, fees (including reasonable fees of any attorneys, consultants or experts), interest, liens, encumbrances, causes of action, damages of any kind and any other obligations (together “Liabilities”) arising out of, relating to or otherwise based upon (i) any actual or alleged violation by UNFI of any federal, state or local law, including any statute, ordinance, administrative order, rule or regulation; (ii) any negligence or willful misconduct of any UNFI Parties or any of their employees or agents; (iii) the breach or alleged breach of any term of this Agreement; (iv) the employment, presence or activities of any UNFI Parties or their employee or contractor at any WFM Location or other property (including, but not limited to, all personal injury, wage and hour, wrongful termination, harassment, discrimination, workers compensation, disability, tort, strict liability or contract claims or demands); and (v) any Product recall or withdrawal or safety notice initiated as a result of a request by a government agency, local health authority or consumer protection agency or court action because of or resulting from a condition which existed at the time of delivery of the Product to the WFM Locations.

(b) WFM Indemnity. WFM shall indemnify, defend and hold harmless UNFI and its parent, subsidiaries and affiliates, together with their stockholders, general and limited partners, members, managers, directors, officers, employees, agents, representatives, successors and assigns from and against any and all Liabilities arising out of, relating to or otherwise based upon

(i) any actual or alleged violation by WFM of any federal, state or local law, including any statute, ordinance, administrative order, rule or regulation; (ii) any negligence or willful misconduct of WFM or any of its employees or agents; (iii) the breach or alleged breach of any term of this Agreement; and (iv) WFM’s failure to purchase UNFI’s Private Label SKU inventory and/or Control Label SKU inventory on condition that UNFI is in compliance with Section 6 of the Agreement and UNFI has no greater than (x) a [*CONFIDENTIAL*] supply of the Product based upon the WFM Locations’ past purchasing practices, or, if a new Product, projections provided in writing by WFM, or (y) the Product supplier’s minimum order quantity; and (v) the employment, presence or activities of WFM or its employee or contractor on any UNFI premises related to this Agreement (including, but not limited to, all personal injury, wage and hour, wrongful termination, harassment, discrimination, workers compensation, disability, tort, strict liability or contract claims or demands).

(c) Third Person Claims. Promptly after a party has received notice of or has actual knowledge of any Claim against it covered by a third party or the commencement of any action or proceeding by a third person with respect to any such Claim, such party (sometimes referred to as the “Indemnitee”) shall give the other party (sometimes referred to as the “Indemnitor”) written notice of such claim or commencement of such action or proceeding; provided, however, that the failure to give such notice will not affect the right to indemnification hereunder with respect to such Claim, action or proceeding, except to the extent that the other party has been actually prejudiced as a result of such failure. If the Indemnitor has notified the Indemnitee within thirty (30) days from the receipt of the foregoing notice that it wishes to defend against the Claim, unless there exists a potential conflict of interest between the parties, then the Indemnitor shall have the right to assume and control the defense of the Claim by appropriate proceedings with counsel reasonably acceptable to the Indemnitee. The Indemnitee may participate in the defense, at its sole expense, of any such Claim for which the Indemnitor shall have assumed the defense pursuant to the preceding sentence, provided, however, that counsel for the Indemnitor shall act as lead counsel in all matters pertaining to the defense or settlement of such Claims, suit or proceeding other than Claims that in the Indemnitee’s reasonable judgment could have a material and adverse effect on Indemnitee’s business apart from the payment of money damages. The Indemnitee shall be entitled to indemnification for the reasonable fees and expenses of its counsel for any period during which the Indemnitor has not assumed the defense of any claim. The Indemnitor may not settle any Claim without obtaining a release for the benefit of the Indemnitee, unless the consent of the Indemnitee is obtained.

(d) Product Liability. UNFI acknowledges that it generally obtains indemnification agreements from the various manufacturers, suppliers, vendors or distributors of Products it purchases and sells. UNFI agrees to indemnify, defend and hold harmless WFM and its parent and affiliates, together with their stockholders, general and limited partners, members, managers, directors, officers, employees, agents, representatives, successors and assigns for any and all Liabilities ( including but not limited to, personal injury, illness or death of any person) arising from or pertaining to the handling, shipment, delivery, condition of consumption or use of any Product (other than Private Label SKUs), without regard to any negligence by UNFI related to such Product, except where the loss is determined to have arisen from the negligence of WFM. UNFI’s obligation to indemnify WFM for any Liabilities arising from any Products sold to WFM shall exist regardless of the existence or nonexistence of any such indemnification agreements from Product manufacturers, suppliers, vendors or distributors. Indemnification under this

section does not extend to Liabilities arising out of any Private Label SKUs, except where the Liability is attributable to the negligence or intentional acts or omissions of UNFI.

(e) Insurance. At all times during the Term and for a two (2) year period after its termination or expiration, UNFI shall maintain, at its expense, occurrence based insurance coverage (the “Insurance Coverage”) in the types and amounts as follows:

(i) Workers’ Compensation and Employer’s Liability insurance affording compensation benefits for all of its employees in an amount sufficient to meet all statutory requirements and employer’s liability insurance with limits of [*CONFIDENTIAL*] for each accident or disease.

(ii) Commercial General Liability Insurance with a bodily injury and property damage limit of [*CONFIDENTIAL*] per occurrence, [*CONFIDENTIAL*] per person/organization limit for personal and advertising injury coverage, [*CONFIDENTIAL*] general aggregate and [*CONFIDENTIAL*] products and completed operations aggregate inclusive of coverage for all premises and operations, contractual liability for this Agreement and product/completed operations coverage.

(iii) UNFI shall use its best efforts to obtain, within one (1) year of the execution of this Agreement, a Cyber Privacy/Network Security policy or equivalent that provides coverage, including but not limited Privacy and Network Security Liability, Regulatory Defense and Penalties, Media Liability, Privacy Notification and Expenses, Network Interruption, Data Asset Restoration, and Cyber Extortion with commercially reasonable limits for a company of UNFI’s size and business.

(iv) Automobile Liability Insurance with a combined single limit of [*CONFIDENTIAL*] per occurrence for injuries, including accidental death and property damage.

(v) Umbrella or Excess Liability Insurance with limits not less than [*CONFIDENTIAL*] per occurrence that provides additional limits for employer’s liability, commercial general liability, automobile liability and products liability insurance.

The Insurance Coverage will be from an insurance company classified by A M Best as a Class VII or larger with a Financial Strength Rating of at least A, A-. None of the Insurance Coverage amounts will be construed as a limitation on UNFI’s potential liability. Except for Workers’ Compensation and Employer’s Liability insurance, the insurance policies will not have a per incident deductible of greater than [*CONFIDENTIAL*] without the prior written consent of WFM. In connection with UNFI’s execution of this Agreement, UNFI will provide WFM with certificates of insurance evidencing all of the referenced insurance policies, which will provide that: (i) such insurance will not be cancelled unless WFM has been given at least 30 days’ advance written notice thereof; and (ii) such certificates will be renewed annually or as policy renewals occur. Except for Workers’ Compensation and Employers Liability, the required insurance policies will, at UNFI’s expense, name “Whole Foods Market, Inc. and its subsidiaries as additional insureds.”

(f) Disaster Recovery and Business Continuity. UNFI will have a Business Continuity Plan and Disaster Recovery Plan (or Emergency Action Plans for each DC) in place to ensure WFM an effective and efficient continuity of Product supply. UNFI shall provide a copy of its Business Continuity Plan and Disaster Recovery Plan (or Emergency Action Plans) to WFM as reasonably requested from time to time. UNFI shall; (i) notify WFM of any material change or modification in the Business Continuity Plan and Disaster Recovery Plan; and (ii) no more than once per year and at the request of WFM upon not less than six weeks advance notice, participate in a walk-through of UNFI’s Business Continuity and Disaster Recovery Plans (or Emergency Action Plans) provided that if UNFI has conducted a test within six months prior to such request the test results shall suffice in lieu of such walk-through. UNFI shall test, at UNFI’s expense, the Business Continuity Plan and Disaster Recovery Plan (or Emergency Action Plans) no less than once per year and promptly upon completing each test provide a copy of the test results to WFM. If WFM, acting reasonably, considers there to be a deficiency in the test results, UNFI agrees to work with WFM to fix the deficiency. The Business Continuity Plan and the Disaster Recovery Plan (or Emergency Action Plans) shall include all of UNFI’s distribution centers. When a new distribution center is introduced the Business Continuity Plan and Disaster Recovery Plan (or Emergency Action Plans) will be promptly updated by UNFI to include the new distribution center. The Business Continuity Plan and Disaster Recovery Plan (or Emergency Action Plans) will include, without limitation, the actions that UNFI will take in the event the distribution environment and/or UNFI’s distribution centers are subject to a Force Majeure Event, its computer network experiences a network disruption or security breach or other unforeseen circumstance.

19. Compliance with Laws.

(a) General. Each party covenants and agrees during the Term it will fully comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local government entity, agency or instrumentality applicable to its responsibilities hereunder. Each party agrees that it shall comply with all certification procedures and regulations. Each party shall promptly notify the other party after it becomes aware of any material adverse proposed law, regulation or order that, to its knowledge, may or does conflict with the parties’ obligations under this Agreement. The parties will then use reasonable efforts to promptly decide whether a change may be made to the terms of this Agreement to eliminate any such conflict or impracticability.

(b) Organic Documentation. In connection with any organic Products, UNFI shall take all such actions as required by any federally recognized certifying organization (or as required by law) in order for such Products to be certified as organic, including, without limitation, the maintenance of any required documentation and the taking of the necessary precautions to prevent Product compromise. UNFI shall provide all documentation relating to the foregoing to WFM at WFM’s request.

20. Termination Provisions.

(a) Either party may terminate this Agreement immediately by providing written notice to the other party (unless otherwise provided below) for cause upon the occurrence of any one or more of the following:

(i) a failure to make any material payment, credit, rebate or other remittance of monetary consideration provided for herein (other than in good faith in connection with a dispute of which notice was given) or failure to remedy any delinquent material payment, credit, rebate or other remittance within fifteen (15) business days after notice (which failure to cure shall be an event of default); and

(ii) a breach of any non-monetary obligations under the Agreement, and failure to cure such breach after 30 days’ prior written notice of the breach.

(b) WFM may terminate this Agreement immediately by providing written notice to UNFI (unless otherwise provided below) for cause upon the occurrence of any one or more of the following:

(i) a significant competitor of WFM in the natural and organic grocery business, or [*CONFIDENTIAL*] or any of its subsidiaries, parents or affiliates, including [*CONFIDENTIAL*], acquires more than a 20% equity interest in UNFI or its direct or indirect affiliates;

(ii) The results of any audit of UNFI show evidence of willful misconduct on the part of UNFI or any of its employees or representatives of a nature that is material in either dollar amount or percentage to total amounts or to the operational units affected, or that could reasonably result in a material impact to the reputation or operational performance of WFM;

(iii) It is determined by any regulatory agency, or UNFI publicly announces, that any certification given by officers of UNFI relating to internal controls was materially incorrect. Regulatory violations by UNFI where the violations or the corrective action required materially and adversely affect the continued ability of UNFI to perform all or any material portion of the Agreement; or

(iv) The quality of service provided by UNFI does not meet industry standards, and UNFI has failed to remedy service problems within [*CONFIDENTIAL*] days after written notice of breach by WFM.

(c) If this Agreement is assigned by WFM pursuant to a Change in Control (as such term is defined in Section 23(e)) and UNFI consents to such assignment, WFM agrees that as of the date of the Change in Control, collectively the WFM Regions (excluding all WFM Stores outside of the continental United States) are obligated to purchase from the UNFI Parties, at a minimum, [*CONFIDENTIAL*] in Products as were purchased [*CONFIDENTIAL*]. UNFI’s rights under this subsection (c) are in addition to, and not in lieu of, its rights to renegotiate pricing for reduced purchase volumes, as set forth in Section 3(a). This Subsection (c) shall not affect either party’s obligations with respect to actual purchases, to include all discounts, rebates, etc., which shall continue to apply.

21. Representations and Warranties of UNFI. UNFI represents and warrants to WFM as follows, and such representations and warranties shall survive the Effective Date:

(a) Sufficient Personnel to Perform Obligations. UNFI (i) has sufficient personnel with adequate training and expertise to perform its obligations as contemplated hereunder in the

time frames contemplated herein and (ii) will use reasonable care in the performance of UNFI’s obligations under this Agreement.

(b) National Organic Standards. UNFI has adequate processes and systems in place, and has adequately educated its personnel, and that it will fully comply with all federal, state and local regulations relating to handling and labeling of organic Products, including, but not limited to, the National Organic Standards as promulgated by the U.S. Department of Agriculture and as such applies to UNFI as a handler or processor of organic foods. UNFI acknowledges that WFM has placed substantial reliance on UNFI to handle various foods for human consumption so as to not invalidate any “organic” designation of such foods.

(c) Computer Systems. UNFI has proper security safeguards in place to ensure the confidentiality of all of WFM’s data as contained in UNFI’s computer systems. All such systems will perform without material defect or error in compliance with the performance standards set forth in this Agreement. UNFI has a disaster recovery program in place to ensure that, in the event of a catastrophic destruction of any portion of UNFI’s computer systems, wherever located, UNFI will be able to recover all necessary data to continue to perform its obligations hereunder in substantially the time frames contemplated herein.

(d) UNFI Distribution Center’s Condition and Capacity. All of the UNFI DCs servicing WFM will be maintained and operated in accordance with UNFI warehousing and delivery standards. Such UNFI DCs have the operational systems required to support the obligations of UNFI as set forth in this Agreement, and all such UNFI DCs have adequate capacity to order, store and deliver Products in accordance with the terms of this Agreement and in the amounts contemplated by WFM. All the UNFI DCs shall have sufficient security measures in place prior to receipt of Products for WFM to ensure that such Products are not tampered with or adulterated in any manner, and that all such Products shall be maintained at temperatures and other storage conditions necessary to preserve the freshness and integrity of the Products.

(e) Financial Controls and Information Provided to Auditors. UNFI has sufficient internal controls over financial reporting that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. All information requested by WFM (i) will be provided by UNFI to WFM and/or its designated auditors, (ii) will be in the format required in this Agreement or agreed upon by the parties, and (iii) will be true and correct in all respects, except as otherwise disclosed to WFM and/or its designees at the time of disclosure.

