Harris Teeter 2009 Annual Report Download

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Innovate. Create. Deliver.
2009 RUDDICK ANNUAL REPORT AND PROXY STAT E M E N T

Table of contents

  • Page 1
    2009 R U D D ICK ANNU AL R EP ORT AND PROX Y S TAT EM ENT Innovate. Create. Deliver.

  • Page 2
    ... 19,800 46,451,240 Harris Teeter American & Efird Corporate Total Capital Expenditures Working Capital Total Assets Long-Term Debt - Including Current Portion Long-Term Debt as a Percent of Capital Employed Number of Employees Common Shares Outstanding 1 Operating Profit, Net Income, Net...

  • Page 3
    ...ï,£ RUDDICK CORPORATION (Exact name of registrant as specified in its charter) North Carolina (State or other jurisdiction of incorporation or organization) 56-0905940 (I.R.S. Employer Identification Number) 301 S. Tryon St., Suite 1800, Charlotte, North Carolina (Address of principal executive...

  • Page 4
    ...'s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities ...Selected Financial Data ...Management's Discussion and Analysis of Financial Condition and Results of Operations ...Quantitative and Qualitative Disclosures about Market Risk ...Financial Statements and...

  • Page 5
    ... two executive officers who formulate and implement overall corporate objectives and policies. The Company's employees perform functions in a number of areas including finance, accounting, internal audit, risk management, financial reporting, employee benefits and public and shareholder relations...

  • Page 6
    ... As of September 27, 2009, Harris Teeter operated 189 supermarkets located in North Carolina (132), Virginia (33), South Carolina (11), Maryland (3), Tennessee (4), Delaware (2), District of Columbia (2), Florida (1) and Georgia (1). These supermarkets offer a full assortment of groceries, produce...

  • Page 7
    ... by a union. A&E considers its employee relations to be good. Available Information The Company's Internet address is www.ruddickcorp.com. The Company makes available, free of charge, on or through its website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form...

  • Page 8
    ... of expansion and renovation plans. Harris Teeter's new store opening program has accelerated in recent years and involves expanding the company's Washington, D.C. metro market area which incorporates northern Virginia, the District of Columbia, southern Maryland and coastal Delaware. The...

  • Page 9
    ... a strategy of growth, renovation and expansion in light of current highly competitive industry conditions could lead to a near-term decline in earnings as a result of opening and operating a substantial number of new stores, particularly with respect to stores in markets where Harris Teeter does...

  • Page 10
    ... sales growth, profitability or productivity may adversely impact A&E's financial condition and results of operations. Additionally, expansions involving foreign markets may present other complexities that may require additional attention from members of management. The diversion of management...

  • Page 11
    ...'s results of operations, financial condition and cash flows. Item 1B. None. Item 2. Properties Unresolved Staff Comments The executive office of the Company is located in a leased space of a downtown office tower at 301 S. Tryon Street, Suite 1800, Charlotte, North Carolina, 28202. Harris Teeter...

  • Page 12
    ...goods. In addition, the Greensboro facility has frozen goods storage and a single pick facility for health and beauty care products and other general merchandise. Harris Teeter operates its retail stores primarily from leased properties. As of September 27, 2009, Harris Teeter held title to the land...

  • Page 13
    ... as Managing Partner of the Charlotte, North Carolina office of Price Waterhouse and PricewaterhouseCoopers from January of 1997 to June of 1999. He joined Price Waterhouse in 1972. Frederick J. Morganthall, II, age 58, was elected President of Harris Teeter on October 30, 1997. Prior to that time...

  • Page 14
    ... Company's common stock (the "Common Stock"), number of shareholders of record, market price information per share of Common Stock and dividends declared per share of Common Stock for each quarterly period in fiscal 2009 and 2008 is set forth below. The Common Stock is listed on the New York Stock...

  • Page 15
    ... Five-Year Period Ending September 27, 2009 The following graph presents a comparison of the yearly percentage change in the Company's cumulative total shareholders' return on Common Stock with the (i) Standard & Poor's 500 Index, (ii) Standard & Poor's Midcap 400 Index, (iii) Standard & Poor's Food...

