Kroger 2013 Annual Report Download - page 49

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47
in฀the฀filing฀of฀Forms฀4฀to฀report฀(i)฀ share฀awards฀under฀Company฀performance฀unit฀agreements,฀and฀(ii)฀
with฀the฀exception฀of฀Mr.฀McMullen,฀share฀dispositions฀for฀tax฀liability฀related฀to฀said฀share฀awards;฀due฀to฀
an฀administrative฀error฀by฀the฀Company.฀Also,฀in฀March฀2013,฀Mark฀C.฀Tuffin฀filed฀a฀Form฀5฀to฀report฀4,000฀
shares฀held฀directly฀that฀inadvertently฀were฀not฀reported฀on฀his฀Form฀3฀filing฀and฀a฀subsequent฀Form฀3/A฀and฀
Form 4 filing.
RE L A T E D P E R S O N T R A N S A C T I O N S
Under฀our฀Statement of Policy with Respect to Related Person Transactions฀and฀the฀rules฀of฀the฀SEC,฀
the Audit Committee approved the following related party transaction:
•฀ During฀fiscal฀year฀2013,฀Kroger฀made฀purchases฀from฀Staples,฀Inc.,฀totaling฀approximately฀$10฀million.฀
This฀amount฀represents฀substantially฀less฀than฀2%฀of฀Staples’฀annual฀consolidated฀gross฀revenue.฀Kroger฀
periodically฀employs฀a฀bidding฀process฀or฀negotiations฀following฀a฀benchmarking฀of฀costs฀of฀products฀
from฀various฀vendors฀for฀the฀items฀purchased฀from฀Staples฀and฀awards฀the฀business฀based฀on฀the฀results฀
of฀ that฀ process.฀ Ronald฀ L.฀ Sargent,฀ a฀ member฀ of฀ Kroger’s฀ Board฀ of฀ Directors,฀ is฀ Chairman฀ and฀ Chief฀
Executive฀Officer฀of฀Staples.
Director฀ independence฀ is฀ discussed฀ above฀ under฀ the฀ heading฀ “Information฀ Concerning฀ the฀ Board฀ of฀
Directors.”฀Kroger’s฀policy฀on฀related฀person฀transactions฀is฀as฀follows:
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).