(f) Transfer of Title. Upon delivery of Products, UNFI will transfer title and ownership of Products to the WFM Locations. Upon WFM’s purchase of Products, the Products will be free of any liens, claims or other encumbrances.

(g) Recall. UNFI has a reliable recall system and policies in place including appropriate tracking, coding and accounting systems for all Products.

22. Representations and Warranties of WFM. WFM represents and warrants to UNFI as follows, and such representations and warranties shall survive the Effective Date:

(a) Sufficient Personnel to Perform Obligations. WFM represents that it has sufficient personnel with adequate training and expertise to perform its obligations as contemplated hereunder in the time frames contemplated herein.

(b) Computer Systems. WFM has proper security safeguards in place to ensure the confidentiality of all of UNFI’s data as contained in WFM’s computer systems. All such systems will perform without material defect or error in compliance with the performance standards set forth in this Agreement. WFM has a disaster recovery program in place to ensure that, in the event of a catastrophic destruction of any portion of WFM’s computer systems, wherever located, WFM will be able to recover all necessary data to continue to perform its obligations hereunder in substantially the time frames contemplated herein.

23. Miscellaneous.

(a) Binding Effect. This Agreement, including its exhibits, supersedes all prior agreements between UNFI and WFM and is the only agreement between UNFI and WFM, either oral or in writing relating to the subject matter hereof.

(b) Force Majeure. “Force Majeure” events shall be events beyond the reasonable control of a party (and not through the fault or negligence of such party) that make timely performance of an obligation not possible. Force Majeure events are those that are not reasonably foreseeable with the exercise of reasonable care, nor avoidable through the payment of nonmaterial additional sums. In the event of a Force Majeure, the party so affected shall give prompt written notice to the other party of the cause and shall take whatever reasonable steps are necessary to relieve the effect of such cause as rapidly as possible.

(c) Governing Law; Forum and Jurisdiction; Waiver of Punitive and Similar Types of Damages. The relationship of the parties hereto and all claims arising out of or related to that relationship, including, but not limited to, the construction and interpretation of any written agreements, including this Agreement, shall be governed by the substantive laws of the State of Delaware (without regard to conflicts of law principles). The parties agree and consent to the jurisdiction of the state and federal courts located in Chicago, Illinois and acknowledge that such courts are proper and convenient forums for the resolution of any actions between the parties with respect to the subject matter of this Agreement, and agree that, in such case, these courts shall be the sole and exclusive forums for the resolution of any actions between the parties with respect to the subject matter hereof. The parties hereby waive any right to a jury trial under any applicable law. The parties also waive any and all right to punitive, incidental or consequential damages, except to the extent such damages are included in any award for which indemnification is sought pursuant to the terms of this Agreement or an action is brought for breach of provisions relating to confidential information. The prevailing party in any action to enforce this Agreement shall be entitled to recover all related costs of the suit, including reasonable attorneys’ fees and court costs.

(d) Confidentiality. In connection with this Agreement, the parties may acquire or develop confidential information relating to each party and such party’s businesses that includes quality standards, business methods, sales data and trends, Intellectual Property, purchasing history, pricing, marketing and pricing strategies, technical data, general or specific customer

information and the terms of this Agreement (“Confidential Information”). The term Confidential Information shall include computer software, source code, object code, hardware configurations and all other information relating to a party, its business and prospects, learned by the other party or disclosed by such party from time to time to the other party in any manner, whether orally, visually or in tangible form (including, without limitation, documents, devices and computer readable media) and all copies, improvements, derivatives and designs thereof, created by either party whether owned by or licensed to such party. The term Confidential Information shall also be deemed to include all notes, analyses, compilations, studies, interpretations or other documents prepared by a party that contain, reflect or are based upon the information furnished to such party by the other party pursuant hereto. The parties (i) will hold all Confidential Information in strict confidence, (ii) will only use Confidential Information for the purpose of performing under this Agreement, and (iii) will not disclose any Confidential Information to any third party (other than to affiliates or subsidiaries and their own outside legal, accounting, insurance or financial advisors or other consultants as necessary) without the other party’s prior written consent. Without limiting the foregoing, UNFI will not use any Confidential Information in connection with the marketing, distribution or sale of UNFI’s Products other than to WFM. UNFI will not use, sell or share any Confidential Information, including, but not limited to, WFM sales data in connection with Infoshare, SIS or any other similar type of data compilation, without the written consent of WFM. The foregoing applies even if the WFM Confidential Information is in a generic format that does not specifically reference WFM. The parties will use the highest degree of care it uses to protect its own confidential information to maintain the confidentiality of all Confidential Information but in no event less than a reasonable degree of care. Confidential Information shall not include any information that:

(i) was in a party’s possession, prior to disclosure by the other party hereunder, provided such information is not known by such party to be subject to another confidentiality agreement with or secrecy obligation to the other party;

(ii) was generally known in the grocery industry at the time of disclosure to a party hereunder, or becomes so generally known after such disclosure, through no act of such party;

(iii) has come into the possession of a party from a third party who is not known by such party to be under any obligation to the other party to maintain the confidentiality of such information; or

(iv) was independently developed by a party without the use of any Confidential Information of the other party, to the extent that such independent development is reasonably established by such first party to the other party.

Notwithstanding the foregoing, nothing herein shall prevent the filing of a copy of this Agreement as an exhibit to any filing required by a regulatory agency having jurisdiction over either party, provided that a party required to file a copy hereof shall notify the other party of the filing and request and use its best efforts to obtain confidential treatment of all financial terms of this Agreement prior to the filing thereof. In addition, either party may disclose the terms of this Agreement pursuant to a valid subpoena, provided such party gives the other party reasonable

prior notice of the service of any subpoena to permit the other party to seek a protective order, and seeks confidential treatment of all financial terms hereof.

If a party breaches or threatens to breach any provision of this Section 23(d), the parties agree that the non-breaching party’s remedy at law is inadequate. Therefore, in the event of such breach or threatened breach, in addition to any other remedy which may be available to the non-breaching party, the non-breaching party shall be entitled to seek, without posting a bond, preliminary or permanent injunctive and/or other equitable relief restraining the breaching party, or any of its agents or employees, from breaching or acting in any manner inconsistent with the conduct or performance required by this Section 23(d). In addition to the foregoing, a party may demand from and be entitled to immediately receive payment from the other party, as liquidated damages for a breach of Section 23(d), if such breach is determined by a court of competent jurisdiction, the amount of [*CONFIDENTIAL*] in immediately available funds. The disclosure of the same information at the same time to more than one third-party shall only be regarded as a single violation for purposes of this subsection (d). The parties agree that (A) the [*CONFIDENTIAL*] in liquidated damages are a reasonable approximation of the injury that would be suffered by a party in the event of a breach of this Section 23(d) by either party; (B) the amount of actual loss cannot be precisely determined, but such liquidated damages provided for in this Section 23(d) are fair and reasonable; (C) all such payments made under this Section 23(d) shall be paid as liquidated damages and not as a penalty; (D) all such payments due under this Section 23(d) shall be made as an offset against all amounts due and owing under this Agreement.

(e) Amendment; Assignment; Binding Effect. This Agreement may not be amended or modified except by a writing signed by an authorized officer of each party specifically referencing this Agreement and the intent to amend or modify. It is agreed that neither party shall transfer or assign this Agreement or any part hereof or any right arising hereunder, by operation of law or otherwise, without the prior written consent of the other party. A “Change of Control” shall be deemed to be an assignment for purposes of this Agreement. Any purported assignment (including a Change of Control) without consent shall be void and of no force or effect. Subject to the foregoing, this Agreement shall be binding on the respective parties and their permitted successors and assigns. A “Change of Control” means (A) any transaction or series of related transactions in which a party or group, acting in concert, acquires beneficial ownership of more than 50% of the equity interests in a party or its direct or indirect parent, or (B) a merger or consolidation of another entity with or into a party or its direct or indirect parent, with the effect that any third party becomes beneficial owner of more than 50% of the equity interests of a party or its direct or indirect parent. Notwithstanding anything to the contrary stated above, WFM may assign this Agreement to any direct or indirect affiliate without obtaining the consent of UNFI and in such event no Change of Control shall be deemed to have occurred.

(f) Entire Agreement; Survival. All exhibits to this Agreement are incorporated by reference. This Agreement (and any documents referred to herein) represents the entire agreement and understanding of the parties with respect to the matters set forth herein, and there are no representations, warranties or conditions or agreements (other than implementing invoices, purchase orders and the like necessary to implement this Agreement) not contained herein that constitute any part hereof or that are being relied upon by any party hereunder. In the event this Agreement terminates, all claims arising prior to such termination shall survive such

termination, and in addition, the following sections shall survive any such termination: 4, 7-10, 12-14 and 17-23.

(g) Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall be enforced.

(h) Publicity. Both parties shall agree on any press release related to the signing of this Agreement; provided, however, that either party may release information reasonably deemed necessary by their respective securities counsel under applicable governing laws. Except for the foregoing, UNFI will not (i) use for any reason any name, logo or trademark of Whole Foods Market, Inc., WFM Purchasing or any of their respective affiliates or subsidiaries in any manner suggesting that UNFI has a relationship with Whole Foods Market, Inc., WFM Purchasing or any of their respective affiliates or subsidiaries (ii) issue any press release or make any other statement to the press or authorize any publication to print anything that mentions Whole Foods Market, Inc., WFM or any of their respective affiliates or subsidiaries by name or refers to this Agreement or the transactions contemplated herein or (iii) disclose the content or existence of this Agreement to any third party.

(i) Notices. Unless otherwise stated, all notices given in connection with this Agreement will be in writing and will be deemed delivered at the time of personal delivery or 3 business days after being sent by facsimile (with a confirmation) or mailed by express, certified or registered mail, or sent by a recognized national or international courier, as appropriate (in all cases postage prepaid and return receipt requested). Notices shall be addressed to the parties at the addresses set forth below or to such other address as shall have been so notified to the other party in accordance with this Section. Notices to UNFI shall be addressed to: President and Chief Executive Officer, 313 Iron Horse Road, Providence, RI 02908, Phone: 401.528.8634, with a copy to the Senior Vice President and General Counsel. Except as set forth herein, notices to WFM shall be addressed to: Global Vice President of Distribution, 550 Bowie Street, Austin, TX 78703, with a copy to General Counsel.

(j) No Third Party Beneficiaries. Nothing in this Agreement, whether expressed or implied, is intended to confer on any person other than the parties to this Agreement or their parent, affiliates or subsidiaries, respective successors or permitted assigns, any rights, remedies, obligations or liabilities.

(k) Independent Contractors. In all matters relating to this Agreement both parties shall be acting solely as independent contractors and shall be solely responsible for the acts of their respective employees, contractors and agents. Employees, agents or contractors of one party shall not be considered employees, agents or contractors of the other party. Nothing contained in this Agreement shall be deemed or construed to create a partnership or joint venture, to create the relationship of an employer-employee or principal-agent, or to otherwise create any liability for or obligation of either party whatsoever with respect to the indebtedness, liabilities, and obligations of the other party. Neither UNFI nor any employee or representative of UNFI shall at any time wear a “Whole Foods Market” (Registered Trademark) uniform or in any way hold himself out to be an employee of WFM or any WFM Affiliate. The parties specifically agrees that this Agreement shall not be deemed to grant or imply that either party or any employee of

either party is authorized to sign, contract, deal, or otherwise act in the name of or on behalf of the other party.

(l) Titles and Headings; Counterparts; Facsimile/Electronic Signature; Preprinted Forms. The titles and headings to Sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement, and will become a binding agreement when one or more counterparts have been signed by each party and delivered to the other party. Electronic or facsimile signatures shall be deemed original signatures for purposes of execution of this document. This Agreement, including its attachments, supersedes all prior agreements between UNFI and WFM or any WFM Affiliate and is the only agreement between WFM and UNFI, either oral or in writing, relating to the matters set forth herein. Each party agrees that use of pre-printed forms, including, but not limited to email, purchase orders, acknowledgements or invoices, is for convenience only and all pre-printed terms and conditions stated thereon, except as specifically set forth in this Agreement, are void and of no effect.

(m) Negotiation of Agreement. Each party and its counsel have cooperated in the drafting and preparation of this Agreement and the documents referred to herein, and any drafts relating thereto shall be deemed the work product of the parties and may not be construed against any party by reason of its preparation. Any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the party that drafted it is of no application and is hereby expressly waived.

(n) Termination of Prior Agreement. Upon execution of this Agreement, the Agreement for the Distribution of Products dated as of September 26, 2006, as amended, that is due to expire on September 26, 2020, shall terminate.

(o) [*CONFIDENTIAL*].

(p) Changes. Without the prior written consent of WFM, UNFI [*CONFIDENTIAL*]. In an effort to [*CONFIDENTIAL*]. Nothing in this section shall [*CONFIDENTIAL*].

[Signature Page to Follow]

WHEREAS, the parties have entered into this Agreement as of October 30, 2015 with the intent to be bound as of the Effective Date.

Whole Foods Market Distribution, Inc.,

a Delaware corporation

By: /s/ Walter Robb

Walter Robb, Co-Chief Executive Officer

United Natural Foods, Inc.

