Kroger 2011 Annual Report Download - page 46

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ST A T E M E N T O F PO L I C Y
W I T H RE S P E C T T O
RE L A T E D PE R S O N TR A N S A C T I O N S
A. I N T R O D U C T I O N
It is the policy of Kroger’s Board of Directors that any Related Person Transaction may be consummated
or may continue only if the Committee approves or ratifies the transaction in accordance with the guidelines
set forth in this policy. The Board of Directors has determined that the Audit Committee of the Board is best
suited to review and approve Related Person Transactions.
For the purposes of this policy, a “Related Person” is:
1. any person who is, or at any time since the beginning of Kroger’s last fiscal year was, a director or
executive officer of Kroger or a nominee to become a director of Kroger;
2. any person who is known to be the beneficial owner of more than 5% of any class of Kroger’s voting
securities; and
3. any immediate family member of any of the foregoing persons, which means any child, stepchild,
parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-
in-law, or sister-in-law of the director, executive officer, nominee or more than 5% beneficial owner,
and any person (other than a tenant or employee) sharing the household of such director, executive
officer, nominee or more than 5% beneficial owner.
For the purposes of this policy, a “Related Person Transaction” is a transaction, arrangement or relationship
(or any series of similar transactions, arrangements or relationships) since the beginning of Kroger’s last fiscal
year in which Kroger (including any of its subsidiaries) was, is or will be a participant and the amount involved
exceeds $120,000, and in which any Related Person had, has or will have a direct or indirect material interest
(other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity).
Notwithstanding the foregoing, the Audit Committee has reviewed the following types of transactions
and has determined that each type of transaction is deemed to be pre-approved, even if the amount involved
exceeds $120,000.
1. Certain Transactions with Other Companies. Any transaction for property or services in the
ordinary course of business involving payments to or from another company at which a Related
Person’s only relationship is as an employee (including an executive officer), director, or beneficial
owner of less than 10% of that company’s shares, if the aggregate amount involved in any fiscal
year does not exceed the greater of $1,000,000 or 2 percent of that company’s annual consolidated
gross revenues.
2. Certain Company Charitable Contributions. Any charitable contribution, grant or endowment by
Kroger (or one of its foundations) to a charitable organization, foundation, university or other not
for profit organization at which a Related Person’s only relationship is as an employee (including
an executive officer) or as a director, if the aggregate amount involved does not exceed $250,000
or 5 percent, whichever is lesser, of the charitable organization’s latest publicly available annual
consolidated gross revenues.
3. Transactions where all Shareholders Receive Proportional Benefits. Any transaction where the
Related Person’s interest arises solely from the ownership of Kroger common stock and all holders
of Kroger common stock received the same benefit on a pro rata basis.
4. Executive Officer and Director Compensation. (a) Any employment by Kroger of an executive
officer if the executive officer’s compensation is required to be reported in Kroger’s proxy statement,
(b) any employment by Kroger of an executive officer if the executive officer is not an immediate
family member of a Related Person and the Compensation Committee approved (or recommended
that the Board approve) the executive officer’s compensation, and (c) any compensation paid to a
director if the compensation is required to be reported in Kroger’s proxy statement.