Harris Teeter 2010 Annual Report Download

Download and view the complete annual report

Please find the complete 2010 Harris Teeter annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

2010 RUDDICK ANNUAL REPORT AND PROXY STATEMENT
Innovate. Create. Deliver.

Table of contents

  • Page 1
    2 0 1 0 RU D D I CK A NNU A L RE P O RT A ND P RO XY STATE M E NT Innovate. Create. Deliver.

  • Page 2
    ... 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 Income Per Share - Diluted and related returns...

  • Page 3
    ..., Charlotte, North Carolina (Address of principal executive offices) Registrant's telephone number, including area code: (704) 372-5404 Securities registered pursuant to Section 12(b) of the Act: 28202 (Zip Code) Title of each class: Common Stock Name of exchange on which registered: New York...

  • Page 4

  • Page 5
    ... and Financial Statement Schedules ...62 Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters ...Certain Relationships and Related Transactions, and Director Independence...

  • Page 6
    ...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 7
    Harris Teeter As of the end of fiscal 2010, Harris Teeter operated 199 supermarkets located in North Carolina (134), Virginia (35), South Carolina (13), Maryland (5), Tennessee (5), Delaware (3), District of Columbia (2), Florida (1) and Georgia (1). These supermarkets offer a full assortment of ...

  • Page 8
    ... 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 9
    ... and management resources on the development and implementation 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...

  • Page 10
    ...on the company's operations. Harris Teeter's Geographic Concentration May Expose it to Regional or Localized Downturns Harris Teeter operates primarily in the southeastern United States, with a strong concentration in North Carolina, Virginia and South Carolina. As a result, Harris Teeter's business...

  • Page 11
    ... expenses and operating results. A&E Has Substantial International Operations In fiscal 2010, approximately 54% of A&E's net sales and a large portion of A&E's production occurred outside the United States, primarily in Europe, Latin America and Asia. A&E's corporate strategy includes the expansion...

  • Page 12
    ...results of operations, financial condition and cash ï¬,ows. Item 1B. Unresolved Staff Comments None. Item 2. Properties 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 13
    ... with respect to Harris Teeter stores for each of the last three fiscal years: 2010 2009 2008 Stores Open at Period End ...Average Weekly Net Sales Per Store* ...Average Square Footage Per Store at Period End ...Average Square Footage Per New Store Opened During Period ...Total Square Footage at...

  • Page 14
    ... 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 59, was elected President of the Company's wholly-owned subsidiary Harris Teeter on...

  • Page 15
    ...-Year Period Ending October 3, 2010 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 Retail...

  • Page 16
    ... of Five-Year Cumulative Total Return* Among Ruddick Corporation and Certain Indices** $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 9/05 9/06 9/07 9/08 9/09 9/10 Ruddick Corporation S&P 500 S&P Midcap 400 S&P Food Retail S&P Apparel, Accessories & Luxury Goods Cumulative Total Return 9/30/05...

  • Page 17
    ...its common stock during the quarter ended October 3, 2010. Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs Period Total Number of Shares Purchased Average Price Paid per Share June...

  • Page 18
    .... Generally, Harris Teeter's markets continue to experience new store opening activity and increased feature pricing or everyday low prices by competitors. Harris Teeter utilizes information gathered from various sources, including its Very Important Customer ("VIC") loyalty card program, and works...

  • Page 19
    ... respect to A&E's customers in the retail apparel and non-apparel markets, caused management to lower the expected future cash ï¬,ows of A&E's U.S. operating segment during the Company's annual strategic planning process. Based on the revised expectations, A&E was required to perform an interim test...

  • Page 20
    ...357 29.85 1,208,447 30.27 SG&A Expenses Harris Teeter ...A&E ...Corporate ...Total ...Impairment Charges - A&E Goodwill ...Long-Lived Assets ...Total ...Operating Profit (Loss) Harris Teeter ...A&E ...Corporate ...Total ... 7.1 20.0 7.9 4.4 (23.4) 2.1 5.0 51.1 6.8 2.7 (31.1) 0.7 1,045,860 23.77...

