Kroger 2010 Annual Report Download - page 72

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7.3 A Right may be exercised in whole or in part as provided in the Agreement, and, subject to
the provisions of the Agreement, entitles its Optionee to receive, without any payment to the Company
(other than required income tax withholding amounts), either cash or that number of Shares (equal to
the highest whole number of Shares), or a combination thereof, in an amount or having a Fair Market
Value determined as of the Date of Exercise not to exceed the number of Shares subject to the portion
of the Right exercised multiplied by an amount equal to the excess of (i) the Fair Market Value of a
Share on the Date of Exercise of the Right over (ii) either (A) the Fair Market Value of a Share on the
Date of Grant of the Right if it is not a Related Right, or (B) the Option Price as provided in the Related
Option if the Right is a Related Right.
7.4 The Right Period will be determined by the Committee and specifically set forth in the
Agreement, provided, however --
(a) a Right may not be exercised before the expiration of six months from the Date of
Grant (except that this limitation need not apply in the event of the death or disability of the Optionee
within the six-month period);
(b) a Right will expire no later than the earlier of (i) ten years from the Date of Grant,
or (ii) in the case of a Related Right, the expiration of the Related Option; and
(c) a Right may be exercised only when the Fair Market Value of a Share exceeds
either (i) the Fair Market Value of a Share on the Date of Grant of the Right if it is not a Related Right,
or (ii) the Option Price as provided in the Related Option if the Right is a Related Right.
7.5 The exercise, in whole or in part, of a Related Right will cause a reduction in the number
of Shares subject to the Related Option equal to the number of Shares with respect to which the
Related Right is exercised. Similarly, the exercise, in whole or in part, of a Related Option will cause
a reduction in the number of Shares subject to the Related Right equal to the number of Shares with
respect to which the Related Option is exercised.
7.6 Rights granted under the Plan, to the extent determined by the Committee, will comply
with the requirements of Rule 16b-3 under the Exchange Act during the term of this Plan. Should any
additional provisions be necessary for this Article 7 to comply with the requirements of Rule 16b-
3 or any other rules or regulations, the Board may amend this Plan to delete, add to or modify the
provisions of the Plan accordingly, subject to the provisions of Article 14, if applicable. The Company
intends to comply, if and to the extent applicable, with the requirements of Rule 16b-3; however, the
Company’s failure for any reason whatsoever to comply with such requirements will not impose any
liability on the Company to any Optionee or any other party.
7.7 To the extent required by Rule 16b-3 under the Exchange Act or otherwise provided in
the Agreement, the Committee will have sole discretion to consent to or disapprove the election
of any Optionee to receive cash in full or partial settlement of a Right. In cases where an election
of settlement in cash must be consented to by the Committee, the Committee may consent to, or
disapprove, such election at any time after such election, or within such period for taking action as
is specified in the election, and failure to give consent will be disapproval. Consent may be given in
whole or as to a portion of the Right surrendered by the Optionee. If the election to receive cash is
disapproved in whole or in part, the Right will be deemed to have been exercised for Shares, or, if so
specified in the notice of exercise and election, not to have been exercised to the extent the election
to receive cash is disapproved.
7.8 The maximum number of Shares with respect to which Rights may be granted to any
Employee or Director under this Plan during its term is 3,750,000 Shares.