Harris Teeter 2011 Annual Report Download - page 73

Pursuant to the 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 and committee meeting fees. The
fees deferred by a director under the Deferral Plan are converted into stock units and credited to the director’s account
as of the date such fees would have otherwise been paid to the director (the “Valuation Date”). The account of a
director is credited with a number of stock units equal to the number of whole and fractional shares of Common
Stock which the director would have received with respect to such fees if the fees had been paid in Common Stock,
determined by dividing such fees by the average of the high and low sale price (“Average Price”) of a share of
Common Stock on the Valuation Date. Directors’ accounts are equitably adjusted for the amount of any dividends,
stock splits or applicable changes in the capitalization of the Company. The Company uses a non-qualified trust
to purchase and hold the Common Stock to satisfy the Company’s obligation under the Deferral Plan, and the
directors are general creditors of the Company in the event the Company becomes insolvent. Upon termination
of service as a director or in the event of death, the number of stock units in the director’s account are delivered
and paid in the form of whole shares of Common Stock to the director or a designated beneficiary, plus the cash
equivalent for any fractional shares.
During the Company’s fiscal year ended October 3, 2010 (“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 (“FDP”). However, during Fiscal 2011, the Company determined to eliminate
the FDP as a deferral option for non-employee directors due to a review of the other deferral options available to
such directors and giving consideration to the level of participation by the directors in that option.
Pursuant to the provisions of the Company’s equity incentive plans, the Company has typically granted to each
new non-employee director upon his or her initial election as director a ten-year option to purchase 10,000 shares
of Common Stock at an exercise price per share equal to the Average Price of the Common Stock on the date of
grant of the option. These options are immediately vested on the date of the director’s election.
In addition to the compensation discussed herein, the Company grants other incentive awards to its non-
employee directors from time to time. At the meeting of the Board of Directors held on November 18, 2010 each
of John R. Belk, John P. Derham Cato, James E. S. Hynes, Anna Spangler Nelson, Bailey W. Patrick, Robert H.
Spilman, Jr., Harold C. Stowe, Isaiah Tidwell and William C. Warden, Jr., constituting all of the non-employee
directors of the Company at the time of the meeting, were credited with a discretionary Company contribution of
$14,000, which was paid into the Deferral Plan and converted into stock units, as described herein. The Company
also provides $100,000 of term life insurance coverage for each non-employee director, personal group excess
liability insurance coverage, and certain perquisites as disclosed in the footnotes to the following table.
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