83706The General Counsel will not forward communications that are not relevantthe communication to the duties and responsibilitiesappropriate group or individual except for correspondence which is not more suitably directed to management or items of the boardfollowing nature – advertising, promotions of directors, including spam, junk mail and mass mailings,a product or service, inquiries,patently offensive material and matters completely unrelated to the Board’s functions, Company performance, Company policies or that could not reasonably be expected to affect the Company’s public perception.
Environmental, Social and
Governance Disclosure
As a long-standing neighborhood grocer, we believe we have an ongoing commitment to leverage our resources and expertise to support the communities we serve and the planet we share. Our Board is deeply committed to this effort and the Governance Committee provides oversight to ensure that the Company’s strategy is appropriate, takes account of material risks, and is likely to deliver results.
During fiscal 2020, we completed a materiality assessment that laid the foundation for our ESG strategy and initiatives for the future. Through this process, we identified high priority areas that align with our long-term strategy and are most critical to our internal and external stakeholders, including Climate Action, Community Stewardship, Diversity, Equity & Inclusion (“DE&I”), and Waste Reduction & Circularity. During fiscal 2021, we developed our ESG aspirations and roadmaps for how to achieve those ambitions, including achieving a science-based carbon reduction target. That in-depth focus enabled us to announce during April 2022 our new ESG platform Recipe for Change based on the following four pillars:
Concurrently with formulating our ESG path, during fiscal 2021 we continued to make progress on our commitments to Community Stewardship, DE&I and Product Sustainability.
Community Stewardship
During fiscal 2021, along with Albertsons Companies Foundation (“Foundation”), we contributed almost $200 million in food and financial support to our communities, including donating approximately $40 million through the Nourishing Neighbors program in support of eradicating hunger in the communities we serve. The September 2021 Nourishing Neighbors breakfast campaign raised over $9 million to provide 37 million healthy breakfasts for children throughout the country. The Nourishing Neighbors program also donated $500,000 to help provide food to those impacted by Hurricane Ida and the California wildfires. The donation supported local food banks and other hunger relief organizations by providing approximately 2 million meals to affected communities. In addition to offering community support, we provided assistance through our “We Care” fund to help our associates who were personally impacted.
DE&I
As one of the largest food and drug retailers in the U.S., we recognize our ability to delight our customers lies in the engagement of our associates. We are committed to fostering a diverse, equitable and inclusive culture and aspire to reflect the vibrant and thriving communities in which we live and work. To enable an inclusive and welcoming culture among our associates we engaged in the following during fiscal 2021:
Integrated DE&I goals into the annual performance management process of our top leaders.
Supported associate resource groups (“ARG”s), which are based on associate interests and are open to all associates in the corporate and division offices as well as field leadership in our retail stores and supply chain facilities. The ARGs during fiscal 2021 consisted of over 3,000 members representing the Women’s Inspiration and Inclusion Network, the Hispanic Leadership Network, the Asian Network, the African American Leadership Council, the Pride Alliance, the Green Team and the Veterans Associate Resource Group.
Created ARG mentorship programs that enable mentors and mentees to build new relationships and help sharpen their skills.
Trained over 10,000 leaders through our “Leading with Inclusion” workshops – a highly interactive experience designed to heighten awareness around bias and provide tools to support associates’ ability to create a more inclusive work environment that acknowledges and celebrates courageous conversations.
Continued to expand opportunities for our associates to learn more about DE&I by facilitating leadership discussions on how to be more inclusive, holding bi-annual store and supply chain huddles and providing monthly online training modules.
Supported Diversity Councils in our 12 operating divisions and back-office functions through the National Diversity Council which is chaired by our CEO and aims to advance DE&I within our Company.
Continued to encourage, empower, and engage social justice and racial equity initiatives through our Racial & Social Justice Grant Program. In 2021 we provided $500,000 to non-profit organizations operating within the communities we serve to fund programs, activities, initiatives, or educational outreach that helps to eliminate inequities and address the unique needs of racial and ethnic minority groups in the community.