  • Page 16
    ... date. Selected Financial Data (dollars in thousands, except per share data) 2009 (1) 2008 2007 2006 2005 Item 6. Net sales ...Operating profit ...Net income...Net income per share Basic ...Diluted ...Dividend per share...Total assets...Long-term debt -- including current portion ...Shareholders...

  • Page 17
    ..." and "club and warehouse stores," specialty supermarkets and drug stores. Generally, Harris Teeter's markets continue to experience new store opening activity and aggressive feature pricing or everyday low prices by competitors. In response, Harris Teeter utilizes information gathered from...

  • Page 18
    ... the Company's annual strategic planning process. Based on the revised expectations, A&E was required to perform an interim test for goodwill impairment and, as a result, recorded non-cash impairment charges related to its U.S. operating segment during the third quarter of fiscal 2009. Impairment...

  • Page 19
    ...Harris Teeter ...American & Efird ...Total ...SG&A Expenses Harris Teeter ...American & Efird ...Corporate ...Total ...Impairment Charges - A&E Goodwill ...Long-Lived Assets...Total ...Operating Profit (Loss) Harris Teeter ...American & Efird ...Corporate ...Total ...Other Expense, net ...Income Tax...

  • Page 20
    ... a further analysis of the segment operating results. Consolidated selling, general & administrative ("SG&A") expenses increased during fiscal 2009, when compared to the prior year, as a result of the increased operating costs at Harris Teeter driven by store expansion. The increase in SG&A expenses...

  • Page 21
    ... the construction period. Fiscal 2009 gross profit as a percent to sales declined 52 basis points from fiscal 2008 as a result of additional promotional activity designed to provide more value to Harris Teeter's customers. Management continues to adjust Harris Teeter's promotional spending programs...

  • Page 22
    ... new store opening schedule and market location. As a result of the sales and cost elements described above, operating profit declined 1.2% in fiscal 2009 from fiscal 2008 and increased 15.4% in fiscal 2008 from fiscal 2007. Harris Teeter continues to invest within its core markets, which management...

  • Page 23
    ...costs associated with the consolidation of one of A&E's manufacturing facilities in North Carolina into one of A&E's other North Carolina operations, which was completed subsequent to the end of fiscal 2009. The shifting of apparel production from the Americas to Asia has continued and management is...

  • Page 24
    ... operating performance and the Company's strong financial position provides the flexibility to continue with Harris Teeter's store development program that includes new and replacement stores along with the remodeling and expansion of existing stores. During fiscal 2010, Harris Teeter plans to open...

  • Page 25
    ... consolidated capital expenditures are planned to total approximately $155 million, consisting of $150 million for Harris Teeter and $5 million for A&E. Harris Teeter anticipates that its capital for new store growth and store remodels will be concentrated in its existing markets in fiscal 2010 as...

  • Page 26
    ... deferred compensation contracts. The net present value of these obligations is recorded by the Company and included with other long-term liabilities in the Company's consolidated balance sheets. (2) (3) (4) In connection with the closing of certain store locations, Harris Teeter has assigned...

  • Page 27
    ... requires, as a prerequisite, the completion of the earnings process and its realization or assurance of realizability. Vendor rebates, credits and other promotional allowances that relate to Harris Teeter's buying and merchandising activities, including lump-sum payments associated with long...

  • Page 28
    ... for price markdowns are credited to the cost of sales during the period in which the related markdown was taken and charged to the cost of sales. Slotting and stocking allowances received from a vendor to ensure that its products are carried or to introduce a new product at the Company's stores are...

  • Page 29
    ... a discount rate representing a return on high-quality fixed income securities with an average maturity equal to the average payout of the related liability. Harris Teeter liabilities represent approximately 95% of the total Company self-insurance reserves for workers compensation, general liability...

