Harris Teeter 2012 Annual Report Download - page 104

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employment. This bonus shall be the shares, or the cash equivalent, of the performance shares that were awarded
to the NEO, subject to the achievement of certain performance criteria, prior to the termination of the NEO’s
employment. The shares received shall be fully vested.
In addition, in the event a NEO’s employment is terminated by the Company either before or after a “change
in control” other than for “cause”, death or disability, or by the NEO for “good reason”, each such NEO is entitled
to continue certain employee benefits, including medical/dental, disability and life insurance coverage, for a period
of time following a termination within 24 months of “change in control”. The period of continued benefits shall
be 36 months for Messrs. Dickson and Woodlief, 30 months for Mr. Morganthall and 24 months for Mr. Antolock.
Alternatively, each such NEO is entitled to continue certain employee benefits, including medical/dental, disability
and life insurance coverage, for a different period of time following a termination before a “change in control” or
more than 24 months after a “change in control”. The period of continued benefits shall be 24 months for Messrs.
Dickson and Woodlief, 18 months for Mr. Morganthall and 12 months for Mr. Antolock. A NEO may elect to waive
these benefits and in lieu thereof receive a single lump sum payment, equal to the Company’s costs in providing
such benefits, including any related tax gross-up, if applicable.
If it is determined that any payment or distribution will be subject to the excise tax imposed under Internal
Revenue Code Section 280G, then the NEO may be entitled to receive an additional payment or “gross up” to ensure
that their severance payments are kept whole as follows:
•For Messrs. Dickson and Woodlief, there is an unconditional gross-up to cover 280G excise tax, but not
ordinary tax obligations; and
•For Messrs. Morganthall and Antolock, there is a conditional gross-up to cover 280G excise tax, but not
ordinary tax obligations. The “change in control” benefit payments for Messrs. Morganthall and Antolock
are capped at the 280G threshold if the safe harbor is exceeded by 10% or less.
When used in the Change-in-Control and Severance Agreements, “severance accrued bonus” means an amount
based upon the current bonus schedule provided in the Company’s Cash Incentive Plan, calculated utilizing the
Company’s annualized NOPAT return on the Company’s invested capital for the cumulative fiscal period-to-date
as of the end of the most recent fiscal quarter ending on or before such NEO’s termination.
When used in the Change-in-Control and SeveranceAgreements, “CIC accrued bonus” means a bonus payment
based upon the current bonus schedule provided in the Company’s Cash Incentive Plan, calculated utilizing the
Company’s annualized NOPAT return on the Company’s invested capital 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 be used shall be the date that produces the greater payment
to the NEO.
When used in the Change-in-Control and Severance Agreements, “CIC average prior bonus payments” means
the greater of the average of a NEO’s total bonus payments for the prior three full fiscal years ending (1) on or
before such NEO’s termination or (2) on or before the “change in control” transaction.
When used in the Change-in-Control and Severance Agreements, “CIC prorated bonus” means a bonus
payment calculated utilizing the Company’s annualized NOPAT return on the Company’s invested capital in the
case of each of Messrs. Dickson and Woodlief for the portion of the fiscal year period to date as of the most recent
fiscal quarter ending on or before the “change in control” transaction.
When used in the Change-in-Control and Severance Agreements, “cause” means the termination of the NEO
due to (a) fraud; (b) embezzlement; (c) conviction or other final adjudication of guilt of the NEO of any felony; (d)
a material breach of, or the willful failure to perform and discharge such NEO’s duties, responsibilities and obligations
under their Change-in-Control and Severance Agreement; (e) any act of moral turpitude or willful misconduct intended
to result in personal enrichment of the NEO at the expense of the Company, or any of its affiliates or which has a
material adverse impact on the business or reputation of the Company or any of its affiliates; (f) intentional material
damage to the property or business of the Company; or (g) gross negligence. The determination of “cause” under (d),
(e), (f) and (g) shall be made by the Board of Directors in its reasonable judgment.
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