ACI Albertsons Companies Inc

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Preliminary Information Statement

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Q:

What is the proposed transaction and what effects will it have on the Company?

A:

The proposed transaction is the acquisition of Albertsons Companies, Inc., a Delaware corporation (the “Company,” “us,” and “we”) by The Kroger Co., an Ohio corporation (“Kroger”), which would be accomplished through a merger of Kettle Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Kroger (“Merger Sub”), with and into the Company (the “Merger”) with the Company surviving the Merger (the “Surviving Corporation”) pursuant to the Agreement and Plan of Merger, dated as of October 13, 2022, by and among Kroger, Merger Sub and the Company (the “Merger Agreement”), a copy of which is attached as Annex A. As a result of the Merger, the Company will become a wholly-owned subsidiary of Kroger, and the Common Stock (as defined below) will (i) cease to be listed on the New York Stock Exchange (“NYSE”), (ii) not be publicly traded and (iii) be deregistered under the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”). Additionally, the Preferred Stock (as defined below), if outstanding at the time of the Merger, will automatically be cancelled and cease to exist.

Q:

Why did I receive this information statement?

A:

On (i) October 14, 2022, an entity affiliated with Kimco Realty Corporation (“Kimco”), which was a holder of record of 28,000,000 shares of Class A Common Stock, par value $0.01 per share (the “Common Stock”), entities affiliated with Klaff Realty, L.P. (“Klaff”), which were holders of record of 58,128,749 shares of Common Stock, and entities affiliated with Lubert-Adler Partners (“Lubert-Adler”), which were holders of record of 58,128,754 shares of Common Stock, each delivered to the Company a written consent adopting and approving the Merger Agreement and the transactions contemplated thereby, including the Merger, (ii) October 17, 2022, an affiliate of Cerberus Capital Management, L.P. (“Cerberus” and together with Kimco, Klaff and Lubert-Adler, the “Majority Common Stockholders”), which beneficially owned 1,482,017 shares of Common Stock, caused the record holder of such shares to deliver to the Company a written consent adopting and approving the Merger Agreement and the transactions contemplated thereby, including the Merger, and (iii) October 18, 2022, affiliates of Cerberus, which together beneficially owned 150,336,663 shares of Common Stock, caused the record holder of such shares to deliver to the Company a written consent adopting and approving the Merger Agreement and the transactions contemplated thereby, including the Merger (the consents in clauses (i) through (iii) together, the “Common Stockholder Consent”). Together, the Majority Common Stockholders beneficially owned 296,076,183 shares of Common Stock, which constituted approximately 55.4% of the voting power of the outstanding shares of Common Stock at the time of delivery of the Common Stockholder Consent. On October 14, 2022, entities affiliated with HPS Investment Partners, LLC (“HPS”), which was a holder of record of 584,000 shares of the issued and outstanding shares of Series A Convertible Preferred Stock of the Company (the “Preferred Stock”) constituting approximately 87.7% of the voting power of the Preferred Stock (the “Majority Preferred Stockholder” and together with the Majority Common Stockholders, the “Majority Stockholders”) delivered to the Company a written consent adopting and approving the Merger Agreement and the transactions contemplated thereby, including the Merger

Q:

What will I be entitled to receive pursuant to the Merger as a stockholder of the Company?

A:

As a result of the Merger, holders of Common Stock immediately prior to the consummation of the Merger will be entitled to receive $34.10 in cash, without interest and less any applicable withholding taxes, for each share of Common Stock they hold as of the effective time of the Merger (the “Effective Time”) less (i) the Pre-Closing Dividend of $6.85 per share of Common Stock and (ii) the SpinCo Consideration Amount (as defined below). See “The Merger Agreement—Merger Consideration” beginning on page 74.

Q:

What will I be entitled to receive pursuant to the Merger as a holder of the Company’s equity awards?

A:

As a result of the Merger, each outstanding equity award denominated in shares of Common Stock immediately prior to the Effective Time will be converted into a corresponding award with respect to Kroger common shares (the “Converted Awards”). The Converted Awards will remain outstanding and subject to the same terms and conditions (including vesting and forfeiture terms) as were applied to the corresponding Company equity award immediately prior to the Effective Time; provided that any Company equity award with a performance-based vesting condition will have such vesting condition deemed satisfied at (i) the greater of target performance and actual performance (for such awards subject to an open performance period at the Effective Time) and (ii) target performance (for such awards subject to a performance period that begins after the Effective Time). For purposes of the conversion described above, the number of Kroger common shares subject to a Converted Award will be based upon the number of shares of Common Stock subject to such Company equity award immediately prior to the Effective Time multiplied by an exchange ratio (the “Equity Exchange Ratio”) equal to (i) $34.10 less the per share amount of the Pre-Closing Dividend divided by (ii) the average closing price of Kroger common shares for five consecutive trading days preceding the closing of the Merger (the “Closing”).

Q:

What regulatory approvals and filings are needed to complete the Merger?

A:

The Merger is subject to compliance with the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). See “The Merger—Regulatory Matters” beginning on page 72.

Q:

When do you expect the Merger to be completed?

A:

The Closing is subject to regulatory review and other customary closing conditions and is anticipated to occur in early 2024.

Q:

What happens if the Merger is not completed?

A:

If the Merger is not completed for any reason, stockholders will not receive any payment for their shares of Common Stock or Preferred Stock in connection with the Merger, and any outstanding equity awards of the

Q:

Why am I not being asked to vote on the Merger?

A:

The approval by holders, in the aggregate, of a majority in voting power of the outstanding shares of Common Stock and of a majority in voting power of the outstanding shares of Preferred Stock entitled to vote is required to adopt the Merger Agreement and effect the Merger. The DGCL and the Company’s Amended and Restated Certificate of Incorporation permit stockholders to act by consent in lieu of a meeting to take actions such as the adoption of the Merger Agreement and the approval of the transactions contemplated thereby (including the Merger). The requisite stockholder approval adopting and approving the Merger Agreement and the transactions contemplated thereby was obtained following the execution of the Merger Agreement through the delivery of the Written Consent. Therefore, your vote or consent is not required and is not being sought. The Company is not asking you for a proxy, and you are requested not to send the Company a proxy.

Q:

Did the board of directors of the Company (the “Board”) approve and recommend the Merger Agreement?

A:

Yes. The Board unanimously:

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determined that the terms of the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders;

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approved the Merger Agreement;

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declared advisable the Merger Agreement and declared advisable and approved the performance by the Company of its covenants and agreements contained in the Merger Agreement and the consummation of the Merger and the other transactions contemplated by the Merger Agreement;

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directed that the Merger Agreement be submitted to the stockholders of the Company entitled to vote for its adoption; and

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recommended the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated by the Merger Agreement by the stockholders of the Company.

Q:

What rights do I have if I oppose the Merger?

A:

Holders or beneficial owners of Common Stock or Preferred Stock who did not provide a consent to the adoption of the Merger Agreement (i.e., stockholders other than the Majority Stockholders) are entitled to appraisal rights under Delaware law by following the procedures and satisfying the requirements specified in Section 262 of the DGCL. A copy of Section 262 is attached as Annex D to this information statement See “The Merger—Appraisal Rights” beginning on page 64.

Q:

Will the Merger be taxable to me?