  • Page 30
    ... regarding the Company's pension and deferred compensation plans, see the Note entitled "Employee Benefit Plans" of the Notes to Consolidated Financial Statements in Item 8 hereof. The Company maintains a post-retirement healthcare plan for retirees whose sum of age and years of service equal at...

  • Page 31
    ... the Company's 2010 fiscal year beginning on September 28, 2009 and will be applied to business combinations occurring after the effective date. In December 2007, the FASB issued an update to its authoritative literature for reporting noncontrolling interest in consolidated financial statements. The...

  • Page 32
    ... fiscal year beginning on October 4, 2010. The Company is currently evaluating the impact of the updated standards on its consolidated financial statements. Item 7A. Quantitative and Qualitative Disclosures about Market Risk The Company does not utilize financial instruments for trading or other...

  • Page 33
    ...RUDDICK CORPORATION AND CONSOLIDATED SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE Page Reports of Independent Registered Public Accounting Firm ...Consolidated Balance Sheets, September 27, 2009 and September 28, 2008 ...Statements of Consolidated Income for the fiscal years...

  • Page 34
    ... Registered Public Accounting Firm The Board of Directors and Shareholders Ruddick Corporation: We have audited the accompanying consolidated balance sheets of Ruddick Corporation and subsidiaries (the Company) as of September 27, 2009 and September 28, 2008, and the related consolidated statements...

  • Page 35
    ... of Ruddick Corporation and subsidiaries as of September 27, 2009 and September 28, 2008, and the related consolidated statements of operations, shareholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended September 27, 2009, and our report dated...

  • Page 36
    ... ...Total Current Liabilities ...Long-Term Debt and Capital Lease Obligations ...Deferred Income Taxes ...Pension Liabilities ...Other Long-Term Liabilities ...Minority Interest ...Commitments and Contingencies ...Shareholders' Equity Common Stock, no par value - Shares Outstanding: 2009 - 48...

  • Page 37
    STATEMENTS OF CONSOLIDATED INCOME RUDDICK CORPORATION AND SUBSIDIARIES (dollars in thousands, except per share data) 52 Weeks Ended September 27, 2009 52 Weeks Ended September 28, 2008 52 Weeks Ended September 30, 2007 Net Sales ...Cost of Sales ...Selling, General and Administrative Expenses ......

  • Page 38
    ... Stock Options, Including Tax Benefits of $1,820 ...Directors' stock plan ...Share-Based Compensation ...Shares Effectively Purchased and Retired for Withholding Taxes ...Net Earnings ...Dividends ($0.44 a Share) ...Foreign Currency Translation Adjustment, Net of $298 for Taxes ...Pension Liability...

  • Page 39
    ... ...Proceeds from Long-Term Debt Borrowings ...Payments on Long-Term Debt and Capital Lease Obligations ...Dividends Paid...Proceeds from Stock Issued ...Share-Based Compensation Tax Benefits ...Purchase and Retirement of Common Stock ...Other, Net...Net Cash (Used in) Provided by Financing...

  • Page 40
    ... events through November 20, 2009, the filing date of this Form 10-K, and has determined that there were no subsequent events to recognize or disclose in these financial statements. Fiscal Year The Company's fiscal year ends on the Sunday nearest to September 30. However, the Company's Harris Teeter...

  • Page 41
    ... are generally intended to defray the costs of promotion, advertising and selling the vendor's products. Vendor rebates, credits and other promotional allowances that relate to Harris Teeter's buying and merchandising activities, including lump-sum payments associated with long-term contracts...

  • Page 42
    ... of (1) the market in which the store is located, (2) the results of its previous efforts to dispose of similar assets and (3) the current economic conditions. Investments The Company's Harris Teeter subsidiary invests in certain real estate development projects, with a managing partner or partners...

  • Page 43
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) Insurance The Company utilizes a combination of self-insured retention and high-deductible programs for most U.S. workers' compensation claims, healthcare claims, and general liability and automotive ...

