Harris Teeter 2011 Annual Report Download - page 91

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2011 Performance Share Awards
Name
Maximum Shares of Restricted Stock
Awardable in FY 2012, Contingent on
FY 2011 Performance
Shares of Restricted Stock
Awarded in FY 2012, Based on
Actual FY 2011 Performance (d)
Thomas W. Dickson (a) .................. 17,500 17,500
John B. Woodlief (a) ..................... 7,500 7,500
Frederick J. Morganthall, II (b) ............ 8,750 8,750
Fred A. Jackson (c) ...................... 4,500 4,500
(a) 95% of award was contingent upon Harris Teeter meeting its operating profit projection for Fiscal 2011 and
5% of award was contingent upon A&E meeting its operating profit projection for Fiscal 2011.
(b) Award was contingent upon Harris Teeter meeting its operating profit projection for Fiscal 2011.
(c) Award was contingent upon A&E meeting its operating profit projection for Fiscal 2011.
(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-qualified defined benefit retirement plan for eligible
employees, on the same basis as other similarly situated employees. NEOs also participate in the Ruddick
Supplemental Executive Retirement Plan (the “SERP”), which is an unfunded excess benefit plan maintained to
supplement the benefits payable to participants (generally senior officers of the Company and its subsidiaries) under
the Pension Plan. SERP participants, depending on length of service and vesting requirements, can become entitled
to retirement payments inclusive of assumed pension, profit sharing and social security retirement benefits up to
60% of a participant’s final average earnings. See “Compensation Discussion and Analysis—Pension Plan and
SERP” for a more detailed discussion of the Pension Plan and the SERP. The Company historically viewed the
Pension Plan as a basic component in retaining employees; however, the Company chose to partially freeze the
plan as other programs were deemed a more effective and widely utilized method to compensate and retain
employees. Effective September 30, 2005, the Company’s Board of Directors approved changes to the Pension Plan
which prohibited participation by new employees, froze benefit accruals for certain participants, and provided
transition benefits to those participants that achieved specified age and service levels on December 31, 2005. These
transition benefits were provided to the majority of the Pension Plan participants as determined on the date of the
freeze. Each of the Company’s NEOs is entitled to these transition benefits and, as a result, the expected benefits
to each under the SERP and Pension Plan were not substantially affected by the plan changes.
Deferred Compensation Plan. The Company has a deferred compensation plan, the FDP, which allows eligible
participants to forego the receipt of earned compensation for specified periods of time. Each of the NEOs is eligible
to participate in the FDP. Pursuant to the FDP, compensation earned by participants (which is also reported in the
Summary Compensation Table for 2011) is deferred at the election of the plan participant. These deferred amounts
and a Company match based upon the same formula applicable to deferrals made pursuant to the RRSP are credited
to the individual’s account. The value of an individual’s account will increase or decrease based on the performance
of the selected market investment alternatives elected by the participant of the FDP. Additional details of the FDP
are included under the heading “Compensation Discussion and Analysis—Flexible Deferral Plan.”
Perquisites and Other Benefits. The Company provides certain perquisites and other benefits to executive
management where they generally either (i) meet the business needs of the organization, or (ii) provide a level of
benefits commensurate with the group insurance plans offered to all employees to recognize limitations on wages.
The Company believes that these types of benefits are highly effective in recruiting and retaining qualified executive
officers because they provide the executive officer with longer term security and protection for the future. The
Company believes that providing these benefits is a relatively inexpensive way to enhance the competitiveness of
the executive’s compensation package and furthers the Company’s goal of attracting, retaining and rewarding highly
qualified executives. Furthermore, the Company believes that while the NEO could purchase such coverage
individually, the superior purchasing power of the Company allows the Company to purchase the benefits in a more
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