A:

The exchange of Common Stock for cash and any other property treated as consideration, which may or may not include SpinCo shares or beneficiary interests in a trust holding such shares, in the Merger will be a taxable transaction for U.S. federal income tax purposes and may also be taxable under state and local and other non-U.S. tax laws. Accordingly, a stockholder that is a “U.S. holder” (as defined in the section entitled “The Merger—Material U.S. Federal Income Tax Consequences” beginning on page 68 of this information statement) will generally recognize capital gain or loss in an amount equal to the difference, if any, between (i) the cash and fair market value of any other property treated as consideration in the Merger

Q:

What happens if I sell or otherwise transfer my shares of Common Stock before the closing of the Merger?

A:

If you transfer your shares of Common Stock before consummation of the Merger, you will have transferred the right to receive the Merger Consideration and lose your appraisal rights with respect to such shares. In order to receive the Merger Consideration or exercise appraisal rights for any of your shares, you must hold such shares through the Effective Time of the Merger.

Q:

How do I surrender my book-entry shares held by the Company’s transfer agent, American Stock Transfer & Trust Company, LLC?

A:

The Surviving Corporation will direct the paying agent to mail each holder of record of book-entry shares not held through the Depository Trust Company instruction for effecting the surrender of such book-entry shares in exchange for the Common Merger Consideration (as defined below). Upon the paying agent’s receipt of an “agent message” (or such other evidence as the paying agent may reasonably request), the holder of such book-entry shares will be entitled to receive the Common Merger Consideration in exchange for each share of Common Stock represented by such book-entry shares as of immediately prior to the Effective Time and such surrendered book-entry shares will be cancelled.

Q:

What happens to my shares of Common Stock held by my broker?

A:

Your broker generally will handle cashing out all shares of Common Stock that you hold in your brokerage account immediately prior to the Effective Time. You should direct any specific questions on this to your broker.

Q:

Why did you declare the Pre-Closing Dividend?

A:

The Board declared the Pre-Closing Dividend to execute the Company’s capital return strategy developed in connection with the Company’s evaluation of strategic alternatives, including providing a near-term return of capital to stockholders.

Q:

When will the Company pay the Pre-Closing Dividend?

A:

The payment of the Pre-Closing Dividend is subject to a temporary restraining order issued by the King County Superior Court of the State of Washington. The Company intends to promptly pay the Pre-Closing Dividend in the event that this restraining order expires or is dissolved and no court of relevant jurisdiction otherwise enjoins the payment of the Pre-Closing Dividend.

Q:

I am not eligible to receive the Pre-Closing Dividend because I was not a holder of record of shares of Common Stock or Preferred Stock as of October 24, 2022. Will I receive additional consideration in the Merger?

A:

No. Stockholders who did not hold shares of Common Stock or Preferred Stock on the record date for the Pre-Closing Dividend are not entitled to any additional consideration in the Merger.

Q:

Is the payment of the Pre-Closing Dividend contingent on the Merger closing?

A:

No. The payment of the Pre-Closing Dividend is not contingent on Closing.

Q:

What is SpinCo?

A:

If established, SpinCo will be a company that will own stores of the Company and Kroger and operate as a publicly traded grocery retailer. Pursuant to the Merger Agreement, if required to obtain regulatory clearance, between 100 and 375 stores of the Company and Kroger will be allocated to SpinCo. SpinCo will operate the stores with appropriate transition support from the Company and Kroger after the Closing. SpinCo is expected to be a standalone public company and will compete with the Company and Kroger after the Merger.

Q:

Is SpinCo currently formed or operating?

A:

No. SpinCo is not currently formed or operating as part of the Company or Kroger or as a standalone public company.

Q:

Why will the Merger Consideration be adjusted based on the value of SpinCo?

A:

The Merger Consideration paid by Kroger will be adjusted to reflect the agreed-upon value of stores which will be a part of SpinCo. Because Kroger will not receive shares of or beneficial interests in SpinCo, the Company and Kroger established an agreed-upon value of SpinCo stores for the purposes of adjusting the Merger Consideration (as defined below) to reflect the potential value of SpinCo. There is no assurance that SpinCo will have a trading value in excess of the adjustment in the Merger Consideration.

Q:

How will the consideration paid to stockholders in the Merger be adjusted based on SpinCo?

A:

For purposes of adjusting the Merger Consideration, the Company and Kroger have agreed that for each store contributed to SpinCo, the consideration paid will be adjusted by the SpinCo Consideration Amount, which is defined as three times the four-wall EBITDA for the thirteen four-week periods ending on the last day of the four-week period nearest to, and at least 30 days prior to, the Closing for each store contributed to SpinCo divided by the number of shares of Common Stock outstanding or issuable upon the conversion of the shares of Preferred Stock outstanding as of the record date for the SpinCo distribution. For an example of how this is calculated, see “The Merger—Potential Range of SpinCo Consideration” beginning on page 75.

Q:

If the Company is not required to establish SpinCo to obtain regulatory clearance, will the consideration paid in the Merger be further adjusted?

A:

No. The adjustment to the Merger Consideration (other than with respect to the Pre-Closing Dividend) will only occur if SpinCo is established and distributed to Company stockholders.

Q:

What is the range of the adjustment for the Merger Consideration as a result of SpinCo?

A:

The range of merger consideration is only an estimate and will depend on the SpinCo Consideration Amount, which is unknown at the date of this information statement. For a range of potential amounts see “The Merger—Potential Range of SpinCo Consideration” beginning on page 75.

Q:

How will SpinCo be distributed to Company stockholders?

A:

As of the date of this information statement, the method of distribution has not been determined. If established, shares of common stock of SpinCo registered in accordance with any applicable federal securities laws or beneficial interests in SpinCo that will later result in the issuance of shares of common stock of SpinCo registered in accordance with any applicable federal securities laws will be distributed to holders of Common Stock and Preferred Stock as of the applicable record date for SpinCo.

Q:

Who will manage SpinCo?

A:

As of the date of this information statement, the management of SpinCo has not been determined, but SpinCo management is expected to include certain members of the Company’s management.

Q:

When will I know more about SpinCo and the adjustment to the Merger Consideration?

A:

Information about SpinCo and any adjustments to the Merger Consideration will be provided to Company stockholders at a future time but prior to the Closing.

Q:

Who can help answer my questions and how can I receive a copy of this information statement?

A:

If you would like additional copies, without charge, of this information statement or if you have questions about the Merger, you should contact:

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the risk that the Merger may not be consummated in a timely manner, if at all;

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the risk that the regulatory approvals required to complete the Merger will not be obtained or any other condition to the consummation of the Merger will not be satisfied in a timely manner, if at all;

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the risk that the Merger Agreement may be terminated in circumstances that require the Company to pay Kroger a termination fee of $318 million in connection therewith;

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the effects that any termination of the Merger Agreement may have on the Company or its business, including the risks that the market price for Common Stock may decline significantly if the Merger is not completed, which may have a negative effect on any potential alternatives to the Merger;

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the effects that the announcement or pendency of the Merger may have on the Company and its business, including the risks that as a result, the Company’s (i) business, operating results or market price for Common Stock may be adversely affected, (ii) current plans and operations may be disrupted, (iii) ability to retain or recruit key employees may be adversely affected, (iv) business relationships (including with customers and suppliers) may be adversely affected, or (v) management’s or employees’ attention may be diverted from the Company’s ongoing business operations or other important matters;

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the effect of limitations that the Merger Agreement places on the Company’s ability to operate its business;

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the risk that legal proceedings may be instituted following announcement of the Merger;

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the risk that legal proceedings may further impact the payment of the Pre-Closing Dividend;

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the risk that the Merger and related transactions may involve unexpected costs, liabilities or delays;

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the risks related to establishing SpinCo for distribution to Company stockholders; and

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other risks detailed in the Company’s current filings with the SEC, including the Company’s most recent filings on Form 10-K and Form 10-Q, which discuss other important risk factors concerning the Company’s operations.

