Kroger 2013 Annual Report Download - page 32

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30
cause฀ within฀ two฀ years฀ following฀ a฀ change฀ in฀ control฀ of฀ Kroger฀ (as฀ defined฀ in฀ the฀ plan).฀ Participants฀ are฀
entitled฀to฀severance฀pay฀of฀up฀to฀24฀months’฀salary฀and฀bonus.฀The฀actual฀amount฀is฀dependent฀upon฀pay฀
level฀and฀years฀of฀service.฀KEPP฀can฀be฀amended฀or฀terminated฀by฀the฀Board฀at฀any฀time฀prior฀to฀a฀change฀
in control.
Stock฀option,฀restricted฀stock฀and฀performance฀unit฀agreements฀with฀participants฀in฀Kroger’s฀long-term฀
incentive฀plans฀provide฀that฀those฀awards฀“vest,”฀with฀options฀becoming฀immediately฀exercisable,฀restrictions฀
on฀restricted฀stock฀lapsing,฀and฀common฀shares฀equal฀to฀50%฀of฀the฀performance฀units฀being฀awarded,฀upon฀
a฀change฀in฀control฀as฀described฀in฀the฀agreements.
None of the named executive officers is party to an employment agreement.
PE R Q U I S I T E S
The฀Committee฀does฀not฀believe฀that฀it฀is฀necessary฀for฀the฀attraction฀or฀retention฀of฀management฀talent฀
to฀provide฀the฀named฀executive฀officers฀a฀substantial฀amount฀of฀compensation฀in฀the฀form฀of฀perquisites.฀In฀
2013,฀the฀only฀perquisites฀available฀to฀our฀named฀executive฀officers฀were:
•฀ premiums฀paid฀on฀life฀insurance฀policies,
•฀ premiums฀paid฀on฀accidental฀death฀and฀dismemberment฀insurance;฀and
•฀ premiums฀paid฀on฀long-term฀disability฀insurance฀policies.
The฀life฀insurance฀benefit฀was฀offered฀beginning฀several฀years฀ago฀to฀replace฀a฀split-dollar฀life฀insurance฀
benefit฀that฀was฀substantially฀more฀costly฀to฀Kroger.฀Currently,฀159 active executives, including the named
executive officers, and 87฀retired฀executives,฀receive฀this฀benefit.
In฀addition,฀the฀named฀executive฀officers฀are฀entitled฀to฀the฀following฀benefit฀that฀does฀not฀constitute฀a฀
perquisite฀as฀defined฀by฀SEC฀rules:฀personal฀use฀of฀Kroger฀aircraft,฀which฀officers฀may฀lease฀from฀Kroger฀and฀
pay฀the฀average฀variable฀cost฀of฀operating฀the฀aircraft,฀making฀officers฀more฀available฀and฀allowing฀for฀a฀more฀
efficient use of their time.
The฀ total฀amount฀of฀perquisites฀furnished฀to฀the฀ named฀executive฀officers฀is฀ shown฀in฀ the฀Summary฀
Compensation฀Table฀and฀described฀in฀more฀detail฀in฀footnote฀6฀to฀that฀table.
EX E C U T I V E C O M P E N S A T I O N R E C O U P M E N T P O L I C Y
If฀ a฀ material฀ error฀ of฀ facts฀ results฀ in฀ the฀ payment฀ to฀ an฀ executive฀ officer฀ at฀ the฀ level฀ of฀ Group฀ Vice฀
President฀ or฀ higher฀ of฀ an฀ annual฀ bonus฀ or฀ a฀ long-term฀ bonus฀ in฀ an฀ amount฀ higher฀ than฀ otherwise฀ would฀
have฀ been฀ paid,฀ as฀ determined฀ by฀ the฀ Committee,฀ then฀ the฀ officer,฀ upon฀ demand฀ from฀ the฀ Committee,฀
will฀reimburse฀Kroger฀for฀the฀amounts฀that฀would฀not฀have฀been฀paid฀if฀the฀error฀had฀not฀occurred.฀This฀
recoupment฀policy฀ applies฀ to฀those฀ amounts฀ paid฀by฀ Kroger฀within฀36฀months฀prior฀to฀the฀detection฀and฀
public฀disclosure฀of฀the฀error.฀In฀enforcing฀the฀policy,฀the฀Committee฀will฀take฀into฀consideration฀all฀factors฀
that it deems appropriate, including:
•฀ The฀materiality฀of฀the฀amount฀of฀payment฀involved;
•฀ The฀ extent฀ to฀ which฀ other฀ benefits฀ were฀ reduced฀ in฀ other฀ years฀ as฀ a฀ result฀ of฀ the฀ achievement฀ of฀
performance฀levels฀based฀on฀the฀error;
•฀ Individual฀officer฀culpability,฀if฀any;฀and
•฀ Other฀factors฀that฀should฀offset฀the฀amount฀of฀overpayment.฀