Kroger 2015 Annual Report Download - page 47

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(2) These amounts relate to the long-term cash bonus potential issued under 2015 Long-Term Incentive
Plan, which covers performance during fiscal years 2015, 2016 and 2017. The long-term cash bonus
potential amount equals the annual base salary of the NEOs as of the last day of fiscal 2014 (or
date of plan entry, if later). By the terms of the plan, payouts are limited to no more than 100% of a
participant’s long-term cash bonus potential; accordingly, the amount listed under “Maximum” equals
the participant’s long-term cash bonus potential. Because the actual payout is based on the level of
performance achieved, the target amount is not determinable and therefore the amount listed under
“Target” is a representative amount based on the probable outcome of the performance conditions.
(3) These amounts represent performance units awarded under the 2015 Long-Term Incentive Plan,
which covers performance during fiscal years 2015, 2016 and 2017. The amount listed under
“Maximum” represents the maximum number of common shares that can be earned by the NEO
under the award. Because the actual payout is based on the level of performance achieved, the target
amount is not determinable and therefore the amount listed under “Target” reflects a representative
amount based on the probable outcome of the performance conditions. The grant date fair value
reported in the last column is based on the probable outcome of the performance conditions as of
the grant date. This amount is consistent with the estimate of aggregate compensation cost to be
recognized by the Company over the three-year performance period of the award determined as of
the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. The aggregate
grant date fair value of these awards is included in the Summary Compensation Table for 2015 in the
“Stock Awards” column and described in footnote 2 to that table.
(4) These amounts represent the number of shares of restricted stock granted in 2015. The aggregate
grant date fair value reported in the last column is calculated in accordance with FASB ASC Topic
718. The aggregate grant date fair value of these awards is included in the Summary Compensation
Table for 2015 in the “Stock Awards” column and described in footnote 2 to that table.
(5) These amounts represent the number of stock options granted in 2015. Options are granted with an
exercise price equal to the closing price of Kroger common shares on the grant date. The aggregate
grant date fair value reported in the last column is calculated in accordance with FASB ASC Topic
718. The aggregate grant date fair value of these awards is included in the Summary Compensation
Table for 2015 in the “Option Awards” column.
The Compensation Committee, and the independent members of the Board in the case of the CEO,
established the bonus potentials shown in this table as “Target” amounts for the performance-based
annual cash bonus awards, and established the amounts shown in this table as “Maximum” amounts for
the long-term cash bonus awards and the performance unit awards. Amounts are payable to the extent
that performance meets specific performance goals established by the Compensation Committee at the
beginning of the performance period. As described in the Compensation Discussion and Analysis, actual
earnings under the annual performance-based cash bonus plan may exceed the target amount if the
Company’s performance exceeds the performance goals, but are limited to 200% of the target amount.
The Compensation Committee, 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 NEO, under which common shares
are earned to the extent performance meets specific objectives established at the beginning of the
performance period. The performance units and the long-term cash bonus awards are more particularly
described in the Compensation Discussion and Analysis.
Restrictions on restricted stock awarded to the NEOs normally lapse, so long as the officer is then
in our employ, in equal amounts on each of the first five anniversaries of the grant date, except that
the awards granted to Messrs. Schlotman, Donnelly, Hjelm and Morganthall on 9/17/2015 and 9,132
shares of the award granted to Mr. Morganthall on 7/15/15 vest in equal amounts on each of the first
three anniversaries of the grant date. Any dividends declared on Kroger common shares are payable on
unvested restricted stock. Nonqualified stock options granted to the NEOs normally vest, so long as the
officer is then in our employ, in equal amounts on each of the first five anniversaries of the grant date.