  • Page 44
    ... of selling, general and administrative expenses in the retail supermarket segment are (a) the costs associated with store operations, including store labor and training, fringe benefits and incentive compensation, supplies and maintenance, regional and district management and store support, store...

  • Page 45
    ...The major components of selling, general and administrative expenses in the corporate segment are (a) the costs associated with a portion of compensation and benefits of holding company employees, and (b) certain other costs that are not related to the operating companies. Advertising Costs incurred...

  • Page 46
    ... awards plans. Stock Options and Stock Awards The Company uses fair-value accounting for all share-based payments to employees for new awards and previously granted awards that were not vested as of the first quarter of fiscal 2006. Compensation expense for stock awards are based on the grant date...

  • Page 47
    ... ...Work in Process ...Total Inventories ...COMPANY OWNED LIFE INSURANCE (COLI) $ 286,113 19,504 4,654 $ 310,271 $ 281,952 23,901 6,736 $ 312,589 The Company has purchased life insurance policies to fund its obligations under certain benefit plans for officers, key employees and directors. The...

  • Page 48
    ...the third quarter of fiscal 2009. A&E also recorded related deferred tax benefits of $2,932,000. There were no goodwill impairment charges required for fiscal 2008 or fiscal 2007. LEASES The Company leases certain equipment under agreements expiring during the next 6 years. Harris Teeter leases most...

  • Page 49
    ... the Company's ability to meet future liquidity requirements through borrowings available under the Company's revolving credit facility, including any liquidity requirements expected in connection with the Company's expansion plans for the foreseeable future. Long-term debt at September 27, 2009 and...

  • Page 50
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) INTEREST RATE SWAP AGREEMENTS During fiscal 2009, the Company entered into two separate three-year interest rate swap agreements with an aggregate notional amount of $80 million. The swap agreements ...

  • Page 51
    ... stock option of 10,000 shares, generally vested immediately, to each of its outside directors at the time of their initial election to the Board. Under each of the stock option plans, the exercise price of each stock option shall be no less than the market price of the Company's stock on the date...

  • Page 52
    ... Company's stock option plans as of September 27, 2009, September 28, 2008, and September 30, 2007, changes during the years ending on those dates and related weighted average exercise price is presented below (shares in thousands): Stock Options Shares 2009 Price Shares 2008 Price Shares 2007 Price...

  • Page 53
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) As of September 27, 2009, all outstanding stock options were exercisable and the price per share ranged from $11.50 to $35.24. The total cash received from stock options exercised for the exercise price and...

  • Page 54
    ... by applying the statutory tax rates to pre-tax income as follows (in thousands): 2009 2008 2007 Income tax on pre-tax income at the statutory federal rate of 35% ...Increase (decrease) attributable to: State and other income taxes, net of federal income tax benefit ...Tax credits ...Employee Stock...

  • Page 55
    ...thread - A&E. Harris Teeter operates a regional chain of supermarkets in the southeastern United States. A&E manufactures and distributes sewing thread for the apparel and other markets, technical textiles and embroidery thread throughout their global operations. The Company evaluates performance of...

  • Page 56
    ...life insurance contracts to support corporate-wide operations and benefit programs. Geographic information for the Company's fiscal years is based on the operating locations where the items were produced or distributed as follows (in thousands): 2009 2008 2007 Net Revenues - Domestic United States...

  • Page 57
    ... Employee retirement benefits or Company contribution amounts under the various plans are a function of both the years of service and compensation for a specified period of time before retirement. The Company's current funding policy for the Pension Plan is to contribute annually the amount required...

  • Page 58
    ... adjustment, net of tax benefit, is reported as a component of other comprehensive income and included in the Statements of Consolidated Shareholders' Equity and Comprehensive Income. Net periodic pension expense for the Company's defined benefit pension plans for fiscal years 2009, 2008 and 2007...

  • Page 59
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) Discount rates are based on the expected timing and amounts of the expected employer paid benefits and are established by reference to a representative yield curve of non-callable bonds with a credit rating...

