Harris Teeter 2012 Annual Report Download - page 91

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materially affected the fairness of those performance criteria and unduly affected the Company’s ability to meet
them at the prescribed levels. The Compensation Committee believes that the transactions with Lowes Foods
provide a long-term strategic benefit to the Company, and that excluding the Lowes Foods Transaction Expenses
is in the best interests of the Company’s shareholders because it is consistent with the Company’s philosophy to
align executive compensation with long-term shareholder value. After excluding these expenses and reviewing the
performance of the Company, the Compensation Committee determined the Fiscal 2012 Incentive Bonuses.
The following table describes the threshold and actual Incentive Bonuses that were payable under the 2006
Cash Incentive Plan to each of the current NEOs for Fiscal 2012. Based on the actual Fiscal 2012 performance
of the Company, adjusted for the Lowes Foods Transaction Expenses, as previously described, the current NEOs
were eligible for and received Incentive Bonuses for Fiscal 2012 in the aggregate amount of $2,043,820. The actual
Incentive Bonuses payable to the current NEOs for performance in Fiscal 2012 are reflected in the following table
and in the Summary Compensation Table for 2012, and additional information regarding the 2006 Cash Incentive
Plan awards for Fiscal 2012 may be found below in the Grants of Plan-Based Awards Table for 2012. The difference
in the potential Incentive Bonuses paid among the current NEOs is reflective of the variance in the duties and
responsibilities of the positions held by each current NEO. This difference in potential Incentive Bonuses is
influenced by the Compensation Committee’s assessment of the degree to which the NEO may directly influence
the Company’s business.
Cash Incentive Plan Awards for 2012
Name
Threshold
Performance
Metric
Threshold
Incentive
Bonus (% of
Base Salary)
Threshold
Incentive
Bonus
($)
Actual Fiscal
2012 Performance
Actual
Incentive
Bonus (% of
Base Salary)
Actual
Incentive
Bonus
($)
Dickson ...... 4% NOPAT Return on
Beginning Invested
Capital
N/A(1) — 8.92% NOPAT Return
on Beginning Invested
Capital
118.08 837,187
Morganthall . . 2% Operating Profit
Margin
15(3) 75,000 4.58% Operating Profit
Margin
79.50 397,500
Woodlief ..... 4% NOPAT Return on
Beginning Invested
Capital
N/A(2) — 8.92% NOPAT Return
on Beginning Invested
Capital
98.40 479,208
Antolock ..... 2% Operating Profit
Margin
15(3) 62,250 4.58% Operating Profit
Margin
79.50 329,925
Jackson(4) . . . — — — — — —
(1) An Incentive Bonus of 24% of his base salary would be earned by Mr. Dickson for each 1% NOPAT return
on beginning invested capital above 4%. Increments of less than 1% would be calculated on a pro rata basis.
(2) An Incentive Bonus of 20% of his base salary would be earned by Mr. Woodlief for each 1% NOPAT return
on beginning invested capital above 4%. Increments of less than 1% would be calculated on a pro rata basis.
(3) An Incentive Bonus of 15% of his base salary would be earned by the individual upon the achievement of
a 2.0% operating profit margin, and an additional Incentive Bonus of 2.5% of his base salary would be earned
for each 0.1% operating profit margin over 2.0%.
(4) Mr. Jackson separated from the Company on November 7, 2011 as previously discussed herein.
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