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that holders of Common Stock will be entitled to receive the Common Merger Consideration and holders of Preferred Stock will be entitled to receive the Preferred Merger Consideration, providing liquidity and value as compared to the uncertain future long-term value to stockholders that might or might not be realized if the Company remained independent;

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the fact that the $34.10 per share value of the Common Merger Consideration represents a 30% premium over the 30-day volume-weighted average price of the Common Stock ending on October 12, 2022 (the last trading day prior to the Board’s approval of the Merger Agreement), represents a 25% premium over the 90-day volume-weighted average price of the Common Stock ending on October 12, 2022 (the last trading day prior to the Board’s approval of the Merger Agreement) and represents a 33% premium over the closing price of the Common Stock on the NYSE on October 12, 2022 (the last trading day prior to the Board’s approval of the Merger Agreement);

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the then-current financial market conditions and the recent and historical market prices of the Common Stock, including the market price performance of the Common Stock relative to those of other industry participants since the Company’s IPO in June 2020. See “Market Prices and Dividend Data” for recent information about the Common Stock prices;

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the concentrated ownership of the Sponsors and the impact on the trading price of the Common Stock should the Sponsors or other parties engage in significant sales of Common Stock;

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the impact of the expiration of the lock-up agreements entered into among certain holders of Common Stock and Preferred Stock;

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the strategic alternatives review conducted by the Board with the assistance of the Company’s financial advisors, which considered a number of potential transactions, with the transaction with Kroger providing for all stockholders to enjoy a premium on the shares of Common Stock and Preferred Stock; and

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the determination of our Board, based on the Company’s strategic alternatives review, and discussions with management, Goldman Sachs and Credit Suisse, that Kroger was the party with an ability to execute a transaction and most likely to have the most interest in acquiring the Company at a premium.

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the conditions to Kroger’s obligation to complete the Merger, including as to antitrust conditions, and the ability of Kroger to terminate the Merger Agreement under certain specified circumstances;

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the structure of the transaction as a Merger, requiring approval by the Majority Stockholders;

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the structure of the divestment process, including the potential establishment of the SpinCo structure;

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the requirement that Kroger pay to the Company a reverse termination fee of $600,000,000 if the Merger Agreement is terminated under certain specified circumstances;

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the requirement that the Company pay to Kroger a termination fee of $318,000,000 if the Merger Agreement is terminated under certain specified circumstances; and

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that the Company’s stockholders will be entitled (other than the Majority Stockholders), to the extent properly exercised, to appraisal rights under Delaware law.

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the risks and contingencies related to the announcement and pendency of the Merger, including the impact on the Company’s employees and the Company’s relationships with existing and prospective customers and business partners, as well as other third parties;

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the conditions to Kroger’s obligation to complete the Merger and the right of Kroger to terminate the Merger Agreement under certain specified circumstances;

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the risks of a delay in receiving, or a failure to receive, the necessary antitrust approvals and clearances necessary to complete the Merger;

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the conditions to Kroger’s obligation to complete the Merger and the right of Kroger to terminate the Merger Agreement under certain specified circumstances;

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the risks in establishing and separating SpinCo as part of completing any divestitures; and

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the risks and costs to the Company if the Merger is not completed, including the diversion of management and employee attention, potential employee attrition, the potential impact on the Company’s stock price and the effect on its business relationships.

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the Merger Agreement;

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annual reports to stockholders and Annual Reports on Form 10-K of the Company for the five (5) fiscal years ended February 26, 2022 and of Kroger for the five (5) fiscal years ended January 29, 2022;

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certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company and Kroger;

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certain other communications from the Company to its stockholders;

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certain publicly available research analyst reports for the Company and Kroger; and

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certain internal financial analyses and forecasts for the Company and certain internal financial estimates of SpinCo prepared by the Company’s management, as approved for Goldman Sachs’ use by the Company, which are referred to as the “Company Forecasts” and the “SpinCo Estimates”, respectively, and collectively, as the “Forecasts”.

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Sprouts Farmers Market, Inc.

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Weis Markets, Inc.

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Ingles Markets, Incorporated

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Village Super Market, Inc.

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reviewed an execution version of the Merger Agreement made available to Credit Suisse;

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reviewed certain publicly available business and financial information relating to the Company;

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reviewed certain other information relating to the Company, including (x) financial forecasts and other estimates relating to the Company provided to or reviewed with Credit Suisse by the management of the Company (the “Company Projections”) and (y) certain data and forward-looking estimates relating to SpinCo provided to or reviewed with Credit Suisse by the management of the Company (the “SpinCo Estimates”);

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spoke with the management of the Company and certain of the Company’s representatives regarding the business and prospects of the Company and SpinCo;

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considered certain financial and stock market data of the Company and certain financial data of SpinCo, and Credit Suisse compared that data with similar data for other companies with publicly traded equity securities in businesses Credit Suisse deemed similar to those of the Company and SpinCo;

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considered, to the extent publicly available, the financial terms of certain other business combinations and other transactions which had been effected; and

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considered such other information, financial studies, analyses and investigations and financial, economic and market criteria which Credit Suisse deemed relevant.

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Enterprise Value — generally the value as of a specified date of the relevant company’s outstanding equity securities (taking into account its options and other outstanding convertible securities) plus the value as of such date of its net debt (the value of its outstanding indebtedness, preferred stock and capital lease obligations less the amount of cash on its balance sheet).

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Adjusted EBITDA — generally the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization for a specified time period, as adjusted for certain non-recurring items and to add back stock-based compensation expense.

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Enterprise Value as a multiple of estimated Adjusted EBITDA for the 2022 fiscal year, or “FY 2022E EBITDA,” calendarized to reflect the Company’s fiscal year end; and

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Enterprise Value as a multiple of estimated Adjusted EBITDA for the 2023 fiscal year, or “FY 2023E EBITDA,” calendarized to reflect the Company’s fiscal year end.

(1)

Based on Adjusted EBITDA for the fiscal year ended January 3, 2021

(2)

Based on Adjusted EBITDA for the fiscal year ended December 31, 2014

(1)

Includes all net sales and other revenue, including in-store sales, digital and fuel sales.

(2)

For purposes of the Forecast, the term “Adjusted EBITDA” is defined as earnings before interest, taxes, depreciation and amortization, further adjusted to eliminate the effects of items management does not consider in assessing the Company’s core performance. Adjusted EBITDA is a financial measure that is not defined under or calculated in accordance with GAAP.

(3)

For purposes of the Forecast, unlevered free cash flow is defined as net operating profit after tax, plus non-cash items (except equity-based compensation expense), less changes in net working capital, less capital expenditures net of any cash proceeds from the sale of assets. Unlevered free cash flow is a financial measure that is not defined under or calculated in accordance with GAAP.

(4)

The Forecast reflected actual Revenue, Adjusted EBITDA and Unlevered Free Cash Flow for the first two quarters of fiscal 2022.

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SpinCo will require overhead costs for corporate functions, including, but not limited to, accounting, auditing, corporate affairs, external reporting, human resources, information technology, legal services, risk management, tax administration, treasury, and certain governance functions (including internal audit and compliance with the Sarbanes-Oxley Act). The cost of these corporate functions is difficult to estimate and the estimates provided by senior management reflect a number of assumptions on costs that may differ from the actual costs incurred by SpinCo.

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Historically, the stores in SpinCo shared economies of scale in costs, employees, vendor relationships and customer relationships that SpinCo may not enjoy to the same extent operating as a standalone company. If SpinCo cannot enjoy certain economies of scale, the SpinCo Estimates could differ from actual results.

