Kroger 2014 Annual Report Download - page 54

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52
RE L A T E D P E R S O N T R A N S A C T I O N S
In accordance with our Statement of Policy with Respect to Related Person Transactions and the rules
of฀the฀SEC,฀the฀Audit฀Committee฀approved฀the฀following฀related฀person฀transaction:
•฀ During฀fiscal฀year฀2014,฀Kroger฀made฀purchases฀from฀Staples,฀Inc.,฀totaling฀approximately฀$8.7฀million.฀
This฀amount฀represents฀substantially฀less฀than฀1%฀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,฀is฀Chairman฀and฀Chief฀Executive฀Officer฀
of฀Staples.฀
Director฀ independence฀ is฀ discussed฀ above฀ under฀ the฀ heading฀ “Information฀ Concerning฀ the฀ Board.”฀
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฀ 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฀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.