  • Page 21
    ... the Company's state income taxes. Income tax expense for fiscal 2008 included refund claims related to prior years of approximately $2.4 million associated with A&E's foreign operations. As a result of the items discussed above (including the extra week of operations in fiscal 2010), fiscal 2010...

  • Page 22
    ...brand unit penetration was 23.58% in fiscal 2010, a 43 basis point increase from fiscal 2009. Harris Teeter considers its reporting of comparable store sales growth to be effective in determining core sales growth during periods of ï¬,uctuation in the number of stores in operation, their locations...

  • Page 23
    ... operational costs such as labor, credit and debit card fees, rent and other occupancy costs. The increase in SG&A expenses (excluding advertising and support department costs) over the previous year for stores opened in fiscal 2010 accounted for $45.0 million of the $52.0 million increase in total...

  • Page 24
    ... other North Carolina operations. Management continues to focus on optimizing costs in its domestic and certain foreign operations. SG&A expenses remained relatively ï¬,at between fiscal 2009 to fiscal 2010: however, SG&A expenses as a percent to sales declined by 342 basis points. Fiscal 2010 SG...

  • Page 25
    ... capital expenditures, sales and operating results. Startup costs associated with opening new stores under Harris Teeter's store development program can negatively impact operating margins and net income. In the current competitive environment, promotional costs to maintain market share could also...

  • Page 26
    ... in its operating subsidiaries, as well as certain property and equipment, cash equivalents and life insurance contracts to support corporate-wide operations and benefit programs. The Company provides a variety of services to its subsidiaries and is dependent upon income and associated cash ï¬,ows...

  • Page 27
    ... of its operations and financing activities. Financial obligations are considered to represent known future cash payments that the Company is required to make under existing contractual arrangements, such as debt and lease agreements. Management expects that cash provided by operations and other...

  • Page 28
    ... based on sales to the customer, number of stores, in-store displays or advertising. The proper recognition and timing of accounting for these items are significant to the reporting of the results of operations of the Company. The Company applies the authoritative guidance of the Securities and...

  • Page 29
    ... 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 30
    ...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 96% of the total Company self-insurance reserves for workers compensation, general liability...

  • Page 31
    ...assumptions applicable to the qualified pension plan include the discount rate, the expected long-term rate of return on plan assets, the rates of increase in future compensation and the rates of future employee turnover. Those assumptions also apply to determinations of the obligations and expense...

  • Page 32
    ... Qualitative Disclosures about Market Risk The Company does not utilize financial instruments for trading or other speculative purposes, nor does it utilize leveraged financial instruments. The Company's exposure to market risks results primarily from changes in interest rates. Generally, the fair...

  • Page 33
    ...CORPORATION AND CONSOLIDATED SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE Page Reports of Independent Registered Public Accounting Firm ...Consolidated Balance Sheets, October 3, 2010 and September 27, 2009 ...Statements of Consolidated Operations for the fiscal years ended...

  • Page 34
    ... 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 October 3, 2010 and September 27, 2009, and the related consolidated statements of operations...

  • Page 35
    ...operations, shareholders' equity and comprehensive income, and cash ï¬,ows for each of the years in the three-year period ended October 3, 2010, and our report dated December 1, 2010 expressed an unqualified opinion on those consolidated financial statements. /s/ KPMG LLP Charlotte, North Carolina...

  • Page 36
    ... Income Taxes ...Pension Liabilities ...Other Long-Term Liabilities ...Commitments and Contingencies ...Equity Common Stock, no par value - Shares Outstanding: 2010 - 48,901,482; 2009 - 48,545,080 ...Retained Earnings ...Accumulated Other Comprehensive Loss ...Total Equity of Ruddick Corporation...

  • Page 37
    ... RUDDICK CORPORATION AND SUBSIDIARIES (dollars in thousands, except per share data) 53 Weeks Ended October 3, 2010 52 Weeks Ended September 27, 2009 52 Weeks Ended September 28, 2008 Net Sales ...Cost of Sales ...Selling, General and Administrative Expenses ...Goodwill Impairment Charge ...Long...