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Like the Company, SpinCo will need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements. The cost of capital for SpinCo’s business may be higher than the Company’s historical cost of capital, which could impact the SpinCo Estimates in unforeseen ways.

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The federal and local tax rate for SpinCo may differ materially from the tax rates applicable to the Company due to SpinCo’s size, location and operations.

(1)

For purposes of the SpinCo Estimates, the term “Four-Wall EBITDA” is defined as store-level retail earnings before interest, taxes, depreciation and amortization, excluding allocated overhead costs and other non-cash adjustments. Four-Wall EBITDA is a financial measure that is not defined under or calculated in accordance with GAAP.

(2)

For purposes of the SpinCo Estimates, unlevered free cash flow is defined as net operating profit after tax, plus non-cash items (except equity-based compensation expense), less changes in net working capital, less capital expenditures. Unlevered free cash flow is a financial measure that is not defined under or calculated in accordance with GAAP.

(1)

Value of the stores was based on recent appraisals conducted by Cushman.

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At the Effective Time, each outstanding Company RSU shall, automatically and without any required action on the part of the holder thereof, cease to represent a restricted stock unit denominated in shares of Common Stock and shall be converted into a restricted stock unit denominated in Kroger common shares (each, a “Kroger RSU”).

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The number of Kroger common shares subject to each such Kroger RSU shall be equal to the product (rounded to the nearest whole number) of (x) the number of shares of Common Stock subject to such Company RSU immediately prior to the Effective Time multiplied by (y) the Equity Exchange Ratio.

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Except as specifically provided above, following the Effective Time, each such Kroger RSU shall continue to be governed by the same terms and conditions (including vesting and forfeiture terms) as were applicable to the corresponding Company RSU immediately prior to the Effective Time, including by giving effect to the fact that the Closing will constitute a “change in control” under the Company Equity Plans.

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Dividend equivalent rights (“DERs”) associated with Company RSUs that are denominated in Company RSUs shall be treated consistent with the foregoing. Company RSUs that were previously granted without DERs (generally, those granted prior to May 12, 2021) are being amended to provide for cash-denominated DERs with respect to the Pre-Closing Dividend only. The cash-denominated

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At the Effective Time, each outstanding Company PSU shall, automatically and without any required action on the part of the holder thereof, cease to represent a performance stock unit denominated in shares of Common Stock and shall be converted into a Kroger RSU. For the avoidance of doubt, any Company PSUs that relate to a performance period ending prior to the Effective Time that become earned, but that are not settled prior to the Effective Time, will also be converted to Kroger RSUs.

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The number of Kroger common shares subject to each such Kroger RSU shall be equal to the product (rounded to the nearest whole number) of (x) the sum of (i) the number of shares of Common Stock subject to such Company PSU immediately prior to the Effective Time that are subject to the performance period in which the Effective Time occurs, based on the greater of target performance and actual performance as determined by the Board (or, if appropriate, any committee thereof administering the Albertsons Companies, Inc. Restricted Stock Unit Plan (f/k/a Albertsons Companies, Inc. Phantom Unit Plan) (the “Restricted Stock Unit Plan”) and Albertsons Companies, Inc. 2020 Omnibus Incentive Plan (the “2020 Omnibus Plan” and together with the Restricted Stock Unit Plan, the “Company Equity Plans”) in accordance with the terms of the Company Equity Plans and applicable award agreements, plus (ii) the number of shares of Common Stock subject to such Company PSU immediately prior to the Effective Time that are subject to any performance period that begins after the Effective Time, based on target performance, multiplied by (y) the Equity Exchange Ratio.

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Except as specifically provided above, following the Effective Time, each such Kroger RSU shall continue to be governed by the same terms and conditions (including vesting and forfeiture terms) as were applicable to the corresponding Company PSU immediately prior to the Effective Time, including by giving effect to the fact that the Closing will constitute a “change in control” under the Company Equity Plans, but shall no longer be subject to any performance-based vesting conditions.

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DERs associated with Company PSUs that are denominated in Company PSUs shall be treated consistent with the foregoing. Company PSUs that were previously granted without DERs (generally, those granted prior to May 12, 2021 and any Company PSUs that were subject to an open or future performance period as of the date that the Pre-Closing Dividend is paid) are being amended to provide for cash-denominated DERs with respect to the Pre-Closing Dividend only. The cash-denominated DERs are payable in cash, without interest, and following the Effective Time shall be provided for in the corresponding Kroger RSU and shall continue to be governed by the same terms and conditions (including vesting and forfeiture terms as well as performance adjustments for open years) as were applicable to the corresponding Company PSU immediately prior to the Effective Time. Performance in the year in which the Effective Time occurs is deemed to be the better of target performance and actual performance (as determined by the Company) and performance in future performance periods is deemed to be at target performance.

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At the Effective Time, each outstanding Company Restricted Stock Award shall, automatically and without any required action on the part of the holder thereof, cease to represent a restricted share of Common Stock and shall be converted into a number of restricted Kroger common shares (each, a “Kroger Restricted Stock Award”) equal to the product (rounded to the nearest whole number) of the Equity Exchange Ratio multiplied by the number of shares of Common Stock subject to such Company Restricted Stock Award immediately prior to the Effective Time.

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Except as specifically provided above, following the Effective Time, each such Kroger Restricted Stock Award shall continue to be governed by the same terms and conditions (including vesting and forfeiture terms) as were applicable to the corresponding Company Restricted Stock Award immediately prior to the Effective Time, including by giving effect to the fact that the Closing will constitute a “change in control” under the Company Equity Plans, but shall no longer be subject to any performance-based vesting conditions.

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DERs associated with Company Restricted Stock Awards that are denominated in Company Restricted Stock Awards shall be treated consistent with the foregoing and such rights denominated in cash shall be provided for in the Kroger Restricted Stock Award and shall continue to be governed by the same terms and conditions (including vesting and forfeiture terms) as were applicable to the corresponding Company Restricted Stock Award immediately prior to the Effective Time. No cash-denominated DERs have been granted with respect to Company Restricted Stock Awards.

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The closing date of the Merger is February 24, 2024, the last day of the Company’s 2023 fiscal year;

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Each unearned Company PSU is settled at target performance;

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No additional Company Equity Awards are granted to any director or executive officer of the Company from October 13, 2022 to February 23, 2024; and

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The per share price of a share of Common Stock is $34.10 per share without adjustments for the Pre-Closing Dividend or the Distribution of SpinCo, and accordingly, such DERs are not included.

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Upon a termination by the Company without “Cause” or a voluntary resignation for “Good Reason” (as defined below in “—Termination Benefits—Executive Officer Employment Agreements—Agreement with Mr. Sankaran”), Mr. Sankaran would be entitled to receive: (i) any earned but unpaid bonus with respect to any completed performance period prior to the date of termination, (ii) a lump sum payment in an amount equal to 200% of the sum of Mr. Sankaran’s Base Salary plus Target Bonus (as such terms are defined in the employment agreement), (iii) a pro-rata bonus for the fiscal year of termination, based on actual performance (and paid at year-end when such amounts are paid to active employees) and (iv) reimbursed COBRA costs for Mr. Sankaran and his dependents for a period of up to eighteen months.

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Upon his death or his termination by the Company due to disability, Mr. Sankaran would be entitled to receive: (i) any earned but unpaid bonus with respect to any completed performance period prior to the date of termination, (ii) a lump sum payment equal to 25% of Mr. Sankaran’s Base Salary then in effect, (iii) a pro-rata bonus for the fiscal year of termination, based on actual performance (and paid at year-end when such amounts are paid to active employees) and (iv) reimbursed COBRA costs for Mr. Sankaran and his dependents for a period of up to eighteen months.

