Kroger 2015 Annual Report Download - page 20

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18
The Corporate Governance Committee considers racial, ethnic and gender diversity to be
important elements in promoting full, open and balanced deliberations of issues presented to the Board.
The Corporate Governance Committee considers director candidates that help the Board reflect the
diversity of our shareholders, associates, customers and the communities in which we operate. Some
consideration also is given to the geographic location of director candidates in order to provide a
reasonable distribution of members from Kroger’s operating areas.
At least annually, the Corporate Governance Committee actively engages in Board succession
planning. The Corporate Governance Committee takes into account the Board and committee
evaluations regarding the specific backgrounds, skills, and experiences that would contribute to overall
Board and committee effectiveness as well as the future needs of the Board and its committees in light
of Kroger’s current and future business strategies and the skills and qualifications of directors who are
expected to retire in the future.
Candidates Nominated by Shareholders
The Corporate Governance Committee will consider shareholder recommendations for nominees for
membership on the Board of Directors. If shareholders wish to nominate a person or persons for election
to the Board at our 2017 annual meeting, written notice must be submitted to Kroger’s Secretary, and
received at our executive offices, in accordance with Kroger’s Regulations, not later than March 28, 2017.
Such notice should include the name, age, business address and residence address of such person, the
principal occupation or employment of such person, the number of Kroger common shares owned of record
or beneficially by such person and any other information relating to the person that would be required to be
included in a proxy statement relating to the election of directors. The Secretary will forward the information
to the Corporate Governance Committee for its consideration. The Corporate Governance Committee
will use the same criteria in evaluating candidates submitted by shareholders as it uses in evaluating
candidates identified by the Corporate Governance Committee, as described above.
Corporate Governance Guidelines
The Board has adopted the Guidelines. The Guidelines, which include copies of the current charters
for each of the five standing committees of the Board,are available on our website at ir.kroger.com under
Corporate Governance – Highlights. Shareholders may obtain a copy of the Guidelines by making a
written request to Kroger’s Secretary at our executive offices.
Independence
The Board has determined that all of the non-employee directors have no material relationships
with Kroger and, therefore, are independent for purposes of the New York Stock Exchange listing
standards. The Board made its determination based on information furnished by all members regarding
their relationships with Kroger and its management, and other relevant information. After reviewing the
information, the Board determined that all of the non-employee directors were independent because:
• they all satisfied the criteria for independence set forth in Rule 303A.02 of the NYSE Listed
Company Manual,
• the value of any business transactions between Kroger and entities with which the directors are
affiliated falls below the thresholds identified by the NYSE listing standards, and
• none had any material relationships with Kroger except for those arising directly from their
performance of services as a director for Kroger.
In determining that Mr. Sargent is independent, the Board considered transactions during fiscal
2015 between Kroger and Staples, Inc. (where Mr. Sargent is Chairman and CEO) and determined that
the amount of business fell below the thresholds set by the NYSE listing standards. The transactions
involved the purchase of goods by Kroger in the ordinary course of business totaling approximately
$12 million and represented less than 0.06% 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.