Ruddick (RDK)

to the higher level of responsibilities of the holding Company executives for the Company’s total performance. Generally, the total annual cash compensation paid to the Company’s executives is approximately the median of the range of total annual cash compensation provided by companies listed in the Compensation Surveys for both the Chief Executive Officer and the remaining executive officers.

     For Fiscal 2008, base salaries of the NEOs were reviewed and, on average, increases of 8.4% were provided. Base salary increases were based primarily on the Compensation Committee’s consideration of relevant market data, which revealed an increase in the median of the Compensation Surveys over the prior year, and each NEOs achievement of personal performance objectives and corporate operating results during Fiscal 2008. The corporate operating results considered were primarily return on invested capital (“ROIC”) 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 Company’s subsidiaries. The personal performance objectives vary for each NEO, but were primarily operational achievements tied to the performance of the operating company by which such NEO was employed (i.e., the Company, Harris Teeter or A&E). These goals included achievement of financial projections for sales and operating profit, achieving a pre-determined number of new Harris Teeter stores opened, achieving a variety of specific productivity and operational goals at Harris Teeter, entering into certain international joint ventures at A&E to expand its global footprint, accelerating global and product diversification and growth and integration of recent acquisitions and consolidations at A&E. No particular weight is assigned to any particular performance goal, and the personal performance objectives considered by the Compensation Committee may 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’s decision to increase the NEOs base salaries was based on a subjective review of the factors considered, and thus, there was not a specific threshold of achievement either for the operating results or for the personal objectives, above or below which necessarily the NEOs base salaries would be increased or decreased. The Compensation Committee does not determine the NEOs base salaries based on a formula or targeted performance in the same way as certain elements of the NEOs future compensation were determined. Furthermore, these increases provided base salaries generally consistent with the median of the Compensation Surveys.