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If Mr. Sankaran’s employment terminates due to the employment agreement not being renewed by the Company, Mr. Sankaran would be entitled to receive: (i) any earned but unpaid bonus with respect to any completed performance period prior to the date of termination, (ii) a lump sum payment in an amount equal to 200% of the sum of Mr. Sankaran’s Base Salary plus Target Bonus and (iii) reimbursed COBRA costs for Mr. Sankaran and his dependents for a period of up to eighteen months.

•

Further, if Mr. Sankaran’s employment terminates due to the Company’s non-renewal of the employment agreement, Mr. Sankaran will become vested in any time-based Company Restricted Stock Awards that would have vested during the thirteen month period following the date of termination.

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Additionally, if Mr. Sankaran’s employment is terminated by the Company without Cause or Mr. Sankaran resigns for Good Reason following a Change in Control (as such term is defined in the employment agreement and award agreements) or within the 180-day period immediately prior to a Change in Control, or if following a Change in Control, Mr. Sankaran’s employment terminates due to his death or disability, Mr. Sankaran will become fully vested in any time-based Company Restricted Stock Awards and any unvested performance-based Company Restricted Stock Awards (to the extent not previously forfeited) as if the performance targets for future fiscal years had been fully achieved.

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Further, with respect to Company Equity Awards granted in the 2022 fiscal year, if, during the 24-month period following a Change in Control (as defined in the Company’s 2020 Omnibus Plan and award agreements) Mr. Sankaran’s employment is terminated (i) due to his death or by the Company due to his Disability, (ii) in a manner that qualifies as an “Early Retirement” or “Normal Retirement” (as such terms are defined in the employment agreement and award agreements), or (iii) by the Company for any reason other than for Cause or if Mr. Sankaran voluntarily resigns for Good Reason, then Mr. Sankaran shall become immediately vested in any portion of the Company RSUs and the Company PSUs in which he has not yet become vested, to the extent not previously forfeited or cancelled.

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“Cause” means, with respect to conduct during Mr. Sankaran’s employment with the Company, whether or not committed during the Term (as defined in the employment agreement), (i) conviction of a felony by Mr. Sankaran; (ii) acts of intentional dishonesty by Mr. Sankaran resulting or intending to result in personal gain or enrichment at the expense of the Company Group (as defined in the employment agreement), other than with respect to (x) de minimis amounts and (y) good faith expense account disputes; (iii) Mr. Sankaran’s material breach of Mr. Sankaran’s obligations under the employment agreement; (iv) conduct by Mr. Sankaran in connection with Mr. Sankaran’s duties thereunder that is fraudulent, unlawful or grossly negligent; (v) engaging in personal conduct by Mr. Sankaran (including but not limited to employee harassment or discrimination, or the use or possession at work of any illegal controlled substance) which seriously discredits or damages the Company Group; (vi) contravention of specific lawful direction from the Board; or (vii) material breach of Mr. Sankaran’s covenants set forth in the employment agreement before termination of employment. Further, Mr. Sankaran shall have fifteen business days after notice from the Company to cure the deficiency leading to the Cause determination (except with respect to (i) above), if curable. A termination for “Cause” shall be effective immediately (or on such other date set forth by the Company).

•

“Good Reason” means the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause, for such termination exists or has occurred) without Mr. Sankaran’s consent (i) a material diminution in Mr. Sankaran’s title, duties, reporting lines or responsibilities as set forth in the employment agreement; (ii) a reduction in Mr. Sankaran’s Base Salary or Target Bonus, provided that, the Company may at any time prior to a Change in Control reduce Mr. Sankaran’s Base Salary or Target Bonus if such reduction is consistent with an “across the board” reduction for all senior executives of the Company and is undertaken in the Board’s reasonable business judgment, acting in good faith, and engaging in fair dealing with Mr. Sankaran, provided, further that the amount of severance pay shall be determined by the Base Salary and Target Bonus of Mr. Sankaran before giving effect to any such reduction; (iii) relocation of Mr. Sankaran’s principal location of work to any

•

Upon a termination by the Company without “Cause” or a voluntary resignation for “Good Reason” (as defined below in “—Termination Benefits—Executive Officer Employment Agreements—Agreement with Ms. McCollam”), Ms. McCollam would be entitled to receive (i) a lump sum payment in an amount equal to 200% of the sum of her Base Salary plus Target Bonus (as such terms are defined in the employment agreement), (ii) a pro-rata bonus for the fiscal year of termination, based on actual performance (and paid at year-end when such amounts are paid to active employees) and (iii) reimbursed COBRA costs for Ms. McCollam and her dependents for a period of up to eighteen months.

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Upon her death or her termination by the Company due to disability, Ms. McCollam would be entitled to receive: (i) a pro-rata bonus for the fiscal year of termination, based on actual performance (and paid at year-end when such amounts are paid to active employees), (ii) any earned but unpaid bonus with respect to any completed performance period prior to the date of termination, (iii) a lump sum payment in an amount equal to 25% of Ms. McCollam’s Base Salary, and (iv) reimbursed COBRA costs for Ms. McCollam and her dependents for a period of up to eighteen months.

•

Further, if Ms. McCollam’s employment terminates due to the employment agreement not being renewed by the Company, Ms. McCollam would be entitled to receive: (i) payment for Accrued Benefits (as defined in the employment agreements), including any earned but unpaid bonus with respect to any completed performance period prior to the date of termination, (ii) a lump sum payment in an amount equal to 200% of the sum of Ms. McCollam’s Base Salary plus Target Bonus, and (iii) reimbursed COBRA costs for Ms. McCollam and her dependents for a period of up to eighteen months.

•

Additionally, if, during the 24-month period following a Change in Control (as defined in the Company’s 2020 Omnibus Plan and award agreements) Ms. McCollam’s employment is terminated (i) due to her death or by the Company due to her Disability, (ii) in a manner that qualifies as an “Early Retirement” or “Normal Retirement” (as such terms are defined in the employment agreement and award agreements), (iii) by the Company for any reason other than for Cause or (iv) with respect to Company Equity Awards granted in the 2022 fiscal year, if Ms. McCollam voluntarily resigns for Good Reason, then Ms. McCollam shall become immediately vested in any portion of the Company RSUs and the Company PSUs in which she has not yet become vested, to the extent not previously forfeited or cancelled.

