Kroger 2012 Annual Report Download - page 45

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43
ST A T E M E N T O F P O L I C Y
W I T H R E S P E C T T O
RE L A T E D P E R S O N T R 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.