  • Page 38
    STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME RUDDICK CORPORATION AND SUBSIDIARIES (dollars in thousands, except share and per share amounts) Accumulated Total Common Stock Other Equity of NonShares Common Retained Comprehensive Ruddick controlling (no par value) Stock ...

  • Page 39
    STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME RUDDICK CORPORATION AND SUBSIDIARIES - (continued) (dollars in thousands, except share and per share amounts) Accumulated Total Common Stock Other Equity of NonShares Common Retained Comprehensive Ruddick controlling (no par ...

  • Page 40
    ... Income Taxes ...Net Gain on Property Sales ...Impairment Losses ...Share-Based Compensation ...Other, Net ...Changes in Operating Accounts Providing (Utilizing) Cash: Accounts Receivable ...Inventories ...Prepaid Expenses and Other Current Assets ...Accounts Payable ...Other Current Liabilities...

  • Page 41
    ... FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Ruddick Corporation and subsidiaries, including its wholly owned operating companies, Harris Teeter, Inc. ("Harris Teeter...

  • Page 42
    ... 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, are recorded as a component of cost of sales as...

  • Page 43
    ... current economic conditions. Investments The Company's Harris Teeter subsidiary invests in certain real estate development projects, with a managing partner or partners, in which Harris Teeter either operates or plans to operate a supermarket. Generally, all major decisions regarding Harris Teeter...

  • Page 44
    ... for claims incurred but not reported (IBNR) and is discounted to present values using 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. The Company records an accrual for the estimated...

  • Page 45
    ... 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 46
    ... 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 47
    ...) Stock Options and Stock Awards The Company uses fair-value accounting for all share-based payments to employees. Compensation expense for stock awards are based on the grant date fair value and are expensed ratably over their vesting period, resulting in more expense in the early years. Income tax...

  • Page 48
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) 3. COMPANY OWNED LIFE INSURANCE (COLI) The Company has purchased life insurance policies to fund its obligations under certain benefit plans for officers, key employees and directors. The cash surrender ...

  • Page 49
    ... the next 11 years and the future minimum lease payments totaling $42,395,000 over this period have been assumed by these sub-tenants. 7. LONG-TERM DEBT On December 20, 2007, the Company and eleven banks entered into a credit agreement that provides for a five-year revolving credit facility in the...

  • Page 50
    ... at 1.80%, excluding the applicable margin and associated fees. Both interest rate swaps were designated as cash ï¬,ow hedges. In the first quarter of fiscal 2010, Harris Teeter entered into a series of purchased call options and written put options in order to limit the price variability in fuel...

  • Page 51
    ... rate swaps (included with Other Long-Term Liabilities on the balance sheet) ... $1,654 $- $1,654 $- $ 585 $- $ 585 $- There were no transfers into or out of Level 1 and Level 2 fair value measurements during the year ended October 3, 2010. The pre-tax unrealized losses associated with...

  • Page 52
    ...ed 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 53
    ...the Company's stock option plans as of October 3, 2010, September 27, 2009, and September 28, 2008, changes during the years ending on those dates and related weighted average exercise price is presented below (shares in thousands): Stock Options Shares 2010 Price Shares 2009 Price Shares 2008 Price...

  • Page 54
    ... statutory tax rates to pre-tax income as follows (in thousands): 2010 2009 2008 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 Ownership Plan...

  • Page 55
    ... annual effective tax rate but would accelerate the payment of cash to the tax authority to an earlier period. 13. INDUSTRY SEGMENT INFORMATION The Company operates primarily in two businesses: retail grocery (including the real estate and store development activities of the Company) - Harris Teeter...

  • Page 56
    ...CONSOLIDATED FINANCIAL STATEMENTS - (continued) Summarized financial information for fiscal years 2010, 2009 and 2008 is as follows (in millions): Industrial Thread Retail Grocery Corporate (1) Consolidated 2010 Net Sales ...Gross Profit ...Operating Profit (Loss) ...Assets Employed at Year End...

