with a class of securities
registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or companies registered as an
investment company under the Investment Company Act of 1940 and the specific experience, qualifications, attributes or skills that led to the
conclusion that such person should serve as a director of the Company.
Nominees for Election as Directors
J
OHN
R
.
B
ELK
, age 52, has been President and Chief Operating Officer of Belk, Inc., retail merchants, since May 2004. Prior to
that time, he served as President Finance, Systems and Operations of Belk, Inc. from May 1998 to May 2004. Mr. Belk is also a former Chairman
and a current member of the Board of Trustees of Novant Health, Inc. and served as director of ALLTEL Corporation from 1996 to November 2007. Mr. Belk
has broad experience in the management and oversight of a retail business. He brings significant expertise in retail business matters, strategic
planning, risk management and corporate governance, which are important to a large and diversified organization like the Company. He has been a
director of the Company since 1997 and also serves as a director of Belk, Inc.
J
OHN
P
.
D
ERHAM
C
ATO
, age 61, has been the Chairman, President and Chief Executive Officer of The Cato
Corporation, a specialty apparel retailer, since February 2004. Prior to that time, Mr. Cato was the President, Vice Chairman of the Board and Chief
Executive Officer of The Cato Corporation from May 1999 to February 2004. Mr. Cato brings to the Board of Directors a breadth and depth of operations,
management, and strategic planning experience in the retail industry. His background at The Cato Corporation and leadership of a public company is
directly relevant to the oversight of a large organization like the Company. Mr. Cato has been a director of the Company since November 2002 and also
serves as a director of The Cato Corporation.
T
HOMAS
W
.
D
ICKSON
, age 56, is the Chairman of the Board of Directors, President and Chief Executive Officer of the Company and
has been Chairman of the Board of Directors since March 2006 and President and principal executive officer since February 1997. Before his election as
President, he served as Executive Vice President of the Company from February 1996 to February 1997. Prior to that time, from February 1994 to February
1996 he served as President of, and from February 1991 to February 1994 he served as Executive Vice President of, American & Efird, Inc., a wholly
owned subsidiary of the Company until November 2011. Mr. Dickson brings executive decision making skills, operating and management experience, and
broad supermarket and real estate experience to the Board of Directors from his 30 years of experience with the Company and its subsidiaries. These
experiences and Mr. Dicksons ongoing interaction with the Companys customers and suppliers provide the Board of Directors with, among other
things, industry expertise important to the Companys business and a deep understanding of the Companys operations and the economic
environment in which it operates. He has been a director of the Company since 1997.
J
AMES
E
.
S
.
H
YNES
, age 71, was the Chairman of the Board of Hynes Inc., a manufacturers representative,
from September 1986 until October 2000. As one of the most tenured directors, Mr. Hynes provides the Board of Directors with retailing and strategic
planning expertise through his service on the board of Hynes Inc. His experiences dealing with major manufacturers of health and beauty products and
large retailers are important to the Board of Directors oversight of strategic planning. He has been a director of the Company since 1983 and
serves as Chairman of the Board of Commissioners of Carolinas HealthCare System, one of the Southeasts leading healthcare
systems.
A
NNA
S
PANGLER
N
ELSON
, age 49, has been Chairman and Executive Vice President of Spangler Companies, Inc. (formerly known as
Golden Eagle Industries, Inc.), a private investment company, since January 2005. Ms. Nelson has been a general partner of the Wakefield Group, a
venture capital company, since September 1988. From these experiences, Ms. Nelson brings knowledge of financial products and investments that assists
the Board of Directors in overseeing the financial management and risk management practices of the Company. Ms. Nelson has been a director of the
Company since 1998, and serves as a Trustee of the Fidelity Charitable Gift Fund, and the John S. and James L. Knight Foundation.
B
AILEY
W
.
P
ATRICK
, age 50, has been Managing Partner of Merrifield Patrick Vermillion, LLC, a company involved in commercial
real estate, brokerage and development, since July 2010. Mr. Patrick was the President of
5
Bissell Patrick LLC, which
was also involved in commercial real estate, brokerage and development, from September 1998 until December 2009, at which time Bissell Patrick LLC
merged into Merrifield Patrick LLC. Mr. Patrick was Managing Partner of Merrifield Patrick LLC from January 2010 until July 2010, at which time
Merrifield Patrick merged to form Merrifield Patrick Vermillion LLC. Mr. Patrick has been a director of the Company since August 2003 and serves as a
director of The Cato Corporation. Mr. Patrick brings a breadth and depth of operations and strategic planning experience to the Board of Directors,
including real estate development experience, from his leadership at Merrifield Patrick Vermillion, LLC and its predecessor organizations. Mr.
Patricks background particularly assists the Board of Directors in overseeing the Companys real estate functions and
expansions.
R
OBERT
H
.
S
PILMAN,
J
R.,
age 55, has been the President and Chief Executive Officer of Bassett Furniture
Industries, Incorporated, a furniture manufacturer and distributor, since March 2000. Mr. Spilman has been a director of the Company since August 2002
and also serves as a director of Bassett Furniture Industries, Incorporated and Dominion Resources, Inc. Through his management experience at Basset
Furniture Industries, Incorporated, a vertically integrated manufacturer, importer and retailer of home furnishings operating a network of licensed and
corporate stores, Mr. Spilman provides the Board of Directors with sales, operations, risk management, strategic planning and corporate governance
expertise that is important to the oversight of the Company.
H
AROLD
C
.
S
TOWE,
age 65, has been the managing member of Stowe-Monier Management, LLC, a venture capital management company
since August 2007. Prior to that time, he served as the Interim Dean of Development at the Wall College of Business Administration of Coastal Carolina
University from June 2006 to August 2007. Prior to that time, Mr. Stowe was the President and Chief Executive Officer of Canal Holdings, LLC, a real
estate and asset management company, from October 2001 to March 2005. Prior to that time, he was the President and Chief Executive Officer of Canal
Industries, Inc., a forest products company, from March 1997 until October 2001. Mr. Stowe has a broad range of financial, banking, and management
expertise, which provides the Board of Directors with valuable experience in its oversight of the financial reporting and corporate governance of the
Company. Mr. Stowe has been a director of the Company since 1998 and also serves as a director of SCANA Corporation.
I
SAIAH
T
IDWELL,
age 66, was the Georgia Wealth Management Director and Executive Vice President of Wachovia Bank, N.A. from September 2001 to
February 2005. Prior to that time, he served as the President, Georgia Banking, of Wachovia Bank from July 1999 to September 2001. Mr. Tidwells
extensive experience in retail banking operations and credit administration at Wachovia Bank provides the Board of Directors with significant financial
and retail expertise important to the oversight of the Companys retail operations, financial reporting and enterprise risk management. Mr.
Tidwell has been a director of the Company since 1999 and also serves as a director of Snyders-Lance, Inc. and Lincoln National
Corporation.
W
ILLIAM
C
.
W
ARDEN,
J
R.,
age 59, was the Executive Vice President, Administration, of Lowes Companies, Inc. from
February 1996 to February 2003. Mr. Wardens experience as an executive of a large retail organization provides the Board of Directors with
expertise in the areas of real estate, engineering and construction, loss prevention and safety, internal audit, administration and legal that is
relevant to the Companys businesses, developments and operations as well as the strategic planning functions of the Board of Directors. Mr.
Warden has been a director of the Company since February 2008 and also serves as a director of Bassett Furniture Industries,
Incorporated.
No director has a family
relationship as close as first cousin with any other executive officer, director or nominee for director of the Company.
Directors Fees and Attendance
The Company compensated each
director elected to the Board of Directors at the Companys 2011 Annual Meeting of Shareholders who was not an employee of the Company or its
subsidiaries via an annual fee in the amount of $34,000 for services as a director. Directors also receive a meeting fee for each Board of Directors or
committee meeting attended. The meeting fee was $2,000 per meeting in the fiscal year ended October 2, 2011 (Fiscal 2011). The Chairman of
the Audit Committee was paid an annual fee of $6,000 in addition to the fees described herein.
6
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
directors 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 Companys 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 directors 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 Companys 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
Companys 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 directors 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 $100,000 of term life insurance coverage for each non-employee director, personal group excess liability
insurance coverage, and certain perquisites as disclosed in the footnotes to the following table.
7
Director Compensation for 2011(1)
Name
|
|
|
|
Fees
Earned
or
Paid in
Cash
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)(2)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
|
|
All
Other
Compensation
($)(3)
|
|
Total
($)
|
John R. Belk
|
|
|
|
62,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
62,085
|
|
John P.
Derham Cato
|
|
|
|
64,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
64,085
|
|
James E. S.
Hynes
|
|
|
|
58,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
58,085
|
|
Anna Spangler
Nelson
|
|
|
|
66,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
66,085
|
|
Bailey W.
Patrick
|
|
|
|
64,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
64,085
|
|
Robert H.
Spilman, Jr.
|
|
|
|
58,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
58,085
|
|
Harold C.
Stowe
|
|
|
|
76,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
76,085
|
|
Isaiah
Tidwell
|
|
|
|
72,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
72,085
|
|
William C.
Warden, Jr.
|
|
|
|
72,000
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
72,085
|
|
(1)
|
|
Thomas W. Dickson, the Companys Chairman, President and
Chief Executive Officer, is not included in this table because he is an employee of the Company and thus receives no compensation for his service as a
director. The compensation received by Mr. Dickson as an employee of the Company is shown in the Summary Compensation Table for 2011 provided
herein.
|
(2)
|
|
There were no option or other awards granted to the
Companys directors during Fiscal 2011, other than to Thomas W. Dickson. With respect to Mr. Dickson, please see Outstanding Equity Awards
at Fiscal Year-End for 2011 for a list of equity awards outstanding as of October 2, 2011. The assumptions used in the calculation of these
amounts, if any, are included in the note entitled Stock Options and Stock Awards in the Notes to Consolidated Financial Statements
included within the Companys Annual Report on Form 10-K for the fiscal year ended October 2, 2011, except that for the purposes of this table the
estimates of forfeitures related to service-based vesting conditions have been disregarded. Options are currently granted only upon initial election or
appointment as director. The outstanding stock options for each director as of October 2, 2011 were as follows:
|
Outstanding Stock Option Awards at Fiscal Year-End for
2011
Name
|
|
|
|
Number
|
John R. Belk
|
|
|
|
|
4,000
|
|
John P.
Derham Cato
|
|
|
|
|
12,000
|
|
James E. S.
Hynes
|
|
|
|
|
2,000
|
|
Anna Spangler
Nelson
|
|
|
|
|
4,000
|
|
Bailey W.
Patrick
|
|
|
|
|
|
|
Robert H.
Spilman, Jr.
|
|
|
|
|
9,000
|
|
Harold C.
Stowe
|
|
|
|
|
4,000
|
|
Isaiah
Tidwell
|
|
|
|
|
4,000
|
|
William C.
Warden, Jr.
|
|
|
|
|
10,000
|
|
(3)
|
|
Perquisites and personal benefits were less than $10,000 in
aggregate for each director listed in the table who served during Fiscal 2011. The Company paid premiums of $85 for a full year of term life insurance
for each of the non-employee directors.
|
The Board of Directors held four
(4) meetings during Fiscal 2011. Each director attended at least 75% of the aggregate number of meetings of the Board of Directors and all committees
of the Board of Directors on which they served during Fiscal 2011.
8
Committees of the Board of
Directors
As of October 2, 2011, the
Companys Board of Directors had the following standing committees: (i) the Audit Committee, whose current members are Harold C. Stowe (Chair),
John R. Belk, Bailey W. Patrick, Isaiah Tidwell and William C. Warden, Jr.; (ii) the Compensation Committee, whose current members are James E. S.
Hynes (Chair), John P. Derham Cato, Anna Spangler Nelson and William C. Warden, Jr.; and (iii) the Corporate Governance & Nominating Committee,
whose current members are Robert H. Spilman, Jr. (Chair), John R. Belk, Anna Spangler Nelson and Isaiah Tidwell. Included herein is a description of
each committee of the Board of Directors.
Audit Committee
: The Audit
Committee discharges the Board of Directors responsibility relating to the oversight of (i) the integrity of the financial statements and
internal controls of the Company, (ii) the compliance by the Company with legal and regulatory requirements, (iii) the outside auditors
independence and qualifications, and (iv) the performance of the Companys internal audit function and outside auditors. The Audit Committee,
among other things, is responsible for the appointment, compensation and oversight of the independent auditors and reviews the financial statements,
audit reports, internal controls and internal audit procedures. Each member of the Audit Committee has been determined to be an independent director,
in accordance with the independence requirements of the Securities and Exchange Commission and the New York Stock Exchange. The Audit Committee was
established in accordance with Section 3(a)(58)A of the Exchange Act. The Audit Committee met seven (7) times during Fiscal 2011.
Compensation Committee
:
The Compensation Committee assesses the Companys overall compensation programs and philosophies. Among other things, it and the Chairman of the
Corporate Governance & Nominating Committee approve the goals and objectives relevant to the Chief Executive Officers compensation and
recommend to the independent members of the Board of Directors for their approval, the salary, incentive compensation and equity compensation of the
Chairman of the Board of Directors, President and Chief Executive Officer. In addition, the Compensation Committee recommends to the independent
members of the Board of Directors for its approval, the salaries, incentive compensation and equity compensation for other executive officers. The
Compensation Committee also reviews the salaries and incentive compensation for other Company officers and key employees of the Companys
subsidiaries other than the executive officers of the Company. In addition, the Compensation Committee approves the annual bonus criteria under the
Companys cash and equity incentive plans, including the Ruddick Corporation Cash Incentive Plan, the Ruddick Corporation 2011 Incentive
Compensation Plan (as amended or supplemented, the 2011 Plan), which was approved by the shareholders at the Annual Meeting of Shareholders
held on February 17, 2011, and prior to the approval thereof, the Addendum to the Ruddick Corporation 2002 Comprehensive Stock Option and Award Plan
(Addendum). The Compensation Committee grants restricted stock to the employees of the Company and its subsidiaries, other than the
executive officers of the Company, pursuant to the Companys equity incentive plans and reports such actions to the Board of
Directors.
For Fiscal 2011, the Compensation
Committee directly engaged a compensation consultant from Mercer Human Resource Consulting (Mercer) to advise the Committee regarding
market practices and general guidelines for equity grant compensation for key employees, including the NEOs (as defined in Compensation
Discussion & Analysis). The Company paid that consultant $24,500 for work performed for the Compensation Committee. The Company, on
managements recommendation, separately retained Mercer and an affiliated company of Mercer (the Affiliate) to provide other services
for the Company in Fiscal 2011, for which the Company paid $514,472. These other services primarily related to health and welfare consulting, insurance
consulting, insurance brokerage and surety bonding. The Company also made payments to the Affiliate for insurance premiums that were collected by the
Affiliate on behalf of insurance carriers, but these amounts are not included in the totals referenced above, as the amounts were paid over to
insurance carriers for services provided by those carriers. Since the engagements relating to the other services are long-standing engagements entered
into by the Company and unrelated to the compensation consultant, neither the Committee nor the Board expressly approved such other services. The
compensation consultant who provided executive compensation advice to the Compensation Committee worked exclusively for the Compensation Committee and
not for the Company in connection with the other services or otherwise.
The Compensation Committee may
delegate any of its powers or duties to the chairperson of the Compensation Committee or any subcommittee, other than as prohibited by law. Each member
of the Compensation Committee
9
has been determined to be an
independent director, in accordance with the independence requirements of the New York Stock Exchange. The Compensation Committee met one (1) time
during Fiscal 2011. For more information see the Report of the Compensation Committee appearing elsewhere in this Proxy
Statement.
Corporate Governance &
Nominating Committee
: The Corporate Governance & Nominating Committee identifies, reviews, evaluates and recommends nominees for the Board of
Directors. In addition, the Corporate Governance & Nominating Committee monitors and evaluates the performance of the directors, individually and
collectively. The Corporate Governance & Nominating Committee also reviews and makes recommendations to the full Board of Directors regarding
changes in the number, chairperson, composition or responsibilities of each of the committees of the Board of Directors and also reviews the committee
charters. The Corporate Governance & Nominating Committee periodically reviews the Companys Corporate Governance Guidelines and recommends
changes to the Board of Directors. Each member of the Corporate Governance & Nominating Committee has been determined to be an independent
director, in accordance with the independence requirements of the New York Stock Exchange. The Corporate Governance & Nominating Committee met one
(1) time during Fiscal 2011. The Corporate Governance & Nominating Committee will consider nominations for directors from shareholders. A more
detailed discussion regarding the process for nominating potential director candidates is included elsewhere in this Proxy Statement under the heading
Corporate Governance Matters Process for Nominating Potential Director Candidates.