By: /s/ Steven L. Spinner

Steven L. Spinner, President and Chief Executive Officer

List of Exhibits

Exhibit A: WFM Periods

Exhibit B: Fuel Surcharge

Exhibit C: Credit Policies

Exhibit D: [*CONFIDENTIAL*]

Exhibit E: Code Date Policy

Exhibit F: Private Label SKU and Control Label SKU Overstock and Short Dated Agreement

Exhibit G: EDCL Bulk Products Process

Exhibit H: Definitions of [*CONFIDENTIAL*] and “Fingerprint”

Exhibit I: UNFI Supplier Packet



Whole Foods Market, Inc.	Exhibit A
Fiscal Period Calendar

Period

Week

Fiscal

2015

Fiscal

2016

Fiscal

2017

Fiscal

2018

Fiscal

2019

Fiscal

2020

Fiscal

2021

Fiscal

2022

Fiscal

2023

Fiscal

2024

Fiscal

2025

10/5/2014

10/02/16

10/01/17

10/07/18

10/06/19

10/04/20

10/03/21

10/02/22

10/01/23

10/06/24

10/02/16

10/12/2014

10/09/16

10/08/17

10/14/18

10/13/19

10/11/20

10/10/21

10/09/22

10/08/23

10/13/24

10/09/16

10/19/2014

10/16/16

10/15/17

10/21/18

10/20/19

10/18/20

10/17/21

10/16/22

10/15/23

10/20/24

10/16/16

10/26/2014

10/23/16

10/22/17

10/28/18

10/27/19

10/25/20

10/24/21

10/23/22

10/22/23

10/27/24

10/23/16

11/2/2014

11/01/15

10/30/16

10/29/17

11/04/18

11/03/19

11/01/20

10/31/21

10/30/22

10/29/23

11/03/24

11/9/2014

11/08/15

11/06/16

11/05/17

11/11/18

11/10/19

11/08/20

11/07/21

11/06/22

11/05/23

11/10/24

11/16/2014

11/15/15

11/13/16

11/12/17

11/18/18

11/17/19

11/15/20

11/14/21

11/13/22

11/12/23

11/17/24

11/23/2014

11/22/15

11/20/16

11/19/17

11/25/18

11/24/19

11/22/20

11/21/21

11/20/22

11/19/23

11/24/24

11/30/2014

11/29/15

11/27/16

11/26/17

12/02/18

12/01/19

11/29/20

11/28/21

11/27/22

11/26/23

12/01/24

12/7/2014

12/06/15

12/04/16

12/03/17

12/09/18

12/08/19

12/06/20

12/05/21

12/04/22

12/03/23

12/08/24

12/14/2014

12/13/15

12/11/16

12/10/17

12/16/18

12/15/19

12/13/20

12/12/21

12/11/22

12/10/23

12/15/24

12/21/2014

12/20/15

12/18/16

12/17/17

12/23/18

12/22/19

12/20/20

12/19/21

12/18/22

12/17/23

12/22/24

12/28/2014

12/27/15

12/25/16

12/24/17

12/30/18

12/29/19

12/27/20

12/26/21

12/25/22

12/24/23

12/29/24

1/4/2015

01/03/16

01/01/17

12/31/17

01/06/19

01/05/20

01/03/21

01/02/22

01/01/23

12/31/23

01/05/25

1/11/2015

01/10/16

01/08/17

01/07/18

01/13/19

01/12/20

01/10/21

01/09/22

01/08/23

01/07/24

01/12/25

1^st Qtr

1/18/2015

01/17/16

01/15/17

01/14/18

01/20/19

01/19/20

01/17/21

01/16/22

01/15/23

01/14/24

01/19/25

1/25/2015

01/24/16

01/22/17

01/21/18

01/27/19

01/26/20

01/24/21

01/23/22

01/22/23

01/21/24

01/26/25

2/1/2015

01/31/16

01/29/17

01/28/18

02/03/19

02/02/20

01/31/21

01/30/22

01/29/23

01/28/24

02/02/25

2/8/2015

02/07/16

02/05/17

02/04/18

02/10/19

02/09/20

02/07/21

02/06/22

02/05/23

02/04/24

02/09/25

2/15/2015

02/14/16

02/12/17

02/11/18

02/17/19

02/16/20

02/14/21

02/13/22

02/12/23

02/11/24

02/16/25

2/22/2015

02/21/16

02/19/17

02/18/18

02/24/19

02/23/20

02/21/21

02/20/22

02/19/23

02/18/24

02/23/25

3/1/2015

02/28/16

02/26/17

02/25/18

03/03/19

03/01/20

02/28/21

02/27/22

02/26/23

02/25/24

03/02/25

3/8/2015

03/06/16

03/05/17

03/04/18

03/10/19

03/08/20

03/07/21

03/06/22

03/05/23

03/03/24

03/09/25

3/15/2015

03/13/16

03/12/17

03/11/18

03/17/19

03/15/20

03/14/21

03/13/22

03/12/23

03/10/24

03/16/25

3/22/2015

03/20/16

03/19/17

03/18/18

03/24/19

03/22/20

03/21/21

03/20/22

03/19/23

03/17/24

03/23/25

3/29/2015

03/27/16

03/26/17

03/25/18

03/31/19

03/29/20

03/28/21

03/27/22

03/26/23

03/24/24

03/30/25

4/5/2015

04/03/16

04/02/17

04/01/18

04/07/19

04/05/20

04/04/21

04/03/22

04/02/23

03/31/24

04/06/25

2^nd Qtr

4/12/2015

04/10/16

04/09/17

04/08/18

04/14/19

04/12/20

04/11/21

04/10/22

04/09/23

04/07/24

04/13/25

4/19/2015

04/17/16

04/16/17

04/15/18

04/21/19

04/19/20

04/18/21

04/17/22

04/16/23

04/14/24

04/20/25

4/26/2015

04/24/16

04/23/17

04/22/18

04/28/19

04/26/20

04/25/21

04/24/22

04/23/23

04/21/24

04/27/25

5/3/2015

05/01/16

04/30/17

04/29/18

05/05/19

05/03/20

05/02/21

05/01/22

04/30/23

04/28/24

05/04/25

5/10/2015

05/08/16

05/07/17

05/06/18

05/12/19

05/10/20

05/09/21

05/08/22

05/07/23

05/05/24

05/11/25

5/17/2015

05/15/16

05/14/17

05/13/18

05/19/19

05/17/20

05/16/21

05/15/22

05/14/23

05/12/24

05/18/25

5/24/2015

05/22/16

05/21/17

05/20/18

05/26/19

05/24/20

05/23/21

05/22/22

05/21/23

05/19/24

05/25/25

5/31/2015

05/29/16

05/28/17

05/27/18

06/02/19

05/31/20

05/30/21

05/29/22

05/28/23

05/26/24

06/01/25

6/7/2015

06/05/16

06/04/17

06/03/18

06/09/19

06/07/20

06/06/21

06/05/22

06/04/23

06/02/24

06/08/25

6/14/2015

06/12/16

06/11/17

06/10/18

06/16/19

06/14/20

06/13/21

06/12/22

06/11/23

06/09/24

06/15/25

6/21/2015

06/19/16

06/18/17

06/17/18

06/23/19

06/21/20

06/20/21

06/19/22

06/18/23

06/16/24

06/22/25

6/28/2015

06/26/16

06/25/17

06/24/18

06/30/19

06/28/20

06/27/21

06/26/22

06/25/23

06/23/24

06/29/25

3^rd Qtr

7/5/2015

07/03/16

07/02/17

07/01/18

07/07/19

07/05/20

07/04/21

07/03/22

07/02/23

06/30/24

07/06/25

7/12/2015

07/10/16

07/09/17

07/08/18

07/14/19

07/12/20

07/11/21

07/10/22

07/09/23

07/07/24

07/13/25

7/19/2015

07/17/16

07/16/17

07/15/18

07/21/19

07/19/20

07/18/21

07/17/22

07/16/23

07/14/24

07/20/25

7/26/2015

07/24/16

07/23/17

07/22/18

07/28/19

07/26/20

07/25/21

07/24/22

07/23/23

07/21/24

07/27/25

8/2/2015

07/31/16

07/30/17

07/29/18

08/04/19

08/02/20

08/01/21

07/31/22

07/30/23

07/28/24

08/03/25

8/9/2015

08/07/16

08/06/17

08/05/18

08/11/19

08/09/20

08/08/21

08/07/22

08/06/23

08/04/24

08/10/25

8/16/2015

08/14/16

08/13/17

08/12/18

08/18/19

08/16/20

08/15/21

08/14/22

08/13/23

08/11/24

08/17/25

8/23/2015

08/21/16

08/20/17

08/19/18

08/25/19

08/23/20

08/22/21

08/21/22

08/20/23

08/18/24

08/24/25

8/30/2015

08/28/16

08/27/17

08/26/18

09/01/19

08/30/20

08/29/21

08/28/22

08/27/23

08/25/24

08/31/25

9/6/2015

09/04/16

09/03/17

09/02/18

09/08/19

09/06/20

09/05/21

09/04/22

09/03/23

09/01/24

09/07/25

9/13/2015

09/11/16

09/10/17

09/09/18

09/15/19

09/13/20

09/12/21

09/11/22

09/10/23

09/08/24

09/14/25

9/20/2015

9/18/2016

9/17/2017

9/16/2018

9/22/2019

9/20/2020

9/19/2021

9/18/2022

9/17/2023

9/15/2024

9/21/2025

4^th

9/27/2015

9/25/2016

9/24/2017

9/23/2018

9/29/2019

9/27/2020

9/26/2021

9/25/2022

9/24/2023

9/22/2024

9/28/2025

Qtr

9/30/2018

9/29/2024

Exhibit B

Fuel Surcharge

The Fuel Surcharge amount, if any, will be set according to the table below.



Price Per Gallon	Surcharge Per Delivery
[CONFIDENTIAL]

Exhibit C

Option 1-Standard Credit Policy

Submitting Credits:

EXCEPT CONSUMER RETURNS, QUALITY AND RECALLS, ALL CREDITS MUST BE SUBMITTED WITHIN 48 HOURS OF DELIVERY. Please submit Consumer Returns within 2 weeks of the return date.

All credits must, be on the UNFI Claim Form, submitted one of the following ways:


•	Email (preferred)


•	UNFI Website (preferred)


•	Fax

To get the claim form or' for questions or assistance, contact your regional UNFI Claims Department.

Acceptable Credits


•	Billed Not Received- Product was billed on the invoice but missing from the delivery.


•	Mispick- Right pick label but wrong Product received.


•	Damage - Product was crushed or broken, damaged by leakage of another Product or otherwise damaged.


•	Short Code- The Product was received with to short of life given the code date (short code).

The minimum code varies by Product category - contact a UNFI Claims Representative for details.


•	Mis-Order - Ordered wrong Product, ordered too many, or changed mind, including any returns on Promo Allocations or Turnover Orders. [CONFIDENTIAL].


•	Quality - Product is within code but is spoiled or infested, has defective packaging or otherwise is not up to reasonable quality standards.


•	Consumer Return - As honored by manufacturers.


•	Pricing Error


•	Recall or Withdrawal

Unacceptable Credits


•	Seasonal suncare overstocks (excluding one cycle return at end of 2006 season). The broker or manufacturer may be able to help swap-out inventory.


•	Demo, sample and tester Product will not be handled as a credit. Contact the broker to request either a Turnover order for free Product or samples from the manufacturer.

Applying the Credit

A Credit Memo will be attached to your next invoice; apply it to a future payment. No deductions allowed,

Product Return

Keep the Product on hand until a Credit Memo number and disposition instructions are received, or credit may be denied. UNFI reserves the right to pick up any Product. However, infested Product may be quarantined (e.g. placed in the freezer), destroyed, or thrown away to prevent further infestation.

Product approved for return should be left for the UNFI driver to pick up on the next delivery, with a copy of the Credit Memo attached if possible. Don't return any Product unless a Credit Memo number has been issued.

Except for Quality, Short Code and Consumer Returns, all returned Product must be in restockable condition: original box, all original pieces, no markings on box, no price stickers, no price sticker residue, and no damage.

Option 2 – Full Allowance Credit Policy for Whole Foods Market

[*CONFIDENTIAL*]

Submitting All Other Credits:

Submit Quality and Recall credits as needed. Consumer Returns are submitted monthly. See acceptable credit guidelines as outlined below.

All other credits must be submitted within 2 business days of delivery (times below are local store times):


•	Sunday delivery = Credits due by Tuesday 4:30 PM


•	Monday delivery = Credits due by Wednesday 4:30 PM


•	Tuesday delivery = Credits due by Thursday 4:30 PM


•	Wednesday delivery = Credits due by Friday 4:30 PM


•	Thursday delivery = Credits due by Monday 4:30 PM


•	Friday delivery = Credits due by Tuesday 4:30 PM


•	Saturday delivery = Credits due by Tuesday 4:30 PM

All credits must be submitted in writing on the UNFI Claim Form. No phone or voice mail credits. Use phone numbers below only for questions or to request a UNFI Claim Form.

Acceptable Credits


•	Billed Not Received – One or more entire pallets or totes billed on invoice but missing from shipment


•	Damage – If all products on a pallet or in a tote are damaged.


•	Short Code – Product received with too short of a code life. Minimum code varies; contact UNFI Claims department for details.


•	Mis-Order – Ordered wrong product/too many, changed mind (including any returns on plus-outs, ad/promo allocations, and Turnover Orders). [CONFIDENTIAL]. Special order products are not returnable.


•	Pricing Error – Wrong price was charged on invoice.


•	Quality – Manufacturing problem has compromised product quality so that it does not meet reasonable quality or safety standards. Examples: product is within code but spoiled/infested; seal/packaging is defective.


•	Consumer Return – Customer did not like. As honored by manufacturers.


•	Recall or Withdrawal – Specific lot codes as listed on manufacturer’s recall/withdrawal notice.

Page 1 of 2

Unacceptable Credits


•	Billed Not Received – Anything less than an entire pallet/tote at one time (covered by credit allowance).


•	Damage - Anything less than a full pallet/full tote at one time (covered by credit allowance).


•	Mispick – Right pick label but wrong product received (covered by credit allowance).


•	Seasonal suncare overstocks – The broker may be able to swap-out inventory.


•	Demo, sample or tester product - The broker may provide samples or a Turnover Order for free product.

Applying the Credit

A Credit Memo will be attached to a future invoice or will arrive in the mail; apply it to a future payment. No deductions or short-pays allowed.

Returning the Product

Keep the product until a Credit Memo number and/or disposition instructions are received, or credit may be denied; UNFI reserves the right to pick up any product. However, infested product may be destroyed to prevent further infestation – write down the lot code and any other info from the packaging.

Product approved for return should be left for the UNFI driver to pick up on the next delivery. Don’t return product unless instructed to do so by a UNFI Claims Representative. Other than Short Code, Quality, Consumer Returns and Recalls, returned product must be in restockable condition: original box, all original pieces, no markings on box, no price stickers, no price sticker residue, and no damage.

Contact Info:

Make sure to direct Claims and inquiries to the appropriate UNFI division:

UNFI-West: UNFI-East:

Email: [email protected] Email: [email protected]

Fax: 866-673-8481 Fax: 603-256-8540

Phone: 800-679-2733 (direct line) Phone: 800-451-2525 ext. 43250

Page 2 of 2

Option 3 - Partial Allowance Credit Policy for Whole Foods Market

This option will provide a credit allowance to [*CONFIDENTIAL*].

Credit Allowance for Grocery

[*CONFIDENTIAL*].

Acceptable Credits for Grocery


•	Billed Not Received – One or more entire pallets or totes billed on invoice but missing from shipment


•	Damage – If all products on a pallet or in a tote are damaged.