  • Page 57
    ...cant. 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...

  • Page 58
    ... end of each year. The following table summarizes the assumptions utilized: 2010 2009 2008 Weighted Average Discount Rate - Pension Plan ...Weighted Average Discount Rate - SERP ...Rate of Increase in Future Payroll Costs: Pension Plan ...SERP ...Assumed Long-Term Rate of Return on Assets (Pension...

  • 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 ...

  • Page 60
    ...ficers of the Company and directors. The Company has developed an Investment Policy Statement based on the need to satisfy the long-term liabilities of the Pension Plan. The Company seeks to maximize return with reasonable and prudent levels of risk. Risk management is accomplished through diversi...

  • Page 61
    ...ed periods of time. These arrangements include (1) a directors' compensation deferral plan, funded in a rabbi trust, the benefit and payment under such plan being made in the Company's common stock that has historically been purchased on the open market, (2) a key management deferral plan, unfunded...

  • Page 62
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) 15. COMPUTATION OF EARNINGS PER SHARE (EPS) The following table details the computation of EPS for fiscal years 2010, 2009 and 2008 (in thousands except per share data): 2010 2009 2008 Basic EPS: Net ...

  • Page 63
    RUDDICK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued) 17. 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 ...

  • Page 64
    ... 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 65
    ... of the Board of Directors," "Corporate Governance Matters: Audit Committee Financial Expert," and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's Proxy Statement to be filed with the Securities and Exchange Commission with respect to the Company's 2011 Annual Meeting of...

  • Page 66
    ... reference to the sections entitled "Transactions with Related Persons and Certain Control Persons" and "Corporate Governance Matters - Director Independence" in the 2011 Proxy Statement. Item 14. Principal Accountant Fees and Services The information required by this item is incorporated herein by...

  • Page 67
    ... filed as part of this report: (1) Financial Statements: Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets, October 3, 2010 and September 27, 2009 Statements of Consolidated Operations for the fiscal years ended October 3, 2010, September 27, 2009, and September...

  • Page 68
    ... Option and Stock Appreciation Rights Plan, incorporated herein by reference to Exhibit 10.7 of the registrant's Annual Report on Form 10-K for the fiscal year ended October 3, 1993 (Commission File No. 1-6905).** Description of the Ruddick Corporation Long Term Key Management Incentive Program...

  • Page 69
    ... 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 70
    ...Corporation Flexible Deferral Plan (Amended and Restated July 1, 2009), incorporated herein by reference to Exhibit 10.1 of the registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 28, 2010 (Commission File No. 1-6905).** Summary of Non-Employee Director Compensation. List...

  • Page 71
    ... following materials from Ruddick Corporation's Annual Report on Form 10-K for the fiscal year ended October 3, 2010, formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Statements of Consolidated Operations, (iii) the Statements of Consolidated...

  • Page 72
    ... duly authorized. RUDDICK CORPORATION (Registrant) Dated: December 1, 2010 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 73
    ... I RUDDICK CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES For the Fiscal Years Ended October 3, 2010, September 27, 2009 and September 28, 2008 (in thousands) COLUMN A COLUMN B BALANCE AT BEGINNING OF FISCAL YEAR COLUMN C ADDITIONS CHARGED TO COSTS AND EXPENSES COLUMN...

  • Page 74
    [This Page Intentionally Left Blank]

  • Page 75
    ..., 2010 TO THE SHAREHOLDERS OF RUDDICK CORPORATION The Annual Meeting of the Shareholders of Ruddick Corporation (the "Company") will be held in the Auditorium, 12th Floor, Two Wells Fargo Center, 301 S. Tryon Street, Charlotte, North Carolina, on Thursday, February 17, 2011 at 10:00 A.M., local time...

  • Page 76
    [This Page Intentionally Left Blank]

  • Page 77
    ...the North Carolina Business Corporation Act, December 10, 2010, 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 record of the common stock of Ruddick Corporation (the "Common Stock") at...