•

“Cause” means, as determined by the Board (or its designee), with respect to conduct during Ms. McCollam’s employment with the Company, whether or not committed during the Term, (i) conviction of a felony by Ms. McCollam; (ii) acts of intentional dishonesty by Ms. McCollam resulting or intending to result in personal gain or enrichment at the expense of the Company, its subsidiaries or its affiliates; (iii) Ms. McCollam’s material breach of Ms. McCollam’s obligations under the employment agreement; (iv) conduct by Ms. McCollam in connection with Ms. McCollam’s duties thereunder that is fraudulent, unlawful or grossly negligent; (v) engaging in personal conduct by Ms. McCollam (including but not limited to employee harassment or discrimination, or the use or possession at work of any illegal controlled substance) which seriously discredits or damages the Company, its subsidiaries or its affiliates; (vi) contravention of specific lawful direction from the Board or (vii) breach of Ms. McCollam’s covenants set forth in the employment agreement before termination

•

“Good Reason” means the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause, for such termination exists or has occurred) without Ms. McCollam’s consent (i) a material diminution in Ms. McCollam’s title, duties, reporting lines, or responsibilities as set forth in the employment agreement; (ii) a reduction in Ms. McCollam’s Base Salary or Target Bonus, provided that, the Company may at any time prior to a Change in Control reduce Ms. McCollam’s Base Salary or Target Bonus if such reduction is consistent with an “across the board” reduction for all senior executives of the Company and is undertaken by the Company’s Compensation Committee or the Company Board, provided, further that the amount of severance pay shall be determined by the Base Salary and Target Bonus of Ms. McCollam before giving effect to any such reduction; (iii) relocation of Ms. McCollam’s principal location of work to any location that is in excess of fifty miles from Ms. McCollam’s principal location of work as of the Start Date (as defined in the employment agreement); or (iv) any other material breach of a material provision of the employment agreement by the Company (other than a provision that is covered by clause (i), (ii) or (iii) above. Ms. McCollam may not terminate employment for Good Reason unless and until Ms. McCollam provides the Company with at least thirty days prior written notice of her intent to terminate for Good Reason, in which Ms. McCollam cites the applicable provision of the employment agreement, and the Company fails to take reasonable action to remedy the alleged cause for Good Reason within such thirty day notice period, and Ms. McCollam terminates employment within three months following the initial existence of such condition.

•

Upon a termination by the Company without “Cause” or a voluntary resignation for “Good Reason” (as defined below in “—Termination Benefits—Executive Officer Employment Agreements— Agreements with Mr. Dhanda, Ms. Morris and Other Executive Officers”), each such executive officer would be entitled to receive: (i) a lump sum payment in an amount equal to 200% of the sum of the executive officer’s Base Salary and Target Bonus, (ii) a pro-rata bonus for the fiscal year of termination, based on actual performance (and paid at year-end when such amounts are paid to active employees) and (iii) reimbursed COBRA costs for the executive officer and the executive officer’s dependents for a period of up to eighteen months.

•

Upon such executive officer’s death or his or her termination by the Company due to disability, each such executive officer would be entitled to receive: (i) payment for Accrued Benefits (as defined in the respective employment agreements), (ii) a pro-rata bonus for the fiscal year of termination, based on actual performance (and paid at year-end when such amounts are paid to active employees), and (iii) a lump sum payment equal to the earned but unpaid portion of any bonus earned in respect of any performance period that is completed prior to such executive officer’s death or disability.

•

Further, upon a termination by the Company during the 24-month period following a Change in Control (as defined in the Company’s 2020 Omnibus Plan and award agreements) (i) due to death or disability, (ii) in a manner that qualifies as an “Early Retirement” or “Normal Retirement” (as such terms are defined in the respective employment agreements and award agreements), (iii) by the Company for any reason other than for Cause or (iv) with respect to Company Equity Awards granted in the 2022 fiscal year, if such executive officer voluntarily resigns for Good Reason, then the executive officer shall become immediately vested in any portion of the Company RSUs and the Company PSUs in which such executive officer has not yet become vested, to the extent not previously forfeited or cancelled.

•

“Cause” means, (i) the executive officer has been convicted of a felony; (ii) acts of intentional dishonesty by the executive officer resulting or intending to result in personal gain or enrichment at the expense of the Company, its subsidiaries or its affiliates; (iii) the executive officer’s material breach of his or her obligations under the employment agreement; (iv) conduct by the executive officer in connection with his or her duties that is fraudulent, unlawful or grossly negligent; (v) personal conduct by the executive officer which would reasonably be expected to seriously discredit or damage the Company, its subsidiaries or its affiliates (including, but not limited, to employee harassment or discrimination under the Company’s policies, or the use or possession at work of any illegal controlled substance); (vi) the executive officer’s contravention of specific lawful direction from the Board; or (vii) breach by the executive officer of the covenants set forth in the employment agreement before termination of employment. The existence of a condition constituting “Cause” shall be determined exclusively by the Board or its designee. The executive officer shall not be deemed to have been terminated for Cause unless and until the executive officer has been given written notice detailing the specific Cause event and a period of fifteen business days following receipt of such notice from the Company to cure the deficiency leading to the Cause determination (except with respect to (i) above), if curable. Any act, or failure to act, based upon and performed in accordance with authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the executive officer in good faith and in the best interest of the Company.

•

“Good Reason” means, the occurrence of one or more of the following without the respective executive officer’s prior written consent: (i) a material reduction in such executive officer’s Base Salary or Target Bonus opportunity, unless such decrease is part of a temporary, uniform reduction in salary for all executive officers of the Company that is undertaken in the Board’s reasonable business judgment, based on the Company’s financial performance or a reasonably anticipated economic downturn; (ii) relocation of such executive officer’s principal location of work to any location that is in excess of thirty miles from such executive officer’s principal work location as of the effective date of his or her employment agreement; or (iii) a material diminution in such executive officer’s authority, responsibilities or duties. A resignation by such executive officer shall not be treated as for Good Reason unless: (a) the executive officer provides written notice to the Company of the circumstances(s) giving rise to a Good Reason condition within sixty days of the executive officer having knowledge of the initial existence of such circumstance(s), (b) the Company fails to cure the applicable circumstance(s) within thirty days after receipt of such written notice, and (c) the executive officer terminates employment with the Company no later than thirty days following the end of such cure period.

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Dealers or brokers in securities or non-U.S. currencies;

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Traders subject to a mark-to-market method of tax accounting with respect to the Common Stock;

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Persons holding Common Stock as part of a straddle, hedging transaction, conversion transaction, integrated transaction or constructive sale transaction;

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Persons whose functional currency is not the U.S. dollar;

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Partnerships or other entities classified as partnerships or pass through entities for U.S. federal income tax purposes;

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Persons who acquired Common Stock through the exercise of employee stock options or otherwise as compensation;

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Foreign pension funds and their affiliates;

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A “controlled foreign corporation,” “passive foreign investment company,” or corporation that accumulates earnings to avoid U.S. federal income tax;

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Certain financial institutions (including banks) and insurance companies;

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Mutual funds;

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Regulated investments companies;

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Real estate investment trusts;

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Holders of Common Stock that demand appraisal rights;

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Tax-exempt entities;

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Governmental agencies or instrumentalities;

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Persons that hold Common Stock through an “individual retirement account,” “Roth IRA,” or other tax-deferred account;

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Persons required to accelerate the recognition of any item of gross income as a result of such income being recognized on an applicable financial statement;

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Persons subject to the United States alternative minimum tax;

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Stockholders who hold shares of Company stock that may constitute Section 306 stock;

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United States expatriates and former long-term residents; or

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Stockholders who will actually or constructively (under the rules of Section 318 of the Code) own any stock of Kroger following the Merger.

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A citizen or resident of the United States;

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A corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

•

An estate the income of which is subject to U.S. federal income taxation regardless of its source; or

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A trust (i) that is subject to the primary supervision of a court within the United States and all the substantial decisions of which are controlled by one or more U.S. persons or (ii) that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

•

The gain, if any, on such shares is effectively connected with a trade or business of the non-U.S. holder in the United States (and if required by an applicable income tax treaty, is attributable to the non-U.S. holder’s permanent establishment or fixed base in the United States);

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The non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the Merger and certain other conditions are met; or

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The non-U.S. holder owned, directly or under certain constructive ownership rules of the Code, more than 5% of the Common Stock at any time during the five-year period preceding the Merger, and the Company is or has been a “United States real property holding corporation” (“USRPHC”) for U.S. federal income tax purposes at any time during the shorter of the five-year period preceding the Merger or the period that the non-U.S. holder held Common Stock.

