Harris Teeter 2012 Annual Report Download - page 75

prevention and safety, internal audit, administration and legal that is relevant to the Company’s businesses,
developments and operations as well as the strategic planning functions of the Board of Directors. Mr. Warden has
been a director of the Company since February 2008 and also serves as a director of Bassett Furniture Industries,
Incorporated.
No director or nominee for director of the Company has a family relationship as close as first cousin with any
other executive officer, director or nominee for director of the Company.
Directors’ Fees and Attendance
The Company compensated each director elected to the Board of Directors at the Company’s 2012 Annual
Meeting of Shareholders who was not an employee of the Company via an annual fee in the amount of $37,500 for
services as a director. Non-employee directors also receive a meeting fee for each Board of Directors or committee
meeting attended. The meeting fee was $2,000 for the October 2011 and November 2011 meetings and $2,500 per
meeting for the meetings held during the remainder of the fiscal year ended October 2, 2012 (“Fiscal 2012”). The
Chairman of the Audit Committee was paid an annual fee of $6,000 in addition to the fees described herein.
Pursuant to the Harris Teeter Supermarkets, Inc. Director Deferral Plan (the “Deferral Plan”), non-employee
directors of the Company may generally defer the payment of the annual fee and/or board and committee meeting
fees. The fees deferred by a director under the Deferral Plan are converted into stock units and credited to the
director’s account as of the date such fees would have otherwise been paid to the director (the “Valuation Date”).
The account of a director is credited with a number of stock units equal to the number of whole and fractional shares
of Common Stock which the director would have received with respect to such fees if the fees had been paid in
Common Stock, determined by dividing such fees by the average of the high and low sale price (“Average Price”)
of a share of Common Stock on the Valuation Date. Directors’ accounts are equitably adjusted for the amount of
any dividends, stock splits or applicable changes in the capitalization of the Company. The Company uses a non-
qualified trust to purchase and hold the Common Stock to satisfy the Company’s obligation under the Deferral Plan,
and the directors are general creditors of the Company in the event the Company becomes insolvent. Upon
termination of service as a director or in the event of death, the number of stock units in the director’s account
are delivered and paid in the form of whole shares of Common Stock to the director or a designated beneficiary,
plus the cash equivalent for any fractional shares.
Pursuant to the provisions of the Company’s equity incentive plans, the Company has typically granted to each
new non-employee director upon his or her initial election as director a ten-year option to purchase 10,000 shares
of Common Stock at an exercise price per share equal to the Average Price of the Common Stock on the date of
grant of the option. These options are typically immediately vested on the date of the director’s election.
In addition to the compensation discussed herein, the Company grants other incentive awards to its non-
employee directors from time to time. At the meeting of the Board of Directors held on November 17, 2011 each
of John R. Belk, John P. Derham Cato, James E. S. Hynes, Anna Spangler Nelson, Bailey W. Patrick, Robert H.
Spilman, Jr., Harold C. Stowe, Isaiah Tidwell and William C. Warden, Jr., constituting all of the non-employee
directors of the Company at the time of the meeting, were credited with a discretionary Company contribution of
$20,000, which was paid into the Deferral Plan and converted into stock units, as described herein. The Company
also provides $100,000 of term life insurance coverage for each non-employee director, personal group excess
liability insurance coverage, and certain perquisites as disclosed in the footnotes to the following table.
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