  • Page 78
    [This Page Intentionally Left Blank]

  • Page 79
    ...favor of approving the Ruddick Corporation 2011 Incentive Compensation Plan, (iii) in favor of providing an advisory (non-binding) "Say on Pay" vote to approve the compensation of the Company's named executive officers as described in the Proxy Statement, (iv) in favor of providing an advisory (non...

  • Page 80
    VOTING SECURITIES Pursuant to the provisions of the North Carolina Business Corporation Act, December 10, 2010, 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...

  • Page 81
    ... and based on a review of reports filed with the SEC pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (2) T. Rowe Price Trust Company, in its capacity as directed trustee, votes Common Stock held by the Ruddick Retirement and Savings Plan (the "RRSP...

  • Page 82
    ... Company Act of 1940. Southeastern had sole power to dispose over 49,079 shares. (5) BlackRock, Inc. ("BlackRock") reported in its Schedule 13G filed with the SEC on January 29, 2010, that it had sole power to vote and sole power to dispose over 2,880,273 shares. (6) River Road Asset Management...

  • Page 83
    ... days of the date the election is certified by the inspector of elections, the Board of Directors will hold a special meeting to consider the matter. Thereafter, the Board of Directors will promptly disclose the explanation of its decision in a Current Report on Form 8-K filed with the Securities...

  • Page 84
    ..., operating and management experience, and broad supermarket, textile and real estate experience to the Board of Directors from his 30 years of experience with the Company and its subsidiaries. These experiences and Mr. Dickson's ongoing interaction with the Company's customers and suppliers provide...

  • Page 85
    ... as close as first cousin with any other executive officer, director or nominee for director of the Company. Directors' Fees and Attendance The Company compensated each director elected to the Board of Directors at the Company's 2010 Annual Meeting of Shareholders who was not an employee of...

  • Page 86
    ...Common Stock to the director or a designated beneficiary, plus the cash equivalent for any fractional shares. During Fiscal 2010, non-employee directors of the Company were also able to defer the payment of the annual fee and/or board meeting fees into the Ruddick Corporation Flexible Deferral Plan...

  • Page 87
    ... service-based vesting conditions have been disregarded. Options are currently granted only upon initial election or appointment as director. The outstanding stock options for each director as of October 3, 2010 were as follows: Outstanding Stock Option Awards at Fiscal Year-End for 2010 Name Number...

  • Page 88
    ... director, in accordance with the independence requirements of the New York Stock Exchange. The Compensation Committee met two (2) times during Fiscal 2010. For more information see the "Report of the Compensation Committee" appearing elsewhere in this Proxy Statement. Corporate Governance...

  • Page 89
    ...ninety days following the date of termination of service as a director. As of October 31, 2010, the Company was authorized to deliver up to 500,000 shares of Common Stock pursuant to the Deferral Plan and has delivered 20,986 shares to the participating non-employee directors who have left the Board...

  • Page 90
    ...979* This sum may vary from other Deferral Plan totals included herein due to rounding. Includes 6,000 shares that may be acquired upon the exercise of stock options that are currently exercisable, as to which such director would have sole voting and investment power upon acquisition. Represents 12...

  • Page 91
    ... extent diversification of such shares is permitted by the plan; 31,649 shares of restricted stock, as to which he has sole voting power, but no investment power; and 6,250 performance shares that will be settled via restricted stock within sixty days of October 31, 2010, upon the issuance of which...

  • Page 92
    ... and Corporate Governance & Nominating Committee are also included on the Company's website and print copies are available to any shareholder that requests a copy. Director Independence For a director to be considered independent under the listing standards of the New York Stock Exchange, the Board...

  • Page 93
    ...on the Company's website promptly following the date of such amendment or waiver. Information on the Company's website, however, does not form a part of this Proxy Statement. Majority Vote Policy for Director Elections The Company's Corporate Governance Guidelines provide that if a director receives...

  • Page 94
    ... 12, of the Company's Bylaws, which generally requires that such recommendation be in writing and include the shareholder's name and address; number of shares of each class of capital stock owned by the shareholder; the potential candidate's name, resume ´ and biographical information; and any...