•	Short Code – Product received with too short of a code life. Minimum code varies; contact UNFI Claims department for details.


•	Mis-Order – Ordered wrong product/too many, changed mind (including any returns on plus-outs, ad/promo allocations, and Turnover Orders). [CONFIDENTIAL]. Special order products are not returnable.


•	Pricing Error – Wrong price was charged on invoice.


•	Quality – Manufacturing problem has compromised product quality so that it does not meet reasonable quality or safety standards. Examples: product is within code but spoiled/infested; seal/packaging is defective.


•	Consumer Return – Customer did not like. As honored by manufacturers.


•	Recall or Withdrawal – Specific lot codes as listed on manufacturer’s recall/withdrawal notice.

Unacceptable Credits for Grocery


•	Billed Not Received – Anything less than an entire pallet/tote at one time (covered by credit allowance).


•	Damage - Anything less than a full pallet/full tote at one time (covered by credit allowance).


•	Mispick – Right pick label but wrong product received (covered by credit allowance).


•	Seasonal suncare overstocks – The broker may be able to swap-out inventory.


•	Demo, sample or tester product - The broker may provide samples or a Turnover Order for free product.


•	.

Credit Policy for Non Grocery

No allowance will be given and the departments will receive credit in any quantity for:


•	Billed Not Received


•	Damage


•	Mispick


•	Short Code


•	Mis-Order


•	Pricing Error


•	Quality


•	Consumer Return


•	Recall or Withdrawal

Unacceptable Credits for Non Grocery


•	Seasonal suncare overstocks – The broker may be able to swap-out inventory.


•	Demo, sample or tester product - The broker may provide samples or a Turnover Order for free product.

Submitting Credits for Grocery and Non Grocery

Submit Quality and Recall credits as needed. Consumer Returns are submitted monthly.

All other credits must be submitted within 2 business days of delivery (times below are local store times):


•	Sunday delivery = Credits due by Tuesday 4:30 PM


•	Monday delivery = Credits due by Wednesday 4:30 PM


•	Tuesday delivery = Credits due by Thursday 4:30 PM


•	Wednesday delivery = Credits due by Friday 4:30 PM


•	Thursday delivery = Credits due by Monday 4:30 PM


•	Friday delivery = Credits due by Tuesday 4:30 PM


•	Saturday delivery = Credits due by Tuesday 4:30 PM

All credits must be submitted in writing on the UNFI Claim Form. No phone or voice mail credits. Use phone numbers below only for questions or to request a UNFI Claim Form.

Applying the Credit

A Credit Memo will be attached to a future invoice or will arrive in the mail; apply it to a future payment. No deductions or short-pays allowed.

Returning the Product

Contact Info:

Make sure to direct Claims and inquiries to the appropriate UNFI division:

UNFI-West: UNFI-East:

Email: [email protected] Email: [email protected]

Fax: 866-673-8481 Fax: 603-256-8540

Phone: 800-679-2733 (direct line) Phone: 800-451-2525 ext. 43250

Page 2 of 2

Exhibit D

[*CONFIDENTIAL*].

Exhibit E

Code Date Policy


1.	[CONFIDENTIAL] -[CONFIDENTIAL]


2.	[CONFIDENTIAL]-[CONFIDENTIAL]


3.	[CONFIDENTIAL]- [CONFIDENTIAL]


4.	[CONFIDENTIAL]- [CONFIDENTIAL]


5.	[CONFIDENTIAL]- [CONFIDENTIAL].


6.	[CONFIDENTIAL]-[CONFIDENTIAL]


7.	[CONFIDENTIAL]-[CONFIDENTIAL]


8.	[CONFIDENTIAL] -[CONFIDENTIAL]


9.	[CONFIDENTIAL]-[CONFIDENTIAL]


10.	[CONFIDENTIAL]-[CONFIDENTIAL]


11.	[CONFIDENTIAL]- [CONFIDENTIAL]

Exhibit F

PRIVATE LABEL SKU AND CONTROL LABEL SKU OVERSTOCK AND SHORT-DATED AGREEMENT

1)Overstock and Short-Dated responsibility chart:



DRY/FROZEN [CONFIDENTIAL]	UNFI	WFM

REFRIGERATED (with normally 30 days minimum code) UNFI WFM

[*CONFIDENTIAL*]


2)	WFM authorizes in advance these autoships:

DRY/FROZEN- Total quantity divided proportionally between the WFM Stores serviced by the UNFI DCc at which the Product is inventoried at 6 weeks from expiration.

DAIRY- Total quantity divided proportionally between the WFM Stores serviced by the UNFI DC at which the Product is inventoried at 3 weeks from expiration.

If the initial notice given is less than 6 weeks on dry/frozen, and less than 3 weeks on refrigerated, UNFI will remove the percentage of stock it is responsible for before performing any autoships. This way the least possible amount of short-dated product is shipped to WFM Stores. Any Product removed from inventory will be food banked or otherwise donated by UNFI.

3)UNFI will automatically remove from inventory any products:

DRY/FROZEN- Dated 2 weeks or less from expiration

DAIRY- Dated 1 week or less from expiration

Loss will be assigned as noted in section 1above, and debits or other reimbursement will be

arranged with WFM if appropriate.

4)UNFI and WFM agree that unusual circumstances may justify a different course of action than would otherwise be indicated by this agreement, and that Refrigerated products that normally have less than 30 days minimum code will be handled on a case-by-case basis.

Exhibit G

EDLC Bulk Products Process

1.Criteria for establishing EDLC Bulk Products. WFM shall maintain a list of monitored bulk Products. The initial monitored list is set forth below:

[*CONFIDENTIAL*]

In order to change the price or establish a bulk Product under the EDLC Program the

following process shall be utilized:


•	Does the cost change email include a monitored item? If yes, go to next step.


•	[CONFIDENTIAL].


•	[CONFIDENTIAL].


•	The earliest regional cost-plus price change effective date will be considered the national effective date.


•	[CONFIDENTIAL].


•	[CONFIDENTIAL].


•	If the item currently has an EDLC, it should be ended the day before the national effective date.


•	Email [email protected] with instructions to end any existing EDLC and/or enter the new EDLC. Ideally, EDLC updates should be data-entered before the 1^st day of the pricing month prior to the earliest price change date (so they'll be picked up by the EDI price file for that month). Copy the appropriate WFM contact on this email for auditing purposes.


2.	Business Analysis. The appropriate UNFI party shall end and/or enter the EDLC's and

confirm internally when that process is complete.

3.Additional Notes. WFM price changes will automatically be picked up by the EDI price files, and included in any future bid/cost reports. Because UNFI pricing may include inbound freight and also because the Delivery Upcharge component is based on UNFI's regular landed· cost, the final prices to WFM may sometimes vary by UNFI DC.

Exhibit H

Section A:

[*CONFIDENTIAL*].

Section B:

"Fingerprint”- Defined as an unloading activity type where the order quantities delivered do not meet the "DC minimum pallet height requirements'' and therefore require additional handling before being moved to a warehouse storage location. UNFI and WFM agree to negotiate DC minimum pallet height requirements that reasonably meet the needs of both parties.

Exhibit I

UNITED NATURAL FOODS, INC.

CODE OF CONDUCT FOR SUPPLIERS

UNFI has established a set of six Core Values. These Core Values inspire our approach to business and are fundamental to building successful relationships with all our stakeholders: Customers, Suppliers, Associates and the Environment.

• Integrity and respect in all of our actions

• Trust and accountability in all relationships

• Open and honest communication with our employees

• Profitable growth of the organization

• A safe and healthy work environment

• Social and environmental responsibility for the health of the planet

UNFI believes that our supplier partners play a major role in shaping and maintaining our reputation. As we strive to apply these values to our business practices every day, we now ask that our supplier partners comply with a Code of Conduct that will allow them to support these same values. UNFI sees this as an opportunity to extend good business practices throughout the supply chain and ultimately create a higher standard of business in the world. We intend to use your support of this policy as a way to raise awareness and standards.

Suppliers doing business with UNFI will:

COMPLY WITH APPLICABLE LAWS AND PRACTICES:

Suppliers will comply with all local and national laws and regulations in the jurisdictions in which they do business.

COMPLY WITH THE FOLLOWING CONDITIONS OF EMPLOYMENT:

Compensation: Suppliers will compensate their employees with wages and benefits which are in compliance with the local and national laws and regulations of the jurisdictions in which they do business.

Hours of Labor: Suppliers must ensure that working hours are consistent with local regulations. If regulations do not address standard working hours, suppliers must ensure that work hours are not excessive or unfair.

Forced Labor: Suppliers will not use forced labor. Suppliers represent their compliance with the California Transparency in Supply Chains Act of 2010, and compliance with existing local and federal laws regarding slavery and human trafficking in the county or countries in which their business with UNFI is being conducted.

Child Labor: Suppliers or their subcontractors will not use child labor. Child labor is defined for these purposes as any person employed at an age younger than the legal minimum age for working in any specific jurisdiction.

Discrimination /Rights: Suppliers will not discriminate on the basis of race, color, national origin, gender, religion, disability, sexual orientation, and other similar factors in their employment practices.

PROVIDE A SAFE WORKPLACE ENVIRONMENT:

Health and Safety: Suppliers will insure that adequate accommodations for the health and safety of workers have been implemented and are maintained.

Security: Suppliers will comply with all USDA requirements for product safety and maintain adequate security at all production and warehousing facilities to prevent dangerous exposures to health hazards or perilous cargo.

In addition, UNFI would like to be informed of your companies’ activities in certain areas of interest. Please include information related to your company’s efforts regarding environmental impact and social responsibility as well as your compliance with the California Transparency in Supply Chains Act of 2010, along with your signed copy of this code of conduct:

Finally, we are all aware that some parts of the world demonstrate better efforts regarding compliance with the above conditions of employment than others. If you are doing business with or in any country in areas of the world known for employing labor practices inconsistent with the above, including the California Transparency in Supply Chains Act of 2010, please consult your legal counsel for appropriate steps to take to ensure compliance with new legal requirements. We ask that you remain mindful of the above and use your best efforts to cease associating with any country or entity tolerating or employing these inconsistent labor practices.

The company identified below agrees, through its authorized representative, to the terms outlined in this UNFI Code of Conduct for Suppliers.

Company Name:_________________________________________________________

Authorized Representative:________________________________________________

Title:___________________________________________________________________

Date:___________________________________________________________________

Please sign and return this UNFI Code of Conduct for Suppliers

by fax to (877) 775-6476

or by email to: [email protected]

or mail to Manager, Legal & Regulatory Affairs

Law Department

UNFI

313 Iron Horse Way

Providence, RI 02908

Supplier Policies and Guidelines

August 2014

Table of Contents



1Introduction	4
2UNFI National Contact List	5
3Definitions	7
4General Policies and Guidelines	7
A.TERMS OF PAYMENT	8
B.INVOICES	8
C.GENETICALLY MODIFIED ORGANISMS (GMOs)	8
D.QUALITY ASSURANCE	9
E.TEMPERATURE TESTING	9
F.DISCLOSURE OF SUPPLY CHAIN INFORMATION	10
G.CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT of 2010	10
H.COMPLIANCE WITH FOOD SAFETY LAWS	11
I.PESTICIDES AND PRODUCT REGISTRATION	11
J.DANGEROUS GOODS	12
K.PROPOSITION 65	12
L.GIFT POLICY	12
M.PRODUCT INFORMATION AND INTELLECTUAL PROPERTY	12
N.PRESS RELEASE POLICY	13
O.ORGANIC AND KOSHER CERTIFICATION	13
P.PRODUCT LOSS CLAIMS AND UNSALABLE PRODUCTS	13
Q.CREDITS, RECLAIM AND SPOILS	14
R.W-9 TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION, OR W-8	15
S.PRODUCT CORRESPONDENCE	15
T.SUPPLIER CHANGES	15
U.INVENTORY TRANSFERS AND BALANCING	17
V.SUPPLIER FREIGHT / PICK-UP ALLOWANCE	17
W.PRICE PROTECTION	17
X.PRICING, PRICE CHANGE, BLACK OUT PERIOD, UPC, SIZE AND PACK CHANGES	17



Y.BRIGHT LINE TESTS FOR THE HANDLING OF PRODUCTS THAT UNDERGO CHANGE IN ORGANIC STATUS	19
Z.INSURANCE CERTIFICATES	20
AA.AUDITS AND INVOICING	21
BB.RECALLS AND PRODUCT WITHDRAWALS	22
CC.UNACCEPTABLE PRODUCTS	23
DD.SUPPLIER & BROKER REPORTS	23
5New Products/Store Openings	24
A.NEW PRODUCT INTRODUCTIONS	24
B.PRODUCT SAMPLES POLICY	24
C.OPENING ORDERS AND RETAILER PLACEMENTS	24
6Product Promotions	25
A.PROMOTIONAL PLANNING AND EXPECTATIONS	25
B.MANUFACTURER CHARGE BACK (MCB)	25
C.EVERYDAY LOW PRICING (EDLP)	26
D.TURNOVER POLICIES	27
E.ADMINISTRATIVE FEES	27
F.RESETS AND OTHER RETAIL SERVICES	28
7Marketing and Advertising	28
A.TRADE MARKETING AND ADVERTISING PROGRAMS	28
B.CONSUMER MARKETING AND ADVERTISING PROGRAMS	29
8 Shipping and Receiving Products	29
A.BACKORDERS	29
B.BIOTERRORISM ACT OF 2002	29
C.PRODUCT TAMPERING	30
D.DATE CODES	30
E.MIS-SHIPS/SHORTAGES/OVER-SHIPS	31
F.TITLE AND RISK OF LOSS	31
G.LATE/UNSCHEDULED LOADS	31
H.LOADS UNLOADED PRIOR TO SCHEDULED APPOINTMENT	32
I.LOADS NOT AVAILABLE AT TIME OF SCHEDULED PICK-UP	32
J.PALLETIZATION OF PRODUCTS	33



K.PALLET EXCHANGE POLICY	33
L.CASE SPLITTING	33
M.LUMPER FEES	33
9Information & Forms	35
A.7 STEP SET UP PROCESS	35
B.NEW SUPPLIER PRODUCT CHECKLIST	35
C.COI (CERTIFICATE OF INSURANCE) EXAMPLE	35
D.W-9	35
E.2013/2014 AD AGREEMENT	35
F.SUPPLIER INFORMATION FORM	35
G.OPENING ORDER – RETAILER PLACEMENT	35
H.GUARANTEED SALE FORM	35
I.FREIGHT PICK-UP FORM	35
J.SUPPLIER/BROKER REPORTS	35
K.ROUTING GUIDE	35
L.THIRD PARTY UNLOADING SERVICE RATE SCHEDULE	35

Supplier Policies and

Guidelines


1	Introduction

This UNFI Supplier Policies document outlines the expectations and requirements for doing business with UNFI.