  • Page 60
    ... Code, that was authorized for the purpose of providing retirement benefits for employees of the Company. The Company provides a matching contribution based on the amount of eligible compensation contributed by the associate and an automatic retirement contribution based on age and years of service...

  • Page 61
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) COMPUTATION OF EARNINGS PER SHARE (EPS) The following table details the computation of EPS for fiscal years 2009, 2008 and 2007 (in thousands except per share data): 2009 2008 2007 Basic EPS: Net income ...

  • Page 62
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) QUARTERLY INFORMATION (UNAUDITED) The Company's stock is listed and traded on the New York Stock Exchange. The following table sets forth certain financial information, the high and low sales prices and ...

  • Page 63
    ... and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. (b) Management's annual report on internal control over financial reporting. Management of the Company is...

  • Page 64
    ... and Management and Related Shareholder Matters The information required by this item is incorporated herein by reference to the sections entitled "Principal Shareholders" and "Election of Directors-Beneficial Ownership of Company Stock" in the 2010 Proxy Statement and "Equity Compensation Plan...

  • Page 65
    ...and Director Independence The information required by this item is incorporated herein by reference to the section entitled "Transactions with Related Persons and Certain Control Persons" and "Corporate Governance Matters" in the 2010 Proxy Statement. Item 14. Principal Accountant Fees and Services...

  • Page 66
    ... Purchase and Private Shelf Agreement dated April 15, 1997 between Ruddick Corporation and The Prudential Insurance Company of America, incorporated herein by reference to Exhibit 4.3 of the registrant's Annual Report on Form 10-K for the fiscal year period ended September 28, 1997 (Commission File...

  • Page 67
    ... between the Company and First Union National Bank, incorporated herein by reference to Exhibit 10.9 of the registrant's Annual Report on Form 10-K for the fiscal year ended October 1, 2000 (Commission File No. 1-6905). Ruddick Corporation Senior Officers Insurance Program Plan Document and Summary...

  • Page 68
    ...File No. 1-6905).** Form of Ruddick Corporation Non-Employee Director Nonqualified Stock Option Agreement for use in connection with the 1995 Plan, 1997 Plan, 2000 Plan and 2002 Plan, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated November 17, 2004...

  • Page 69
    ...'s Quarterly Report on Form 10-Q for the quarterly period ended June 28, 2009 (Commission File No. 1-6905).** Summary of Non-Employee Director Compensation. List of Subsidiaries of the Company. Consent of Independent Registered Public Accounting Firm. Certification of Chief Executive Officer...

  • Page 70
    * ** + (b) Incorporated by reference. Indicates management contract or compensatory plan required to be filed as an Exhibit. Indicates exhibits filed herewith and follow the signature pages. Exhibits See (a)(3) above. (c) Financial Statement Schedules See (a)(2) above. 66

  • Page 71
    ... duly authorized. RUDDICK CORPORATION (Registrant) Dated: November 20, 2009 By: /s/ THOMAS W. DICKSON Thomas W. Dickson, Chairman of the Board, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 72
    SCHEDULE I RUDDICK CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES For the Fiscal Years Ended September 27, 2009, September 28, 2008 and September 30, 2007 (in thousands) COLUMN A COLUMN B BALANCE AT BEGINNING OF FISCAL YEAR COLUMN C ADDITIONS CHARGED TO COSTS AND ...

  • Page 73
    ... December 28, 2009 TO THE SHAREHOLDERS OF RUDDICK CORPORATION The Annual Meeting of the Shareholders of your Company will be held in the Auditorium, 12th Floor, Two Wachovia Center, 301 S. Tryon Street, Charlotte, North Carolina, on Thursday, February 18, 2010 at 10:00 A.M., local time. Pursuant to...

  • Page 74
    ... of the North Carolina Business Corporation Act, December 11, 2009, has been fixed as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting, and accordingly, only holders of the Company's Common Stock of record at the close of business...

  • Page 75
    ... PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS to be held on February 18, 2010 This statement, first mailed or made available to shareholders on or about December 28, 2009, is furnished in connection with the solicitation by the Board of Directors of Ruddick Corporation (herein called the "Company...