Beneficial Ownership of Company
Stock
The following table presents
information regarding the beneficial ownership of the Common Stock, within the meaning of applicable securities regulations, of all current directors
and all nominees for director of the Company and the executive officers named in the Summary Compensation Table for 2011 included herein, and of such
directors and executive officers of the Company as a group, all as of October 31, 2011. Except as otherwise indicated, the persons named in the table
have sole voting and investment power over the shares included in the table.
Name
|
|
|
|
Shares of
Common Stock
Beneficially
Owned
(1)(2)
|
|
Percent
of Class
|
John R. Belk
|
|
|
|
|
10,783
|
(3)
|
|
*
|
John P. Derham
Cato
|
|
|
|
|
12,000
|
(4)
|
|
*
|
Thomas W.
Dickson
|
|
|
|
|
309,331
|
(5)
|
|
*
|
James E. S.
Hynes
|
|
|
|
|
8,780
|
(3)
|
|
*
|
Fred A.
Jackson
|
|
|
|
|
79,321
|
(6)
|
|
*
|
Frederick J.
Morganthall, II
|
|
|
|
|
59,882
|
(7)
|
|
*
|
Anna Spangler
Nelson
|
|
|
|
|
31,000
|
(8)
|
|
*
|
Bailey W.
Patrick
|
|
|
|
|
|
|
|
*
|
Robert H.
Spilman, Jr.
|
|
|
|
|
11,093
|
(9)
|
|
*
|
Harold C.
Stowe
|
|
|
|
|
5,000
|
(3)
|
|
*
|
Isaiah Tidwell
|
|
|
|
|
4,000
|
(3)
|
|
*
|
William C.
Warden, Jr.
|
|
|
|
|
15,000
|
(10)
|
|
*
|
John B.
Woodlief
|
|
|
|
|
65,990
|
(11)
|
|
*
|
All directors
and executive officers as a group (13 persons)
|
|
|
|
|
612,180
|
(12)
|
|
1.2%
|
(1)
|
|
The table includes shares allocated under the RRSP to individual
accounts of those named persons and group members who participate in the plan, the voting of which is directed by such named persons or group members,
as appropriate.
|
(2)
|
|
In accordance with Rule 13d-3 promulgated under the Exchange
Act, the table does not include shares of Common Stock that are deliverable in connection with the Deferral Plan. Pursuant to the Deferral Plan,
distributions under the Deferral Plan are paid in the form of Common Stock ninety days following the date
|
10
|
|
of termination of service as a director. As of October 31, 2011,
the Company was authorized to deliver up to 500,000 shares of Common Stock pursuant to the Deferral Plan and has delivered 20,986 shares to the
participating non-employee directors who have left the Board of Directors. Additionally there were 134,132 stock units reserved under the Deferral Plan
for delivery to the current participating non-employee directors. A more detailed discussion regarding the Deferral Plan is included elsewhere in this
Proxy Statement under the heading Election of Directors Directors Fees and Attendance. The number of stock units that have
been credited to each of the participating non-employee directors as of October 31, 2011 is set forth herein:
|
Name
|
|
|
|
Stock Units
Credited Under
Deferral Plan
|
John R. Belk
|
|
|
|
|
19,758
|
|
John P.
Derham Cato
|
|
|
|
|
15,189
|
|
James E. S.
Hynes
|
|
|
|
|
8,530
|
|
Anna Spangler
Nelson
|
|
|
|
|
23,636
|
|
Bailey W.
Patrick
|
|
|
|
|
14,330
|
|
Robert H.
Spilman, Jr.
|
|
|
|
|
12,105
|
|
Harold C.
Stowe
|
|
|
|
|
20,372
|
|
Isaiah
Tidwell
|
|
|
|
|
15,354
|
|
William C.
Warden, Jr.
|
|
|
|
|
4,854
|
|
Total
|
|
|
|
|
134,128
|
*
|
*This sum may
vary from other Deferral Plan totals included herein due to rounding.
|
|
|
|
|
|
|
(3)
|
|
Includes 4,000 shares that may be acquired upon the exercise of
stock options that are currently exercisable, as to which such director would have sole voting and investment power upon acquisition.
|
(4)
|
|
Represents 12,000 shares that may be acquired upon the exercise
of stock options that are currently exercisable, as to which Mr. Cato would have sole voting and investment power upon acquisition.
|
(5)
|
|
Includes 206,921 shares owned of record and beneficially by
Thomas W. Dickson, as to which he has sole voting and investment power; 10,991 shares allocated to his RRSP account, as to which he has sole voting
power, but no investment power except to the extent diversification of such shares is permitted by the plan; 2,200 shares held as custodian for his
children, as to which he has sole voting and investment power; 71,719 shares of restricted stock, as to which he has sole voting power, but no
investment power; and 17,500 performance shares that will be settled via restricted stock within sixty days of October 31, 2011, upon the issuance of
which he will have sole voting power, but no investment power.
|
(6)
|
|
Includes 41,523 shares owned of record and beneficially by Mr.
Jackson, as to which he has sole voting and investment power and all of which are pledged by Mr. Jackson as security; 18,000 shares of restricted
stock, as to which he has sole voting power, but no investment power; 4,500 performance shares that will be settled via restricted stock within sixty
days of October 31, 2011, upon the issuance of which he will have sole voting power, but no investment power; and 15,298 shares that may be acquired by
him upon the exercise of stock options that are currently exercisable or become exercisable within sixty days of October 31, 2011, as to which he would
have sole voting and investment power upon acquisition.
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(7)
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Includes 14,257 shares owned of record and beneficially by Mr.
Morganthall, as to which he has sole voting and investment power; 36,875 shares of restricted stock, as to which he has sole voting power, but no
investment power; and 8,750 performance shares that will be settled via restricted stock within sixty days of October 31, 2011, upon the issuance of
which he will have sole voting power, but no investment power.
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(8)
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Includes 15,000 shares owned of record and beneficially by Ms.
Nelson as to which she has sole voting and investment power; 4,000 shares that may be acquired upon the exercise of stock options that are currently
exercisable, as to which she would have sole voting and investment power upon acquisition; and 12,000 shares owned by a corporation with respect to
which she has shared voting and investment power and is deemed the beneficial owner.
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11
(9)
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Includes 9,000 shares that may be acquired upon the exercise of
stock options that are currently exercisable, as to which Mr. Spilman would have sole voting and investment power upon acquisition.
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(10)
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Includes 10,000 shares that may be acquired upon the exercise of
stock options that are currently exercisable, as to which Mr. Warden would have sole voting and investment power upon acquisition.
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(11)
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Includes 22,030 shares owned of record and beneficially by Mr.
Woodlief, as to which he has sole voting and investment power; 1,851 shares allocated to his RRSP account, as to which he has sole voting power, but no
investment power except to the extent diversification of such shares is permitted by the plan; 34,609 shares of restricted stock, as to which he has
sole voting power, but no investment power; and 7,500 performance shares that will be settled via restricted stock within sixty days of October 31,
2011, upon the issuance of which he will have sole voting power, but no investment power.
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(12)
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Includes (i) 323,587 shares owned of record and beneficially as
to which such persons have sole voting and investment power; (ii) 64,298 shares that may be acquired by such persons upon the exercise of stock options
that are currently exercisable or become exercisable within sixty days of October 31, 2011, as to which such persons would have sole voting and
investment power upon acquisition; (iii) 12,000 shares as to which such persons have shared voting and investment power; (iv) 161,203 shares of
restricted stock, as to which such persons have sole voting power, but no investment power; (v) 38,250 performance shares that will be settled via
restricted stock within sixty days of October 31, 2011, upon the issuance of which such persons will have sole voting power, but no investment power;
and (vi) 12,842 shares allocated to their respective RRSP accounts, as to which they have sole voting power, but no investment power except to the
extent diversification of such shares is permitted by the plan.
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12
CORPORATE GOVERNANCE MATTERS
Corporate Governance Guidelines and Committee
Charters
In furtherance of its
longstanding goal of providing effective governance of the Companys business and affairs for the benefit of shareholders, the Board of Directors
of the Company has approved Corporate Governance Guidelines. The Corporate Governance Guidelines contain general principles regarding the functions of
the Companys Board of Directors. The Corporate Governance Guidelines are available on the Companys website at
www.ruddickcorp.com
.
In addition, committee charters for the Companys Audit Committee, Compensation Committee and Corporate Governance & Nominating Committee are
also included on the Companys website.
Director Independence
For a director to be considered
independent under the listing standards of the New York Stock Exchange, the Board of Directors must affirmatively determine that the director has no
direct or indirect material relationship with the Company, other than as a director. The Board of Directors has adopted categorical
standards to assist it in making independence determinations. The categorical standards set forth below and available on the Companys website at
www.ruddickcorp.com,
specify certain relationships that may exist between the Company and a director, each of which is deemed not to be a
material relationship and therefore will not, alone, prevent a director from being considered independent.
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Prior Employment.
The director was an employee of the
Company or one of its operating subsidiaries, or his or her immediate family member was an executive officer of the Company, and over five years have
passed since such employment ended.
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Prior Relationship with the Companys Auditors.
A
director or immediate family member was an employee or partner of the Companys independent auditor, and over three years have passed since such
employment, partner or auditing relationship ended.
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Current Employment.
An immediate family member of a
director is employed by the Company, one of its operating subsidiaries or another entity in a non-officer position, or by the Companys
independent auditor not as a partner and not participating in the firms audit, assurance or tax compliance practice.
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Interlocking Directorships.
A director was employed, or
his or her immediate family member was employed, as an executive officer of another company, during a time in which any of the Companys executive
officers served on that other companys compensation committee, and over three years have passed since such service or employment relationship
ended.
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Business Relationships.
A director was an executive
officer or an employee, or his or her immediate family member was an executive officer, of another company that made payments to, or received payments
from, the Company or its operating subsidiaries for property or services in an amount which, in each of the preceding three fiscal years, was less than
the greater of $1 million, or 2% of such other companys consolidated gross revenues.
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Charitable Contributions.
A director was an executive
officer of a charitable organization that received contributions from the Company or its operating subsidiaries in an amount which, in each of the
preceding three fiscal years, was less than the greater of $1 million, or 2% of such charitable organizations consolidated gross
revenues.
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After considering these
categorical standards, the listing standards of the New York Stock Exchange and all other relevant facts and circumstances, including commercial or
charitable relationships between the directors and the Company, the Board of Directors has determined that all of its members meet the Companys
categorical independence standards, meet the independence requirements of the New York Stock Exchange and are independent except for Thomas W. Dickson.
In connection with its independence evaluation, the Board of Directors considered the transactions involving the Company and Mr. Spilman. Mr. Spilman
is the President and Chief Executive Officer of Bassett Furniture Industries, Incorporated, which is a customer of American & Efird, the
Companys wholly
13
owned subsidiary until
November 2011. The Board of Directors categorical standards for determining director independence are also available on the Companys
website previously referenced.
Audit Committee Financial Expert
The Board of Directors has
determined that at least one member of the Audit Committee, Harold C. Stowe, is an audit committee financial expert. Mr. Stowe is
independent as that term is defined in the New York Stock Exchange Listed Company Manual.
Executive Sessions of Non-Management
Directors
Non-management directors meet
without management present at regularly scheduled executive sessions. In addition, to the extent that, from time to time, the group of non-management
directors includes directors that are not independent, at least once a year there is a scheduled executive session including only independent
directors. The Chairman of the Corporate Governance & Nominating Committee presides over meetings of the non-management or independent directors.
Shareholders and other interested parties may communicate directly with any of the directors, including the independent or non-management directors as
a group, by following the procedures set forth herein under the caption Shareholder and Interested Party Communications with
Directors.
Code of Ethics and Code of Business Conduct and
Ethics
The Company has adopted a written
Code of Ethics (the Code of Ethics) that applies to the Companys Chairman of the Board of Directors, President and Chief Executive
Officer, Vice President-Finance and Chief Financial Officer and Vice President and Treasurer. The Company has also adopted a Code of Business Conduct
and Ethics (the Code of Conduct) that applies to all employees, officers and directors of the Company as well as any subsidiary company
officers that are executive officers of the Company. The Companys sole operating subsidiary, Harris Teeter, maintains a code of ethics tailored
to its business. The Code of Ethics and Code of Conduct are available on the Companys website previously referenced under the Corporate
Governance caption. Any amendments to the Code of Ethics or Code of Conduct, or any waivers of the Code of Ethics or any waiver of the Code of
Conduct for directors or executive officers, will be disclosed on the Companys website promptly following the date of such amendment or waiver.
Information on the Companys website, however, does not form a part of this Proxy Statement.
Majority Vote Policy for Director
Elections
The Companys Corporate
Governance Guidelines provide that if a director receives a Majority Withheld Vote, that he or she will, with no further action, immediately resign
from the Board of Directors, effective upon acceptance of the resignation by the Board of Directors. Abstentions and broker non-votes are not
considered withheld votes. Please see the discussion of the Majority Withheld Vote policy contained in Proposal 1 Election of
Directors.
Shareholder and Interested Party Communications with
Directors
Shareholders and other interested
parties may communicate directly with the entire Board of Directors, any committee of the Board of Directors, the Chair of any committee, any
individual director, the independent or non-management directors, as a group, or any other group of directors by writing to: Ruddick Corporation Board
of Directors, c/o Secretary of the Corporation, 301 S. Tryon Street, Suite 1800, Charlotte, North Carolina 28202. Each such communication should
specify the applicable addressee(s). The Companys Board of Directors has instructed the Secretary to forward these communications to the
addressee, and if no specific addressee is listed, to the Chairman of the Board of Directors.
Director Attendance at Annual
Meeting
The Company believes that the
Annual Meeting is an opportunity for shareholders to communicate directly with the Companys directors. Consequently, each director is encouraged
to attend the Annual Meeting of Shareholders. All of the Companys directors attended the 2011 Annual Meeting of Shareholders.
14
Process for Nominating Potential Director
Candidates
The Corporate Governance &
Nominating Committee is responsible for identifying and screening potential director candidates and recommending qualified candidates to the full Board
of Directors for nomination. Director nominees are recommended to the Board of Directors annually by the Corporate Governance & Nominating
Committee for election by the shareholders. As described in the Companys Corporate Governance Guidelines, which are available at the
Companys website previously referenced, nominees for director will be selected on the basis of outstanding achievement in their personal careers,
wisdom, broad experience, integrity, ability to make independent analytical inquiries, understanding of the business environment and willingness to
devote adequate time to Board of Directors duties.
The Corporate Governance &
Nominating Committee reviews the background and qualifications of each nominee to determine such nominees experience, competence and character
and shall assess such nominees potential contribution to the Board of Directors, taking into account the then-existing composition of the Board
of Directors and such other matters as the Corporate Governance & Nominating Committee deems appropriate. In addition, while the Company does not
have a formal policy on Board of Directors diversity, the Corporate Governance Guidelines specify that the Board of Directors is committed to
diversified membership. The Corporate Governance & Nominating Committee actively considers such diversity in recruitment and nominations of
directors. The current composition of the Board reflects those efforts.
Nominees recommended by
shareholders will be analyzed by the Corporate Governance & Nominating Committee in the same manner as nominees that are otherwise considered by
such committee. Any recommendation submitted by a shareholder to the Corporate Governance & Nominating Committee must comply in all respects with
Article III, Section 12, of the Companys Bylaws, which generally requires that such recommendation be in writing and include the
shareholders name and address; number of shares of each class of capital stock owned by the shareholder; the potential candidates name,
resumé and biographical information; and any material interest, direct or indirect, that the shareholder may have in the election of the
potential candidate to the Board of Directors. Article III, Section 12, of the Companys Bylaws also requires that any such shareholder
recommendation be received by the Company in accordance with the timeframe described under the caption Shareholder Proposals. A copy of the
Companys Bylaws is available upon request to: Ruddick Corporation, 301 South Tryon Street, Suite 1800, Charlotte, North Carolina 28202,
Attention: Secretary of the Corporation.
Pursuant to its Charter, the
Corporate Governance & Nominating Committee (i) periodically reviews the Companys corporate governance principles, including criteria for the
selection of Board of Directors members to insure that the criteria, including diversity, are being addressed appropriately and (ii) conducts an annual
assessment of its performance and of the Charter and recommends changes to the Board of Directors when necessary.
All nominees for election to the
Board of Directors have been recommended by the Corporate Governance & Nominating Committee. All such nominees are current directors standing for
re-election.