UNFI offers many successful promotional and marketing vehicles to support your Products to the trade and to consumers. Your UNFI Supplier Relationship Manager (“SRM”) will be able to give you comprehensive information on these programs.

If you have any questions regarding any sections of this document, please contact our New Item Coordinator or your UNFI SRM.

The policies outlined and described in this document supersede any conflicting policies submitted by Supplier(s) to UNFI unless special exceptions have been made in writing by an authorized member of UNFI management.

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2	UNFI National Contact List



Advertising Agreement Questions	[email protected]
Deductions Coordinators	[email protected] [email protected]
Inbound Routing	[email protected]
Insert or B&W Ad Questions	[email protected]
Invoices	UNFI, Accounts Payable – East Region PO Box 567 Keene, NH 03431 UNFI, Accounts Payable – West Region 1101 Sunset Blvd Rocklin, CA 95765
New Items New item forms and information to your SRMs	United Natural Foods Attn: SRM 313 Iron Horse Way Providence, RI 02908 (401) 528-8634
Opening Order Forms – Retail Store Placement	[email protected]
Pack Changes All Pack Changes shall be submitted to your SRM and Buyer (at their UNFI email addresses)

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Planogram Product Photos	Email to [email protected] Or send CD to: United Natural Foods Attn: Image Coordinator 260 Lake Road Dayville, CT 06241
Price Changes All Price Changes shall be submitted to your SRM and Buyer (at their UNFI email addresses) on the UNFI Price Change Form
Product Images and Information Updates Send actual Product samples, electronic files of ingredients, nutritional data, Product photo, logo and key selling points, as listed on the required information page found in the Supplier Packet to the SRM.	United Natural Foods Attn: Marketing 313 Iron Horse Way Providence, RI 02908 (401) 528-8634 AND United Natural Foods Attn: National Marketing Program Manager 2340 Heinz Road Iowa City, IA 52240 Email hi-res Product photos to: [email protected] Email ingredients and nutritional information to: [email protected]
Product Recalls Product Recall information must be sent by email only	Director National Food Safety & Quality Assurance [email protected]
Publication Questions	[email protected]

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Turnovers/EDLP’s	Email or fax turnover orders to EAST: [email protected] Fax: 860-779-9152 Email turnover orders to WEST: [email protected] Fax: 866-648-8199 Email EDLP to: [email protected] [email protected]

Visit https://unfinc.zendesk.com/home for general Supplier support and forms for new Suppliers, new item information, promotions, price changes and advertising agreements, etc.


3	Definitions

In these policies, the below terms are used as follows:


•	“Consumer” means any entity or person who buys from UNFI’s Customer (as defined below).


•	“Customer” means any entity that purchases Products from UNFI.


•	“Product(s)” means goods, including, but not limited to, foods, perishables, consumables, dry goods, personal care items, nutritional supplements, vitamins, non-food items and pet supplies.


•	“Reclaim” is defined in accordance with the terms outlined in the FMI “Joint Industry Report”, which can be found at:

http://www.fmi.org/docs/supply/GMA_Unsale.pdf.


•	“Supplier” means the entity that supplies UNFI with Products.


•	“SRM” means UNFI Supplier Relationship Manager.


4	General Policies and Guidelines

All forms and accompanying information must be completed and returned to your UNFI SRM.

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A.	TERMS OF PAYMENT

UNFI requires payment terms of 2%, 10 days, net 30 from the date UNFI receives the invoice, the date the Supplier's invoice is post-marked or from the date UNFI receives the Product, whichever is later. Payment of initial invoices will be made 60 days after receipt of initial orders and SRM approval. All appropriate deductions will be deducted from Supplier payment(s) by UNFI. If UNFI cannot deduct amounts due to it by Supplier within 30 days, UNFI will bill Supplier. Any such amounts billed shall be due immediately.

UNFI may offset amounts due to Supplier with amounts due by Supplier to UNFI.


B.	INVOICES

Please send all invoices to:



UNFI, Accounts Payable – East Region	UNFI, Accounts Payable – West Region
P.O. Box 567	1101 Sunset Boulevard
Keene, NH 03431	Rocklin, CA 95765

UNFI reserves the right to conduct 3^rd party audits on our Accounts Payable records and execute justified deductions as necessary.

All allowances offered “off invoice” must be reflected on the invoice.

•

Note that Pricing may change due to market conditions, and 90 days’ written notice to UNFI is required on all price changes. Changes in pricing will be reflected on the Purchase Order. When Supplier requests a price change, it is Supplier’s responsibility to email the UNFI Buyer and request adjustment to the price(s) on any previously acknowledged Purchase Order(s) and to then acknowledge the revised Purchase Order(s) by confirming quantities and pricing. When a P.O., previously accepted by the Supplier, conflicts with an Invoice or any other documentation, UNFI reserves the right to have the P.O. price prevail.


C.	GENETICALLY MODIFIED ORGANISMS (GMOs)

UNFI supports sustainable agriculture and organic farming and is very concerned about the proliferation of genetically modified organisms in foods. UNFI supports a moratorium on the use of GMOs until more in-depth research on their long-range consequences is completed. UNFI encourages its Suppliers to require independent third party non-GMO verification from their own suppliers and to use only ingredients that have not been genetically modified.

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D.	QUALITY ASSURANCE

Supplier shall adopt and operate in accordance with good manufacturing practices (GMPs). Annually Supplier shall provide UNFI with a copy of Supplier’s most recent food safety audit as performed by an independent third party. UNFI will treat said documents as Confidential. Notwithstanding however, UNFI reserves the right to, and Supplier acknowledges that UNFI may, share these documents with UNFI’s Customer when requested.

Upon UNFI’s request, with respect to consumable/food Products, Supplier must provide UNFI with the results of any sanitation or food safety audits made by or for Supplier during the term of Supplier’s relationship with UNFI related to any Facility. Supplier must notify UNFI immediately of any third party food safety or sanitation audits or analyses that indicate the presence of Listeria monocytogenes, Salmonella, E. coli, E. coli 0157:H7 or other harmful or pathogenic bacteriological, viral or fungal presence in the Facilities or the Products or any of Supplier's other products manufactured at the Facilities during the term of Supplier’s relationship with UNFI.

Supplier must also inform UNFI immediately of any non-routine inquiry, investigation or inspection by any federal, state or local governmental agency in connection with the Facilities or the Products that reveal a food safety or sanitation deficiency or a possible recall, labeling or allergen alert and provide UNFI with a copy of any reports related thereto. Supplier must inform UNFI immediately upon receipt and provide a copy of any FDA Form 483 involving a Facility; of any entry Supplier makes to the Reportable Food Registry involving the Products; and of any “Warning Letter” or “Dear Manufacturer” letter received by Supplier related in any way to the Facilities or the Products.

UNFI will not treat any of the above information as confidential and may provide such information to its Customers upon request.


E.	TEMPERATURE TESTING

To adhere to UNFI’s HACCP requirements, all perishable and frozen Products delivered to a UNFI facility must, when delivered, satisfy certain temperature requirements. Perishable Products must temperature test at 40 degrees Fahrenheit or less; eggs must temperature test at 45 degrees ambient Fahrenheit or less; and Frozen Products must temperature test at 20 degrees Fahrenheit or less, provided that if Supplier has specified a temperature less than 20 degrees Fahrenheit, such Products must temperature test in accordance with that specification.

Receivers at UNFI’s facilities will verify the temperature of perishable and frozen Products and eggs by non-invasively probing the exterior packaging of a

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Supplier Policies and

Guidelines

sample of the Product. In the event that the temperature of the exterior packaging exceeds the limit specified above, the UNFI receiver will open the exterior packaging to probe the actual Product. If the temperature of the actual Product exceeds the acceptable limit specified above, UNFI will refuse Supplier’s entire shipment of such Product, which may not be re-delivered to UNFI at any time.


F.	DISCLOSURE OF SUPPLY CHAIN INFORMATION

UNFI may require Suppliers to identify the country, and the specific region of such country, where each of the ingredients, components or parts of Supplier’s Product are grown, produced and/or manufactured. In the event of an actual or contemplated product recall, withdrawal or other similar circumstances affecting Supplier’s Product or other products that are of the same sort or similar to Supplier’s Product and upon request from UNFI, Supplier shall promptly identify the direct supplier or source of any of the ingredients, components or parts of Supplier’s Product. Supplier further agrees that UNFI may provide such information to its Customers upon request from such Customers.

In order to allow both Supplier and UNFI to be able to definitively trace the source of Products as well as the place and time of their processing, all Products must bear a unique lot or batch number that isolates the processing of Products between sanitation efforts. Products produced in a facility or through a process that does not undergo sanitation must be designated by field and harvest date.


G.	CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT of 2010

The California Transparency in Supply Chains Act of 2010 requires retailers and manufacturers doing business in California to disclose their efforts to combat human trafficking and forced labor in their own direct supply chains. Even if UNFI is neither a retailer nor a manufacturer, it is committed to meeting the requirements of the Act and requires its Suppliers to do so. As well, certain UNFI Customers require UNFI, as one of their direct suppliers, to help them satisfy the Act’s disclosure requirements. As a result, UNFI requires its Suppliers to certify that they have met the Act’s requirements.

Specifically, each Supplier must certify that:


1.	It verifies its Product supply chains to evaluate and address risks of human trafficking and slavery (and will disclose to UNFI whether a third party conducted the verification);


2.	It audits its own suppliers to evaluate compliance with Supplier’s company standards (and will specify to UNFI whether the audits are independent and unannounced);

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3.	It requires its direct suppliers to certify that the products they provide to Supplier comply with the laws of the country in which the supplier does business;


4.	It maintains internal accountability standards for employees and contractors concerning human trafficking and slavery; and


5.	It ensures that Supplier employees and management responsible for supply chain management are trained to identify human trafficking and slavery and how to mitigate risks within supply chains.

Each Supplier must also certify that it and all employees and agents involved in the manufacturing, processing or delivery of the Products strictly adhere to all applicable federal, state and local laws, regulations and prohibitions of the United States, its territories and all countries in which the Product is produced or delivered with respect to the operation of their production facilities and their other business and labor practices, including but not limited to the California Transparency in Supply Chains Act of 2010, and comply with existing local and federal laws regarding slavery and human trafficking in the country or countries in which UNFI’s business with Supplier is being conducted.


H.	COMPLIANCE WITH FOOD SAFETY LAWS

UNFI expects its Suppliers to be aware of and comply with all applicable laws, rules and regulations regarding food safety, including, but not limited to, the Federal Food, Drug and Cosmetic Act, as amended by the Food Safety and Modernization Act (“FSMA”), and rules and regulations adopted thereunder (collectively, the “FD&C Act”), and all applicable provisions of the Meat Inspection Act (“MIA”), Poultry Product Inspection Act (“PPIA”) and/or Egg Product Inspection Act (“EPIA”), including all applicable rules and regulations adopted thereunder.


I.	PESTICIDES AND PRODUCT REGISTRATION

A pesticide is defined as any substance intended to control, destroy, repel, or attract a pest. Any living organism that causes damage or economic loss or transmits or produces disease may be the target pest. Pests can be animals (e.g. insects or mice), unwanted plants (e.g. weeds), or microorganisms (e.g. plant diseases or germs that is, viruses and bacteria). Pesticide products include not only insecticides and herbicides, but many products not typically thought of as pesticides, including algaecides (e.g. pool chlorine), disinfectants and sanitizers (such as toilet bowl cleaner), repellants (e.g. mosquito repellent), rodenticides (e.g. rat poison), and fungicides (e.g. rose dust).

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2.	Pesticides are required to be registered with the Federal Government and with certain states, including California. California also requires pesticide manufacturers to pay an assessment on sales of pesticides sold in the state.


3.	Before selling any Product to UNFI, Suppliers must complete UNFI’s Pesticide Questionnaire, which is included in your Supplier Packet and can also be obtained from your SRM.


4.	The Supplier is responsible for registering, at its sole cost (including fees or assessments), any Product that is required by the EPA or any applicable state agency to be registered as pesticides. The Supplier is also responsible for filing any reports related to such registration. An example of such a registration and assessment is the California “Mill Assessment.”


J.	DANGEROUS GOODS

UNFI requires that prior to selling or shipping a hazardous material to UNFI Suppliers provide UNFI with the proper shipping name, the unit/type, the hazard class, UN/NA ID number, the packing group, the total quantity, emergency response information (including a 24 hour telephone number), and the shipper’s name and address. Suppliers must also provide UNFI with a safety data sheet for each hazardous material sold or shipped to UNFI. UNFI expects its Suppliers to comply with the requirements and obligations regarding the transportation of hazardous materials, as set forth in 49 CFR Parts 171-180.


K.	PROPOSITION 65

UNFI requires that its Suppliers provide all warnings required under California’s Safe Drinking Water and Toxic Enforcement Act of 1986, Health and Safety Code Section 25249.5 (“Proposition 65”) (or any similar local, state, or federal law or regulation) which requires a specific warning on any products containing certain chemicals known to cause cancer or reproductive toxicity.


L.	GIFT POLICY

UNFI employees cannot accept gifts or travel worth $100 or more without senior management approval.


M.	PRODUCT INFORMATION AND INTELLECTUAL PROPERTY

In an effort to best market Supplier’s Products, UNFI requires and Supplier agrees to provide UNFI with the following items as frequently as reasonably necessary and upon request from UNFI: (1) a current list of Products offered, with corresponding UNFI item numbers, UPCs, descriptions and case packs; (2) Product photography, descriptions, video footage and/or clips; (3) nutritional information; and (4) other advertising and

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labeling content. Where Supplier does not submit the Product information, in whole or in part, Supplier authorizes UNFI to obtain and use Product information.

