Kroger 2013 Annual Report Download - page 69

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67
Unit฀ surrendered฀ by฀ the฀ Optionee.฀ If฀ the฀ election฀ to฀ receive฀ cash฀ is฀ disapproved฀ in฀ whole฀ or฀ in฀ part,฀ the฀
Performance฀Unit฀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.฀
8.9฀ The฀maximum฀number฀of฀Shares฀that฀may฀be฀issued฀to฀any฀Employee฀or฀Director฀pursuant฀to฀
the฀exercise฀of฀Performance฀Units฀may฀not฀exceed฀3,750,000฀Shares.฀For฀purposes฀of฀the฀preceding฀sentence,฀
any฀Performance฀Units฀paid฀in฀the฀form฀of฀cash฀will฀be฀deemed฀to฀have฀been฀paid฀in฀Shares,฀with฀the฀number฀
of฀Shares฀being฀deemed฀paid฀equal฀to฀the฀amount฀of฀cash฀paid฀to฀the฀Employee฀or฀Director฀divided฀by฀the฀Fair฀
Market฀Value฀of฀a฀Share฀on฀the฀date฀of฀payment.
9. Exercise
An฀Option,฀Right฀or฀Performance฀Unit,฀subject฀to฀the฀provisions฀of฀the฀Agreement฀under฀which฀it฀was฀
granted,฀may฀be฀exercised฀in฀whole฀or฀in฀part฀by฀the฀delivery฀to฀the฀Company฀of฀written฀notice฀of฀the฀exercise,฀
in฀such฀form฀as฀the฀Committee฀may฀prescribe,฀accompanied,฀in฀the฀case฀of฀an฀Option,฀by฀(i)฀full฀payment฀for฀
the฀Shares฀with฀respect฀to฀which฀the฀Option฀is฀exercised,฀or฀(ii)฀irrevocable฀instructions฀to฀a฀broker฀selected฀
by฀the฀Committee฀to฀consummate฀“cashless”฀exercises฀to฀deliver฀promptly฀to฀the฀Company฀cash฀equal฀to฀full฀
payment฀for฀the฀Shares฀for฀which฀the฀Option฀is฀exercised.฀
10. Non-transferability
Options,฀Rights,฀Performance฀Units฀and฀Incentive฀Shares฀granted฀or฀awarded฀under฀the฀Plan฀will฀not฀
be฀ transferable฀ otherwise฀ than฀ by฀ will฀ or฀ the฀ laws฀ of฀ descent฀ and฀ distribution,฀ and฀ an฀ Option,฀ Right฀ or฀
Performance฀Unit฀may฀be฀exercised฀during฀his฀or฀her฀lifetime฀only฀by฀the฀Optionee฀or,฀in฀the฀event฀of฀his฀
or฀ her฀ legal฀ disability,฀ by฀ his฀ or฀ her฀ legal฀ representative.฀ A฀ Related฀ Right฀ or฀ Related฀ Performance฀ Unit฀ is฀
transferable฀only฀when฀the฀Related฀Option฀is฀transferable฀and฀only฀with฀the฀Related฀Option฀and฀under฀the฀
same conditions.
11. Restricted Stock Awards
11.1฀ The฀ Committee฀ is฀ hereby฀ authorized฀ to฀ award฀ Shares฀ of฀ Restricted฀ Stock฀ to฀ Employees฀ and฀
Directors.
11.2฀ Restricted฀Stock฀awards฀under฀the฀Plan฀will฀consist฀of฀Shares฀that฀are฀restricted฀against฀transfer,฀
subject฀ to฀ forfeiture,฀ and฀ subject฀ to฀ such฀ other฀ terms฀ and฀ conditions฀ intended฀ to฀ further฀ the฀ purposes฀ of฀
the฀Plan฀as฀may฀be฀determined฀by฀the฀Committee.฀The฀terms฀and฀conditions฀may฀provide,฀in฀the฀discretion฀
of฀the฀Committee,฀for฀the฀vesting฀of฀such฀awards฀to฀ be฀ contingent฀upon฀ the฀achievement฀of฀one฀ or฀more฀
Performance฀Goals.฀
11.3฀ Restricted฀Stock฀awards฀will฀be฀evidenced฀by฀Agreements฀containing฀provisions฀setting฀forth฀
the terms and conditions governing such awards. Each such agreement will contain the following:
฀ (a)฀ prohibitions฀ against฀ the฀ sale,฀ assignment,฀ transfer,฀ exchange,฀ pledge,฀ hypothecation,฀
or฀other฀encumbrance฀of฀(i)฀the฀Shares฀awarded฀as฀Restricted฀Stock฀under฀the฀Plan,฀(ii)฀the฀right฀to฀vote฀the฀
Shares,฀or฀(iii)฀the฀right฀to฀receive฀dividends฀thereon฀in฀each฀case฀during฀the฀restriction฀period฀applicable฀to฀
the฀Shares;฀provided,฀however,฀that฀the฀Grantee฀will฀have฀all฀the฀other฀rights฀of฀a฀shareholder฀including,฀but฀
not฀limited฀to,฀the฀right฀to฀receive฀dividends฀and฀the฀right฀to฀vote฀the฀Shares;฀
฀ (b)฀ at฀least฀one฀term,฀condition฀or฀restriction฀constituting฀a฀“substantial฀risk฀of฀forfeiture”฀as฀
defined฀in฀Section฀83(c)฀of฀the฀Code;฀
฀ (c)฀ such฀other฀ terms,฀conditions฀and฀restrictions฀as฀ the฀Committee฀in฀its฀discretion฀may฀
specify฀(including,฀without฀limitation,฀provisions฀creating฀additional฀substantial฀risks฀of฀forfeiture);฀
฀ (d)฀ a฀requirement฀that฀each฀certificate฀or฀other฀evidence฀of฀ownership฀representing฀Shares฀
of฀Restricted฀Stock฀must฀be฀deposited฀with฀the฀Company,฀or฀its฀designee,฀and฀will฀bear฀the฀following฀legend:฀
“This฀ certificate฀ or฀ other฀ evidence฀ of฀ ownership฀ and฀ the฀ shares฀ of฀ stock฀
represented฀hereby฀are฀subject฀to฀the฀terms฀and฀conditions฀(including฀the฀risks฀
of฀ forfeiture฀ and฀ restrictions฀ against฀ transfer)฀ contained฀ in฀ THE฀ KROGER฀ CO.฀