Harris Teeter 2012 Annual Report Download - page 113

Compensation Committee Certification and Determination of Awards
The bonus amount for each participant is determined after calculating the amount payable under the bonus
formula approved at the beginning of the performance period for the participant. After the conclusion of each
performance period, the Compensation Committee will determine and certify the extent to which the targeted goals
for the performance measures applicable to the performance period were achieved or exceeded. The Compensation
Committee will also certify the bonus amount for each participant for the performance period based upon the bonus
formula for such participant as previously established by the Compensation Committee. The Compensation
Committee has the authority to reduce or eliminate the amount of any bonus payable under the Plan to any
participant; however, the Compensation Committee cannot increase the bonus amounts payable under the Plan in
excess of the maximum that a participant would receive based on the bonus formula established for the participant
at the beginning of the performance period.
Non-exclusivity
Nothing contained in the Plan prevents the Board from adopting other or additional compensation arrangements
that provide for bonuses or other forms of compensation for the Company’s executive officers, directors or other
employees regardless of shareholders’ approval of the Plan. Such other arrangements may or may not qualify for
deductibility under Section 162(m) of the Code and may be either applicable only for specific executives, directors
or employees or may be generally applicable. However, for payments under the Plan to qualify as performance-
based compensation under Section 162(m), any such other or additional compensation arrangements may not be
designed to provide Plan participants all or part of the compensation they would receive under the Plan regardless
of whether the performance goal is attained.
Term, Amendment and Termination of the Plan
The Plan is effective as of October 3, 2012, provided that the Plan will terminate unless it is approved by
shareholders at the Annual Meeting. If the shareholders do not approve the Plan, awards that are comparable to
the 2013 cash Incentive Awards are expected to be granted in accordance with the Company’s historical cash
incentive program, however, these awards will not be eligible for deduction under Section 162(m) to the extent
the participant’s total compensation exceeds the $1 million limit established by Section 162(m). If the Plan is
approved by shareholders, the Compensation Committee may establish additional bonus grants for subsequent
performance periods until the earlier of (i) its termination at the discretion of the Compensation Committee, (ii)
the date any shareholder approval requirement under Section 162(m) of the Code ceases to be met or (iii) the date
that is five years after the Annual Meeting.
The Compensation Committee may amend, suspend or terminate the Plan at any time as it may deem proper
and in the best interests of the Company; provided that no amendment, suspension or termination may be made
that would increase the amount of compensation payable pursuant to a bonus awarded under the Plan or cause
amounts payable under the Plan to fail to qualify as performance-based compensation under Section 162(m) of the
Code. Administrative changes or changes required by law may be made by the Compensation Committee. To the
extent required under applicable law, amendments to the Plan will be subject to shareholder approval.
New Plan Benefits
The performance criteria for Fiscal 2013 Cash Incentive Awards to the current NEOs have been established
under the Plan (the “2013 Cash Incentive Awards”). These awards entitle each recipient to a cash payment in fiscal
2014, based upon level of achievement of certain financial criteria for Fiscal 2013. Generally, if the Company
achieves the predetermined minimum level of achievement, executives are paid a predetermined percentage of base
compensation as incentive pay. The percentage of base compensation payable as incentive compensation increases
as the return or profit margin increases. Amounts to be received, if any, by the participants in connection with the
2013 Cash Incentive Awards are based on the Company’s Fiscal 2013 performance, and, accordingly, the value
of the awards is not currently determinable. However, for the purposes of illustration only, set forth herein are the
amounts that would have been received in connection with the 2013 Cash Incentive Awards if the Plan and these
awards had been in effect for Fiscal 2012.
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