All intellectual property or proprietary rights in any Product, Product information, Product labels, Product packaging, nutritional content, and other advertising copy, including any photographs, images or other content delivered or obtained in accordance with the foregoing and/or provided by Supplier in connection with the Products are Supplier’s intellectual property rights (“Product IP Rights”). Supplier further authorizes UNFI to use the Product information and Product IP Rights therein in connection with the sale and promotion of the Products, no matter how the Product information is received or obtained by UNFI. Supplier grants UNFI a worldwide, nonexclusive, royalty-free right and license to use and further sublicense the Product IP Rights for UNFI’s business purposes, but only in connection, directly or indirectly, with the sale and promotion of the Products. Supplier may terminate such license and any related sublicense upon reasonable, written notice to UNFI, which notice shall be deemed a notice of termination pursuant to the Supplier Agreement. Notwithstanding any such termination, UNFI and its sublicensees shall have the right to continue to use the Product IP Rights while exhausting their respective inventory of Products on hand at the time of the termination.


N.	PRESS RELEASE POLICY

UNFI senior management must pre-approve any reference to UNFI in a press release, posting on Social Media, or reference in print publication prior to publication or distribution.


O.	ORGANIC AND KOSHER CERTIFICATION

For an item to be identified as organic and/or kosher in UNFI publications, UNFI must have a current organic and/or kosher certificate on file. Organic certificates are required before Products that are marketed and/or labeled as organic can be set up in UNFI’s systems. Kosher certificates are not required before items can be set up in UNFI’s systems. However, UNFI will not identify an item as kosher if a kosher certificate is not provided. All renewal certificates must be forwarded to your SRM annually and must be received by the anniversary of last certificate submission and no later than the expiration of the prior year’s organic certification.


P.	PRODUCT LOSS CLAIMS AND UNSALABLE PRODUCTS

Product Loss Claims (“PLCs”)/Unsalables are generated in 3 ways: defective Product reported by Customers; Product returned by Consumers to our Customers; and shelf worn Product. It is UNFI’s expectation that all PLCs / Unsalables are covered 100% by the Supplier.

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1.	Defective Product – This includes defects in Product that may not be apparent until the case is opened by the Customer, such as poorly sealed Product, tops/ends not glued shut, dented cans/damaged boxes inside a sealed, undamaged case, and Product that spoils before the expiration date on the Product.

Consumer Returns – Products returned by the Consumer to the Retail Customer where they purchased it. UNFI asks its Retail Customers to provide explanations and lot/date codes for these returns, but cannot guarantee that it will receive them and be able to pass that information on to Suppliers. In the event that a Supplier notifies UNFI that excessive quantities have been returned, UNFI may, in its sole discretion, investigate.


3.	Shelf Worn Product – Products usually found on a retail shelf in a Supermarket Store that a reasonable Consumer would not purchase due to label defects, discontinued, damaged, etc.


4.	Unsalable – Products that are removed from the primary channel of distribution for any reason (such as out of date, discontinued, damaged, etc.). They will be disposed of at store level.

Discontinued Items – As our mutual Customers review and update retail assortments, there is always the risk of residual inventory being returned from Customer. With the proper information and notification, we will do our best to minimize any excess inventory at the Customer level. However, if a Customer discontinues Product, it is the Supplier’s responsibility to cover this excess or returned inventory.

PLCs/Unsalables are generally reported monthly by division and are deducted at UNFI’s wholesale price. This covers the costs incurred on top of the invoice price, including stocking, picking and shipping the defective Product. Except for some full cases or excessive quantities, PLCs/Unsalables are not picked up by UNFI, but are destroyed at the store level.

PLC/Unsalable claims are not covered by any spoils allowance programs between the Supplier and UNFI. These spoils allowance programs are specific to UNFI and are intended to handle spoils within our DCs.


Q.	CREDITS, RECLAIM AND SPOILS

Certain Customers, primarily supermarkets, require reclaim support from their suppliers. This support service is typically a required condition of doing business in the supermarket channel. UNFI defines “reclaim” according to the terms outlined in the FMI “Joint Industry Report.” For more information, visit: http://www.fmi.org/docs/supply/GMA_Unsale.pdf. UNFI considers out of code at the shelf, damages at the shelf, promotional residual and reset residual to be included in the definition of “reclaim.”

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Certain Customers, including supermarkets, may utilize a 3rd party reclaim service or manage their reclaims internally, and, in rare circumstances, UNFI may act as the reclaim operator for the Customer. Fees will be imposed on the Supplier in all three of these situations. The fees imposed by UNFI for serving as the reclaim operator are consistent with the fees imposed by both 3rd party reclamation services and by Customer accounts who manage this process internally.


3.	In addition, certain Customers, including supermarkets, may contract UNFI to act as a 3^rd party billing agent for reclaims support. In these cases, UNFI will impose an administrative fee on the Supplier for this service/support which will be added on to the invoice at the time of billing. These fees depend on many factors and are subject to change.


4.	Spoils allowances, given off invoice, are intended to address spoils within UNFI DCs and not to support credits at retail. These spoils allowances, which are typically significantly lower than retail reclaim credits, are intended to share the expense driven by packaging issues, products that go out of code within the DC, etc.


R.	W-9 TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION, OR W-8

A current W-9 Taxpayer Identification Number and Certification with an actual or electronic signature must be on file with UNFI. Visit http://www.irs.gov/pub/irs-pdf/fw9.pdf to retrieve the form. Canadian and other international Suppliers may be required to complete a Form W-8 in order to claim exempt status from certain tax withholdings.


S.	PRODUCT CORRESPONDENCE

All correspondence regarding Products must be directed to the appropriate SRM and must contain a twelve-digit UPC number and an UNFI item number for each Product that is the subject of the correspondence. Such correspondence requiring this information may include, but is not limited to:


•	New Product announcements


•	Promotions


•	Size, pack and description changes


•	Price lists and updates


T.	SUPPLIER CHANGES

Changes to Supplier’s address must be submitted in writing on Supplier’s letterhead, be signed by an officer or owner of the business, and be received 90

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days prior to the effective date. This information should be sent to: SRM, Buyer and Accounting.



UNFI, Accounts Payable – East Region P.O. Box 567 Keene, NH 03431	UNFI, Accounts Payable – West Region 1101 Sunset Boulevard Rocklin, CA 95765
AND to your UNFI Supplier Relationship Manager and Buyer

For more information and forms, please visit the UNFI Supplier support site at: https://unfinc.zendesk.com/home

UNFI must also be informed of certain other changes to Supplier’s business and Suppliers are required to submit new documents to reflect such changes.

UNFI must be provided a minimum of ninety (90) days’ written notice of changes to Supplier’s pick up location. Changes to Supplier’s pick up location may affect freight rates and wholesale price. If UNFI is not timely notified of an address change, and Supplier’s failure to provide timely notice results in increased freight rates/charges to UNFI, UNFI shall not be responsible for such increases until UNFI adjusts its pricing with its Customers. In the event of change to pickup location, a new freight rate form must be submitted.


2.	Supplier may not assign any rights or delegate any obligations without the prior written consent of UNFI, including changes necessitated by an assignment or transfer of ownership. Where an assignment or transfer of ownership has occurred, a new Supplier Agreement and W-9 or W-8 is required in order to continue doing business with UNFI.


3.	UNFI must be informed of acquisitions or name changes.


a.	Acquisition – In the event that a Supplier is acquired, a new Supplier Packet must be completed by the acquiring entity.


b.	Supplier Name Change


•	In the event that a Supplier is changing its name and maintaining its Taxpayer Identification Number (“TIN”), UNFI must be notified of this change to ensure that the Supplier information is updated in its host system.

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•	If the Supplier is changing its TIN, UNFI requires that a new Supplier be set up. Supplier must complete and submit a new Supplier Packet in order to be set up as a Supplier and do business with UNFI under the new TIN.


•	Any Supplier name change, regardless of whether Supplier retains or changes the TIN, requires a new W-9 evidencing the new Supplier name and TIN.


U.	INVENTORY TRANSFERS AND BALANCING

UNFI strives to provide a strong service level to our Customers. With this focus, we will, on occasion, request help from Suppliers in balancing inventory across our DCs. If we are unable to secure inventory from a Supplier because a Product is out of stock and we have inventory available in other DCs, UNFI will transfer or require Supplier to transfer Product in order to meet Customer service level expectations, and Supplier shall be responsible for the cost associated with such transfer.


V.	SUPPLIER FREIGHT / PICK-UP ALLOWANCE

Where a Supplier offers a pick-up allowance, a Freight/Pick-up Allowance Form may be obtained from and submitted to Supplier’s SRM.


W.	PRICE PROTECTION

“Price protection” means a credit for the difference between UNFI's previous invoice price and the new lower invoice price. UNFI requires price protection on all affected Products inventoried by UNFI, as of the effective date of any price decrease.


X.	PRICING, PRICE CHANGE, BLACK OUT PERIOD, UPC, SIZE AND PACK CHANGES


1.	UNFI will not accept and implement changes on Products that are on promotion until after the promotional period ends.

Ninety (90) days’ prior written notice is required on all price changes, including changes to off-invoice allowance programs (excluding commodities). Price changes must be submitted on the UNFI Price Change Form, accompanied by a Supplier price list and written documentation explaining the change. The UNFI Price Change Form is available at: https://unfinc.zendesk.com/home. In the event that the price change is not submitted with the required 90 days’ notice, UNFI reserves the right to

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charge and enforce the Purchase Order price. Changes in pricing will be reflected on the Purchase Order (“P.O.”).


3.	UNFI will not accept price changes with an effective date between October 1st and December 31st. All price changes need to be effective prior to, or after, this time.


4.	Ninety (90) days’ prior written notice is required on all UPC, size and pack changes and must be submitted to the Supplier’s SRM using the appropriate UNFI forms, which are available at: https://unfinc.zendesk.com/home. A $35 per item fee will be assessed for all pack changes per DC. Failure to provide the required notice will result in assessment of a $500 fee per occurrence.


5.	Ninety (90) days’ prior written notice is required for any material changes to Supplier’s Product formulation, labels and or packaging.


6.	Upon notification that an item has been discontinued by Supplier or UNFI or has undergone a UPC, size or pack change, UNFI will:


a.	Supply inventory count of items and verify the landed cost of inventory by disposition date.


b.	Remove Product from inventory and send a notice to the Supplier to arrange for pick up.


c.	Supply the accounting department with the anticipated credit amount. If the credit amount should exceed open invoices, all payments will be held until the credit amount is cleared from the account.


d.	Charge $35 per hour (one hour minimum) for any additional UNFI labor.


7.	If Supplier has not picked up or made arrangements to have the Product picked up within fourteen (14) days from notice, UNFI will send the Product to the local food bank and charge the full landed cost back to Supplier or dispose of it as UNFI sees fit.


8.	Any change to one of the following will require a new UNFI item number:


a.	Case pack


b.	Retail UPC code


c.	Brand name


d.	Unit size


•	Only exception is an increase in unit size in an amount less than 1 ounce.


e.	Any change in organic status


•	A change from organic to non-organic will also require a new UPC code.


f.	Description


•	No longer recognizable from original description and is normally associated with an ingredient change.

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g.	Ingredient change


•	Any ingredient change that adds or removes an allergen as set forth in the then-current FDA allergen list will be assigned a new UNFI product number. For example, milk, eggs, fish (bass, flounder, cod, etc.), crustacean shellfish (crab, lobster, shrimp, etc.), tree nuts (pecans, etc.), peanuts, wheat and/or soybeans.


•	Any ingredient change that may cause a material change to the Product will be reviewed for a possible UNFI number change (e.g. non-hydrogenated oil to hydrogenated oil).


Y.	BRIGHT LINE TESTS FOR THE HANDLING OF PRODUCTS THAT UNDERGO CHANGE IN ORGANIC STATUS

The following are guidelines in the event a Supplier makes material changes to its Product content and/or label which could mislead Customers and/or the Consumers as to the new/changed Product contents. This is intended to ensure UNFI continues to comply with its legal requirements, maintains its certification as an organic handler, meets its obligations to Customers and Consumers, and does what it believes is the right thing in such instances.

UNFI requires Suppliers to promptly notify UNFI of any proposed change to a Product’s organic status as defined under the USDA NOP labeling standards. In the case of material changes as discussed below, a new UPC code may need to be assigned to the Product.

Suppliers that promptly coordinate Product changes with UNFI may avoid interruptions to the distribution of their Products, particularly by providing UNFI with proper and timely notification of changes and by assigning a new UPC code when a Product changes from 100% organic or other organic status to a lesser organic or natural status.

In the event the Supplier does not provide timely notification of proposed material Product changes to UNFI, thereby precluding appropriate coordination between UNFI and the Supplier, the following guidelines apply:

Once UNFI becomes aware of a change in a Product’s organic status, such as where a Supplier has previously and conspicuously labeled a Product as “organic” and then eliminates any labeling references to the organic status as provided under the USDA/NOP labeling standards, but does not change the Product UPC code, we will notify our relevant Customers and the Supplier that we are putting the Product on hold until the UPC code is changed to reflect and communicate a Product change.

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Once UNFI becomes aware of a change in a Product’s organic status, whether or not a Supplier has previously and conspicuously labeled a Product as “organic” as set out above, but the Supplier has previously otherwise represented that the Product is 100% Organic, Organic, or Made With Organic as defined by the USDA/NOP labeling standards, and the Supplier now represents the Product to be less than the previously listed designated organic category, and the Supplier does not alter or change the Product’s UPC code, we will notify our relevant Customers and the Supplier that we are putting the Product on hold until the UPC code is changed to reflect and communicate a Product change.

Once UNFI becomes aware of a change in a Product’s organic status, where a Product has never been conspicuously labeled as ”100% Organic, Organic, or Made With Organic” as defined by the USDA/NOP labeling standards, although the previous Product had some organic ingredients as defined under the USDA/NOP labeling standards, but the Product now is changed to contain fewer or no organic ingredients or a previous certification representing it included some organic ingredients, although less than 70%, has now been eliminated, but, in any or all cases, the Supplier has not changed the Product’s UPC code, UNFI may change its internal Product code accordingly. UNFI will require the Supplier to immediately create an appropriate Customer notification letter, to be pre-approved by UNFI, to be distributed by UNFI and/or the Supplier, as determined solely by UNFI, to all impacted Customers. If Supplier is designated by UNFI to distribute such communications to the impacted Customers, the Supplier, after timely distributing those communications, shall represent in writing to UNFI that all impacted Customers have been so notified before UNFI will ship the correctly labeled Product.


