Harris Teeter 2010 Annual Report Download - page 122

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Eligible individuals, including employees and non-employee directors, may also receive stock awards. Stock
awards are shares of Common Stock issued without any restrictions on transferability, other than restrictions
necessary to comply with applicable securities laws.
Performance Shares and Restricted Stock Units
Performance shares and restricted stock units are rights to receive shares of Common Stock (or cash in lieu
of the shares). Performance shares are subject to performance vesting conditions measured on an individual,
corporate or other basis (or a combination thereof), and may also be subject to service-based vesting conditions.
Restricted stock units may be subject to service-based and/or performance-based vesting conditions. Restricted
stock units and performance shares are similar to restricted stock except that shares of Common Stock are not issued
(or cash in lieu of the shares is not paid) until the vesting conditions of the award are satisfied, as determined by
the Committee or, with respect to awards to non-employee directors, the Board of Directors. Restricted stock units
and performance shares may be settled in shares of Restricted Stock, Common Stock, in cash, or in a combination
of both. The Committee (or, with respect to non-employee director awards, the Board of Directors) may reserve
the right to determine the method of settlement at the time the award is settled.
Performance shares and restricted stock units may be specifically designed to qualify as “performance-based
compensation” for purposes of Code Section 162(m). Performance goals for Code Section 162(m) are required to
use objective and quantifiable performance criteria. The 2011 Plan permits the use of a wide variety of performance
criteria to provide flexibility in the design of our executive compensation program while preserving the deductibility
of awards under Code Section 162(m). The permissible performance criteria, measured with respect to our
performance as a company or the performance of any of our related companies, subsidiaries, divisions or business
units, or any individual, are:
•Return on invested capital
•Net operating profit (before or
after tax)
•Operating profit margin
•Gross margin
•Operating profit
•Earnings before income taxes
•Earnings (which may include
earnings before interest and
taxes and net earnings—
determined in accordance with
U.S. Generally Accepted
Accounting Principles
(“GAAP”) or adjusted to include
or exclude any or all items)
•Earnings per share (GAAP or
non-GAAP basis)
•Growth in any of the criteria
described in the column above
•Customer indicators
•Improvements in productivity
•Attainment of objective
operating goals
•Employee metrics
•Stock price
•Return on equity or average
shareholders’ equity
•Total shareholder return
•Growth 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 and
implementation
•Succession plan development and
implementation
•Improvement in workforce
•Diversity
The Committee will set target and maximum amounts payable under the restricted stock units or performance
shares award, as applicable. A restricted stock units or performance shares award that is intended to qualify under
Code Section 162(m) must be granted in accordance with certain procedures and will be paid only upon certification
by the Committee that the performance goals applicable to the award are met. The Committee may not increase
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