Board Leadership Structure
Currently, Thomas W. Dickson
serves as the Companys Chairman of the Board, President and Chief Executive Officer. The Board of Directors does not have a lead independent
director. However, as described below in the section Corporate Governance MattersExecutive Sessions of Non-Management Directors, the
Chairman of the Corporate Governance & Nominating Committee, who is an independent director, presides over executive session meetings of the
non-management or independent directors. The Board of Directors believes that Mr. Dicksons service as both Chairman of the Board and Chief
Executive Officer is in the best interests of the Company and its shareholders because Mr. Dickson possesses detailed and in-depth knowledge of the
issues, opportunities and challenges facing the Company and its business and is thus best positioned to develop agendas that ensure that the Board of
Directors time and attention are focused on the most important matters. The combined positions help to provide a unified leadership and direction
for the Company, enables decisive leadership, ensures clear accountability, and enhances the Companys ability to communicate its message and
strategy clearly and consistently to the Companys shareholders, employees, customers and suppliers. Furthermore, the Board of Directors believes
that this practice is appropriate in light of the fact that currently only one of the directors,
15
Mr. Dickson, is an employee
of the Company, all of the other directors are independent, and all of the committees of the Board of Directors are comprised solely of independent
directors. The Board of Directors believes that its current leadership structure enhances Mr. Dicksons ability to provide insight and direction
on important strategic initiatives simultaneously to both management and the independent directors.
Role in Risk Oversight
As the Companys principal
governing body, the Board of Directors has the ultimate responsibility for overseeing the Companys risk management practices. The Board of
Directors has delegated certain risk management functions to its committees.
Pursuant to the Audit Committee
Charter, one of the primary roles and responsibilities of the Audit Committee is to assist the Board of Directors with the oversight of: (1) the
integrity of the financial statements and internal controls of the Company, (2) the compliance by the Company with legal and regulatory requirements,
(3) the outside auditors independence and qualifications, and (4) the performance of the Companys internal audit function and outside
auditors. Under the Audit Committee Charter, the Audit Committee will, among other responsibilities and duties:
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Review with the outside auditor and management, as appropriate,
significant financial reporting issues and judgments identified by management or the outside auditor and made in connection with the preparation of the
Companys financial statements;
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Review with the outside auditor and management, major issues
identified by management or the outside auditor regarding the Companys accounting and auditing principles and practices, including critical
accounting policies, and major changes in auditing and accounting principles and practices suggested by the outside auditor, internal auditor or
management; and
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Consult with the outside auditor and management concerning the
Companys internal controls, including any significant deficiencies and significant changes in internal controls, and review managements and
the outside auditors reports on internal control over financial reporting.
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16
REPORT OF THE COMPENSATION COMMITTEE
The
Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that immediately follows this report. Based
on this review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be
included in this Proxy Statement and incorporated by reference into the Companys Annual Report on Form 10-K for the year ended October 2,
2011.
SUBMITTED BY THE COMPENSATION
COMMITTEE
John P. Derham Cato
James E.
S. Hynes
Anna Spangler Nelson
William C. Warden, Jr.
17
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
Despite the challenging global
economic and regulatory environment, the Company delivered strong financial results in Fiscal 2011. Subsequent to Fiscal 2011, in November 2011 the
Company sold its American & Efird business (A&E), the Companys textile subsidiary. As a result, the Companys Fiscal
2011 results related to A&E were reported as discontinued operations. The Company reported earnings from continuing operations for Fiscal 2011 of
$111.5 million, or $2.28 per diluted share, an increase from $98.7 million, or $2.03 per diluted share, for Fiscal 2010. Consolidated net income was
$91.2 million, comprised of the $111.5 million in earnings from continuing operations, $16.2 million in earnings from discontinued operations and a
loss on sale of discontinued operations of $36.5 million (net of tax benefits). The Company also generated net sales of $4.29 billion for Fiscal 2011,
a 4.5 percent increase in net sales from Fiscal 2010, attributable to new store activity and comparable store sales increases. Comparable store sales
increased by 3.27% for Fiscal 2011. The Companys subsidiaries achieved their operating profit targets for Fiscal 2011.
Based on a comprehensive
performance assessment of the Companys financial results, and combined with a review of the economic environment and competitive trends, the
Compensation Committee made the following decisions for the four named executive officers listed in the Summary Compensation Table for 2011, which we
refer to as NEOs:
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Base salaries increased for each NEO, due to the Companys
and its subsidiaries meeting Fiscal 2010 performance targets, the relative success of each NEO in achieving his applicable individual performance
goals, and the discontinuation of certain perquisites historically provided to the NEOs, all as described in more detail below.
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Fiscal 2011 annual cash plan incentive awards were granted to
NEOs based upon the respective Fiscal 2011 operating results of the Company and its subsidiaries and as computed in accordance with the respective
bonus formulas approved by the Compensation Committee.
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The Compensation Committee granted long-term incentive awards
covering 35,000 shares of Common Stock to Mr. Dickson and covering an aggregate of 41,500 shares of Common Stock to the other NEOs.
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For Fiscal 2011, Mr. Dickson
received total compensation of $3,371,225, reflecting strong Company and individual performance in Fiscal 2011. Mr. Dicksons total compensation
reflects the role he plays in establishing the Companys strategic agenda and long-range plan, overseeing the management and execution of the
Companys day-to-day operations and leading the Company in a challenging global economic and regulatory environment. Although his compensation is
determined using the same methodology as used for each of the other NEOs, Mr. Dicksons compensation is higher than the compensation paid to any
of the other NEOs as his responsibilities and obligations at the Company are greater than those of any of the other NEOs.
Each of the other NEOs received
total compensation in Fiscal 2011 as follows: Mr. Woodlief, $1,963,597, Mr. Morganthall, $1,944,092 and Mr. Jackson, $1,384,612. The compensation paid
to these NEOs reflects the relative performances of the Company or subsidiary for which these officers were responsible during Fiscal 2011, as well as
individual performance. As of the sale of A&E, Mr. Jackson, A&Es President, was no longer an employee of the Company or its
subsidiaries.
During Fiscal 2011, the
Compensation Committee made minimal changes to the compensation programs, other than the modification of the perquisites provided to NEOs as described
below. Minor adjustments were made to the cash incentive plans and bonus amounts to address the economic environment and projected performance. No
changes were made to the overall design of the long-term incentive portion of compensation.
Executive Compensation Philosophy
The primary objective of the
Companys executive compensation program is to enhance shareholder value in the Company while attracting, retaining and rewarding highly qualified
executives. Accordingly, the Companys executive compensation program encourages management to produce strong financial performance by
tying
18
corporate and individual
performance to compensation levels. The Companys executive compensation program consists generally of annual base salary, annual cash incentive
bonuses, long-term equity incentive compensation, such as stock options, restricted stock and performance share grants, and other
benefits.
The Companys practice is to
provide incentives through its compensation program that promote both the short-term and long-term financial objectives of the Company and its
subsidiaries. Achievement of short-term objectives is rewarded through base salary and annual cash incentive bonuses, while long-term equity incentive
awards encourage management to focus on the Companys long-term goals and success. Both annual cash incentive bonuses and a substantial portion of
long-term equity incentive compensation are performance-based. These incentives are based on financial objectives of importance to the Company,
including operating profit percentage and net operating profit after tax return on invested capital. The Companys compensation practices reflect
a pay-for-performance philosophy, whereby a substantial portion of an executives potential compensation is at risk and tied to performance of the
Company and its subsidiaries, as applicable. The percentage of an executives compensation that is tied to performance increases as the
Companys profit performance and rate of return increases.
Compensation Setting Process
The Compensation Committee is
responsible for setting total compensation for executives of the Company and for overseeing the Companys various executive compensation plans and
the overall management of the compensation program. Periodically, the Compensation Committee obtains independent and impartial advice from external
compensation consulting firms and industry surveys and resources in executing its responsibilities. For Fiscal 2011, the Compensation Committee engaged
Mercer to act as its independent compensation consultant with respect to equity grant compensation. For additional information regarding the role of
Mercer and its affiliates, see Committees of the Board of Directors Compensation Committee above. The Compensation Committee also
referenced other market information the Compensation Committee considered relevant.
The Compensation Committee
considers various published broad-based third party surveys of the annual compensation of wholesale and retail food companies as well as other retail
companies including drug store, convenience, mass merchandising and specialty retail (the Compensation Surveys). The companies surveyed in
the Compensation Surveys generally include (i) companies that operate in the specific industries in which the Company operates, (ii) regional companies
that are comparable in size to the Company and (iii) other companies with which the Company believes it competes for its top executives. For example,
one survey covers 189 companies in the retail sector including big box stores, grocery, drug and convenience stores, outlet stores, restaurants,
department and specialty stores, while a second survey covers 104 companies in the retail sector, and a third survey covers 35 wholesale and retail
food companies. The Compensation Surveys generally provide information on what companies paid their executives in terms of base salary and annual
incentives, the target annual compensation the executives could have received upon attainment of certain goals, the value and composition of long term
incentives companies granted to executives, and long term incentives and annual incentives as a percentage of base salary. While the Compensation
Committee believes the Compensation Surveys are valuable, it does not use the Compensation Surveys as a benchmark to set executive compensation. The
Compensation Committee does not believe it is appropriate to tie executive compensation directly to the compensation awarded by other companies or to a
particular survey or group of surveys. Instead, the purpose of the Compensation Surveys, and the manner in which it was used by the Compensation
Committee, was to provide a general understanding of current compensation practices and trends of similarly situated companies. The Compensation
Surveys contain high-level analyses and are compiled from information from a number of companies. The Compensation Committee uses the Compensation
Surveys as a tool to compare the overall compensation of its own executives to the executives of other companies in similar sectors. No specific
compensation decision for any individual was based on or justified by any Compensation Survey.
In its annual review of executive
compensation, the Compensation Committee meets with the Companys Chief Executive Officer with regard to the compensation packages of the
Companys executive officers other than the Chief Executive Officer. The Chief Executive Officer recommends any compensation adjustments for these
officers to the Compensation Committee for its review, with changes in compensation being based upon the individuals performance, the performance
of the Company or its subsidiaries, as applicable, and the individuals level of
19
responsibility. The
Compensation Committee accepts, rejects or modifies the Chief Executive Officers recommendations at its discretion. The Compensation Committee
then makes a recommendation to the independent directors for their approval. The Compensation Committee, along with the Chairman of the Corporate
Governance & Nominating Committee, performs the annual evaluation of the Chief Executive Officer. The compensation for the Chief Executive Officer
is approved by the independent directors upon the recommendation of the Compensation Committee.
At the 2011 Annual Meeting of
Shareholders, the Shareholders provided an advisory vote with 98% of the votes cast approving the compensation of the Companys named executive
officers for Fiscal 2010 (the Advisory Vote). Subsequently, in its meeting held in November 2011 the Compensation Committee considered the
results of the Advisory Vote in determining compensation policies and decisions of the Company. The Advisory Vote affected the Companys executive
compensation decisions and policies by reaffirming the Companys pay-for-performance philosophy, and the Compensation Committee will continue to
use this philosophy and past practice in determining future compensation decisions.
Elements of Compensation
Annual Cash Compensation
.
The Companys annual cash compensation for its executives consists of base salary and cash incentive bonuses.
The total annual cash
compensation levels of the respective executives reflect the varying duties and responsibilities of each individual executives position with the
Company or a subsidiary, as appropriate, with consideration given to the executives individual performance and the relative size and complexity
of each business unit, as well as the units relative contribution to the consolidated financial condition and results of operation of the
Company. As a general rule, the total annual cash compensation of executives employed by the Company is somewhat higher than cash compensation for
executives of the subsidiary companies, primarily due to the higher level of responsibilities of the holding Company executives for the Companys
total performance.
For Fiscal 2011, base salaries of
the NEOs were reviewed and, on average, increases of 9.0% were provided. Base salary increases were based on the Compensation Committees
determination to discontinue certain perquisites as described below, and each NEOs achievement of personal performance objectives and corporate
operating results during Fiscal 2011. The corporate operating results considered were primarily return on invested capital during the fiscal year
calculated as net operating profit after tax divided by invested capital at the beginning of the fiscal year (NOPAT Return) and operating
margins at each of the Companys subsidiaries. The personal performance objectives vary for each NEO as described in specific detail below, and
were primarily tied to the performance of the operating company by which such NEO was employed (i.e., the Company, Harris Teeter, Inc. (Harris
Teeter), the Companys supermarket subsidiary, or A&E, the Companys textile subsidiary during Fiscal 2011) for the prior year,
Fiscal 2010. No particular weight was assigned to any particular performance goal, and the personal performance objectives considered by the
Compensation Committee may from year to year change, depending on the needs of the Company. The Chief Executive Officer meets with the Compensation
Committee and presents a set of personal objectives for the Compensation Committee to consider. After discussion, the Compensation Committee approves
the personal objectives for the Chief Executive Officer. For all NEOs other than the Chief Executive Officer, the performance objectives are generally
discussed between the respective NEO and the Chief Executive Officer, who then reviews them with the Compensation Committee. The Compensation Committee
does not determine the NEOs base salaries based on a formula or targeted performance.
Based upon the recommendations of
management relating to managements expectations for Fiscal 2011 as well as the foregoing factors, the Compensation Committee determined to
increase the base salaries of the NEOs for Fiscal 2011 as detailed in the Base Salary Adjustment table below. The target corporate operating results
and individual performance objectives for the NEOs from the prior year, Fiscal 2010, that were used to determine the base salaries for Fiscal 2011 were
as follows:
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For Mr. Dickson, the Fiscal 2010 target corporate operating
results were achieving sales at Harris Teeter of $4.11 billion (actual $4.10 billion) and operating profit of $164.5 million (actual $181.6 million),
and sales at A&E of $251 million (actual $301.1 million) and operating profit of $3.95 million (actual
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20
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$19.5 million). The Fiscal 2010 performance objectives for Mr. Dickson included: on
a consolidated Company basis, selling the Companys equity share in a foreign investment company; at Harris Teeter, opening 13 new stores and
completing 2 major store remodelings, achieving a variety of specific productivity, cost savings and operational goals and achieving positive same
store sales of 0.5%; and at A&E, increasing global market share and integration of recent acquisitions and consolidations at A&E. During Fiscal
2010, the Company sold its interest in the foreign investment company; Harris Teeter opened 13 new stores, and completed the major remodeling of 2
stores, and achieved productivity, cost savings and operational goals, but did not achieve the stated positive same store sales goals at Harris Teeter;
and A&E increased global market share and made progress on the growth and integration of recent acquisitions and consolidations.
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For Mr. Woodlief, the Fiscal 2010 target corporate operating
results were achieving sales at Harris Teeter of $4.11 billion (actual $4.10 billion) and operating profit of $164.5 million (actual $181.6 million),
and sales at A&E of $251 million (actual $301.1 million) and operating profit of $3.95 million (actual $19.5 million). The Fiscal 2010 performance
objectives for Mr. Woodlief included selling the Companys equity share in the foreign investment company, developing, overseeing and improving
banking relationships, investor relations, financial planning, risk management practices, employee and executive benefit programs, investment banking
relationships, accounting and financial controls in an effective and cost-efficient manner at both corporate and subsidiary levels, designing and
maintaining corporate governance and compliance programs, and effectively coordinating with the audit committee and the outside auditors.
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For Mr. Morganthall, the Fiscal 2010 target corporate operating
results were achieving sales at Harris Teeter of $4.11 billion (actual $4.10 billion) and operating profit of $164.5 million (actual $181.6 million).
The Fiscal 2010 performance objectives for Mr. Morganthall included opening 13 new stores and completing 2 major store remodelings at Harris Teeter,
achieving positive same store sales of 0.5%, and identifying cost savings in product cost and operating and corporate costs at Harris Teeter. During
Fiscal 2010, Harris Teeter opened 13 new stores and closed 3 stores, and completed the major remodeling of 2 stores, and made progress toward
identifying cost savings. However, Harris Teeter did not achieve the stated positive same store sales goal.
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For Mr. Jackson, the Fiscal 2010 target corporate operating
results were achieving sales at A&E of $251 million (actual $301.1 million) and operating profit of $3.95 million (actual $19.5 million). The
Fiscal 2010 performance objectives for Mr. Jackson included achieving profitability in the U.S. through continued cost reductions, and expanding market
share and profitability in China and India. In Fiscal 2010, A&E achieved those performance objectives.
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2011 Base Salary Adjustment
Name
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Fiscal 2010
Base Salary ($)
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Fiscal 2011
Base Salary ($)
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Increase ($)
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Increase (%)
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Dickson
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620,000
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682,000
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62,000
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10.0
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Woodlief
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435,000
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472,500
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37,500
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8.6
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Morganthall
|
|
|
|
|
452,500
|
|
|
|
482,000
|
|
|
|
29,500
|
|
|
|
6.5
|
|
Jackson
|
|
|
|
|
295,000
|
|
|
|
328,000
|
|
|
|
33,000
|
|
|
|
11.2
|
|
Annual cash incentive plan awards
(Incentive Bonuses) are provided to the NEOs through the Ruddick Corporation Cash Incentive Plan (the Cash Incentive Plan),
which was approved by the shareholders at the Annual Meeting of Shareholders held on February 15, 2007. Awards under the Cash Incentive Plan link
incentive pay to achievement of predetermined, objective performance goals. The Compensation Committee awards potential Incentive Bonuses to the NEOs
based upon each such NEOs level of responsibility within the Company or at the operating subsidiary, and the attainment of that potential
compensation is based upon the performance of the Company or such operating subsidiary. In particular, the Compensation Committee has set forth
performance metrics for the Company, Harris Teeter and A&E based on information which the Compensation Committee deems most important to
determining the performance of such entities. The footnotes to the 2011 Cash Incentive Plan
21
Awards table identify the
different performance metric thresholds which the NEOs would be required to meet in order to earn an Incentive Bonus under the plan.
