Kroger 2010 Annual Report Download - page 57

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Shares Subject to Grant. Under the Plan up to 25,000,000 authorized but unissued or reacquired
common shares may be issued upon the exercise of stock options, stock appreciation rights, performance
units, or awarded as restricted stock or incentive shares. In no event may any participant receive awards
and grants totaling more than 3,750,000 common shares in the aggregate under the Plan. The maximum
number of shares that may be issued as restricted stock, incentive shares, or performance units under the
Plan is 10,000,000 in the aggregate. However, the Committee under the Insider Program may increase this
number, but for each share issued for such purpose in excess of 10,000,000, the number of shares that may
be issued under the Plan will be reduced by four shares.
If an option, stock appreciation right, or performance unit expires or terminates without having been
fully issued, or if restricted stock or incentive shares are not issued or are forfeited prior to the payment of
a dividend on those shares to a participant, the shares not exercised, unissued or forfeited, as the case may
be, will generally become available for other grants or awards under the Plan.
Stock Options. Nonstatutory stock options granted under the Plan will have exercise prices not less
than the greater of the fair market value per common share or the par value of a common share, a term of
not more than 10 years after the date of grant, and may not be exercised before six months from the date of
grant. The Plan prohibits the “repricing” of stock options. Subject to the terms of the Plan, the Committee
determines the vesting schedule and other terms and conditions applicable to stock options granted to
employees. In recent years, option grants generally have not become exercisable earlier than one year from
the date of grant. An eligible participant may receive more than one grant of options.
The Committee may in its discretion provide for the payment of the option exercise price otherwise
than in cash, including by delivery of common shares, valued at their fair market value on the date of
exercise, or by a combination of both cash and common shares.
Stock Appreciation Rights. Stock appreciation rights may be granted in connection with the grant
of a nonstatutory option under the Plan (“related rights”). In the Committee’s sole discretion, a related
right may apply to all or a portion of the common shares subject to the related option. Stock appreciation
rights may also be granted independently of any option granted under the Plan. A stock appreciation right
entitles the grantee upon exercise to elect to receive in cash, common shares or a combination thereof, the
excess of the fair market value of a specified number of common shares at the time of exercise over the fair
market value of such number of shares at the time of grant, or, in the case of a related right, the exercise
price provided in the related option. To the extent required to comply with the requirements of Rule 16b-3
under the Exchange Act or otherwise provided in an agreement under the Plan, the Committee will have
sole discretion to consent to or disapprove the election of any grantee to receive cash in full or partial
settlement of a right. A stock appreciation right generally will not be exercisable until at least six months
from the date of grant and will have a term of not more than ten years from the date of grant (or, in the
case of a related right, not beyond the expiration of the related option). The Plan prohibits the “repricing”
of stock appreciation rights.
Performance Units. Performance units may be granted in connection with the grant of a nonstatutory
stock option under the Plan (“related performance unit”). In the Committee’s sole discretion, a related
performance unit may apply to all or a portion of the common shares subject to the related option.
Performance units may also be granted independently of any option granted under the Plan. In connection
with the grant of performance units, the Committee will establish Performance Goals (as defined below)
for a specified period.