Kroger 2012 Annual Report Download - page 34

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32
(2)฀ This฀ amount฀ represents฀ the฀ bonus฀ potential฀ of฀ the฀ named฀ executive฀ officer฀ under฀ the฀ cash฀ bonus฀
component of the Company’s performance-based 2012 Long-Term Incentive Plan. The “Target” amount
equals the annual base salary of the named executive officer as of the last day of fiscal year 2011. Bonuses
are determined upon completion of the performance period as of fiscal year ending 2014. The “Target”
amount฀is฀also฀the฀“Maximum”฀amount฀payable฀under฀this฀program,฀as฀participants฀can฀earn฀no฀more฀
than 100% of their bonus potentials.
(3)฀ This฀amount฀represents฀the฀number฀of฀restricted฀shares฀awarded฀under฀one฀of฀the฀Company’s฀long-term฀
incentive plans.
(4)฀ This฀ amount฀represents฀the฀number฀ of฀ stock฀ options฀granted฀under฀one฀of฀ the฀ Company’s฀long-term฀
incentive฀plans.฀Options฀are฀granted฀at฀fair฀market฀value฀of฀Kroger฀common฀shares฀on฀the฀date฀of฀the฀
grant.฀Fair฀market฀value฀is฀defined฀as฀the฀closing฀price฀of฀Kroger฀shares฀on฀the฀date฀of฀the฀grant.
(5)฀ Performance฀units฀were฀awarded฀under฀the฀Company’s฀performance-based฀2012฀Long-Term฀Incentive฀
Plan.฀The฀“Maximum”฀amount฀represents฀the฀maximum฀number฀of฀common฀shares฀that฀can฀be฀earned฀
by the named executive officer under the award. Because the target amount of common shares is not
determinable, the amount listed under “Target” reflects a representative amount based on the probable
outcome of the performance conditions. The dollar amount listed in the grant date fair value column is
the value at the grant date based on the probable outcome of these conditions. This amount is consistent
with the estimate of aggregate compensation cost to be recognized by the Company over the three-year
performance period determined as of the grant date under FASB ASC Topic 718, excluding the effect of
estimated forfeitures along with estimated cash payments equal to projected dividend payments.
The Compensation Committee of the Board of Directors, and the independent members of the Board in
the case of the CEO, established bonus potentials, shown in this table as “target” amounts, for the performance-
based annual and long-term cash bonus awards for the named executive officers. Amounts were payable to
the extent that performance met specific objectives established at the beginning of the performance period.
As described in the Compensation Discussion and Analysis, actual earnings under the annual cash bonus
can exceed the target amounts if performance exceeds the thresholds. The Compensation Committee of the
Board of Directors, and the independent members of the Board in the case of the CEO, also determined the
number of performance units to be awarded to each named executive officer, under which common shares
are earned to the extent performance meets objectives established at the beginning of the performance
period. The performance units are more particularly described in the Compensation Discussion and Analysis.
Restrictions฀on฀restricted฀stock฀awards฀made฀to฀the฀named฀executive฀officers฀normally฀lapse,฀as฀long฀
as the officer is then in our employ, in equal amounts on each of the five anniversaries of the date the award
is฀ made,฀ except฀ that:฀ (1)฀ 70,000฀ shares฀ awarded฀ to฀ Mr.฀ McMullen฀ in฀ 2009฀ vest฀ as฀ follows:฀ 15,000฀ shares฀
on฀6/25/2012,฀20,000฀shares฀on฀6/25/2013,฀and฀35,000฀shares฀on฀6/25/2014;฀(2)฀30,000฀shares฀awarded฀to฀
Mr.฀Heldman฀in฀2008฀vest฀as฀follows:฀6,000฀shares฀on฀6/26/2011,฀12,000฀shares฀on฀6/26/2012,฀and฀12,000฀
shares฀on฀6/26/2013;฀(3)฀111,986฀shares฀awarded฀to฀Mr.฀Dillon฀in฀2012฀vest฀in฀equal฀amounts฀on฀each฀of฀the฀
four฀anniversaries฀of฀the฀date฀the฀award฀was฀made;฀and฀(4)฀18,000฀shares฀awarded฀to฀Ms.฀Barclay฀in฀2012฀vest฀
in equal amounts on each of the three anniversaries of the date the award was made. Any dividends declared
on฀Kroger฀common฀shares฀are฀payable฀on฀restricted฀stock.฀Nonqualified฀stock฀options฀granted฀to฀the฀named฀
executive officers normally vest in equal amounts on each of the five anniversaries of the date of grant. Those
options฀were฀granted฀at฀the฀fair฀market฀value฀of฀Kroger฀common฀shares฀on฀the฀date฀of฀the฀grant.฀Options are
granted only on one of the four dates of Compensation Committee meetings conducted after Kroger’s public
release of its quarterly earnings results.