We believe in fostering DE&I not only among our associates, but also among our business partners. We are dedicated to providing opportunities to diverse suppliers to grow their business and have their products on more shelves. Given one of the biggest hurdles for small businesses is access to working capital, we have launched an expanded early payment program to determine the best time and terms for payments for our diverse-owned suppliers. The goal is to help these businesses alleviate immediate capital challenges by making access to working capital more equitable. During fiscal 2021, we hosted our first event with nearly 1,000 diverse suppliers. Our Supplier Diversity Program applies to the following groups that are over 50% owned and controlled/operated by a U.S. citizen and one of the following categories or ethnicities:
• African American • Asian American • Hispanic | • LGBTQ+ • Native American | • Service-Disabled Veteran • Female |
Product Sustainability
During fiscal 2021, we furthered our industry leadership in product sustainability, particularly regarding seafood. Originally adopted in 2018 under our Responsible Seafood Policy, our “Top 5 by 2022” Sushi Commitment set an ambitious goal for our business to transition the sourcing of certain seafood to suppliers that meet our Responsible Seafood Policy by 2022. This commitment included the discontinuation of eel offerings until they became more sustainably sourced, and that commitment was achieved in 2019. During fiscal 2021, we achieved our sushi commitment by sourcing salmon, tuna, shrimp, and imitation crab that met one or service suggestions, resumesmore of the following Responsible Seafood Policy criteria:
Rated Green (best choice) or Yellow (good alternative) by the Monterey Bay Aquarium’s Seafood Watch program.
Certified to an equivalent environmental standard.
Sourced from fisheries or farms making measurable and time-bound improvements.
Certain Relationships and Related Party Transactions
The following discussion is a brief summary of certain material arrangements, agreements and transactions we have with related parties during fiscal 2021. We enter into transactions with our Sponsors and other entities owned by, or affiliated with, our Sponsors in the ordinary course of business. These transactions include, amongst others, professional advisory, consulting and other corporate services.
Our Board has adopted a written policy (the “Related Party Policy”) and procedures for the review, approval or ratification of “Related Party Transactions” by the Audit Committee. For purposes of the Related Party Policy, a “Related Party Transaction” is any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including the incurrence or issuance of any indebtedness or the guarantee of indebtedness) in which (1) the aggregate amount involved will or may be reasonably expected to exceed $120,000 in any fiscal year, (2) we or any of our subsidiaries is a participant and (3) any related party has or will have a direct or indirect material interest.
Management presents any proposed related party transaction at an Audit Committee meeting for review and approval. If management becomes aware of a proposed or existing related party transaction that has not been presented or pre-approved by the Audit Committee, management shall promptly notify the Chair and the Audit Committee. If it is not practicable for management to wait for the Audit Committee to consider the matter, the Chairman will consider whether the Related Party Transaction should be ratified or rescinded, or other forms of job inquiries, opinion surveys and polls, business solicitations or advertisements, or other frivolous communications.
As” above for more information.Transactions with Cerberus
We paid Cerberus Technology Solutions, an affiliate of June 25, 2020, weCerberus, fees totaling approximately $7.0 million for fiscal 2021 for information technology advisory and implementation services in connection with modernizing our information systems.
We paid Cerberus Operations and Advisory Company, LLC, an affiliate of Cerberus, fees totaling approximately $0.2 million for fiscal 2021 for consulting services provided in connection with improving the Company's operations.
Transactions with Kimco Realty
We entered into an amendment to a stockholders agreementshopping center lease with our Sponsors (the “Stockholders’ Agreement”Ingleside, LLC (“Ingleside”)., an affiliate of Kimco Realty. The Stockholders’ Agreement provides for designation rightsterm of the lease was extended to November 30, 2027, with four 5-year options. In addition to other lease terms related to percentage rent and remodeling that are favorable to us, the annual rent for the Sponsorsperiod ending in November 2027 was reduced from $0.7 million to nominate directors$0.5 million to our board of directors. Pursuant tobring the Stockholders’ Agreement, we will be required to appoint to our board of directors individuals designated by and voted for by our Sponsors. If Cerberus (or a permitted transferee or assignee) has beneficial ownership of at least 20% of our then-outstanding common stock, it shall have the right to designate four directors to our board of directors. If Cerberus (or a permitted transferee or assignee) owns less than 20% but at least 10% of our then-outstanding common stock, it shall have the right to designate two directors to our board of directors. If Cerberus (or a permitted transferee or assignee) owns less than 10% but at least 5% of our then-outstanding common stock, it shall have the right to designate one director to our board of directors. If Klaff Realty, L.P. (or a permitted transferee or assignee) owns at least 5% of our then-outstanding common stock, it shall have the right to designate one director to our board of directors. If Schottenstein Stores Corp. (or a permitted transferee or assignee) owns at least 5% of our then-outstanding common stock, it shall have the right to designate one director to our board of directors. Each Sponsor will agree to vote the common stock owned by themrent more in favor of each other Sponsor’s nominees to the board of directors.