Harris Teeter 2009 Annual Report Download - page 115

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TRANSACTIONS WITH RELATED PERSONS AND CERTAIN CONTROL PERSONS
The Company’s Code of Business Conduct and Ethics provides that all employees, officers and directors
must avoid any activity that is, or has the appearance of, conflicting with the interests of the Company and that
transactions in which certain related persons may have a material interest must be disclosed to the Company.
Related party transactions are reported to the Company’s Secretary in response to an annual written questionnaire,
or by the parties involved from time to time, and reviewed by legal counsel for inclusion 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 as a designated broker for Harris Teeter for several of its HT
Trader® private label products and other specialty products. Metro Marketing, in its role as independent broker,
performed various services on behalf of Harris Teeter including order placement, interface with manufacturers
for product issues or product problems, marketing and retail support services and the development of new
products. Third party manufacturers represented by Metro Marketing that provide these products to Harris
Teeter are required to pay Metro Marketing a fee based upon the amount of product sold. Rush Dickson (the
brother of Thomas W. Dickson) is the owner of Metro Marketing. During Fiscal 2009, Harris Teeter purchased
approximately $19,361,000 of product from manufacturers represented by Metro Marketing resulting in fees of
approximately $659,000 paid to Metro Marketing.
John Dickson (the brother of Thomas W. Dickson) is the Director of Property Development for Harris
Teeter and was paid an aggregate salary, bonus and taxable benefits of $145,668 during Fiscal 2009.
Effective May 1, 2002, Alan T. Dickson and R. Stuart Dickson (the father of Thomas W. Dickson)
(collectively, the “Retired Executives”) retired from the Company as executive officers, but retained their
positions on the Board of Directors as Chairman of the Board of Directors and Chairman of the Executive
Committee of the Board of Directors, respectively. At that time, the Retired Executives became eligible to
receive retirement benefits earned during their employment with the Company. The targeted aggregate annual
retirement benefit for each of the Retired Executives pursuant to the SERP, Pension Plan and Social Security
was $241,573. In addition, beginning in January 2003 each of Alan T. Dickson and R. Stuart Dickson began
to receive monthly payments for a fifteen-year period pursuant to, and in accordance with the terms of, an
historical deferred compensation plan in the amounts of $26,315 and $19,899, respectively.
Effective March 31, 2006, Thomas W. Dickson was elected the new Chairman of the Board of Directors
and Alan T. Dickson and R. Stuart Dickson retired from their positions as Chairman of the Board of Directors
and Chairman of the Executive Committee of the Board of Directors, respectively. As described herein, since the
Retired Executives have retired from their respective leadership positions on the Board of Directors, effective
March 31, 2006, they stopped receiving the benefits relating to their service as Chairman of the Board of
Directors and Chairman of the Executive Committee. However, in recognition of each of their 38 years of service
as Company executives and their invaluable contributions to the Company, upon the approval of the Board of
Directors, the Company entered into a new Supplemental Executive Retirement Plan with each of Alan T. and R.
Stuart Dickson (together, the “March 2006 Retirement Plans”) that provides each an annual life-time payment
in the amount of $98,000, paid in equal monthly installments. Each of the March 2006 Retirement Plans became
effective as of March 31, 2006, and the first of the monthly payments began on April 1, 2006. Each of the Retired
Executives has been permitted to continue to use the Company’s parking facilities and administrative support for
personal purposes, but is required to reimburse the Company for such usage. Consistent with past practice, each
of them may also request to use Company aircraft for personal purposes, subject to availability and approval by
the Company. No reimbursement to the Company was historically required for such use, nor is reimbursement
currently required or expected to be required in the future. However, IRS regulations require reporting of such
use as taxable income to the individual, determined in accordance with rates prescribed by those regulations.
The Retired Executives will continue to receive the retirement benefits earned as employees with the Company
and, as long as they continue as non-employee directors of the Company, each will continue to receive the annual
fees, meeting fees and other compensation that the Company pays its non-employee directors from time to time.
R. Stuart Dickson retired as a non-employee director at the 2008 annual meeting of shareholders.