Harris Teeter 2012 Annual Report Download - page 107

Download and view the complete annual report

Please find page 107 of the 2012 Harris Teeter annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

(2) The value of the Incentive Bonus payment is calculated in accordance with and payable under the terms each
current NEO’s Change-in-Control and Severance Agreement.
(3) The value of the accelerated equity awards is composed of restricted stock awards and performance share
awards. The value of the restricted stock and performance share awards is calculated by multiplying the number
of accelerated shares by the average of the high and low trading price on the last business day prior to the
assumed termination of service date in accordance with plan administration rules.
(4) This represents the aggregate estimated net cost to the Company of health and welfare benefits provided to
each current NEO under the terms of such NEO’s Change-in-Control and Severance Agreement.
Termination Following a Change in Control or Resignation For Good Reason. The table below summarizes
the incremental benefits (beyond the accrued and vested benefits) that each of the current NEOs would be entitled
to, assuming their termination occurred on October 2, 2012 concurrent with a “change in control” transaction.
Thomas W.
Dickson
($)
Frederick J.
Morganthall, II
($)
John B.
Woodlief
($)
Rodney C.
Antolock
($)
Change In Control Benefit (1) ............. 4,623,099 2,243,750 2,888,962 1,489,850
Incentive Bonus Payments (2) ............. 837,187 397,500 479,208 329,925
Accelerated and Additional Portion of
SERP Benefits (3) ....................... 2,178,000 — 1,760,000 5,179,000
Accelerated Equity Awards (4) ............. 3,850,058 1,990,014 1,698,159 1,181,719
Health and Welfare Benefits (5) ............ 641,799 313,926 345,600 549,647
Excise Tax (280G) Gross-up ............... 3,502,395 — 2,176,257 2,089,923
(1) The value of the Change in Control Benefit is calculated in accordance with and payable under the terms of
their Change-in-Control and Severance Agreement.
(2) The value of the Incentive Bonus payment is calculated in accordance with and payable under the terms of
their Change-in-Control and Severance Agreement.
(3) The value of the accelerated and additional portion of SERP Benefits reflects accelerated commencement of
benefit payments without accrued benefit reduction and additional service accrual for all current NEOs, and
it is valued using the discount rate and method prescribed for the 280G calculations.
(4) The value of the accelerated equity awards is composed of restricted stock awards and performance share
awards. The value of the restricted stock and performance share awards is calculated by multiplying the number
of accelerated shares by the average of the high and low trading price on the last business day prior to the
assumed termination of service date in accordance with plan administration rules.
(5) The value of the health and welfare benefits represents the aggregate estimated net cost to the Company of
health and welfare benefits provided to each current NEO under the terms of their Change-in-Control and
Severance Agreement.
Compensation Policies and Practices as they Relate to Risk Management
As previously discussed, the Company’s compensation policies and practices for its employees are designed to
attract and retain highly qualified and engaged employees, and to minimize risks that would have a material adverse
effect on the Company. In addition the Company’s compensation policies and practices seek to align the interests of
management with those of the Company’s shareholders. The Company believes its incentive compensation programs
are appropriately balanced between value created indirectly by the performance of the Common Stock and payments
resulting from the achievement of specific financial performance objectives. The Compensation Committee considers
risks arising from the Company’s employee compensation policies and practices and has concluded that any risks from
such policies and practices are not reasonably likely to have a material adverse effect on the Company. Overall, the
Compensation Committee reached this conclusion after considering a number of features of the Company’s
compensation structure that are designed to mitigate risk, such as:
39