•

the Company’s and its subsidiaries’ organization, good standing and qualification and similar corporate matters;

•

the Company’s and its subsidiaries’ capital structure and indebtedness;

•

the Company’s subsidiaries and equity interests;

•

the Company’s corporate power and authority to execute and deliver the Merger Agreement, to consummate the Merger and the other transactions contemplated by the Merger Agreement and to comply with the terms of the Merger Agreement;

•

the enforceability of the Merger Agreement against the Company;

•

the Board’s approval of the Merger Agreement;

•

the Board’s recommendation that Company stockholders vote to adopt the Merger Agreement;

•

the required vote of Company stockholders by written consent;

•

the absence of any violation of the Company’s charter documents, certain contracts or laws or judgments to which the Company is subject as a result of its execution and delivery of the Merger Agreement and its consummation of the Merger;

•

the consents, approvals, licenses and other similar actions with respect to governmental entities as a result of the Company’s execution and delivery of the Merger Agreement and its consummation of the Merger;

•

the filing of required reports and other documents by the Company with the SEC, the compliance of such reports and other documents with the applicable requirements of the federal securities laws, rules and regulations, the compliance of the Company’s financial statements included in such reports and other documents with applicable accounting requirements and the rules and regulations of the SEC, the absence of any outstanding or unresolved comments received by the Company from the SEC and the absence of certain types of undisclosed liabilities;

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compliance with the Sarbanes-Oxley Act of 2002;

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the preparation of the Company’s financial statements included in its reports and other documents filed with the SEC in accordance with GAAP;

•

the maintenance by the Company of internal control over financial reporting and disclosure controls and procedures designed as required by federal securities laws;

•

the accuracy of the information supplied by the Company in connection with this information statement and, to the extent applicable, the SpinCo registration statement;

•

the absence, since February 26, 2022 of any Company Material Adverse Effect (as defined in the Merger Agreement);

•

the conduct of the Company and its subsidiaries respective businesses in the ordinary course consistent in all material respects with past practice, in each case from February 26, 2022 to the date of the Merger Agreement;

•

the absence, in each case from February 26, 2022 to the date of the Merger Agreement, of:

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certain dividends or other distributions on the Company’s or its subsidiaries’ capital stock;

•

any splits, combinations or reclassifications of the Company or its subsidiaries’ capital stock or any issuances or authorization of any issuance of any other securities in respect of shares of Company capital stock;

•

any material change in accounting methods, principles or practices by the Company or its subsidiaries, except as required by GAAP or applicable law; or

•

any other action that, if taken after the date of the Merger Agreement, would violate the Company’s covenants under the Merger Agreement related to its conduct of the business, as applicable;

•

tax matters;

•

labor relations and employee benefits matters;

•

title to the Company’s material properties, both real and personal;

•

specified and material contracts;

•

certain pending and threatened litigation;

•

the Company’s compliance with all applicable laws and judgments;

•

the Company’s possession of all permits and other approvals necessary to operate its business as conducted as of the date of the Merger Agreement;

•

environmental matters;

•

the Company’s intellectual property;

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privacy and data security matters;

•

the Company’s insurance policies;

•

the Company’s engagement of, and payment of fees to, brokers, investment bankers and financial advisors, and fees payable by the Company to other advisors in connection with the Merger Agreement and the Merger;

•

the Company’s receipt of a fairness opinion from Goldman Sachs;

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the Company’s receipt of a fairness opinion from Credit Suisse;

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the absence of certain related party transactions;

•

the Company’s compliance with anti-bribery, anti-corruption and anti-money laundering laws;

•

the Company’s compliance with health care laws;

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food safety matters; and

•

the absence of sanctions against the Company.

•

has or would reasonably be expected to have, a material adverse effect on the business, financial condition or results of operations of the Company or its subsidiaries, taken as a whole; or

•

would reasonably be expected to prevent or delay the Closing beyond January 13, 2024 (or a later outside date extended in accordance with the Merger Agreement);

•

changes in general economic, regulatory, political, business, financial, congressional appropriation or market conditions in the United States or elsewhere in the world;

•

changes in the credit, debt, financial or capital markets or in interest or exchange rates, in each case, in the United States or elsewhere in the world;

•

changes in conditions generally affecting the industry in which the Company and its subsidiaries operate, including to changes in governmental entity funding level or program changes;

•

any outbreak of any military conflict, declared or undeclared war, armed hostilities, or acts of foreign or domestic terrorism (including cyber-terrorism);

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any hurricane, flood, tornado, earthquake or other natural disaster or act of God, epidemics, pandemics or contagious disease outbreaks (including COVID-19), weather conditions and other similar force majeure events in the United States or any other country or region in the world (or any worsening of any of the foregoing), including, in each case, the response of governmental entities thereto (including COVID-19 measures);

•

any failure by the Company or any of its subsidiaries to meet any internal or external projections or forecasts, any change in the market price or trading volume of Common Stock or any change in the Company’s credit rating (but excluding, in each case, the underlying causes of such failure or decline, as applicable, unless such underlying causes would otherwise be excepted from the definition);

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the public announcement, pendency or performance of the Merger or the identity of, or any facts or circumstances relating to Kroger, Merger Sub or their respective affiliates, including, in any such case, the impact thereof on relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, investors, licensors, licensees, venture partners or employees (other than, in each case, for purposes of any representations or warranties relating to authority, enforceability, absence of violations or required consents);

•

changes in, including any actions taken to comply with any change in, applicable laws or the interpretation thereof;

•

changes in, including any actions taken to comply with any change in, GAAP or any other applicable accounting standards or the interpretation thereof;

•

any divestment action or other action required to be taken by the Company pursuant to the terms of the Merger Agreement or at the direction of Kroger or Merger Sub or the Company’s failure to take any action that requires consent of Kroger pursuant to relevant covenants under the Merger Agreement to the extent Kroger fails to give its consent thereto, or requires cooperation of Kroger pursuant to relevant covenants under the Merger Agreement to the extent Kroger fails to provide cooperation thereto;

•

any breach of this Agreement by Kroger or Merger Sub;

•

the settlement of certain proceedings outstanding as of the date of the Merger Agreement;

•

any litigation or other proceeding brought in connection with the Merger Agreement or the Merger, including breach of fiduciary duty or inadequate disclosure claims; or

•

any of the matters set forth on the Company’s disclosure letter;

•

their organization, good standing and qualification and similar corporate matters;

•

Merger Sub’s capitalization and lack of prior operating activity;

•

their corporate power and authority to execute and deliver the Merger Agreement, to consummate the Merger and the other transactions contemplated by the Merger Agreement and to comply with the terms of the Merger Agreement;

•

the enforceability of the Merger Agreement against them;

•

approval of the Merger Agreement by the board of directors of Kroger and the board of directors of Merger Sub;

•

the absence of any violation of Kroger’s or Merger Sub’s charter documents, certain contracts or laws and judgments applicable to Kroger or Merger Sub as a result of Kroger’s execution and delivery of the Merger Agreement and the consummation of the Merger;

•

the consents, approvals and other similar actions with respect to governmental entities required as a result of Kroger’s and Merger Sub’s execution and delivery of the Merger Agreement and the consummation of the Merger;

•

Kroger’s financing commitments;

•

the accuracy of information supplied by Kroger and Merger Sub for inclusion in this information statement and, to the extent applicable, the SpinCo Registration Statement;

•

certain pending or threatened litigation;

•

Kroger’s engagement of, and payment of fees to, brokers, investment bankers and financial advisors, and fees payable by them to other advisors in connection with the Merger Agreement and the Merger; and

•

that none of Kroger, Merger Sub or any other Kroger affiliate or associate is a Company “interested stockholder” under Delaware law.