Z.	INSURANCE CERTIFICATES

Before a new Supplier can be set up in UNFI’s system, a certificate of insurance must be received by the appropriate Supplier Relationship Manager, demonstrating the coverage outlined below.

Supplier will maintain, in any combination of primary and excess policy(ies), commercial/comprehensive general liability insurance (including but not limited to product/completed operations, independent contractors and contractual liability insurance) from a carrier or carriers reasonably satisfactory to UNFI, in a minimum amount of five million dollars ($5,000,000) combined single limit for bodily injury and property damage per occurrence; five million dollars ($5,000,000) for products/completed operations aggregate; and five million dollars ($5,000,000) general aggregate, if Supplier’s Products include any of the following:

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•	Supplements;


•	Raw or cooked, fresh and/or frozen meats (including beef, poultry, pork, lamb and deli meats); or


•	Raw or cooked, fresh and/or frozen seafood.


2.	If Supplier’s Products do not include any of the Products identified in Sec. (Z)(1) above, then Supplier will maintain one million ($1,000,000) combined single limit for bodily injury and property damage per occurrence; two million dollars ($2,000,000) for products/completed operations aggregate; and two million dollars ($2,000,000) general aggregate.


3.	In addition to the above insurance coverage, Supplier will also maintain the following insurance coverage:


a.	Worker’s Compensation - Statutory as required by state law;


b.	Employer’s Liability - $100,000 per accident for bodily injury or disease; $500,000 in the aggregate for disease; and


c.	Commercial Automobile Liability - $1,000,000 combined single limit covering bodily injury and property damage arising out of the use of any owned, non-owned, leased and hired autos

The policy(ies) will designate “United Natural Foods, Inc. and its affiliates” as additional insureds on a primary non-contributory basis, and will be endorsed to provide contractual liability insurance in the amount specified above, specifically covering Supplier's obligations to defend and indemnify UNFI as set forth in the UNFI supplier agreement and specifying that such coverage is primary and not contributory. The policy(ies) will also contain a waiver of subrogation in favor of United Natural Foods, Inc. and its affiliates.

Supplier will provide a certificate of insurance for such coverage, provided by a carrier or carriers with an A.M. Best rating of at least A-, Financial Size category 7, and stating that “United Natural Foods, Inc. and its affiliates” are additional insureds. Supplier will deliver the certificate(s) to Supplier’s UNFI Buyer or Category Manager no later than the Effective Date, and annually thereafter. Supplier’s failure to provide a current, updated COI may result in a disruption of service and may prevent UNFI from purchasing from Supplier.


6.	The policy(ies) and certificate(s) will also specify that UNFI will be given at least thirty (30) days prior written notice by the insurer in the event of any material modification, cancellation or termination of coverage.


AA.	AUDITS AND INVOICING

UNFI reserves the right to conduct third party audits on payments and invoices, which may result in a deduction after the original payment is made.

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These audits may be conducted within twenty-four (24) months of the close of the UNFI fiscal year in which the transaction(s) occurred.


BB.	RECALLS AND PRODUCT WITHDRAWALS

Supplier shall cooperate with UNFI on all recalls and market withdrawals, promptly provide information requested by UNFI as needed for UNFI to administer a recall or market withdrawal and comply with all applicable requirements, including but not limited to UNFI’s Recall Policy for Suppliers, as may be amended from time to time. In the event of a recall or market withdrawal (as defined below), UNFI will charge Supplier back for all fees related to the recall or market withdrawal, including, but not limited to, any Customer fees related to the recall and charged to UNFI, costs associated with Product retrieval from retail stores, storage, shipping, disposal related costs, and all communication related expenses. Furthermore, UNFI reserves the right to charge back to Supplier any costs and/or fees assessed to or imposed upon UNFI by its Customer(s) resulting from or relating to a press release, government advisory or warning letter relating to the Product. UNFI utilizes a third party recall notification service company called Recall Info Link. This service allows UNFI to contact all Customers within four (4) hours, allowing UNFI to meet compliance regulations. The charges for customer contact via Recall Info Link will be charged back to affected Suppliers. For customers not reached via Recall Info Link, UNFI Customer Service will contact said customers and will charge back Supplier for costs incurred.

Recall means a Supplier’s removal or correction of a Product that the FDA or USDA considers to be in violation of the laws it administers and against which an agency may initiate legal action (e.g. seizure). Recall does not include a market withdrawal or stock recovery. Market withdrawal means a Supplier’s removal or correction of a Product which does not pose a potential threat to consumer health or safety, is not materially misleading, and is not subject to legal action by the FDA or USDA.

Supplier must promptly notify UNFI of all recalls and market withdrawals involving Supplier’s Products. Supplier must make every reasonable effort to notify UNFI prior to any public announcement of a recall or market withdrawal involving Supplier’s Products, but such notification must, in all events, occur within six (6) hours of Supplier’s decision to recall or announce a market withdrawal.


3.	In the event of a recall, Supplier must promptly notify UNFI by completing a Supplier Notification Report and submitting the report electronically via [email protected].

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4.	In the event of a market withdrawal, Supplier must promptly notify UNFI by completing a Supplier Notification of Market Withdrawal form and submitting the report electronically to [email protected].


CC.	UNACCEPTABLE PRODUCTS

“Unacceptable Product" means any one of the following if applicable to Supplier’s Products:


1.	The Product is unable to maintain its quality and integrity in accordance with industry standards for the duration of the Product's shelf life;


2.	The Product is unable to maintain its integrity with respect to its packaging, labeling and/or UPC compliance in accordance with industry standards;


3.	The Product fails to meet the applicable warranties of this Agreement; or


4.	The Product is the subject of a recall.

UNFI may refuse to accept delivery of Unacceptable Products. If Unacceptable Product has been delivered to UNFI or if, after delivery to UNFI or its customer, the Product is discovered to be Unacceptable Product through no fault of UNFI or its customer, Supplier shall accept Products for return, for full credit and with freight paid by Supplier. Alternatively, at Supplier’s discretion and expense, UNFI may dispose of such Unacceptable Product in a manner as the circumstances may reasonably dictate and Supplier shall reimburse UNFI for any amount by which the sale or disposal price realized by UNFI will be less than UNFI’s cost of the Product plus reasonable expenses for such sale or disposition. Notwithstanding any other provision of this Section, Supplier will not be required to reimburse UNFI for Unacceptable Product if the unacceptability resulted solely from negligence or willful misconduct in the handling of the Product by UNFI or a UNFI customer.


DD.	SUPPLIER & BROKER REPORTS

Where Suppliers use a broker, UNFI may provide aggregated information to facilitate broker compensation. Suppliers and Brokers Supplier Breakout Reports, and Sales by State Reports are available to a Supplier or Broker upon execution of the required documentation. The reports are provided within the time frames outlined in the agreement.

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5	New Products/Store Openings


A.	NEW PRODUCT INTRODUCTIONS

All new Product introductions must be supported by advertising and an off-invoice introductory discount for a minimum of ninety (90) days.

UNFI requires a six (6) month guaranteed sale on all new items. If any Products, when purchased by UNFI for the first time, do not reach a minimum sales level of five cases per week in the first six months of introduction, Supplier will arrange for the remaining Products to be promptly picked up from UNFI and will accept them for return and a full refund, unless the parties otherwise mutually agree on disposition.


B.	PRODUCT SAMPLES POLICY

In limited circumstances, UNFI may pull Product samples from its inventory to better market a Supplier’s Product. Product samples (including, but not limited to, samples of new Products and/or samples of regularly stocked items) may be pulled from UNFI inventory by UNFI sales representatives to introduce Supplier Product(s) to selected customers that do not currently stock the Product(s) or to photograph the Product(s) for use in UNFI publications (e.g., Natural Connection/Healthy Advantage, UNFI website) and processed as a Manufacturer Charge Back (“MCB”) at the regular wholesale price.

Any questions regarding UNFI’s Product samples policy should be directed to the Supplier’s SRM.


C.	OPENING ORDERS AND RETAILER PLACEMENTS

UNFI’s retail Customers generally require complimentary goods support for any new items or new stores. Because Suppliers typically do not have a financial relationship directly with the retailer, these charges are normally passed through UNFI and are either a lump sum payment / deduction agreed to between Supplier and Customer or in the value of a free product equivalent. The value of the placement is calculated at the item wholesale price, as UNFI will have performed the supply chain and SG&A (selling, general and administrative expenses) activity to distribute the new items to the account and in many cases physically cut them into the sections. It is expected that all Suppliers agree to support these programs. If the Supplier is unwilling to support their placement cost into retail distribution and recognizing that UNFI has no consumer equity with the brand or item (which is solely enjoyed by the Supplier), UNFI will not fund this program and will not offer the item as part of our assortment with the Customer. UNFI

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requires that Suppliers complete the Opening Order Form, which is available at https://unfinc.zendesk.com/home.


6	Product Promotions


A.	PROMOTIONAL PLANNING AND EXPECTATIONS


1.	Yearly promotional plans are encouraged with emphasis on quarterly promotions per Product group.


2.	An Annual Advertising Agreement is required for each region. Suppliers may not participate in any other UNFI marketing programs unless an Annual Advertising Agreement is current/signed.


3.	UNFI offers some marketing programs that require a Product’s performance to be in the top segment of its category. UNFI encourages its Suppliers to plan promotional spending for a Product in order to improve its category position and be considered for some of UNFI’s top “invitation only” marketing programs that may further increase the sales of the Supplier’s Product.


4.	UNFI Promotion Forms shall be completed and emailed to the SRM.


5.	Where UNFI is unable to purchase Products during a promotional period due to excess inventories, UNFI will require that Supplier shall credit UNFI for the difference in price of the current inventory carried and the promotional discount. This will permit UNFI to honor the promotion.


6.	Unless agreed to in writing, UNFI will do a deal match between our East and West regions and will apply regional deals nationally.

If UNFI cannot purchase sufficient quantities during a promotional period to cover the quantities shipped at the discount, it will, on a per region basis, require a credit for the difference in the price of the current inventory carried and the promotional discount. This will allow UNFI to honor the promotion. This will be deducted automatically with no prior authorization or notice given and is expected to be honored.


B.	MANUFACTURER CHARGE BACK (MCB)

Unless otherwise agreed to with the SRM, UNFI does not accept promotions based solely on MCBs. UNFI calculates MCBs based on wholesale pricing.

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C.	EVERYDAY LOW PRICING (EDLP)


1.	EDLPs are Customer specific deals submitted by a Supplier/broker for a minimum of six (6) months. EDLPs submitted for any store that is a member of a chain will be honored for all members of that chain.

EDLPs must be submitted on the UNFI EDLP form (which can be obtained from your chain (Key Account Manager). The East Region requires a sixty (60) day lead time. The West Region requires a ten (10) business day lead time. EDLPs not timely received for the indicated start date will take effect the day after they are entered into UNFI’s system. EDLPs cannot be backdated. Credits will not be issued for EDLPs not timely submitted. EDLPs must be submitted with a specific end date (e.g. DD/MM/YY) or they may be submitted as “ongoing.” EDLPs identified by the Supplier as “ongoing” require a sixty (60) day lead time and will end only after receiving sixty (60) days notification from the Supplier or Supplier’s broker. It is the Supplier’s/Supplier’s broker’s responsibility to inform the Customer of the EDLP end date.


3.	Any extensions to an EDLP must be submitted on a new EDLP form with the appropriate lead time. UNFI will not issue credits for lapsed EDLPs.


4.	UNFI will not be responsible for tracking, monitoring, or providing performance reporting on any Customer on an EDLP program, and will not be responsible for enforcing case minimums or maximums.

Changes to Product pricing or pack size, additions/deletions of SKUs, or introduction of new seasonal or special promotional items that necessitate a change to the original EDLP shall be submitted by Supplier or Supplier’s broker. Supplier must submit such changes with a new EDLP Form, which can be obtained from the SRM, and other UNFI forms, as applicable. To ensure that UNFI can administer accurate customer discounts and pricing, where Customers do not require price change lead time, Suppliers must submit EDLP forms a minimum of seven days prior to the discount start date. Where Customers do require price change lead time, Supplier must submit EDLP forms a minimum of 60 days prior to the discount start date. Suppliers that fail to comply with these notice requirements may forfeit EDLP discounts. UNFI reserves the right not to issue credits for discounts missed due to untimely submission of an EDLP.


6.	EDLP discounts shall be submitted as MCB percentage discounts. If there is an off invoice (purchase order allowance) during the EDLP deal period the off invoice will be backed out of the MCB.

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D.	TURNOVER POLICIES

A turnover order (“Turnover Order”) is any one-time deal a Customer has authorized a Supplier or broker to submit in writing or through the UNFI portal. A turnover can be for the purposes of basic stocking, line extension, promotion, store demonstration, store expansion, new store opening, new Product placement or Product replacement. Only UNFI will determine the UNFI contribution to Turnover Order deals, if any.


1.	UNFI requires a minimum of two business days to process Turnover Orders.


2.	All Turnover Orders must be submitted on the Turnover Form via email, fax or mail. UNFI will not accept Turnover Orders via telephone.


3.	Turnover Orders will not be back ordered or held for Product availability.


4.	Order quantities on Turnover Orders should reflect UNFI case pack (unit of issue). Quantities will be entered for the case pack of the product number submitted.


5.	UNFI item code numbers and store account numbers must be on all Turnover Orders.


6.	The Turnover Form must be completed with all information.


7.	A four week lead time is required for ad items, demo Products, or holiday stock. Please include the aforementioned information on the Turnover Form.


8.	All promotional items must be shipped within the published dates specified on the front cover of UNFI’s Monthly Specials Book.


9.	A separate Turnover Form is required for each ship date and each customer.


E.	ADMINISTRATIVE FEES

Our Customers may elect to engage UNFI to process billings for various programs, many of which are often directly negotiated and determined by the Supplier (or their representative) and the Customer. In addition to the internal administrative expense (which can be significant depending on the scope of the activity and the efficiency of the billing from the Customer) UNFI often acts as a “bank” in that the Customer automatically and immediately deducts from UNFI, while payment from the participating Supplier typically lags. As a result, UNFI will charge participating Suppliers a menu of administrative fees depending on the specific activity.

Suppliers have the option to manage and process these financial and/or marketing transactions directly with the Customer and avoid any UNFI administrative fees. By electing to process any financial/marketing transactions through UNFI, the Supplier expressly agrees to all UNFI policies related to these administrative fees.