For Fiscal 2011, Incentive
Bonuses for executives employed directly by the holding Company were based on NOPAT Return. With respect to an executive officer employed directly by
Harris Teeter or A&E, the Incentive Bonus was based on operating profit margin for Harris Teeter or NOPAT Return for A&E. Generally, if the
Company or a subsidiary, as applicable, achieves the predetermined minimum goals, which are approved by the Compensation Committee, executives are paid
a predetermined percentage of their base salary as their Incentive Bonus. The percentage of base salary payable as Incentive Bonus increases as the
operating profit margin or NOPAT Return increases relative to the predetermined performance goal. The Compensation Committee has the discretion to
eliminate or reduce the Incentive Bonus payable to any or all of the NEOs in accordance with the Cash Incentive Plan.
The Compensation Committee uses
NOPAT Return and operating profit margin as performance measures for the Company and its operating subsidiaries because the Compensation Committee
believes these measures are appropriate determinates of the Companys and its operating subsidiaries success. NOPAT Return is a measure by
which the Compensation Committee is able to determine the Companys return on total invested capital (for all investors, including shareholders
and debt holders). NOPAT Return effectively adjusts for the financing of a company and is a better measure of the operational performance of the
business. By using NOPAT Return the Compensation Committee is able to determine the on-going operational success of the Company or A&E, as
applicable. Operating profit margin is a measurement of what proportion of a companys revenue is remaining after paying for all operating costs,
specifically excluding financing costs. Operating profit margin provides a measure of how much a company earns (before interest and taxes) on each
dollar of sales. If the operating profit margin is increasing, the Company is earning more per dollar of sales. In addition, the Compensation Committee
has chosen these performance measures because the Compensation Committee believes these measures are used by third parties, such as investment banks,
analysts and lenders, to judge the performance of the Company, its operating subsidiaries and their competitors, and these performance measures are
utilized by the Company and its operating subsidiaries when evaluating their performance against their peers. Further, these measures are used to
compensate various other employees at the Company and its operating subsidiaries.
The following table describes the
threshold and actual Incentive Bonuses that were payable under the Cash Incentive Plan to each of the NEOs for Fiscal 2011. Based on the actual Fiscal
2011 performance of the Company and its subsidiaries, NEOs were eligible for and received Incentive Bonuses for Fiscal 2011 in the aggregate amount of
$1,968,924. The actual Incentive Bonuses payable to the NEOs for performance in Fiscal 2011 are reflected in the following table and in the Summary
Compensation Table for 2011, and additional information regarding the Cash Incentive Plan awards for Fiscal 2011 may be found below in the Grants of
Plan-Based Awards Table for 2011. The difference in the potential Incentive Bonuses paid among the NEOs is reflective of the variance in the duties and
responsibilities of the positions held by each NEO. This difference in potential Incentive Bonuses is influenced by the Compensation Committees
assessment of the degree to which the NEO may directly influence either the Companys business or the operating subsidiaries business, as
applicable.
22
2011 Cash Incentive Plan Awards
Name
|
|
|
|
Threshold
Performance
Metric
|
|
Threshold
Incentive
Bonus (% of
Base Salary)
|
|
Threshold
Incentive Bonus
($)
|
|
Actual Fiscal
2011
Performance
|
|
Actual
Incentive
Bonus (% of
Base Salary)
|
|
Actual
Incentive
Bonus
($)
|
Dickson
|
|
|
|
4% NOPAT Return on Beginning Invested Capital for the Company
|
|
|
NA (1
|
)
|
|
|
|
|
|
9.29% NOPAT Return on Beginning Invested Capital for the Company
|
|
|
126.96
|
|
|
|
865,867
|
|
Woodlief
|
|
|
|
4% NOPAT Return on Beginning Invested Capital for the Company
|
|
|
NA (2
|
)
|
|
|
|
|
|
9.29% NOPAT Return on Beginning Invested Capital for the Company
|
|
|
105.80
|
|
|
|
499,905
|
|
Morganthall
|
|
|
|
2% Operating Profit Margin for Harris Teeter
|
|
|
15 (3
|
)
|
|
|
72,300
|
|
|
4.45% Operating Profit Margin for Harris Teeter
|
|
|
76.25
|
|
|
|
367,525
|
|
Jackson
|
|
|
|
0% NOPAT Return on Beginning Invested Capital for A&E
|
|
|
NA (4
|
)
|
|
|
|
|
|
8.21% NOPAT Return on Beginning Invested Capital for A&E
|
|
|
71.84
|
|
|
|
235,627
|
|
(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 for the Company 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 for the Company 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
Mr. Morganthall upon the achievement of a 2.0% operating profit margin for Harris Teeter, 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% for Harris Teeter. Increments of less than 0.1% would be calculated on a pro rata
basis.
|
(4)
|
|
An Incentive Bonus of 8.75% of his base salary would be earned
by Mr. Jackson for each 1% NOPAT return on beginning invested capital for A&E above 0%. Increments of less than 1% would be calculated on a pro
rata basis.
|
Long-Term Equity Incentive
Compensation
. The Companys executive compensation program is intended to provide executives who have significant responsibility for
the management, growth and future success of the Company with an opportunity to increase their ownership in the Company and thereby gain from
any long-term appreciation in the Companys stock. The Company typically provides long-term equity incentive compensation to its executives
through the grant of restricted stock and performance shares pursuant to its shareholder approved equity incentive plans.
Generally, the Company plans its
equity incentive award grant dates well in advance of any actual grant. The timing of the Companys regular annual awards coincides with a
scheduled meeting of the Board of Directors, which historically has been the first meeting of the Board of Directors in the new fiscal year. The grant
date is established when the Board of Directors, acting upon the recommendation of the Compensation Committee, approves the grants and all key terms.
Newly hired employees may receive equity incentive awards prior to the annual grant date upon
23
the approval of the
Compensation Committee. The Company does not coordinate the timing of equity incentive awards with the release of material non-public
information.
In Fiscal 2011, the Company
granted restricted stock and performance shares to a broad range of management employees of the Company and its operating subsidiaries, including the
NEOs. All of the Fiscal 2011 grants were made in November 2010 and generally each employee received a grant of equal amounts of restricted stock and
performance shares. The restricted stock vests 20% per year on each of the first five anniversaries of the date of the award. The performance shares
entitled each recipient to receive shares of restricted stock, only upon the achievement of certain performance objectives as described herein for
Fiscal 2011. Restricted stock issued in satisfaction of performance shares vests 25% per year on each of the first four anniversaries of the issuance
of the restricted stock. For the NEO employed by Harris Teeter, the issuances of restricted stock from performance shares were 100% subject to Harris
Teeter meeting its operating profit projections for Fiscal 2011. For executives employed by A&E, the issuances of restricted stock from performance
shares were 100% subject to A&E meeting its operating profit projections for Fiscal 2011. Issuances of restricted stock from performance shares to
executives employed by the Company were dependent as to 95% of their performance shares on Harris Teeter meeting its operating profit projections and
as to 5% of their performance shares on A&E meeting its operating profit projections, reflecting the relative size of the operating subsidiaries.
For Fiscal 2011 the operating profit projection for Harris Teeter was $172.5 million, and for A&E it was $18.5 million.
The belief of the Compensation
Committee is that the equity awards incentivize employees by tying their compensation to the value of the Companys Common Stock. The performance
share grants are designed to incent the broad range of management employees, including the NEOs, to achieve the annual operating profit projections
which are provided to the Companys Board of Directors. During Fiscal 2011, with respect to performance share awards, the Harris Teeter
executives, the A&E executives and the Companys executives earned the full amount of awards. The performance share awards for Fiscal 2011 are
designed to be achievable by all of the participants in such award plans. Reference is made to the Grants of Plan-Based Awards for 2011 table for more
information regarding the equity award grants.
The criteria considered by the
Compensation Committee in granting restricted stock and performance shares to NEOs included level of responsibility or position with the Company or its
subsidiaries, performance and length of employment. The Compensation Committee also considers the number of options, shares of restricted stock and
performance shares previously granted to employees when approving new grants. The Companys equity based incentive compensation awards are
intended to provide executive officers a vested interest in the long-term financial performance of the Company and closely align the interests of the
shareholders and executives, with the goal of increasing shareholder value in the Company. The vesting schedule utilized for both the restricted stock
and performance shares is a retention feature designed to encourage long-term employment by executives.
2011 Restricted Stock Awards
Name
|
|
|
|
Shares of Restricted Stock
Awarded in FY 2011
(a)
|
Thomas W.
Dickson
|
|
|
|
17,500
|
John B.
Woodlief
|
|
|
|
7,500
|
Frederick J.
Morganthall, II
|
|
|
|
8,750
|
Fred A.
Jackson
|
|
|
|
4,500
|
(a)
|
|
These awards of restricted stock will vest 20% per year on each
of the first five anniversaries of the date of the award.
|
24
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 participants final average earnings. See Compensation Discussion and AnalysisPension 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 Companys 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 Companys 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 individuals account. The value of an
individuals 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 AnalysisFlexible 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 executives compensation package and furthers the Companys 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
25
cost effective manner. The
Company generally believes that perquisites have greater value to the executives than the cost to the Company to provide them, thus providing a return
on the cost of providing such benefits. The Compensation Committee considers these other forms of compensation, as well as perquisites made available
to executive officers, when setting annual base salary, incentive compensation and long-term incentive compensation. Additionally, the Company provides
tax gross-up reimbursements to the NEOs for the value of certain of these benefits, in order to provide the NEOs with the full value of such
benefits.
Perquisites.
The cost of
certain golf and social club memberships was historically covered for the NEOs, provided that the club membership provided for a business-use
opportunity such as use of the facilities for functions and meetings, and client networking and entertainment. The country club membership
reimbursements were historically grossed up for tax purposes. However, during Fiscal 2011 the Compensation Committee determined to discontinue
reimbursement of such golf and social club membership dues after a review of the total compensation packages provided to the NEOs. Other perquisites
are provided from time to time.
RRSP.
The Company also
maintains the RRSP in which executives and other employees are entitled to participate upon satisfaction of the eligibility requirements. The RRSP
provides participants a specified Company match on a portion of their pay contributed to the RRSP in accordance with plan rules. The Company provides a
match equal to 50% of the pay contributed to the RRSP up to 4% of pay for participants employed by the Company or Harris Teeter, subject to certain
limitations. Effective January 1, 2011, the Company match for A&E participants became 25% of the pay contributed to the RRSP up to 4% of pay. The
RRSP also provides eligible participants a Company-paid automatic retirement contribution. Based upon the employing company and age and service points,
eligible participants will receive an annual automatic retirement contribution equal to between 1% and 5% of covered pay, subject to certain
limitations.
Disability Benefits and Excess
Liability Insurance.
The Company generally provides income protection in the event of disability under group insurance plans for its employees.
These group plans have limitations on income replacement and, as a result, highly compensated employees are not provided proportional income
protection. Accordingly, alternative disability coverage is provided by the Company to certain members of executive management, including all NEOs,
pursuant to the Executive Long Term Disability Plan. The amount of the premiums paid with respect to the Executive Long Term Disability Plan were
grossed up for tax purposes. Beginning in Fiscal 2011, the Company began providing personal group excess liability insurance coverage to certain
members of executive management, including all NEOs.
Life Insurance.
The
Company maintains a group universal insurance plan through the Key Employee Life Insurance Plan (the KELIP) which provides for life
insurance coverage equal to two and one-half times an executives base salary. As part of the KELIP, the Company also makes a contribution into a
cash value investment account on behalf of KELIP participants in the amount of 0%, 1.2% or 2.4% of base salary. All NEOs are in the 2.4% category. In
addition, the Ruddick Corporation Executive Bonus Insurance Plan (the EBIP) provides the Companys executives with a whole life
insurance policy as to which the Company makes the premium payments while the participant is employed by the Company. The amount of the premiums paid
with respect to the Executive Bonus Insurance Plan were grossed up for tax purposes. The EBIP generally requires the Company to continue premium
payments on behalf of participants until age 65 if their employment is terminated within two years following a change in control. This provision is
coordinated with the Change-in-Control and Severance Agreements discussed below such that, in the case of a change in control, the Company will
continue EBIP premium payments for a NEO until the later of the end of the continuation period provided under the EBIP or the Change-in-Control and
Severance Agreements. In Fiscal 2011, the Compensation Committee determined to increase Mr. Dicksons death benefits under EBIP by $500,000 to a
total of $2.5 million, in order to more closely align his benefit as a multiple of base salary similar to other EBIP participants.
Change-in-Control and
Severance Agreements.
The Company entered into Change-in-Control and Severance Agreements with the NEOs during the Companys fiscal year ended
September 30, 2007 (Fiscal 2007). Please see the discussion of the Change-in-Control and Severance Agreements contained below in
Potential Payments Upon Termination of Employment or Change in Control.
26
Deductibility of Compensation
Expenses
Section 162(m) of the Internal
Revenue Code of 1986 (the Code) generally limits the tax deductibility by the Company for compensation paid to the Chief Executive Officer
and the other most highly compensated executive officers to $1 million per officer per year, unless it qualifies as performance-based
compensation. To qualify as performance-based, compensation payments must satisfy certain conditions, including limitations on the
discretion of the Compensation Committee in determining the amounts of such compensation. It is the Companys current policy that, to the extent
possible, compensation paid to its executive officers be deductible under Section 162(m) of the Code. In furtherance of this policy, the Board of
Directors has adopted, and the shareholders have approved, the Cash Incentive Plan, the Addendum, and the 2011 Plan. The Cash Incentive Plan, the
Addendum and the 2011 Plan have each been structured in a manner such that cash incentive payments and performance-based equity awards under each plan
can satisfy the requirements for performance-based compensation within the meaning of Section 162(m) of the Code.