  • Page 95
    ... that the Board of Directors' time and attention are focused on the most important matters. The combined positions help to provide a unified leadership and direction for the Company, enables decisive leadership, ensures clear accountability, and enhances the Company's ability to communicate its...

  • Page 96
    ... 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 October 3, 2010...

  • Page 97
    ... 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 through its compensation program that promote...

  • Page 98
    ... to all elements of compensation paid to each of the four named executive officers listed in the Summary Compensation Table for 2010, which we refer to as "NEOs". In its annual review of executive compensation, the Compensation Committee meets with the Company's Chief Executive Officer with regard...

  • Page 99
    ...new stores and completing four (4) major store remodelings at Harris Teeter, improving customer service performance, developing new marketing campaigns, enhancing merchandising efforts and increasing operational efficiency at Harris Teeter. During Fiscal 2009, Harris Teeter opened fifteen (15) new...

  • Page 100
    ...meet in order to earn an Incentive Bonus under the plan. For Fiscal 2010, 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...

  • Page 101
    ... granted by the Board of Directors of A&E on account of A&E's operating profit achievement. Long-Term Equity Incentive Compensation. The Company's executive compensation program is intended to provide executives - who have significant responsibility for the management, growth and future success of...

  • Page 102
    ... grant date upon the approval of the Compensation Committee. The Company does not coordinate the timing of equity incentive awards with the release of material non-public information. In Fiscal 2010, the Company granted restricted stock and performance shares to a broad range of management employees...

  • Page 103
    ... 2010. (d) 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 Employees' Pension Plan (the "Pension Plan"), a tax...

  • Page 104
    ... and, as a result, highly compensated employees are not provided proportional income protection. Accordingly, alternative disability coverage is provided by the Company to certain members of executive management, including all NEOs, pursuant to the Executive Long Term Disability Plan. The amount of...

  • Page 105
    ...Payments Upon Termination of Employment or Change in Control." Deductibility of Compensation Expenses Section 162(m) of the Internal 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...

  • Page 106
    ... II Fred A. Jackson Executive Bonus Insurance Plan ($) ...Ruddick Retirement and Savings Plan ($) ...Executive Long Term Disability Plan ($) ...Key Employee Life Insurance Plan ($) ...Tax Reimbursement ($) ...Dividends on unvested Restricted Stock Awards ($) ...Ruddick Corporation Flexible Deferral...

  • Page 107
    ... 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 2010, and in the case of Harris Teeter, the individual...

  • Page 108
    ... ($)(4) Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#)(1) Market Value of Shares or...

  • Page 109
    ... Date # of Shares Vesting John B. Woodlief ... 11/15/2010 11/16/2010 11/19/2010 11/20/2010 11/15/2011 11/16/2011 11/19/2011 11/20/2011 11/15/2012 11/19/2012 11/20/2012 11/19/2013 11/20/2013 11/19/2014 11/15/2010 11/16/2010 11/19/2010 11/20/2010...

  • Page 110
    ... closing market price of the Company's Common Stock on October 1, 2010, the last trading day in Fiscal 2010 ($34.88) (the "Closing Market Price"). (3) Amounts shown are target number of performance shares granted in 2010, assuming Harris Teeter and A&E each meet or exceed their respective operating...

  • Page 111
    ...present value of the current accrued benefit under each of the Pension Plan and SERP, please refer to the note entitled "Employee Benefit Plans" of the Consolidated Financial Statements included with the Company's Annual Report on Form 10-K for the year ended October 3, 2010. (2) "Present Value of...

  • Page 112
    ...on facts and circumstances that meet Internal Revenue Service and plan guidelines. Potential Payments Upon Termination of Employment or Change in Control After reviewing market trends, including information prepared by a consultant, the Company entered into Change-in-Control and Severance Agreements...

  • Page 113
    ... • In the event a NEO's employment is terminated by the Company either before or after a "change in control" other than for "cause", or by the NEO for "good reason", such NEO is also entitled to a payment of a bonus under an equity incentive plan based upon the Company's actual performance up to...

