Kroger 2013 Annual Report Download - page 71
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15. Modification, Extension and Renewal of Options, Rights, Performance Units, Restricted Stock
and Incentive Shares
SubjecttothetermsandconditionsandwithinthelimitationsofthePlan,theCommitteemaymodify,
extendorrenewoutstandingOptions,RightsandPerformanceUnits,oracceptthesurrenderofoutstanding
options,rightsandperformanceunits(totheextentnottheretoforeexercised)grantedunderthePlan or
underanyotherplanoftheCompany,aSubsidiaryoracompanyorsimilarentityacquiredbytheCompany
oraSubsidiary,andauthorizethegrantingofnewOptions,RightsandPerformanceUnitspursuanttothe
Planinsubstitutiontherefor(totheextentnottheretoforeexercised),andthesubstitutedOptions,Rightsand
PerformanceUnitsmayspecifyalongertermthanthesurrenderedoptions,rightsandperformanceunitsor
mayhaveanyotherprovisionsthatareauthorizedbythePlan;providedthattheexercisepricemaynotbe
lessthanthatofthesurrenderedoption,rightsandperformanceunits.Subjecttothetermsandconditions
and within the limitations of the Plan, the Committee may modify the terms of any outstanding Agreement
providingforawardsofRestrictedStockorIncentiveShares.Notwithstandingtheforegoing,however,no
modificationofanOption,RightorPerformanceUnitgrantedunderthePlan,oranawardofRestrictedStock
orIncentiveShares,will,withouttheconsentoftheOptioneeorGrantee,alterorimpairanyoftheOptionee’s
orGrantee’srightsorobligations.
16. Cash Bonuses
TwotypesofbonusescanbeawardedundertheCashBonusProgram;anannualbonusawardforeach
fiscalyear,andalong-termbonusawardformeasurementperiodsinexcessofoneyear.Bonuspaymentsare
basedontheCompany’sperformancemeasuredagainstPerformanceGoalsestablishedbytheCommittee.
TheCommitteeestablishesabonus“potential”foreachbonuspayableundertheCashBonusProgramforeach
participant,basedontheparticipant’slevelwithintheCompany,andactualpayoutscanexceedthatamount
whentheCompany’sperformanceexceedsthepre-establishedthresholds.InitiallythePerformanceGoals
forannualbonuseswillincludethefollowingcomponents:(i)EBITDA;(ii)identicalsales;(iii)achievement
ofstrategicinitiatives,and(iv)achievementofsupermarketfuelcentergoalsforEBITDA,gallonssold,and
number of fuel centers. Initially the Performance Goals for long-term bonuses will include the following
components:(i)performanceinfourkeycategoriesintheCompany’sstrategicplan,(ii)reductioninoperating
costsasapercentageofsales,(iii)performanceincategoriesdesignedtomeasureassociateengagement,and
(iv).Nosinglecashbonustoaparticipantmayexceed$5,000,000.
17. Effectiveness of the Plan
The Plan and any amendments requiring shareholder approval pursuant to Article 14 are subject to
approvalbyvoteoftheshareholdersoftheCompanywithin12monthsaftertheiradoptionbytheBoard.
Subjecttothatapproval,thePlaniseffectiveuponapproval bytheshareholdersandanyamendmentsare
effectiveonthedateonwhichtheyareadoptedbytheBoard.Options,Rights,PerformanceUnits,Restricted
StockandIncentiveSharesmaybegrantedorawardedpriortoshareholderapprovalofthePlanoramendments,
buteachsuchOption,Right,PerformanceUnit,RestrictedStockorIncentiveSharegrantorawardwillbe
subjecttotheapprovalofthePlanoramendmentsbytheshareholders.ThedateonwhichanyOption,Right,
PerformanceUnit,RestrictedStockorIncentiveSharesgrantedorawardedpriortoshareholderapprovalof
thePlanoramendmentisgrantedorawardedwillbetheDateofGrantforallpurposesasiftheOption,Right,
PerformanceUnit,RestrictedStockorIncentiveShareshadnotbeensubjecttoapproval.NoOption,Rightor
PerformanceUnitmaybeexercisedpriortosuchshareholderapproval,andanyRestrictedStockorIncentive
Sharesawardedwillbeforfeitedifsuchshareholderapprovalisnotobtained.
18. Term of the Plan
UnlesssoonerterminatedbytheBoardpursuanttoArticle14,thePlanwillterminateonthedateten
yearsafteritsadoptionbytheBoard,andnoOptions,Rights,PerformanceUnits,RestrictedStockorIncentive
Sharesmaybegrantedorawardedaftertermination.TheterminationwillnotaffectthevalidityofanyOption,
Right,PerformanceUnit,RestrictedStockorIncentiveSharesoutstandingonthedateoftermination.