Summary Compensation Table for 2011
Name and
Principal Position
|
|
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)(1)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)(2)
|
|
Change in
Pension Value
and
Non-Qualified
Deferred
Compensation
Earnings
($)(3)
|
|
All Other
Compensation
($)(4)
|
|
Total
($)
|
Thomas
W. Dickson
|
|
|
|
|
2011
|
|
|
|
682,000
|
|
|
|
|
|
|
|
1,345,400
|
|
|
|
|
|
|
|
865,867
|
|
|
|
306,000
|
|
|
|
171,958
|
|
|
|
3,371,225
|
|
Chairman of the Board,
|
|
|
|
|
2010
|
|
|
|
620,000
|
|
|
|
|
|
|
|
667,062
|
|
|
|
|
|
|
|
662,160
|
|
|
|
1,804,000
|
|
|
|
139,686
|
|
|
|
3,892,908
|
|
President and Chief Executive
|
|
|
|
|
2009
|
|
|
|
620,000
|
|
|
|
|
|
|
|
663,376
|
|
|
|
|
|
|
|
502,944
|
|
|
|
2,565,000
|
|
|
|
140,288
|
|
|
|
4,491,608
|
|
Officer of the Company
|
|
John
B. Woodlief
|
|
|
|
|
2011
|
|
|
|
472,500
|
|
|
|
|
|
|
|
576,600
|
|
|
|
|
|
|
|
499,905
|
|
|
|
272,000
|
|
|
|
142,592
|
|
|
|
1,963,597
|
|
Vice
PresidentFinance and
|
|
|
|
|
2010
|
|
|
|
435,000
|
|
|
|
|
|
|
|
333,532
|
|
|
|
|
|
|
|
387,150
|
|
|
|
728,000
|
|
|
|
139,766
|
|
|
|
2,023,448
|
|
Chief
Financial Officer
|
|
|
|
|
2009
|
|
|
|
435,000
|
|
|
|
|
|
|
|
331,688
|
|
|
|
|
|
|
|
294,060
|
|
|
|
929,000
|
|
|
|
134,434
|
|
|
|
2,124,182
|
|
of the
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frederick J. Morganthall, II
|
|
|
|
|
2011
|
|
|
|
482,000
|
|
|
|
|
|
|
|
672,700
|
|
|
|
|
|
|
|
367,525
|
|
|
|
286,000
|
|
|
|
135,867
|
|
|
|
1,944,092
|
|
President of
|
|
|
|
|
2010
|
|
|
|
452,500
|
|
|
|
|
|
|
|
333,532
|
|
|
|
|
|
|
|
341,638
|
|
|
|
1,245,000
|
|
|
|
118,290
|
|
|
|
2,490,960
|
|
Harris
Teeter, Inc.
|
|
|
|
|
2009
|
|
|
|
452,500
|
|
|
|
|
|
|
|
331,688
|
|
|
|
|
|
|
|
359,738
|
|
|
|
1,785,000
|
|
|
|
114,313
|
|
|
|
3,043,239
|
|
|
Fred
A. Jackson
|
|
|
|
|
2011
|
|
|
|
328,000
|
|
|
|
|
|
|
|
345,960
|
|
|
|
|
|
|
|
235,627
|
|
|
|
363,000
|
|
|
|
112,025
|
|
|
|
1,384,612
|
|
President of
|
|
|
|
|
2010
|
|
|
|
295,000
|
|
|
|
29,500
|
(6)
|
|
|
240,142
|
|
|
|
|
|
|
|
162,361
|
|
|
|
262,000
|
|
|
|
103,125
|
|
|
|
1,092,128
|
|
American & Efird (5)
|
|
|
|
|
2009
|
|
|
|
295,000
|
|
|
|
|
|
|
|
238,816
|
|
|
|
|
|
|
|
|
|
|
|
616,000
|
|
|
|
106,275
|
|
|
|
1,256,091
|
|
(1)
|
|
Amounts reflect the grant date fair value computed in accordance
with Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) Topic 718, related to restricted stock and
performance shares granted in the fiscal year noted. The assumptions used in the calculation of these amounts are included in the note entitled
Stock Options and Stock Awards in the Notes to Consolidated Financial Statements included within the Companys Annual Report on Form
10-K for the fiscal year ended October 2, 2011, except that for the purposes of this table the estimates of forfeitures related to service-based
vesting conditions have been disregarded. For more information on the actual forfeitures, if any, for each of the NEOs listed in the table during
Fiscal 2011, please refer to 2011 Performance Share Awards. For more information on the outstanding shares of restricted stock held by the
NEOs, please refer to Outstanding Equity Awards at Fiscal Year-End for 2011.
|
(2)
|
|
This column represents Incentive Bonuses paid to the NEOs. In
accordance with the Securities and Exchange Commission requirements, Incentive Bonuses paid are performance-based and therefore are
reported in the Non-Equity Incentive Plan Compensation column. As described in the Compensation Discussion and Analysis section, such cash
incentive bonuses are paid to the NEOs when specific performance measures are achieved and the payment is approved by the Compensation Committee. These
amounts were paid in November 2011 with respect to the Companys performance in Fiscal 2011.
|
27
(3)
|
|
The amounts listed for Fiscal 2011 are attributable to the change
in actuarial present value for the Pension Plan and the SERP from October 4, 2010 through October 2, 2011. For a discussion of the assumptions
underlying this valuation, please refer to the note to the table entitled Pension Benefits for 2011. The Companys non-qualified
deferred compensation plan does not provide above-market or preferential earnings on deferred compensation, and therefore, in accordance with
Securities and Exchange Commission rules, there were no changes of value attributable to nonqualified deferred compensation earnings. A change in the
actuarial present value of the benefits under the Pension Plan and the SERP can occur due to changes in the discount rate. The present values of the
accumulated Pension Plan and SERP benefits of Messrs. Dickson, Woodlief, Morganthall and Jackson were negatively impacted due to an increase in the
discount rate from 5.05% for the Pension Plan and 4.65% in the SERP for Fiscal 2010 to 5.50% for the Pension Plan and 5.40% for the SERP for Fiscal
2011.
|
(4)
|
|
All other compensation for each of the NEOs consists of the
following:
|
|
|
|
|
Thomas W.
Dickson
($)
|
|
John B.
Woodlief
($)
|
|
Frederick J.
Morganthall, II
($)
|
|
Fred A.
Jackson
($)
|
Executive
Bonus Insurance Plan
|
|
|
|
|
28,303
|
|
|
|
52,858
|
|
|
|
41,052
|
|
|
|
48,519
|
|
Ruddick
Retirement and Savings Plan
|
|
|
|
|
17,150
|
|
|
|
14,494
|
|
|
|
17,150
|
|
|
|
11,717
|
|
Ruddick
Corporation Flexible Deferral Plan
|
|
|
|
|
21,253
|
|
|
|
4,850
|
|
|
|
11,225
|
|
|
|
|
|
Key Employee
Life Insurance Plan
|
|
|
|
|
21,446
|
|
|
|
17,309
|
|
|
|
17,122
|
|
|
|
12,260
|
|
Tax
Reimbursement
|
|
|
|
|
21,485
|
|
|
|
31,306
|
|
|
|
26,928
|
|
|
|
26,956
|
|
Executive
Long Term Disability Plan
|
|
|
|
|
6,921
|
|
|
|
3,778
|
|
|
|
3,215
|
|
|
|
3,213
|
|
Dividends on
unvested Restricted Stock Awards
|
|
|
|
|
37,294
|
|
|
|
17,997
|
|
|
|
19,175
|
|
|
|
9,360
|
|
Meals and
Entertainment Expenses (a)
|
|
|
|
|
1,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft
Usage (a)
|
|
|
|
|
14,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Group Excess Liability Insurance (a)
|
|
|
|
|
1,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________
(a) Amounts represent the incremental value of perquisites reportable under the Securities and Exchange Commission
rules.
|
|
|
(5)
|
|
Subsequent to Fiscal 2011, in November 2011 the Company sold
A&E, at which point Mr. Jackson was no longer an employee of the Company or its subsidiaries.
|
(6)
|
|
Amount represents a discretionary bonus provided to Mr. Jackson
in the amount of ten percent of his base salary for the Fiscal 2010 based on A&Es operating profit achievement.
|
Grants of Plan-Based Awards for 2011
|
|
|
|
|
|
Estimated
Future
Payouts Under
Non-Equity
Incentive Plan
Awards (1)
|
|
Estimated
Future Payouts
Under Equity
Incentive Plan
Awards (2)
|
|
All Other
Stock Awards:
Number of
Shares of
Stock
or Units
|
|
Grant Date
Fair Value of
Stock and
Option
Awards
|
Name
|
|
|
|
Grant Date
|
|
Threshold($)
|
|
Target(#)
|
|
(#)(3)
|
|
($)(4)
|
Thomas W.
Dickson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
Bonus
|
|
|
|
|
11/18/10
|
|
|
|
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
Performance
Shares
|
|
|
|
|
11/18/10
|
|
|
|
NA
|
|
|
|
17,500
|
|
|
|
NA
|
|
|
|
672,700
|
|
Restricted
Stock
|
|
|
|
|
11/18/10
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
17,500
|
|
|
|
672,700
|
|
|
John B.
Woodlief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
Bonus
|
|
|
|
|
11/18/10
|
|
|
|
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
Performance
Shares
|
|
|
|
|
11/18/10
|
|
|
|
NA
|
|
|
|
7,500
|
|
|
|
NA
|
|
|
|
288,300
|
|
Restricted
Stock
|
|
|
|
|
11/18/10
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
7,500
|
|
|
|
288,300
|
|
28
|
|
|
|
|
|
Estimated
Future
Payouts Under
Non-Equity
Incentive Plan
Awards (1)
|
|
Estimated
Future Payouts
Under Equity
Incentive Plan
Awards (2)
|
|
All Other
Stock Awards:
Number of
Shares of
Stock
or Units
|
|
Grant Date
Fair Value of
Stock and
Option
Awards
|
Name
|
|
|
|
Grant Date
|
|
Threshold($)
|
|
Target(#)
|
|
(#)(3)
|
|
($)(4)
|
|
Frederick
J. Morganthall, II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
Bonus
|
|
|
|
|
11/18/10
|
|
|
|
72,300
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
Performance
Shares
|
|
|
|
|
11/18/10
|
|
|
|
NA
|
|
|
|
8,750
|
|
|
|
NA
|
|
|
|
336,350
|
|
Restricted
Stock
|
|
|
|
|
11/18/10
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
8,750
|
|
|
|
336,350
|
|
|
Fred A.
Jackson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
Bonus
|
|
|
|
|
11/18/10
|
|
|
|
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
Performance
Shares
|
|
|
|
|
11/18/10
|
|
|
|
NA
|
|
|
|
4,500
|
|
|
|
NA
|
|
|
|
172,980
|
|
Restricted
Stock
|
|
|
|
|
11/18/10
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
4,500
|
|
|
|
172,980
|
|
(1)
|
|
Amounts shown are estimated threshold payouts for Fiscal 2011 to
the NEOs under the Cash Incentive Plan. Under the applicable performance criteria for the Company and each operating subsidiary, if the Company or
operating subsidiary, as applicable, achieves the predetermined minimum goals, executives are paid a predetermined percentage of base compensation as
Incentive Bonus. The percentage of base compensation payable as Incentive Bonus increases as the return or profit margin increases. The plans are
discussed in greater detail in the 2011 Cash Incentive Plan Awards table and the footnotes thereunder.
|
(2)
|
|
Amounts shown are estimated target number of performance shares
awards that were granted in Fiscal 2011, assuming Harris Teeter and A&E each meet or exceed their respective operating profit projections, which
are discussed in greater detail in the Compensation Discussion and Analysis section. For executives employed by Harris Teeter and A&E,
issuances of performance shares were 100% subject to the applicable company meeting its respective operating profit projections for Fiscal 2011, while
issuances to holding Company executives were dependent as to 95% on Harris Teeter meeting its operating profit projections and as to 5% on A&E
meeting its operating profit projections. If performance is achieved, these performance shares will be settled by issuance of restricted stock. Once
issued, 25% of these shares of restricted stock vest on each of the first four anniversaries of the date of the issuance.
|
(3)
|
|
Represents number of shares of restricted stock granted in
Fiscal 2011. The restricted stock will vest 20% per year on each of the first five anniversaries of the date of the award.
|
(4)
|
|
Represents the grant date fair value of performance shares
awards or restricted stock awards, as the case may be, of such award computed in accordance with FASB ASC Topic 718. The assumptions used in the
calculation of these amounts are included in the note entitled Stock Options and Stock Awards in the Notes to Consolidated Financial
Statements included within the Companys Annual Report on Form 10-K for the fiscal year ended October 2, 2011, except that for the purposes of
this table the estimates of forfeitures related to service-based vesting conditions have been disregarded. The grant date fair value for performance
shares awards is based on the FASB ASC Topic 718 value of $38.44.
|
29
Outstanding Equity Awards at Fiscal Year-End for
2011
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of Stock
That
Have
Not Vested
(#)(1)
|
|
Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)(2)
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)(3)
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(4)
|
Thomas
W. Dickson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,719
|
|
|
|
2,796,324
|
|
|
|
17,500
|
|
|
|
682,325
|
|
John B.
Woodlief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,609
|
|
|
|
1,349,405
|
|
|
|
7,500
|
|
|
|
292,425
|
|
Frederick J. Morganthall, II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,875
|
|
|
|
1,437,756
|
|
|
|
8,750
|
|
|
|
341,163
|
|
Fred A.
Jackson
|
|
|
|
|
6,298
|
|
|
|
|
|
|
|
14.385
|
|
|
|
11/20/2012
|
|
|
|
18,000
|
|
|
|
701,820
|
|
|
|
4,500
|
|
|
|
175,455
|
|
|
|
|
|
|
9,000
|
|
|
|
|
|
|
|
16.88
|
|
|
|
11/19/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
A vesting schedule for each unvested restricted stock award,
including performance shares awards that have been settled by payment of restricted stock due to the achievement of performance goals, is included
herein:
|
|
|
|
|
Vesting Date
|
|
# of Shares
Vesting
|
Thomas W.
Dickson
|
|
|
|
11/15/2011
|
|
|
5,313
|
|
|
|
|
|
11/16/2011
|
|
|
5,156
|
|
|
|
|
|
11/18/2011
|
|
|
3,500
|
|
|
|
|
|
11/19/2011
|
|
|
5,624
|
|
|
|
|
|
11/20/2011
|
|
|
5,313
|
|
|
|
|
|
11/15/2012
|
|
|
5,312
|
|
|
|
|
|
11/18/2012
|
|
|
3,500
|
|
|
|
|
|
11/19/2012
|
|
|
5,625
|
|
|
|
|
|
11/20/2012
|
|
|
5,312
|
|
|
|
|
|
11/18/2013
|
|
|
3,500
|
|
|
|
|
|
11/19/2013
|
|
|
5,625
|
|
|
|
|
|
11/20/2013
|
|
|
5,313
|
|
|
|
|
|
11/18/2014
|
|
|
3,500
|
|
|
|
|
|
11/19/2014
|
|
|
5,626
|
|
|
|
|
|
11/18/2015
|
|
|
3,500
|
|
|
|
|
|
|
|
|
71,719
|
|
30
|
|
|
|
Vesting Date
|
|
# of Shares
Vesting
|
John B. Woodlief
|
|
|
|
11/15/2011
|
|
|
2,656
|
|
|
|
|
|
11/16/2011
|
|
|
2,578
|
|
|
|
|
|
11/18/2011
|
|
|
1,500
|
|
|
|
|
|
11/19/2011
|
|
|
2,812
|
|
|
|
|
|
11/20/2011
|
|
|
2,656
|
|
|
|
|
|
11/15/2012
|
|
|
2,656
|
|
|
|
|
|
11/18/2012
|
|
|
1,500
|
|
|
|
|
|
11/19/2012
|
|
|
2,813
|
|
|
|
|
|
11/20/2012
|
|
|
2,656
|
|
|
|
|
|
11/18/2013
|
|
|
1,500
|
|
|
|
|
|
11/19/2013
|
|
|
2,812
|
|
|
|
|
|
11/20/2013
|
|
|
2,657
|
|
|
|
|
|
11/18/2014
|
|
|
1,500
|
|
|
|
|
|
11/19/2014
|
|
|
2,813
|
|
|
|
|
|
11/18/2015
|
|
|
1,500
|
|
|
|
|
|
|
|
|
34,609
|
|
|
Frederick J.
Morganthall, II
|
|
|
|
11/15/2011
|
|
|
2,813
|
|
|
|
|
|
11/16/2011
|
|
|
2,812
|
|
|
|
|
|
11/18/2011
|
|
|
1,750
|
|
|
|
|
|
11/19/2011
|
|
|
2,812
|
|
|
|
|
|
11/20/2011
|
|
|
2,813
|
|
|
|
|
|
11/15/2012
|
|
|
2,812
|
|
|
|
|
|
11/18/2012
|
|
|
1,750
|
|
|
|
|
|
11/19/2012
|
|
|
2,813
|
|
|
|
|
|
11/20/2012
|
|
|
2,812
|
|
|
|
|
|
11/18/2013
|
|
|
1,750
|
|
|
|
|
|
11/19/2013
|
|
|
2,812
|
|
|
|
|
|
11/20/2013
|
|
|
2,813
|
|
|
|
|
|
11/18/2014
|
|
|
1,750
|
|
|
|
|
|
11/19/2014
|
|
|
2,813
|
|
|
|
|
|
11/18/2015
|
|
|
1,750
|
|
|
|
|
|
|
|
|
36,875
|
|
|
Fred A. Jackson
|
|
|
|
11/15/2011
|
|
|
900
|
|
|
|
|
|
11/16/2011
|
|
|
900
|
|
|
|
|
|
11/18/2011
|
|
|
900
|
|
|
|
|
|
11/19/2011
|
|
|
2,025
|
|
|
|
|
|
11/20/2011
|
|
|
900
|
|
|
|
|
|
11/15/2012
|
|
|
900
|
|
|
|
|
|
11/18/2012
|
|
|
900
|
|
|
|
|
|
11/19/2012
|
|
|
2,025
|
|
|
|
|
|
11/20/2012
|
|
|
900
|
|
|
|
|
|
11/18/2013
|
|
|
900
|
|
|
|
|
|
11/19/2013
|
|
|
2,025
|
|
|
|
|
|
11/20/2013
|
|
|
900
|
|
|
|
|
|
11/18/2014
|
|
|
900
|
|
|
|
|
|
11/19/2014
|
|
|
2,025
|
|
|
|
|
|
11/18/2015
|
|
|
900
|
|
|
|
|
|
|
|
|
18,000
|
|
31
(2)
|
|
Calculated by multiplying the unvested shares of restricted
stock by the closing market price of the Companys Common Stock on September 30, 2011, the last trading day in Fiscal 2011 ($38.99) (the
Closing Market Price).
|
(3)
|
|
Amounts shown are target number of shares of performance shares
granted in Fiscal 2011, assuming Harris Teeter and A&E meet or exceed their respective operating profit projections, which are discussed in greater
detail in the Compensation Discussion and Analysis section. For executives employed by A&E, issuances of performance shares were 100%
subject to A&E meeting its operating profit projections for Fiscal 2011, while issuances to holding Company executives were dependent as to 95% on
Harris Teeter meeting its operating profit projections and as to 5% on A&E meeting its operating profit projections. For the NEO employed by Harris
Teeter, issuance of Performance Shares was subject to Harris Teeter meeting its operating profit projections for Fiscal 2011. Once issued, these
performance-based shares of restricted stock vest 25% per year on each of the first four anniversaries of the date of the issuance.
|
(4)
|
|
Calculated by multiplying the target number of shares of
performance shares by the Closing Market Price.
|
Option Exercises and Stock Vested for
2011
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
|
|
Number of Shares
Acquired on
Exercise
(#)
|
|
Value Realized
on Exercise
($)(1)
|
|
Number of Shares
Acquired on Vesting
(#)
|
|
Value Realized
on Vesting
($)(2)
|
Thomas W.