  • Page 114
    ...; or (c) operating profit margin of Harris Teeter for Mr. Morganthall, for the fiscal period-to-date as of the most recent fiscal quarter ending on or before either: (1) the date of such NEO's termination or (2) the date of the "change in control" transaction; provided that the date which shall...

  • Page 115
    ...relationship between any customer, supplier, or other person or entity in a business relation with the Company during the same period. Furthermore, under the terms of the 2002 Comprehensive Stock Option and Award Plan (the "2002 Plan"), in the event of a change in control of the Company, as defined...

  • Page 116
    ...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 117
    ...programs are appropriately balanced between value created indirectly by the performance of the Common Stock and payments resulting from the achievement of specific financial performance objectives. The Compensation Committee considers risks arising from the Company's employee compensation policies...

  • Page 118
    .... For more information on the Company's restricted stock and performance share grants, see Note 11 to the Consolidated Financial Statements included within the Company's Annual Report on Form 10-K for the fiscal year ended October 3, 2010. (2) The weighted average exercise price does not take...

  • Page 119
    ... directors and operates under a written charter adopted by the Board of Directors. The Company has affirmed to the New York Stock Exchange that the Board of Directors has determined that all members of the Audit Committee are "independent" as defined in the New York Stock Exchange Listed Company...

  • Page 120
    ... will secure for the Company and its shareholders the benefits arising from ownership of the Common Stock by employees and non-employee directors of the Company, all of whom are and will be responsible for the Company's future growth. A primary reason for adopting the 2011 Plan is to reserve shares...

  • Page 121
    ... Plan. Shares exchanged in payment of an option exercise price or retained to satisfy applicable withholding taxes may not be subjected to new awards and the cash proceeds from option exercises may not be used to purchase open-market shares for reuse under the 2011 Plan. The number of shares that...

  • Page 122
    ... in shareholder value relative to the moving average of S&P 500 Index or another index • Return on capital • Return on assets or net assets • Return on investment • Economic value added • Market shares • Overhead or other expense reduction • Credit rating • Strategic plan development...

  • Page 123
    ... any time. Amendments to increase the total number of shares of Common Stock reserved under the 2011 Plan, or that otherwise constitute material changes to the 2011 Plan under applicable tax or securities laws or the listing standards of the NYSE, require shareholder approval. The Board of Directors...

  • Page 124
    ...officers, by other employees or by non-executive directors under the 2011 Plan if the plan is approved by our shareholders. Such benefits will depend on future actions of the Committee or the Board of Directors and on the fair market value of the Common Stock at various future dates and the extent...

  • Page 125
    ... performance shares or restricted stock units will not incur federal income tax, and the Company will not be allowed a deduction, at the time the award is granted. When the participant receives payment for such awards in cash or shares of Common Stock, the amount of the cash and the fair market...

  • Page 126
    ... respect to this matter at the Annual Meeting, neither abstentions nor broker non-votes will have the effect of a negative vote with respect to this matter. The Board of Directors recommends that the shareholders vote FOR the approval of the Ruddick Corporation 2011 Incentive Compensation Plan. 48

  • Page 127
    ... in Company's Proxy Statement for Fiscal 2010 pursuant to the compensation disclosure rules of the Securities and Exchange Commission." The above "Say on Pay" vote is an advisory vote only and is not binding on the Company or the Board of Directors. However, the Compensation Committee will consider...

  • Page 128
    ... will consider, in its discretion, the result of the Say on Frequency vote in setting the frequency of the Say on Pay votes. The Board of Directors may in the future periodically re-visit the frequency of the Say on Pay votes based on the Company's then-current compensation policies. Vote Required...

  • Page 129
    ...with respect to this matter at the Annual Meeting in person or by proxy. 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 October 2, 2011. If the...

  • Page 130
    ..., that decision is required to be presented at the next meeting of the Audit Committee. Prior to approving any services, the Audit Committee considers whether the provision of such services is consistent with the Securities and Exchange Commission's rules on auditor independence and is compatible...

  • Page 131
    ... 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...

