Harris Teeter 2011 Annual Report Download - page 105

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Termination Following a Change in Control or Resignation For Good Reason. The table herein summarizes
the incremental benefits (beyond the accrued and vested benefits) that each of the NEOs would be entitled to,
assuming their termination occurred on October 2, 2011 concurrent with a “change in control” transaction.
Thomas W.
Dickson ($)
John B.
Woodlief ($)
Frederick J.
Morganthall, II ($)
Fred A.
Jackson ($)
Change In Control Benefit (1) ............. 4,628,122 2,907,491 2,123,813 1,409,068
Incentive Bonus Payments (2) ............. 865,867 499,905 367,525 235,627
Accelerated and Additional Portion of SERP
Benefits (3) .......................... 2,572,000 1,470,000 143,000 67,000
Accelerated Equity Awards (4) ............. 3,523,258 1,662,884 1,801,732 888,525
Health and Welfare Benefits (5) ............ 525,404 395,795 387,287 297,631
Excise Tax (280G) Gross-up .............. 3,763,058 2,105,117 — 832,093
(1) The value of the Change in Control Benefit is calculated in accordance with and payable under the terms of
their Change-in-Control and Severance Agreement.
(2) The value of the Incentive Bonus payment is calculated in accordance with and payable under the terms of
their Change-in-Control and Severance Agreement.
(3) The value of the accelerated and additional portion of SERP Benefits reflects accelerated commencement of
benefit payments without accrued benefit reduction and additional service accrual for all NEOs, and it is valued
using the discount rate and method prescribed for the 280G calculations.
(4) The value of the accelerated equity awards is composed of restricted stock awards and performance share
awards. The value of the restricted stock and 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.
(5) 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 terms of their Change-in-Control and Severance
Agreement.
Compensation Policies and Practices as they Relate to Risk Management
As previously discussed, the Company’s compensation policies and practices for its employees are designed
to attract and retain highly qualified and engaged employees, and to minimize risks that would have a material
adverse effect on the Company. In addition the Company’s compensation policies and practices seek to align the
interests of management with those of the Company’s shareholders. The Company believes its incentive
compensation 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 and
practices and has concluded that any risks from such policies and practices are not reasonably likely to have a
material adverse effect on the Company. Overall, the Compensation Committee reached this conclusion after
considering a number of features of the Company’s compensation structure that are designed to mitigate risk,
such as:
•The Company uses a balance of fixed and variable compensation in the form of cash and equity, which
is designed to provide both short and long-term focus.
•The overall compensation of the NEOs is not overly-weighted towards the achievement of performance
criteria in a particular fiscal year and an appropriate portion of compensation is awarded in the form of
equity awards that vest over a multi-year period, subject to continued service by the recipient. This further
aligns the interests of the NEOs to long-term shareholder value and helps retain management.
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