Dickson
|
|
|
|
|
|
|
|
|
|
|
|
|
21,168
|
|
|
|
800,026
|
|
John B.
Woodlief
|
|
|
|
|
|
|
|
|
|
|
|
|
10,790
|
|
|
|
407,727
|
|
Frederick
J. Morganthall, II
|
|
|
|
|
|
|
|
|
|
|
|
|
11,487
|
|
|
|
434,014
|
|
Fred A.
Jackson
|
|
|
|
|
8,511
|
|
|
|
220,992
|
|
|
|
4,250
|
|
|
|
160,577
|
|
(1)
|
|
The value realized on exercise represents: (a) the difference
between the average of the high and low sale price (Average Price) on the day of exercise and the exercise price multiplied by the number
of shares acquired on exercise, in the case of stock swaps, and (b) the actual gain realized in the case of cashless sale or cashless hold
exercises.
|
(2)
|
|
The value realized represents the number of shares acquired on
vesting multiplied by the Average Price on the day of vesting.
|
Pension Benefits for 2011(1)
Name
|
|
|
|
Plan Name
|
|
Number of Years
Credited Service
(#)
|
|
Present Value of
Accumulated
Benefit
($)(2)
|
|
Payments During
Last Fiscal Year
($)
|
Thomas W.
Dickson
|
|
|
|
Pension
Plan
|
|
31
|
|
|
1,101,000
|
|
|
|
|
|
|
|
SERP
|
|
31
|
|
|
7,291,000
|
|
|
|
John B.
Woodlief
|
|
|
|
Pension
Plan
|
|
12
|
|
|
252,000
|
|
|
|
|
|
|
|
SERP
|
|
12
|
|
|
3,042,000
|
|
|
|
Frederick
J. Morganthall, II
|
|
|
|
Pension
Plan
|
|
25
|
|
|
835,000
|
|
|
|
|
|
|
|
SERP
|
|
25
|
|
|
5,672,000
|
|
|
|
Fred A.
Jackson
|
|
|
|
Pension
Plan
|
|
34
|
|
|
710,000
|
|
|
|
|
|
|
|
SERP
|
|
34
|
|
|
1,983,000
|
|
|
|
(1)
|
|
For a discussion of the valuation methods and material
assumptions applied in quantifying the present value of the current accrued benefit under each of the Pension Plan and SERP, please refer to the note
entitled Employee Benefit Plans of the Consolidated Financial Statements included with the Companys Annual Report on Form 10-K for
the year ended October 2, 2011.
|
32
(2)
|
|
Present Value of Accumulated Benefit assumes the
value of the benefit as of October 2, 2011 and assumes that the NEO will wait to receive any benefit thereunder until the NEO would have attained an
age where such NEO would receive an unreduced benefit amount under such benefit plan.
|
Pension Plan
. The Pension
Plan is a tax-qualified defined benefit retirement plan for eligible employees. Effective October 1, 2005 the Pension Plan was amended to limit
participation in the Pension Plan to eligible employees of the Company and its subsidiaries who were employed on September 30, 2005. All of the NEOs
are participants in the Pension Plan. Contributions to the Pension Plan are determined annually by the Retirement Plan Committee, the named fiduciary,
based upon an analysis and recommendation from actuarial consultants who estimate the Plans total obligation to participants. For participants
with age and service points as of December 31, 2005 equal to or greater than 45, their benefit accruals under the Plan after September 30, 2005 will be
offset by the actuarial equivalent of the portion of their account balance under the RRSP that is attributable to automatic retirement contributions
made by the Company after September 30, 2005, plus earnings and losses on such contributions. All NEOs had 45 points or more as of December 31, 2005. A
participants normal annual retirement benefit under the Pension Plan at age 65 is an amount equal to 0.8% (and through the Companys sale of
A&E in November 2011, 0.6% for employees of A&E) of the participants final average earnings multiplied by years of service at retirement,
plus 0.6% of the participants final average earnings in excess of Social Security covered compensation multiplied by the number of years of
service up to a maximum of thirty-five years. A participants final average earnings is the average annual cash compensation paid to the
participant during the plan year, including salary, incentive compensation and any amount contributed to the RRSP, for the five consecutive years in
the last ten years that produce the highest average. Subsequent to Fiscal 2011, as of the Companys sale of A&E in November 2011, A&E
employees were no longer participants in the Pension Plan.
SERP
. The Company also
maintains the SERP. The SERP covers certain senior executive employees of the Company and participating subsidiaries, including the NEOs, as designated
by its administrative committee. Under the SERP, participants who retire at normal retirement age (60) receive monthly retirement benefits equal to
between 55% and 60% of the participants final average earnings times the participants accrual fraction and reduced by the
participants (1) assumed Pension Plan Retirement Benefit, (2) assumed Social Security Benefit and (3) assumed profit sharing plan retirement
benefit, if any. The final average earnings are the average annual earnings during the highest 3 calendar years out of the last 10 calendar years
preceding termination of employment for all executives, other than the executives of A&E, for whom the final average earnings are the average of
the 3 highest calendar years earnings during their employment. The accrual fraction is a fraction, the numerator of which is the years of credited
service, the denominator of which is 20, and which may not exceed 1.0. The benefits payable under the SERP are payable for the participants
lifetime with an automatic 75% survivor benefit payable to the participants surviving eligible spouse for his or her lifetime. Participants are
eligible to receive an early retirement benefit upon termination of employment, other than on account of death, after attaining age 55 and completing
10 years of credited service. The amount of early retirement benefit is the monthly retirement benefit reduced by 0.4167% for each month by which
payment begins before normal retirement age. Subsequent to Fiscal 2011, as of the Companys sale of A&E in November 2011, accrued SERP
benefits of participants who were A&E employees were frozen.
Non-Qualified Deferred Compensation for
2011
Name
|
|
|
|
Executive
Contributions
in Last
Fiscal
Year
($)
|
|
Registrant
Contributions
in Last
Fiscal
Year
($)
|
|
Aggregate
Earnings (loss)
in Last
Fiscal
Year
($)
|
|
Aggregate
Withdrawals
and/or Distributions
in
Last Fiscal Year
($)
|
|
Aggregate
Balance at
Last Fiscal
Year
End
($)
|
Thomas W. Dickson
|
|
|
|
|
33,000
|
|
|
|
21,253
|
|
|
|
(2,891
|
)
|
|
|
|
|
|
|
259,658
|
|
John B. Woodlief
|
|
|
|
|
|
|
|
|
4,850
|
|
|
|
(6,252
|
)
|
|
|
|
|
|
|
77,345
|
|
Frederick J. Morganthall, II
|
|
|
|
|
20,000
|
|
|
|
11,225
|
|
|
|
(1,493
|
)
|
|
|
|
|
|
|
208,762
|
|
Fred A. Jackson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,896
|
|
Flexible Deferral Plan
.
The FDP is an unfunded, excess benefit plan that provides certain highly compensated employees, including the NEOs, the opportunity to defer the
receipt and taxation on a portion of their annual compensation. The purpose of the FDP is to allow deferral of a portion of the participants
annual base salary and
33
Incentive Bonus and to
supplement the benefits under the tax-qualified retirement plans to the extent that such benefits are curtailed by the application of certain limits
imposed by the Code (e.g., Code Section 402(g) and Code Section 414 limitations). During Fiscal 2011, eligible employees were permitted to defer up to
50% of their base salary and up to 90% of their Incentive Bonus payment in the FDP. Cash compensation is eligible for deferral unless prohibited under
Code Section 409A, subject to plan limits. Plan participants may choose deemed investments in the FDP that represent choices that span a variety of
diversified asset classes. No contributions may be used to purchase the Common Stock. Participants make an election for each years deferral
election regarding the timing of plan distributions, subject to limitations under the plan and Code Section 409A. A participant may elect up to five
(5) in-service accounts and one (1) retirement account for payment of deferral contributions, subject to plan limitations. Each in-service account will
be paid in accordance with the respective election in lump-sum or installments and in the year elected, subject to restrictions imposed by Code Section
409A. The FDP also allows for an in-service withdrawal for an unforeseeable emergency based on facts and circumstances that meet Internal Revenue
Service and plan guidelines. The Company uses a non-qualified trust to purchase and hold the assets to satisfy the Companys obligation under the
FDP, and participants in the FDP are general creditors of the Company in the event the Company becomes insolvent.
Potential Payments Upon Termination of Employment or
Change in Control
After reviewing market trends,
including information prepared by a consultant, the Company entered into Change-in-Control and Severance Agreements with the NEOs during Fiscal 2007.
The Company determined to enter into the Change-in-Control and Severance Agreements with the NEOs because the Company believed that these agreements
would ensure that the NEOs were incentivized to achieve the greatest possible return for the Companys shareholders, including through a potential
change in control transaction, irrespective of a loss of their own position in connection with such a transaction. During Fiscal 2007 the Compensation
Committee was presented data that a majority of public companies surveyed by the compensation consultant entered into similar agreements with their
executives. A second goal of the Compensation Committee in entering into the Change-in-Control and Severance Agreements was to aid in the retention of
the Companys NEOs and to give them protections and benefits similar to executives at other companies. The Compensation Committee also considered
the cost to the Company of replacing the NEOs in the event of a change in control. The Compensation Committee and the Company believed it was important
for the Change-in-Control and Severance Agreements to contain provisions which would prohibit the NEOs from competing against the Company or soliciting
the Companys employees or clients following their termination, other than following a change in control. These provisions protect the Company
from any such actions by tying the benefits the NEO would receive upon such termination of employment, to the continued adherence to the
agreement.
The Compensation Committee
considered the information contained in the study and asked the consultant to provide a recommendation concerning the terms of such change in control
and severance agreements provided by such companies. The consultant recommended that the Company enter into agreements with the NEOs on terms
substantially similar to those contained in the executed agreements. Based on the consultants recommendations and the data contained in the
consultants study the Compensation Committee determined that the terms of the Change-in-Control and Severance Agreements were appropriate for the
NEOs. The Compensation Committee presented those terms to the NEOs, and the NEOs accepted the terms as presented.
The Change-in-Control and
Severance Agreements are effective until the termination of the NEOs employment with the Company, or until terminated by written agreement
between the Company and the NEO.
Mr. Jacksons employment
with the Company ended upon the sale of A&E in November 2011, subsequent to the end of Fiscal 2011. The sale of A&E did not constitute a
triggering event under the Change-in-Control and Severance Agreement with Mr. Jackson. In connection with the sale, however, the Company and Mr.
Jackson entered into a written agreement terminating the Change-in-Control and Severance Agreement applicable to Mr. Jackson as of the closing date of
the sale, November 7, 2011, pursuant to which written agreement Mr. Jackson waived any right to receive benefits under such agreement. However, in
accordance with Securities and Exchange Commission requirements, the remainder of the discussions below in Potential Payments Upon Termination of
Employment or Change in Control include hypothetical payments with respect to Mr. Jackson.
34
Under the terms of the
Change-in-Control and Severance Agreements, a NEO is entitled to severance benefits only if the NEOs employment is terminated by the Company
prior to a change in control (as defined below) transaction or after twenty-four (24) months following a change in control
transaction. The following is a summary of the severance benefits the NEOs are expected to receive under the Change-in-Control and Severance
Agreements:
|
|
For Messrs. Dickson and Woodlief, a single lump sum payment in
an amount equal to (i) if terminated other than for cause (as defined below), death or disability, two (2) times the sum of his annual base
salary plus the greater of (a) his severance accrued bonus (as defined below) or (b) the average of his total bonus payments for the prior
three full fiscal years ending on or before his termination, and (ii) if terminated other than for cause, a pro-rated portion of his
severance accrued bonus.
|
|
|
For Messrs. Morganthall and Jackson, a single lump sum payment
in an amount equal to (i) if terminated other than for cause, death or disability, one and one-half (1.5) times the sum of his annual base
salary plus the greater of (a) his severance accrued bonus or (b) the average of his total bonus payments for the prior three full fiscal
years ending on or before his termination, and (ii) if terminated other than for cause, a pro-rated portion of his severance accrued
bonus.
|
The following is a summary of the
change in control benefits the NEOs are expected to receive under the Change-in-Control and Severance Agreements if the NEOs employment
terminates at any time within twenty-four (24) months following a change in control transaction:
|
|
For Messrs. Dickson and Woodlief, (i) if terminated by the
Company other than for cause, death, or disability, or by the NEO for good reason (as defined below), a single lump sum payment
in an amount equal to 2.99 times the sum of his annual base salary plus the greater of (a) his CIC accrued bonus (as defined below) or (b)
his CIC average prior bonus payments (as defined below), and (ii) if terminated by the Company other than for cause, or by the
NEO for good reason the pro-rated portion of his CIC prorated bonus (as defined below). This pro-rated portion of his CIC
prorated bonus payment shall be in addition to any pro-rated bonus such NEO may be entitled, during the period following a change in
control transaction through the termination of his employment.
|
|
|
For Messrs. Morganthall and Jackson, (i) if terminated by the
Company other than for cause, death, or disability, or by the NEO for good reason, a single lump sum payment in an amount equal
to 2.5 times the sum of his annual base salary plus the greater of (a) his CIC accrued bonus, or (b) his CIC average prior bonus
payments and (ii) if terminated by the Company other than for cause, or by the NEO for good reason, a pro-rated portion
of his CIC prorated bonus. This pro-rated portion of his CIC prorated bonus payment shall be in addition to any pro-rated bonus
such NEO may be entitled, during the period following a change in control transaction through the termination of his
employment.
|
In the event a NEOs
employment is terminated by the Company either before or after a change in control other than for cause, or by the NEO for
good reason, such NEO is also entitled to a payment of a bonus under an equity incentive plan based upon the Companys actual
performance up to the date of termination of such NEOs 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 NEOs employment.
The shares received shall be fully vested.
In addition, in the event a
NEOs 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 and 30 months for Messrs. Morganthall and Jackson. 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 and 18 months for Messrs. Morganthall and Jackson. A NEO may elect to waive these benefits
and
35
in lieu thereof receive a
single lump sum payment, equal to the Companys 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;
|
|
|
For Messrs. Morganthall and Jackson, 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
Jackson are capped at the 280G threshold if the safe harbor is exceeded by 10% or less (the 280G Cap).
|
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
Cash Incentive Plan, calculated (i) utilizing the Companys annualized NOPAT return on the Companys invested capital in the case of each of
Messrs. Dickson and Woodlief; (ii) utilizing A&Es annualized NOPAT return on invested capital of A&E in the case of Mr. Jackson; or (iii)
utilizing operating profit margin of Harris Teeter in the case of Mr. Morganthall, for the cumulative fiscal period-to-date as of the end of the most
recent fiscal quarter ending on or before such NEOs termination.
When used in the
Change-in-Control and Severance Agreements, CIC accrued bonus means a bonus payment based upon the current bonus schedule provided in the
Cash Incentive Plan, calculated utilizing (a) the Companys annualized NOPAT return on the Companys invested capital in the case of each of
Messrs. Dickson and Woodlief; (b) A&Es annualized NOPAT return on invested capital of A&E in the case of Mr. Jackson; or (c) operating
profit margin of Harris Teeter for Mr. Morganthall, for the fiscal period-to-date as of the most recent fiscal quarter ending on or before either: (1)
the date of such NEOs 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 NEOs total bonus
payments for the prior three full fiscal years ending (1) on or before such NEOs 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 (a) the Companys annualized
NOPAT return on the Companys invested capital in the case of each of Messrs. Dickson and Woodlief; (b) A&Es annualized NOPAT return on
invested capital of A&E in the case of Mr. Jackson; or (c) operating profit margin of Harris Teeter for Mr. Morganthall, calculated 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 NEOs
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.