  • Page 76
    ... the provisions of the North Carolina Business Corporation Act, December 11, 2009, has been fixed as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting. Accordingly, only holders of the Common Stock of record at the close of business on that...

  • Page 77
    ... table. Name and Address of Beneficial Owner Number of Shares Beneficially Owned (1) Percent of Class T. Rowe Price Trust Company (2) ...Trustee of the Ruddick Retirement and Savings Plan Post Office Box 89000 Baltimore, Maryland 21289 Neuberger Berman Group LLC (3) ...605 Third Avenue New York, NY...

  • Page 78
    (5) Barclays Global Investors, NA ("Barclays Investors") reported in its Schedule 13G/A filed with the SEC on February 5, 2009, that it had beneficial ownership of 2,480,947 shares, collectively with its affiliates, Barclays Global Fund Advisors ("Barclays Advisors"), Barclays Global Investors, LTD...

  • Page 79
    ... term of one year. All of the nominees are currently members of the Board of Directors. Mr. Alan T. Dickson is retiring from the Board of Directors effective as of the opening of the Annual Meeting. It is intended that the persons named as proxies in the accompanying form of proxy will vote to elect...

  • Page 80
    ...LLC, a company involved in commercial real estate, brokerage and development, since September 1998. Mr. Patrick has been a director of the Company since August 2003 and serves as a director of The Cato Corporation. RoBeRt h. sPilman, JR., age 53, has been the President and Chief Executive Officer of...

  • Page 81
    ... Ruddick Corporation Director Deferral Plan (the "Deferral Plan"), non-employee directors of the Company may generally defer the payment of the annual fee and/or board meeting fees. The fees deferred by a director are converted into stock units and credited to the director's account as of the date...

  • Page 82
    ... 100% vested upon grant. Options are currently granted only upon initial election or appointment as director. The outstanding stock options for each director as of September 27, 2009 were as follows: Outstanding Stock Option Awards at Fiscal Year-End for 2009 Name Number (2) John R. Belk ...John...

  • Page 83
    ...independent director, in accordance with the independence requirements of the New York Stock Exchange. The Compensation Committee met one (1) time during Fiscal 2009, for more information see the "Report of the Compensation Committee" appearing elsewhere in this Proxy Statement. Corporate Governance...

  • Page 84
    ... table presents information regarding the beneficial ownership of the Common Stock, within the meaning of applicable securities regulations, of all current directors and all nominees for director of the Company and the executive officers named in the Summary Compensation Table for 2009 included...

  • Page 85
    ... delivery to the current participating non-employee directors. A more detailed discussion regarding the Deferral Plan is included elsewhere in this Proxy Statement under the heading "Election of Directors - Directors' Fees and Attendance". The number of stock units that have been credited to each of...

  • Page 86
    ... may be acquired by Mr. Woodlief upon the exercise of stock options that are currently exercisable or become exercisable within sixty days of October 31, 2009, as to which he would have sole voting and investment power upon acquisition; and 1,799 shares allocated to his RRSP account, as to which he...

  • Page 87
    ... another company, during a time in which any of the Company's executive officers served on that other company's compensation committee, and over three years have passed since such service or employment relationship ended. Business Relationships. A director was an executive officer or an employee, or...

  • Page 88
    ... in the New York Stock Exchange Listed Company Manual. Executive Sessions of Non-Management Directors Non-management directors meet without management present at regularly scheduled executive sessions. In addition, to the extent that, from time to time, the group of non-management directors includes...

  • Page 89
    ... under the caption "Shareholder Proposals". A copy of the Company's Bylaws is available upon request to: Ruddick Corporation, 301 South Tryon Street, Suite 1800, Charlotte, North Carolina 28202, Attention: Secretary of the Corporation. All nominees for election to the Board of Directors have been...

  • Page 90
    ... report. Based on this review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended September 27, 2009...