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F.	RESETS AND OTHER RETAIL SERVICES

UNFI, UNFI’s Suppliers and UNFI’s Customers all share responsibility for promoting a Supplier’s Products. Many of UNFI’s Customers, including supermarkets, have retail services programs in place to help promote Products that may include, but are not limited to: category updates, major resets, minor resets, shelf strip updates, hardware maintenance and hardware updates. Customers bill UNFI directly for the costs and administrative fees associated with such programs and services and UNFI is then expected to collect these funds from its Suppliers. These costs and fees are typically collected in the form of a deduction. It is the Supplier’s responsibility to cover all of the costs and fees charged to UNFI by its Customers for resets and other retail services performed in connection with the promotion of Supplier’s Products.


7	Marketing and Advertising

UNFI’s Advertising & Marketing Programs have been designed to promote Supplier Products to UNFI Customers and to the end consumer. UNFI’s programs build brand awareness, advertise promotions and seasonal Products, educate store buyers and target specific channels such as natural/organic retailers, supermarkets and foodservice.

Participation in these programs is encouraged for the long-term growth and success of a Supplier’s product line.


A.	TRADE MARKETING AND ADVERTISING PROGRAMS

These programs target retailers, supermarkets and foodservice.


1.	Tri-Annual Wholesale Catalog Advertising – The Wholesale Catalog is the main reference for UNFI Customers for Products, pricing and ordering. Suppliers can use Wholesale Catalog advertising to highlight key selling points and build brand awareness.


2.	Monthly Specials Book – The Monthly Specials Book offers the opportunity to focus attention on a Supplier’s new products, promotions and seasonal Products.


3.	Website Advertising Program – The Website Advertising Program includes display advertisements and “ads-as-content” advertising options on UNFI’s secure Customer website. Ads can be targeted to specific channels, regions and DCs and can be linked to additional information, videos, etc.


4.	Foodservice Advertising – The Foodservice Catalog, published three times a year, contains Products hand-picked for the foodservice channel. Foodservice advertising programs include catalog, email and website banner ad opportunities.

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B.	CONSUMER MARKETING AND ADVERTISING PROGRAMS

These programs target the end consumer in the natural channel.


1.	Consumer Circular Programs, the Natural Connection and Customized Marketing Program – These Programs drive Product sales, encourage consumer trial and promote brand loyalty.


2.	HEALTHY Clippings® Coupon Tear Pad Program – This program promotes trial purchases.


3.	Celebration Programs – The Celebration Programs combine consumer education and promotions focused on selected categories and special interests, including supplements, Earth Day and non-GMO Products.


4.	Trailer Advertising – UNFI’s trailers can be used as rolling billboards and can be targeted to focus on certain specific geographic regions.

Additional information about the above programs is available through SRMs.

**NOTE: Prices and program options for Marketing and Advertising Programs are subject to change. UNFI will deduct all UNFI’s payments due on advertising invoices from UNFI’s payments to Supplier.


8	Shipping and Receiving Products


A.	BACKORDERS

UNFI does not accept back orders.


B.	BIOTERRORISM ACT OF 2002

The Establishment and Maintenance of Records under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the “Bioterrorism Act”) states, in part:

“Persons who manufacture, process, pack, distribute, receive, hold, or import food in the United States must establish and maintain the following records to identify the immediate previous sources and immediate subsequent recipients for all food they receive and release . . . : Name, address, telephone number and, if available, fax number, and e-mail address of the immediate previous source and subsequent recipient; adequate description; date received or released; for persons who manufacturer, process, or pack food, the lot or code number or other identifier; quantity and how the food is packaged; and name, address, telephone number and, if available, fax number, and e-mail address of the transporter who

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transported the food to and from you”. 69 Federal Register 236, Dec. 9, 2004, 71563-564.


1.	Deliveries: All deliveries to UNFI of Products covered by the Bioterrorism Act (e.g. “food” and beverages for humans and animals and related packaging, as defined in the Bioterrorism Act) must comply with the Bioterrorism Act, including, but not limited to the requirements set for in Section V(B)(2).


2.	DC receiving and shipping: Each driver shall provide the following information to the UNFI receiving or shipping office personnel at the time of the driver’s scheduled check-in:


a.	Driver’s name and photo proof of identity: valid commercial driver’s license (CDL) and/or company issued photo badge identification. All identification will be photocopied.


b.	Transporter/carrier company name and street address, city, state, zip code (a P.O. Box address is insufficient), telephone number, fax number and email address.

If any driver is unable or unwilling to supply this information, the load will not be loaded or unloaded at any UNFI location, including UNFI distribution centers, or any delivery location designated by UNFI.


C.	PRODUCT TAMPERING

UNFI reserves the right to refuse Products that appear to have been tampered with.


D.	DATE CODES


1.	UNFI requires that all Products be identified with an open coded shelf life or “use by” date, which shall appear on the Product and be printed on the outside of the shipping case. UNFI reserves the right to accept products that do not adhere to this requirement, however in all such cases supplier must provide the actual expiration date, by product, on the packing slip and/or Bill of Lading.


2.	UNFI requires that the shelf life of all Products be at least 75% of the production shelf life at the time of receipt. UNFI requires that the Supplier provide the appropriate SRM written, updated information regarding production shelf life and guaranteed minimum shelf life at time of receipt.


3.	If Products do not have a human readable calendar expiration date on the outside shipping case, UNFI will bill-back any Products that are not sold before the expiration date on the package.

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E.	MIS-SHIPS/SHORTAGES/OVER-SHIPS


1.	Supplier shall maintain a 95% fill rate or higher. Failure to meet or exceed the acceptable service level may result in item replacement and discontinuation or financial penalty. If UNFI is shorted items on incoming orders and Product subsequently becomes available, Supplier shall notify and expedite these items to our distribution centers at the Supplier’s expense.


2.	In the event of a mis-ship and UNFI receives Product that it did not order, UNFI will notify Supplier of the Product and inventory count, and Supplier will be responsible for all costs associated with the mis-ship.


3.	Supplier must notify the UNFI Buyer of any shortages/out of stocks before delivery or pickup. Any Product shorted will be placed on a new PO and will be shipped at Supplier’s expense.


4.	In the event an over-ship occurs, UNFI may agree to receive the Product above and beyond the purchase order quantity at a discounted rate of 35% OI, with a $35 minimum charge, unless instructed otherwise by Supplier.

Where an over-ship occurs and UNFI declines to receive the Product into inventory, UNFI may, in its sole discretion, store the Product in its DC. Any such Product must be removed from the DC within two weeks of the date that it was received at the DC. In the event that the Product is not removed from the DC within two weeks, UNFI may, in its sole discretion, dispose of any such Product stored in the DC, and assess a fee of $25 per pallet per week for any such product that UNFI. Any costs associated with removal, as well as the $25 per pallet per week fee, shall be borne by and charged back to Supplier. UNFI assumes no liability for any over-shipments stored in its DC.


F.	TITLE AND RISK OF LOSS

Title to and risk of loss of Products pass to UNFI, free of any encumbrances, on pick-up by UNFI at Supplier’s dock or, if applicable, upon delivery to the destination designated by UNFI. Each delivery will be invoiced by Supplier, and the invoice will include Product description and quantities sold. Supplier acknowledges and accepts that all shipments and/or pick-ups of Product for delivery to UNFI are subject to final count by UNFI. The parties agree to work in good faith to resolve any disputes relating to Product count.


G.	LATE/UNSCHEDULED LOADS

A delivery appointment specifying the date and time of delivery is required for all loads. Suppliers will be assessed a fee for late and/or unscheduled deliveries. These fees, set forth below, are subject to change without notice and at any time

August 1, 2014

Supplier Policies and

Guidelines

at UNFI’s sole discretion. All fees must be paid by Supplier or Supplier’s carrier at the time of delivery and prior to unloading. No exceptions will be made.



31 – 60 Minutes Late	$50.00 per occurrence
Over 60 Minutes Late	$200.00 per occurrence
Unscheduled Load	$300.00 per occurrence
No Show/Rescheduled with less than 72 hours of the appointment time	$300.00 per occurrence

UNFI reserves the right to refuse delivery of any late or unscheduled load.

Delivery drivers and co-drivers are not allowed on UNFI docks without permission from UNFI management. UNFI may, in its sole discretion, invite drivers and/or co-drivers onto a UNFI dock while UNFI verifies temperature readings.


H.	LOADS UNLOADED PRIOR TO SCHEDULED APPOINTMENT

A delivery appointment specifying the date and time of delivery is required for all loads. In the event that Supplier asks to unload prior to Supplier’s scheduled appointment, UNFI will, in its sole discretion, determine if the request can be accommodated. If UNFI accommodates Supplier’s request to unload prior to its scheduled appointment, UNFI will assess a fee. These fees must be paid at the time of delivery and prior to unloading. No exceptions will be made.



Unloading 24 hours or more prior to the appointment date and within normal receiving hours	$50.00 per occurrence
Unloading 24 hours or more prior to the appointment date and outside of normal receiving hours	$100.00 per occurrence


I.	LOADS NOT AVAILABLE AT TIME OF SCHEDULED PICK-UP

UNFI schedules loads for pick up at the Supplier’s dock according to an agreed upon schedule. In the event that loads are not available for a scheduled pick-up by UNFI or its carrier or if UNFI or its carrier is detained at Supplier’s dock, UNFI shall assess the following fees:



Truck Order Not Used (TONU)	$350 per occurrence

August 1, 2014

Supplier Policies and

Guidelines



Detention	$60 per hour after 2 hours from the original pick-up appointment. If UNFI or its carrier is late, detention fees shall not apply.


J.	PALLETIZATION OF PRODUCTS

All Products will be palletized on standard GMA pallets according to the Tier/High (TI/HI) specifications when provided by UNFI. Anytime multiple SKUs are shipped on a pallet they must be separated by a pallet or they will be subject to lumper fees.


K.	PALLET EXCHANGE POLICY


1.	UNFI will pay $4.50 for exchange pallets and $6.50 for each #1 grade pallet only if so noted on the bill of lading.


2.	The delivery bill of lading and invoice must indicate the number and type of pallets exchanged (“ins and outs”) for UNFI to authorize payment.


3.	UNFI does not participate in any pallet pool programs (e.g. CHEP) nor will UNFI accumulate pallets for return.


4.	UNFI does not accept iGPS plastic pallets.


5.	UNFI will exchange pallets one for one.


L.	CASE SPLITTING

UNFI reserves the right to charge $0.50/case for any grocery items it case splits in its distribution centers to allow for one shelf facing at retail. This does not apply to inner packs or each pick items. UNFI encourages Suppliers to utilize proper case packs acceptable to the retail community instead of requiring case splitting.


M.	LUMPER FEES

Absent different language set forth in a contract, Supplier acknowledges and agrees that Supplier and/or Supplier’s carrier shall use a third-party unloading service selected by UNFI. UNFI does not permit “driver breakdown,” and inbound shipments must be unloaded by this unloading service.

Supplier further acknowledges and agrees that Supplier shall be responsible for all fees associated with such unloading services, whether paid directly by Supplier to the third-party unloading service or negotiated between Supplier and Supplier’s carrier as a portion of the transportation costs. Such fees have been negotiated between UNFI and the unloading service and are available to Supplier upon request. All Suppliers and/or Supplier’s carriers must set up an account directly with the unloading service, as UNFI does not permit the use of cash on

August 1, 2014

Supplier Policies and

Guidelines

its docks. Suppliers should contact their SRMs for more information regarding setting up an account. UNFI will not accept any charges related to Supplier-selected inbound carriers, nor will related charges be accepted on any Supplier invoice.

Any and all fees related to break down of any and all freight where UNFI is the “bill to” party must be coded as a loading/unloading fee on a separate line item on the freight invoice. Fees for such charges will not be processed or paid if on separate invoices. Copies of the lumper fees as well as copies of the bills of lading must be included with Supplier’s freight bill. In addition, if Supplier’s deliveries are managed by UNFI's Inbound Logistics Team, in order to be processed for payment, Supplier must provide third party provider unloading receipts.

RATES ARE SUBJECT TO CHANGE. Changes will be posted on Supplier Portal or UNFI website with as much advance notification as possible.

https://unfinc.zendesk.com/home

If the Supplier/shipper is paying the freight expense, UNFI is not responsible for the lumper charges. If carriers currently deliver both prepaid and collect freight from any of UNFI’s facilities, please be prepared, as UNFI isolates prepaid vendors that will be required to pay for this service. The carrier will need to include these charges on its bills to those prepaid Suppliers, not to UNFI Inbound Logistics.

August 1, 2014

Supplier Policies and

Guidelines


9	Information & Forms


B.	7 STEP SET UP PROCESS

NEW SUPPLIER PRODUCT CHECKLIST


C.	COI (CERTIFICATE OF INSURANCE) EXAMPLE


D.	W-9


E.	2013/2014 AD AGREEMENT


F.	SUPPLIER INFORMATION FORM


G.	OPENING ORDER – RETAILER PLACEMENT


H.	GUARANTEED SALE FORM


I.	FREIGHT PICK-UP FORM


J.	SUPPLIER/BROKER REPORTS


K.	ROUTING GUIDE


L.	THIRD PARTY UNLOADING SERVICE RATE SCHEDULE

August 1, 2014

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION

302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven L. Spinner, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of United Natural Foods, Inc.;


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 the 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.

December 10, 2015



	/s/ Steven L. Spinner
	Steven L. Spinner
	Chief Executive Officer


Note:	A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION

302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael P. Zechmeister, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of United Natural Foods, Inc.;


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 the 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.

December 10, 2015



	/s/ Michael P. Zechmeister
	Michael P. Zechmeister
	Chief Financial Officer


Note:	A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, in his capacity as the Chief Executive Officer of United Natural Foods, Inc., a Delaware corporation (the “Company”), hereby certifies that the Quarterly Report of the Company on Form 10-Q for the quarterly period ended October 31, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of the Company.



	/s/ Steven L. Spinner
	Steven L. Spinner
	Chief Executive Officer

	December 10, 2015


Note:	A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, in his capacity as the Chief Financial Officer of United Natural Foods, Inc., a Delaware corporation (the “Company”), hereby certifies that the Quarterly Report of the Company on Form 10-Q for the quarterly period ended October 31, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of the Company.



	/s/ Michael P. Zechmeister
	Michael P. Zechmeister
	Chief Financial Officer

	December 10, 2015


Note:	A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Form 10-Q UNITED NATURAL FOODS For: Oct 31

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