When used in the
Change-in-Control and Severance Agreements, good reason shall mean the termination by the NEO of the NEOs employment with the Company
within the two (2) year period following a change in control which is due to (i) a material diminution of responsibilities, or working
conditions, or duties, or in the case of Messrs. Dickson and Woodlief, ceasing to be the Chief Executive Officer or Chief Financial Officer,
respectively, of a publicly traded company; (ii) a material diminution in base salary or potential incentive compensation; (iii) a material negative
change in the terms or status of the Change-in-Control and Severance
36
Agreement; or (iv) a forced
relocation of the NEO outside of a 30 mile radius of the intersection of the Trade and Tryon Streets in Charlotte, North Carolina.
When used in the
Change-in-Control and Severance Agreements, a change in control means a change in ownership, a change in effective
control, or a change in the ownership of substantial assets of a corporation as generally described in Treasury Regulation Section
1.409A-3(i)(5) and as specifically described in the Change-in-Control and Severance Agreements.
Pursuant to the Change-in-Control
and Severance Agreements, except in the event the NEOs employment terminates following a change in control, each NEO has agreed that
during the term of the Change-in-Control and Severance Agreements and for a period of 24 months thereafter, the NEO shall not directly or indirectly
enter into an employment relationship or a consulting arrangement (or other economically beneficial arrangement) with any competitor of the Company, as
defined in each NEOs respective Change-in-Control and Severance Agreement. In addition, each NEO has agreed not to solicit, induce or attempt to
induce any employee of the Company to leave the employ of the Company or to solicit or induce or attempt to induce or interfere with the relationship
between any customer, supplier, or other person or entity in a business relation with the Company during the same period.
Furthermore, under the terms of
the Ruddick Corporation 2002 Comprehensive Stock Option and Award Plan (the 2002 Plan), in the event of a change in control of the Company,
as defined in the 2002 Plan, if all options or restricted stock are not converted, assumed, or replaced by a successor, then such awards will become
fully exercisable and all forfeiture restrictions on such awards will lapse and all restricted stock shall become deliverable, unless otherwise
provided in any award agreement or any other written agreement entered into with a NEO. The options shall remain exercisable for the remaining term of
such option. Under the terms of the 2011 Plan, the committee established to administer such plan may grant certain awards that provide that
restrictions will lapse upon, among other things, the occurrence of a change in control, as defined in the 2011 Plan. As of the end of Fiscal 2011, no
awards had been granted under the 2011 Plan.
Accrued and Vested
Benefits.
Each of the NEOs has accrued various benefits under the Companys compensation programs and retirement and other broad-based
employee benefit plans. Many of these benefits and awards are fully vested and each of the NEOs would receive all of their vested benefits and awards
in the event that their employment with the Company ends for any reason, including termination by the Company.
The table herein summarizes the
accrued and vested benefits that each of the NEOs would be entitled to, assuming termination by the NEO from the Company on October 2, 2011, not
related to a change in control transaction and not due to death or disability.
|
|
|
|
Thomas W.
Dickson ($)
|
|
John B.
Woodlief ($)
|
|
Frederick J.
Morganthall, II ($)
|
|
Fred A.
Jackson ($)
|
Vested SERP
(1)
|
|
|
|
|
7,674,000
|
|
|
|
3,042,000
|
|
|
|
5,672,000
|
|
|
|
1,983,000
|
|
Vested
Pension Benefit (1)
|
|
|
|
|
1,101,000
|
|
|
|
282,000
|
|
|
|
835,000
|
|
|
|
769,000
|
|
Vested
Deferred Compensation Balance
|
|
|
|
|
259,658
|
|
|
|
77,345
|
|
|
|
208,762
|
|
|
|
13,896
|
|
Vested Stock
Options (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
353,952
|
|
(1)
|
|
The amount for the SERP and Pension Benefit represents the
actuarial present value of the benefit payable immediately.
|
(2)
|
|
Incentive Stock Options and Non-qualified Stock Options
(together Stock Options) granted prior to 2003 terminate immediately upon termination of employment, and thus would have to be exercised
upon termination of employment. Stock Options granted in or after 2003 are exercisable for three (3) months after termination of employment, other than
for cause. For the purpose of this table, it is assumed that all vested Stock Options are exercised on the last business day on or before October 2,
2011, and the value of such vested Stock Options is calculated by multiplying the number of options by the difference between the exercise price and
the Closing Market Price.
|
Death.
The table herein
summarizes the incremental benefits (beyond the accrued and vested benefits) that each of the NEOs would be entitled to, assuming their death occurred
on October 2, 2011.
37
|
|
|
|
Thomas W.
Dickson ($)
|
|
John B.
Woodlief ($)
|
|
Frederick J.
Morganthall, II ($)
|
|
Fred A.
Jackson ($)
|
Incentive
Bonus Payments
|
|
|
|
|
865,867
|
|
|
|
499,905
|
|
|
|
367,525
|
|
|
|
235,627
|
|
Accelerated
Equity Awards (1)
|
|
|
|
|
3,523,258
|
|
|
|
1,662,884
|
|
|
|
1,801,732
|
|
|
|
888,525
|
|
Accelerated
(Reduced) SERP
|
|
|
|
|
(2,035,000
|
)
|
|
|
(817,000
|
)
|
|
|
(1,706,000
|
)
|
|
|
(617,000
|
)
|
Accelerated
(Reduced) Pension Benefit
|
|
|
|
|
(598,000
|
)
|
|
|
(170,000
|
)
|
|
|
(475,000
|
)
|
|
|
(443,000
|
)
|
(1)
|
|
The value of the accelerated equity awards is composed of
restricted stock awards and performance share awards. The value of the restricted stock awards and performance share awards is calculated by
multiplying the number of accelerated shares by the Average Price on the last business day prior to the assumed termination of service date in
accordance with plan administration rules.
|
Disability.
The table
herein summarizes the incremental benefits (beyond the accrued and vested benefits) that each of the NEOs would be entitled to, assuming their
disability occurred on October 2, 2011.
|
|
|
|
Thomas W.
Dickson ($)
|
|
John B.
Woodlief ($)
|
|
Frederick J.
Morganthall, II ($)
|
|
Fred A.
Jackson ($)
|
Incentive
Bonus Payments
|
|
|
|
|
865,867
|
|
|
|
499,905
|
|
|
|
367,525
|
|
|
|
235,627
|
|
Accelerated
Equity Awards (1)
|
|
|
|
|
3,523,258
|
|
|
|
1,662,884
|
|
|
|
1,801,732
|
|
|
|
888,525
|
|
Accelerated
SERP (2)
|
|
|
|
|
1,869,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated
(Reduced) Pension Benefit
|
|
|
|
|
(589,000
|
)
|
|
|
(30,000
|
)
|
|
|
(292,000
|
)
|
|
|
(59,000
|
)
|
(1)
|
|
The value of the accelerated equity awards is composed of
restricted stock awards and performance share awards. The value of the restricted stock awards 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.
|
(2)
|
|
Mr. Dickson is the only NEO not currently eligible for the full
Plan benefit.
|
Termination Without Cause.
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 by the Company on October 2, 2011, prior to a change in control or more than twenty-four (24) months following a
change in control other than for cause, death, or disability.
|
|
|
|
Thomas W.
Dickson ($)
|
|
John B.
Woodlief ($)
|
|
Frederick J.
Morganthall, II ($)
|
|
Fred A.
Jackson ($)
|
Severance
Benefit (1)
|
|
|
|
|
3,095,734
|
|
|
|
1,944,810
|
|
|
|
1,274,288
|
|
|
|
845,441
|
|
Incentive
Bonus Payments (2)
|
|
|
|
|
865,867
|
|
|
|
499,905
|
|
|
|
367,525
|
|
|
|
235,627
|
|
Accelerated
Equity Awards (3)
|
|
|
|
|
3,523,258
|
|
|
|
1,662,884
|
|
|
|
1,801,732
|
|
|
|
888,525
|
|
Health and
Welfare Benefits (4)
|
|
|
|
|
172,870
|
|
|
|
229,492
|
|
|
|
140,043
|
|
|
|
148,188
|
|
(1)
|
|
The value of the severance benefit is calculated in accordance
with and payable under the terms of each NEOs Change-in-Control and Severance Agreement.
|
(2)
|
|
The value of the Incentive Bonus payment is calculated in
accordance with and payable under the terms each NEOs Change-in-Control and Severance Agreement.
|
(2)
|
|
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.
|
(4)
|
|
This represents the aggregate estimated net cost to the Company
of health and welfare benefits provided to each NEO under the terms of such NEOs Change-in-Control and Severance Agreement.
|
38
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
Companys 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 Companys compensation policies and practices seek to
align the interests of management with those of the Companys 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 Companys 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 Companys 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.
|
39
|
|
Payouts under the Companys annual incentive compensation
and other long-term incentive programs are based on performance criteria that the Compensation Committee believes to be challenging yet reasonable and
attainable without excessive risk-taking.
|
EQUITY COMPENSATION PLAN INFORMATION
The following table provides
information as of October 2, 2011 regarding the number of shares of Common Stock that may be issued under the Companys equity compensation
plans.
Plan category
|
|
|
|
Number of securities
to be issued upon
exercise
of outstanding
options, warrants
and rights
(a)(1)(#)
|
|
Weighted-average exercise
price of outstanding
options, warrants
and rights
(b)(2)($)
|
|
Number of securities
remaining available for
future issuance
under equity
compensation
plans (excluding
securities reflected
in column (a))
(c)(#)
|
Equity
compensation plans approved by security holders
|
|
|
|
|
213,831
|
|
|
|
18.77
|
|
|
|
2,958,599
|
|
Equity
compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
213,831
|
|
|
|
18.77
|
|
|
|
2,958,599
|
|
(1)
|
|
Includes grants of 147,325 performance shares outstanding as of
October 2, 2011. Excludes 134,132 shares of Common Stock that are deliverable in connection with the 134,132 stock units outstanding under the Director
Deferral Plan that have been accumulated in a rabbi trust for the purpose of funding distributions from the Deferral Plan. Does not include any shares
of restricted stock that were outstanding as of October 2, 2011 since these shares are already outstanding and do not represent potential dilution. For
more information on the Companys restricted stock and performance share grants, see Note 11 to the Consolidated Financial Statements included
within the Companys Annual Report on Form 10-K for the fiscal year ended October 2, 2011.
|
(2)
|
|
The weighted average exercise price does not take into account
performance share awards or restricted stock units outstanding as of October 2, 2011.
|
40
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board
of Directors is composed of five independent directors and operates under a written charter adopted by the Board of Directors. The Company has affirmed
to the New York Stock Exchange that the Board of Directors has determined that all members of the Audit Committee are independent as
defined in the New York Stock Exchange Listed Company Manual.
Management is responsible for the
Companys internal controls and the financial reporting process. KPMG LLP, the Companys independent auditors, are responsible for performing
an independent audit of the Companys consolidated financial statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States) and issuing a report on those financial statements. The Audit Committee, among other things, is responsible for
monitoring and overseeing these processes and is directly responsible for the appointment, compensation, retention and oversight of the Companys
independent auditors.
In this context, the Audit
Committee has met and held discussions with management and the independent auditors. Management represented to the Audit Committee that the
Companys consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has
reviewed and discussed the audited consolidated financial statements with management and the independent auditors. The Audit Committee discussed with
the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA,
Professional
Standards
, Vol. 1. AU section 380), as adopted by the Public Company Accounting Board in Rule 3200T and No. 114,
The Auditors
Communication With Those Charged With Governance
.
The Companys independent
auditors also provided to the Audit Committee the written disclosures and the letter required by the Public Company Accounting Oversight Board
regarding the independent accountants communications with the audit committee concerning independence, and the Audit Committee discussed with the
independent auditors that firms independence.
Based upon the Audit
Committees discussion with management and the independent auditors and the Audit Committees review of the representations of management and
the report of the independent auditors to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Companys Annual Report on Form 10-K for the fiscal year ended October 2, 2011.
SUBMITTED BY THE AUDIT
COMMITTEE
John R. Belk
Bailey W.
Patrick
Harold C. Stowe
Isaiah Tidwell
William C. Warden, Jr.
41
PROPOSAL 2
AMENDMENT TO THE COMPANYS RESTATED ARTICLES OF
INCORPORATION
TO CHANGE THE NAME OF THE COMPANY TO
HARRIS TEETER SUPERMARKETS, INC.
The Company proposes to amend its
Restated Articles of Incorporation, dated December 14, 2000 (the Restated Articles), to change the name of the Company from Ruddick
Corporation to Harris Teeter Supermarkets, Inc. The Board of Directors has determined that it would be in the best interests of the
Company and its shareholders to effect this name change, and recommends that the shareholders approve the amendment to the Restated
Articles.
For more than 50 years, the
Companys operations have included at least two primary lines of business, including most recently a retail supermarket business, through Harris
Teeter, and the global manufacture and distribution of industrial sewing threads, through A&E. As a result of the Companys sale of A&E in
November 2011, the Company is now primarily engaged in only the retail supermarket business. Accordingly, the Board of Directors believes that the name
Harris Teeter Supermarkets, Inc. better describes the Companys current operating activities and long-term strategic focus than the
current name, and believes that Harris Teeter represents a strong tradition of quality and focus on customer service.
The name change would be effected
by filing Articles of Amendment to the Restated Articles with the Secretary of State of the State of North Carolina.
The Board of Directors
recommends approval of the following resolutions:
RESOLVED, that the
shareholders approve an amendment to the Restated Articles of Incorporation of Ruddick Corporation to amend Article 1 thereof to read as
follows:
ARTICLE 1. The name of the Corporation is HARRIS TEETER SUPERMARKETS,
INC.
RESOLVED, that the shareholders
authorize the officers of the Corporation to file such amendment with the North Carolina Secretary of State at such time as may be determined by the
Board of Directors in its sole discretion, or to abandon the proposed name change, without further action by the shareholders, at any time prior to the
name change becoming effective if the Board of Directors, in its sole discretion, determines that it is no longer in the best interests of the
Corporation and its shareholders to proceed with the name change.
The name change will not affect
the validity or transferability of currently outstanding stock certificates, and shareholders will not be requested to surrender for exchange any
certificates presently held by them. Following the name change, the Common Stock will continue to be listed on the NYSE, however it will be assigned a
new CUSIP number. In connection with the name change the Company anticipates filing an application with the NYSE to change the Common Stocks
ticker symbol from RDK to HTSI. It is anticipated that the ticker symbol change would be effective at the same time as the name
change.
Vote Required
The amendment to the Restated
Articles to effect the name change requires the affirmative vote of the shareholders holding a majority of the votes cast with respect to this matter
at the Annual Meeting in person or by proxy. Accordingly, while abstentions and broker non-votes, if any, will count for purposes of establishing a
quorum with respect to this matter at the Annual Meeting, neither abstentions nor broker non-votes will have the effect of a negative vote with respect
to this matter.
The Board of Directors
recommends that the shareholders vote FOR the resolutions approving the amendment to the Companys Restated Articles of Incorporation to change
the Companys name to Harris Teeter Supermarkets, Inc.
42
PROPOSAL 3
ADVISORY (NON-BINDING) SAY ON PAY VOTE
APPROVING EXECUTIVE COMPENSATION
As discussed under the heading
Compensation Discussion and Analysis, the Companys executive compensation program is designed to enhance shareholder value in the
Company while attracting, retaining and rewarding highly qualified executives. Additionally, the Companys compensation practices reflect a
pay-for-performance philosophy, whereby a substantial portion of an executives potential compensation is at risk and tied to performance of the
Company and its subsidiaries, as applicable.
For these reasons and the others
described elsewhere in this Proxy Statement, the Board of Directors recommends that the Companys shareholders vote in favor of approving the
compensation of the NEOs as described in the narrative disclosure, tables and footnotes contained in this Proxy Statement (including under the heading
Compensation Discussion and Analysis and in the Summary Compensation Table for 2011).
The Board of Directors
recommends approval of the following resolution:
RESOLVED, that the
shareholders approve the compensation of the Companys named executive officers for the fiscal year ended October 2, 2011, as disclosed in
Companys Proxy Statement for Fiscal 2011 pursuant to the compensation disclosure rules of the Securities and Exchange
Commission.
The above Say on Pay
vote is being provided pursuant to Section 14A of the Exchange Act, is an advisory vote only and is not binding on the Company or the Board of
Directors. However, the Compensation Committee will consider, in its discretion, the result of the Say on Pay vote in future compensation decisions for
the NEOs. The Company includes this shareholder advisory vote annually, and the next such vote will occur at the 2013 Annual Meeting of
Shareholders.
Vote Required
The proposal for providing an
advisory (non-binding) resolution approving the NEO compensation for Fiscal 2011 requires the affirmative vote of the shareholders holding a majority
of the votes cast with respect to this matter at the Annual Meeting in person or by proxy. Accordingly, while abstentions and broker non-votes, if any,
will count for purposes of establishing a quorum with respect to this matter at the Annual Meeting, neither abstentions nor broker non-votes will have
the effect of a negative vote with respect to this matter.