  • Page 91
    .... The Company's executive compensation program consists generally of annual base salary, annual cash incentive bonuses, long-term equity incentive compensation, such as stock options, restricted stock and performance share grants, and other benefits. The Company's practice is to provide incentives...

  • Page 92
    ... relating to all elements of compensation paid to each of the four named executive officers listed in the Summary Compensation Table for 2009, which we refer to as "NEOs". In its annual review of executive compensation, the Compensation Committee meets with the Company's Chief Executive Officer...

  • Page 93
    ... supermarket subsidiary, or American & Efird, Inc. ("A&E"), the Company's textile subsidiary). These goals included achievement of financial projections for sales and operating profit, achieving a pre-determined number of new Harris Teeter stores opened, achieving a variety of specific productivity...

  • Page 94
    ... 2009, Incentive Bonuses for executives employed directly by the holding Company were based on NOPAT Return. With respect to an executive officer employed directly by Harris Teeter and A&E, the Incentive Bonus was based on operating profit margin for Harris Teeter and NOPAT Return for A&E. Generally...

  • Page 95
    ...stock. Historically, the Company provided long-term equity incentive compensation to its executives through the grant of stock options pursuant to its shareholder approved equity incentive plans. Beginning in Fiscal 2005, the Company began to utilize grants of restricted stock and performance shares...

  • Page 96
    ... considers the number of options, shares of restricted stock and performance shares previously granted to employees when approving new grants. The Company's equity based incentive compensation awards are intended to provide executive officers a vested interest in the long-term financial performance...

  • Page 97
    ...upon A&E meeting its operating profit projection for Fiscal 2009. Once issued, these shares of restricted stock vest 25% per year on each of the first four anniversaries of the date of the issuance. Pension Plan and Supplemental Executive Retirement Plan. NEOs participate in the Ruddick Corporation...

  • Page 98
    ...and age and service points, eligible participants will receive an annual automatic retirement contribution equal to between 1% and 5% of covered pay, subject to certain limitations. Disability Benefits. The Company generally provides income protection in the event of disability under group insurance...

  • Page 99
    ... Revenue Code of 1986 (the "Code") generally limits the tax deductibility by the Company for compensation paid to the Chief Executive Officer and the other most highly compensated executive officers to $1 million per officer per year, unless it qualifies as "performance-based" compensation. To...

  • Page 100
    ... Insurance Plan ($) ...Ruddick Retirement and Savings Plan ($) ...Executive Long Term Disability Plan ($) ...Key Employee Life Insurance Plan ($)...Country Club Dues (a)($) ...Aircraft Usage (a)($) ...Tax Reimbursement ($) ...Dividends on unvested Restricted Stock Awards ($) ...Ruddick Corporation...

  • Page 101
    ... in the "Compensation Discussion and Analysis" section. For executives employed by Harris Teeter and A&E, issuances of performance shares were 100% subject to the applicable company meeting its respective operating profit projections for Fiscal 2009, and in the case of Harris Teeter, the individual...

  • Page 102
    ... Equity Awards at Fiscal Year-End for 2009 Option Awards Stock Awards Equity Equity Incentive Incentive Plan Awards: Plan Awards: Market or Market Number of Unearned Payout Value Value of Shares, of Unearned Shares or Units of Units or Other Shares, Units or Other Rights Stock That Rights That Have...

  • Page 103
    Vesting Date # of Shares Vesting John B. Woodlief ... 11/15/2009 11/16/2009 11/17/2009 11/20/2009 11/15/2010 11/16/2010 11/20/2010 ... 900 900 900 900 900 900 12,600 Frederick J. Morganthall, II ... 11/15/2009 11/16/2009 11/17/2009 11/20/2009 11/15/2010 11/16/2010 11/20/2010 11/15/2011 11/16/2011 11...

  • Page 104
    ... Ruddick's common stock on September 25, 2009, the last trading day in the fiscal year ended September 27, 2009 ($26.62) (the "Closing Market Price"). Amounts shown are target number of performance shares granted in 2009, assuming Harris Teeter and A&E each meet or exceed their respective operating...