  • Page 132
    ... 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, and Alan T. Dickson retired as a non-employee director at the 2010 Annual Meeting...

  • Page 133
    ...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 134
    ...Purpose. The Ruddick Corporation 2011 Incentive Compensation Plan is intended to secure for the Company, its Related Companies and its shareholders the benefits arising from ownership of the Company's common stock by the employees of the Company and its Related Companies and by the directors of the...

  • Page 135
    ...members of the Board. (i) "Company" means Ruddick Corporation, and its successors or assigns. (j) "Company Stock" means the common stock of the Company. In the event of a change in the capital structure of the Company (as provided in Section 14), the shares resulting from the change shall be deemed...

  • Page 136
    ... Employee provides services. (q) "Fair Market Value" means, with respect to a share of Company Stock on a particular date, the mean between the highest and lowest composite sales price per share of the Company Stock, as reported on the consolidated transaction reporting system for the New York Stock...

  • Page 137
    ... Act, as amended from time to time. (kk) "Service Provider" means an Employee, Consultant or other natural person employed by or providing bona fide services to the Company or a Related Company, excluding any Outside Director. (ll) "Stock Award" means a share of Company Stock awarded upon the terms...

  • Page 138
    ...under the Plan. Any shares of Company Stock tendered or exchanged by a Participant as full or partial payment to the Company of the exercise price under an Option and any shares retained or withheld by the Employer in satisfaction of an Employee's obligations to pay Applicable Withholding Taxes with...

  • Page 139
    ...; (B) the Participant may elect to have his Employer retain that number of shares of Company Stock (valued at their Fair Market Value as of the date of such retention) that would satisfy all or a specified portion of the Applicable Withholding Taxes; or (C) unless prohibited by law, the Participant...

  • Page 140
    ... to the Employer, from the sale or loan proceeds with respect to the sale of Company Stock or a loan secured by Company Stock, the amount necessary to pay the Applicable Withholding Taxes. 7. Performance Shares and Restricted Stock Units (a) The Committee (or, with respect to executive officers...

  • Page 141
    ...an active employee on the Company's or a Related Company's payroll on the last day of each applicable Performance Period and at the time the payment is made, unless the Participant's employment was earlier terminated due to early, normal or late retirement under the terms of the Company's pension or...

  • Page 142
    ... Corporation Insider Information and Stock Trading Policy, by giving written notice of the exercise to the Company, stating the number of shares the Participant has elected to purchase under the Option. The notice shall be effective only if accompanied by the exercise price in full in cash; provided...

  • Page 143
    ... with respect to the sale of Company Stock or a loan secured by Company Stock, the amount necessary to pay the exercise price and, if required by the terms of the Option or the Committee in its discretion, Applicable Withholding Taxes, (ii) may deliver shares of Company Stock for which the holder...

  • Page 144
    ...Date of the Plan. No new Awards shall be granted under the Plan after its termination. The Board may terminate the Plan at any time and may amend the Plan at any time in any respect as it shall deem advisable; provided that no change shall be made that increases the total number of shares of Company...

  • Page 145
    ... the exercise price of Options, and other relevant terms of the Plan and any Awards whenever, in the event of a stock dividend, stock split or combination of shares, recapitalization or merger in which the Company is the surviving corporation, or other change in the Company's corporate structure or...

  • Page 146
    ... to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Company Stock is then listed and any applicable federal or state laws, and the...

  • Page 147
    ...to all present and future regulations and rulings of the Secretary of the Treasury of the United States or his or her delegate relating to the qualification of Incentive Stock Options under the Code. To the extent applicable, this Plan and the individual Awards under the Plan are intended to comply...

  • Page 148
    [This Page Intentionally Left Blank]

  • Page 149
    [This Page Intentionally Left Blank]

  • Page 150

  • Page 151
    ..., Administration, Lowes Companies, 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 Closing Stock Price Fiscal Year End (In Dollars) Subsidiaries Harris Teeter, Inc. 701...

  • Page 152
    Innovate. Create. Deliver. Subsidiaries of 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 ...