The Board of Directors
recommends that the shareholders vote FOR the resolution approving the compensation of the Companys named executive officers as described in the
Proxy Statement.
43
PROPOSAL 4
RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Audit Committee of the Board
of Directors has retained KPMG LLP as the Companys independent registered public accounting firm for the fiscal year ending September 30, 2012.
Although the Audit Committee has the sole authority to select and appoint the independent registered public accounting firm, the Board of Directors
deems it advisable to obtain your ratification of this appointment. In retaining KPMG LLP as the Companys independent registered public
accounting firm, the Audit Committee considered whether the provision of non-audit services by KPMG LLP was compatible with maintaining KPMG LLPs
independence and concluded that it was.
Representatives of KPMG LLP are
expected to be present at the Annual Meeting and will have the opportunity to respond to appropriate questions and to make a statement if they
desire.
Vote Required
The ratification of the
appointment of KPMG LLP as the Companys independent registered public accounting firm requires the affirmative vote of the shareholders holding a
majority of the votes cast with respect to this matter at the Annual Meeting in person or by proxy.
The Board of Directors
recommends that the shareholders vote FOR the ratification of the appointment of KPMG LLP as the Companys Independent Registered Public
Accounting Firm for the Fiscal Year Ending September 30, 2012.
If the shareholders do not ratify the appointment of KPMG LLP, the Audit Committee
will consider a change in independent registered public accounting firm for the next fiscal year.
Audit Fees
The fees billed or incurred by
KPMG LLP for services rendered to the Company for the fiscal years indicated were as follows:
|
|
|
|
Fiscal Year Ended
|
|
|
|
|
|
October 2, 2011 ($)
|
|
October 3, 2010 ($)
|
Audit Fees
|
|
|
|
|
930,044
|
|
|
|
989,526
|
|
Audit Related
Fees
|
|
|
|
|
|
|
|
|
|
|
Tax Fees (1)
|
|
|
|
|
382,020
|
|
|
|
689,741
|
|
All Other
Fees (2)
|
|
|
|
|
100,000
|
|
|
|
|
|
(1)
|
|
These amounts were incurred entirely for tax compliance services
for the respective fiscal years.
|
(2)
|
|
These amounts were incurred for tax analysis in connection with
the sale of A&E.
|
Policy on Audit Committee Pre-Approval of Audit and
Permissible Non-Audit Services by the Independent Registered Public Accounting Firm
The Audit Committee is
responsible for the appointment, compensation and oversight of the work of the independent public accountants. As part of this responsibility, the
Audit Committee is required to pre-approve all audit and non-audit services performed by the independent public accountants in order to assure that
they do not impair the accountants independence from the Company. Accordingly, the Audit Committee has adopted procedures and conditions under
which services proposed to be performed by the independent public accountants must be pre-approved.
Pursuant to this policy, the
Audit Committee will consider annually and approve the terms of the audit engagement. Any proposed engagement relating to permissible non-audit
services must be presented to the Audit Committee and pre-approved on a case-by-case basis. In addition, particular categories of permissible non-audit
services that are recurring may be pre-approved by the Audit Committee subject to pre-set fee limits. If a category of services is so approved, the
Audit Committee will be regularly updated regarding the status of those services and the fees incurred. The Audit Committee reviews requests for the
provision of audit and non-audit services by
44
the Companys
independent public accountants and determines if they should be approved. Such requests could be approved either at a meeting of the Audit Committee or
upon approval of the Chair of the Audit Committee, or another member of the Audit Committee designated by the Chair. If a permissible non-audit service
is approved by the Chair or his designee, that decision is required to be presented at the next meeting of the Audit Committee. Prior to approving any
services, the Audit Committee considers whether the provision of such services is consistent with the Securities and Exchange Commissions rules
on auditor independence and is compatible with maintaining KPMG LLPs independence. All of the fees paid to KPMG LLP in Fiscal 2011 were
pre-approved by the Audit Committee.
45
TRANSACTIONS WITH RELATED PERSONS AND CERTAIN CONTROL
PERSONS
The Companys Code of
Business Conduct and Ethics provides that all employees, officers and directors must avoid any activity that is, or has the appearance of, conflicting
with the interests of the Company and that transactions in which certain related persons may have a material interest must be disclosed to the Company.
Related party transactions are reported to the Companys Secretary in response to an annual written questionnaire, or by the parties involved from
time to time, and reviewed by legal counsel for inclusion in the proxy statement as appropriate. The Companys executive officers and legal
counsel review any related party transaction and determine whether such transaction should be reported to the Board of Directors.
The Company does not have a
formal policy concerning the review, approval or ratification of related party transactions; however, as the transactions are reported, the Board of
Directors considers any related party transactions on a case by case basis to determine whether the Board of Directors must approve such transaction
and, if the Board of Directors determines such approval is required, the Board of Directors then determines, among other things, whether the
transaction or arrangement was undertaken in the ordinary course of business and whether the terms of the transaction are no less favorable to the
Company than terms that could have been reached with an unrelated party. If any member of the Board of Directors is interested in the transaction, such
director will recuse themselves from the discussion and decision on the transaction. For transactions that have been recurring annually, such as the
transactions with Metro Marketing and John Dickson as described below, the Board of Directors reviews the disclosure provided in the Proxy Statement,
and determines if any additional action or approval is required.
During Fiscal 2011, Metro
Marketing acted as a designated broker for Harris Teeter for several of its private label products and other specialty products. Metro Marketing, in
its role as independent broker, performed various services on behalf of Harris Teeter including order placement, interface with manufacturers for
product issues or product problems, marketing and retail support services and the development of new products. Third party manufacturers represented by
Metro Marketing that provide these products to Harris Teeter are required to pay Metro Marketing a fee based upon the amount of product sold. Rush
Dickson (the brother of Thomas W. Dickson) is the owner of Metro Marketing. During Fiscal 2011, Harris Teeter purchased approximately $52,280,000 of
product from manufacturers represented by Metro Marketing resulting in fees of approximately $1,104,000 paid to Metro Marketing. The terms of such
services provided by Metro Marketing are, in the Companys opinion, no less favorable than the Company would have been able to negotiate with an
unrelated party for similar services.
John Dickson (the brother of
Thomas W. Dickson) is the Director of Property Development for Harris Teeter and was paid an aggregate salary, bonus and taxable benefits of $155,483
during Fiscal 2011. The terms of the employment relationship with John Dickson are, in the Companys opinion, no less favorable than the Company
would have been able to enter into with a similarly situated employee that was an unrelated party.
Subsequent to Fiscal 2011,
effective December 12, 2011, Harris Teeter and Legacy PropertiesCollege Road Investments, LLC (Landlord) entered into an amendment to
Harris Teeters existing lease for the Harris Teeter store located at 820 South College Road in Wilmington, North Carolina. The amendment was
entered into in connection with Landlords purchase of the real estate from an unrelated party that had listed the property for sale on the open
market. Under the terms of the amendment to the lease, Landlord agreed to provide $150,000 to be used by Harris Teeter for renovations to the front
exterior of the store, and Harris Teeter agreed to extend the base term of the lease, which was slated to expire in May 2015, for an additional ten
years beyond the original expiration date. Under the existing lease, which has been in place since 1995, Harris Teeter is required to pay to Landlord
approximately $616,858 per year (of which $558,340 is base rent and approximately $58,518 is pass-through payments such as taxes and insurance), which
terms were unchanged by the amendment. The amendment to the lease provides for six five-year renewal periods, exercisable at the option of Harris
Teeter, with a rent increase of five percent effective at the beginning of each renewal period. William T. Dickson and Michael A. Dickson (sons of
Thomas W. Dickson) together own all of the equity interests in Landlord. In determining whether to approve this transaction, the Board took into
consideration the report of an independent certified real estate appraiser, which found the rental rate to be at or slightly below market and the
$150,000 of improvement allowance to be in favor of Harris Teeter. As a result, the Board approved the proposed amendment. There were no amounts due to
the Landlord under the lease, as amended, for Fiscal 2011. The terms of the lease, as amended, are, in the Companys opinion, no less favorable
than the Company would have been able to negotiate with an unrelated party.
46
R. Stuart Dickson (the father of
Thomas W. Dickson) retired from the Company as an executive officer effective May 1, 2002, retired from his position as Chairman of the Executive
Committee of the Board effective March 31, 2006, and retired from the Board at the 2008 Annual Meeting. At the time of his retirement as an executive
officer, he became eligible to receive retirement benefits earned during his employment with the Company. The targeted aggregate annual retirement
benefit pursuant to the SERP, Pension Plan and Social Security was $241,573. In addition, beginning in January 2003, R. Stuart Dickson began to receive
monthly payments for a fifteen-year period pursuant to, and in accordance with the terms of, an historical deferred compensation plan in the amount of
$19,899. In recognition of R. Stuart Dicksons 38 years of service as a Company executive and his invaluable contributions to the Company, upon
the approval of the Board of Directors, the Company entered into a Supplemental Executive Retirement Plan (the March 2006 Retirement Plan)
that provides an annual life-time payment in the amount of $98,000, paid in equal monthly installments. The March 2006 Retirement Plan became effective
as of March 31, 2006, and the first of the monthly payments began on April 1, 2006.
R. Stuart Dickson has been
permitted to continue to use the Companys parking facilities and administrative support for personal purposes, but is required to reimburse the
Company for such usage. Consistent with past practice, he may also request to use Company aircraft for personal purposes, subject to availability and
approval by the Company. No reimbursement to the Company was historically required for such use, nor is reimbursement currently required or expected to
be required in the future. However, Internal Revenue Service regulations require reporting of such use as taxable income to the individual, determined
in accordance with rates prescribed by those regulations. Currently R. Stuart Dickson is not an employee or director of the Company, but continues to
receive the retirement benefits earned as an employee with the Company. The terms of the retirement benefits provided to R. Stuart Dickson were
approved by the Board of Directors in March 2006 as specified above based upon his contributions to the Company and based on the belief of the Board of
Directors that such benefits were merited by his service to the Company. The terms of those benefits are, in the Companys opinion, no more
favorable to R. Stuart Dickson than the Company would have provided to other executives for similar services, based on the relative contributions and
service of R. Stuart Dickson.
See Compensation Discussion
and AnalysisPotential Payments Upon Termination of Employment or Change in Control included herein for a more detailed discussion of
agreements with the NEOs.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER
PARTICIPATION IN COMPENSATION DECISIONS
None of the individuals that
served as a member of the Compensation Committee during Fiscal 2011 were at any time officers or employees of the Company or any of its subsidiaries or
had any relationship with the Company requiring disclosure under Securities and Exchange Commission regulations.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING
COMPLIANCE
Section 16 of the Exchange Act
requires the Companys directors, certain officers and beneficial owners of more than ten percent of the Companys Common Stock to file
reports with the Securities and Exchange Commission indicating their holdings of and transactions in the Companys equity securities and to
provide copies of such reports to the Company. To the Companys knowledge, based solely on a review of such copies or written representations
relating thereto, insiders of the Company complied with all filing requirements for the fiscal year.
SHAREHOLDER PROPOSALS
The deadline for submission of
shareholder proposals pursuant to Rule 14a-8 under the Exchange Act for inclusion in the Companys proxy statement for its 2013 Annual Meeting of
Shareholders is August 29, 2012. Any shareholder proposal to be submitted at the 2013 Annual Meeting of Shareholders (but not required to be included
in the Companys proxy statement), including nominations for election to the Board of Directors, must also comply with Article III, Section 12 of
the Companys Bylaws, which requires that a shareholder give written notice to the Company not later than the 45th day prior to the first
anniversary of the date the Company first mailed its proxy materials for the preceding years annual meeting of shareholders. Shareholder
proposals submitted at the 2013
47
Annual Meeting of
Shareholders (but not required to be included in the Companys proxy statement) will not be considered timely unless the notice required by the
Bylaws is delivered to the Secretary of the Company not later than November 12, 2012.
HOUSEHOLDING OF ANNUAL MEETING
MATERIALS
The Securities and Exchange
Commission rules permit registrants to send a single Notice to any household at which two or more shareholders reside if the registrant believes they
are members of the same family. This procedure, referred to as householding, reduces the volume of duplicate information shareholders receive and
reduces the expense to the registrant. The Company has not implemented these householding rules with respect to its record holders; however, a number
of brokerage firms have instituted householding which may impact certain beneficial owners of Common Stock. If your family has multiple accounts by
which you hold Common Stock, you may have previously received a householding notification from your broker. Please contact your broker directly if you
have any questions, require additional copies of the Notice, or wish to revoke your decision to household, and thereby receive multiple Notices. Those
options are available to you at any time.
ANNUAL REPORT
We filed an Annual Report on Form
10-K with the Securities and Exchange Commission on December 1, 2011. We make available through our website our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as
soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.
Shareholders may also obtain a copy of these reports, without charge, upon request to: Ruddick Corporation, 301 South Tryon Street, Suite 1800,
Charlotte, North Carolina 28202, Attention: Secretary of the Corporation.
OTHER MATTERS
The Board of Directors knows of
no other business that will be presented for consideration at the Annual Meeting. However, if other matters are properly presented at the Annual
Meeting, it is the intention of the proxy holders named in the accompanying form of proxy to vote the proxies in accordance with their best
judgment.
By order of the Board of
Directors
Douglas J. Yacenda
Secretary
December 27, 2011
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VOTE BY INTERNET -
www.proxyvote.com
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Use the Internet to transmit your voting instructions and for
electronic delivery of information up until 11:59 P.M. Eastern Time the
day before the meeting date. Have your proxy card in hand when you access
the web site and follow the instructions to obtain your records and to
create an electronic voting instruction form.
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ELECTRONIC DELIVERY OF FUTURE PROXY
MATERIALS
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If you would like to reduce the costs incurred by our company in
mailing proxy materials, you can consent to receiving all future proxy
statements, proxy cards and annual reports electronically via e-mail or
the Internet. To sign up for electronic delivery, please follow the
instructions above to vote using the Internet and, when prompted, indicate
that you agree to receive or access proxy materials electronically in
future years.
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VOTE BY PHONE - 1-800-690-6903
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Use any touch-tone telephone to transmit your voting instructions up
until 11:59 P.M. Eastern Time the day before the meeting date. Have your
proxy card in hand when you call and then follow the
instructions.
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VOTE BY MAIL
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Mark, sign and date your proxy card and return it in the postage-paid
envelope we have provided or return it to Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717. Your proxy card must be received by
Broadridge no later than the day before the meeting date.
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TO VOTE, MARK BLOCKS BELOW
IN BLUE OR BLACK INK AS FOLLOWS:
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M39536-P18191
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KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION
ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED.
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RUDDICK
CORPORATION
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For
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Withhold
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For
All
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All
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All
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Except
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The Board of Directors of Ruddick Corporation recommends that you vote in Proposal 1 FOR ALL NOMINEES to the Board of
Directors, and FOR each of Proposals 2, 3 and 4.
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o
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o
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o
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1.
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Election of the following ten nominees as Directors listed below to
serve until the next Annual Meeting of Shareholders or until their
respective successors are duly elected and qualified:
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Nominees:
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01)
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John R. Belk
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06) Bailey W. Patrick
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02)
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John P. Derham Cato
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07) Robert H. Spilman,
Jr.
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03)
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Thomas W. Dickson
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08) Harold C. Stowe
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04)
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James E. S. Hynes
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09) Isaiah Tidwell
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05)
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Anna Spangler Nelson
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10) William C. Warden,
Jr.
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To withhold authority to vote for any individual nominee(s), mark For
All Except and write the number(s) of the nominee(s) on the line
below.
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For
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Against
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Abstain
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4.
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To ratify the appointment of KPMG LLP as the independent
registered public accounting firm of the Company for the
fiscal year ending September 30, 2012.
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5.
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The proxies are authorized to act upon any other business which may
properly be brought before said meeting or any adjournment thereof.
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For
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Against
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Abstain
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2.
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Approval of an Amendment to the Restated Articles of Incorporation Changing the Name of the Corporation to “Harris Teeter Supermarkets, Inc.”
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o
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o
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o
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3.
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An advisory (non-binding) vote approving the compensation of the Company's named executive officers.
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o
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o
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o
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The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders, dated December 27, 2011, and the Proxy Statement
furnished therewith.
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For address changes and/or comments, please check this box and write
them on the back where indicated.
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o
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Yes
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No
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Please indicate if you plan to attend this meeting.
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o
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o
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Please sign exactly as your name(s) appear(s) hereon. When
signing as attorney, executor, administrator, or other fiduciary,
please give full title as such. Joint owners should each sign personally. All holders
must sign. If a corporation or partnership, please sign in full corporate or partnership
name, by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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