  • Page 105
    ... had 45 points or more as of December 31, 2005. A participant's normal annual retirement benefit under the Pension Plan at age 65 is an amount equal to 0.8% (0.6% for employees of American & Efird, Inc.) of the participant's final average earnings multiplied by years of service at retirement, plus...

  • Page 106
    Non-Qualified Defined Contribution Plan. The Company maintains the Ruddick Corporation Flexible Deferral Plan (the "Non-Qualified Defined Contribution Plan"). This plan is an unfunded, excess benefit plan that provides certain highly compensated employees, including the NEOs, the opportunity to ...

  • Page 107
    ... event a NEO's employment is terminated by the Company either before or after a "change in control" other than for "cause", death or disability, or by the NEO for "good reason", each such NEO is entitled to continue certain employee benefits, including medical/dental, disability and life insurance...

  • Page 108
    ... Woodlief (b) A&E's annualized NOPAT return on invested capital of A&E in the case of Mr. Jackson or (c) operating profit margin of Harris Teeter for Mr. Morganthall, calculated for the portion of the fiscal year period to date as of the most recent fiscal quarter ending on or before the "change in...

  • Page 109
    ... remain exercisable for the remaining term of such option. Accrued and Vested Benefits. Each of the NEOs has accrued various benefits under the Company's compensation programs and retirement and other broad-based employee benefit plans. Many of these benefits and awards are fully vested and each of...

  • Page 110
    ...by the Closing Market Price. The value of the performance share awards is calculated by multiplying the number of accelerated shares by the average of the high and low trading price on the last business day prior to the assumed termination of service date in accordance with plan administration rules...

  • Page 111
    ... awards is calculated by multiplying the number of accelerated restricted stock and performance shares by the Closing Market Price. The value of the health and welfare benefits represents the aggregate estimated net cost to the Company of health and welfare benefits provided to each NEO under the...

  • Page 112
    ...'s review of the representations of management and the report of the independent auditors to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended...

  • Page 113
    ... shares of Common Stock present at the Annual Meeting in person or by proxy and entitled to vote. The Board of Directors recommends that the shareholders vote for the ratification of the appointment of KPMG LLP as the Company's Independent Registered Public Accounting Firm for the Fiscal Year Ending...

  • Page 114
    ... and the fees incurred. The Audit Committee reviews requests for the provision of audit and nonaudit services by the Company's independent public accountants and determines if they should be approved. Such requests could be approved either at a meeting of the Audit Committee or upon approval of...

  • Page 115
    ... in the proxy statement as appropriate. The Company does not have a formal policy concerning the review, approval or ratification of related party transactions, however the Board of Directors considers any related party transactions on a case by case basis. During Fiscal 2009, Metro Marketing acted...

  • Page 116
    ... Directors, must also comply with Article III, Section 12 of the Company's Bylaws, which requires that a shareholder give written notice to the Company not later than the 45th day prior to the first anniversary of the date the Company first mailed its proxy materials for the preceding year's annual...

  • Page 117
    ...the Securities and Exchange Commission. Shareholders may also obtain a copy of these reports, without charge, upon request to: Ruddick Corporation, 301 South Tryon Street, Suite 1800, Charlotte, North Carolina 28202, Attention: Secretary of the Corporation. OTHER MATTERS The Board of Directors knows...

  • Page 118
    ..., Harris Teeter, Inc. Fred A. Jackson President, American & Efird, Inc. Shareholder Information Corporate Address 301 S. Tryon Street Suite 1800 Charlotte, NC 28202 704-372-5404 New York Stock Exchange (NYSE) Listing Common stock symbol: RDK The most recent certifications by our Chief Executive...

  • Page 119
    Ruddick Corporation Ruddick Corporation is a holding company with two primary operating subsidiaries- Harris Teeter, a leading regional supermarket chain, and American & Efird, one of the world's largest global manufacturers and distributors of industrial sewing thread, embroidery thread and ...