•

issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any additional equity or any additional rights, with certain specified exceptions;

•

split, combine, reclassify or subdivide, directly or indirectly, any of the Company’s equity interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for the Company’s equity interests;

•

repurchase, redeem or otherwise acquire, or permit any of the Company’s subsidiaries to purchase, redeem or otherwise acquire, any membership, partnership or other equity interests or rights, with certain specified exceptions;

•

sell, lease, sublease, license, sublicense, abandon, waive, relinquish, transfer, pledge assign, swap, mortgage or otherwise dispose of or subject to any lien all or any material portion of the Company’s assets, businesses or properties, subject to certain exceptions including for actions in the ordinary course of business consistent with past practice;

•

acquire (including by merger, consolidation, acquisition of stock or assets) or lease any assets or all or any portion of (or interests in) the business or property of any other entity in each case in exchange for the payment or delivery of consideration that is in excess of $10,000,000;

•

merge, consolidate or enter into any other business combination transaction with any person;

•

convert from a limited partnership, limited liability company or corporation, as the case may be, to any other business entity;

•

make or declare dividends or distributions to holders of Common Stock or to any subsidiary, except such dividends pursuant to the Merger Agreement;

•

amend the Company’s or its subsidiaries’ organizational documents;

•

assign, convey, abandon, encumber, transfer, license, sublicense, covenant not to assert, allow to lapse or expire or otherwise dispose of any rights to any material intellectual property, except in the ordinary course of business consistent with past practice;

•

enter into any contract that would, if entered into prior to the date hereof, be a material contract, except in the ordinary course of business consistent with past practice, with certain specified exceptions;

•

modify, amend, terminate or assign, or waive or assign any rights under, any material contract in any material manner or in any manner that would reasonably be expected to prevent or materially delay the consummation of any of the transactions contemplated by the Merger Agreement;

•

waive, release, assign, settle or compromise any proceeding, in each case made or pending by or against the Company or any of its subsidiaries or any of its or their officers and directors in their capacities as such, other than the compromise or settlement of proceedings that (i) involves the payment by the Company or any of its subsidiaries for an amount in excess of insurance proceeds and reserves not to exceed, for any such compromise or settlement individually, $10,000,000 or involves no such payment, (ii) does not impose any injunctive relief that is reasonably likely to be material to the Company and its subsidiaries, taken as a whole, and (iii) does not contain an admission of liability by the Company or any of its representatives in their capacities as such;

•

implement or adopt any material change in the Company’s GAAP accounting principles, practices or methods, other than as may be required by GAAP or regulatory accounting requirements applicable to U.S.-publicly owned business organizations generally;

•

fail to use commercially reasonable efforts to maintain, with financially responsible insurance companies, insurance in such amounts and against such risks and losses substantially as is maintained by the Company at present;

•

(i) make, change or rescind in any material respect any elections relating to taxes, (ii) settle or compromise any material proceeding, audit or controversy relating to taxes, (iii) amend any tax return in any material respect, (iv) enter into any closing agreement with respect to any material tax, (v) surrender any right to claim a material refund, offset, or other reduction in tax liability; (vi) consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment relating to the Company or any of its subsidiaries or (vii) change in any material respect any of its methods of reporting income or deductions for federal income tax purposes, except, in each case, in the ordinary course of business consistent with past practice;

•

grant to any current or former director, officer, employee, contractor or consultant or other service provider (i) any material increase in compensation, bonus, pension, welfare, fringe or other benefits,

•

incur, assume, guarantee, or otherwise become liable for any indebtedness (directly, contingently or otherwise), with specified exceptions;

•

create any lien that is not permitted by the Merger Agreement on any of the Company’s or its subsidiaries’ property;

•

make, commit to make, or authorize any capital expenditures that are in excess of (i) 5% of the individual line items of or (ii) 5% of the aggregate amount of capital expenditures scheduled to be made in, the capital expenditure budget set forth in the disclosure letter for the period indicated therein;

•

enter into any transaction or contract with any of the Company’s affiliates or any other person that would be required to be disclosed by the Company under federal securities laws;

•

authorize, recommend, propose or announce an intention to adopt a plan of complete or partial dissolution or liquidation;

•

sell, lease, sublease, license, assign, transfer or otherwise dispose of any real property, which individually either (i) requires by its terms or is reasonably likely to require the payment or delivery of cash or other consideration by or to the Company or its subsidiaries in an amount having an expected value in excess of $15,000,000 during the Company’s current fiscal year and cannot be cancelled by the Company or its subsidiaries without penalty or further payment without more than ninety days’ notice, with certain specified exceptions or (ii) relates to any real property used by the Company or its subsidiaries as a distribution center or for the manufacture or preparation of food (in each case other than real property used as a grocery store;

•

take any other action that (i) is not prohibited by the above, (ii) does not fall within any of the exceptions set forth above and (iii) individually, or in the aggregate, would, or would reasonably be expected to, prevent materially impede, materially interfere with or materially delay beyond January 13, 2024 (or a later outside date extended in accordance with the Merger Agreement) the consummation of the transactions contemplated by the Merger Agreement (including the Merger); or

•

agree or commit to do any of the above.

•

initiate, solicit or knowingly encourage, or knowingly facilitate the making of, any Company Acquisition Proposal (as described below under the heading “—Covenants—Board Recommendation” beginning on page 84);

•

engage in, continue or otherwise participate in negotiations or discussions with, or furnish any non-public information concerning the Company or its subsidiaries, to any third party in connection with a Company Acquisition Proposal; or

•

enter into any acquisition agreement, letter of intent, agreement in principle or similar agreement with respect to a Company Acquisition Proposal.

•

furnish any information (including non-public information) or access to such information to any third party making a bona fide written Company Acquisition Proposal; and

•

participate or engage in discussions or negotiations with the person or group making such Company Acquisition Proposal (and its representatives) regarding such Company Acquisition Proposal.

•

the unsolicited Company Acquisition Proposal was made after the date of the Merger Agreement and did not result from the Company’s breach of the Merger Agreement;

•

the Board determined in good faith, after consultation with the Company’s financial advisors and outside counsel, that such Company Acquisition Proposal constituted, or could reasonably be expected to lead to, a Company Superior Proposal (as described below);

•

the third party had provided the Company with an executed confidentiality agreement;

•

the furnished non-public information had been previously provided or made available to Kroger, or was provided or made available to Kroger promptly (and in any event no later than 48 hours) after it was furnished to such third party;

•

the Company complied with its obligations to advise Kroger, orally or in writing, promptly and in any event within 48 hours of receipt of:

•

any Company Acquisition Proposal or any inquiry, proposal or request for information that the Company reasonably believed could lead to a Company Acquisition Proposal; and

•

the identity of the third party making the Company Acquisition Proposal, inquiry or request and the material terms and conditions of such Company Acquisition Proposal, inquiry or request (or any material changes thereof); and

•

the Company complied with its obligations to provide to Kroger or its outside counsel promptly (and in any event within 48 hours) upon receipt thereof, copies of all written materials and other material written correspondence sent or provided to the Company and its subsidiaries that described any terms or conditions of any Company Acquisition Proposal.

•

withdraw or modify, amend or qualify in a manner adverse to Kroger, or propose publicly to withdraw or modify, amend or qualify in a manner adverse to Kroger, the recommendation by the Board that Company stockholders adopt the Merger Agreement and approve the Merger (any such withdrawal, modification, amendment or qualification being referred to as a “Company Change in Recommendation”);

•

approve, recommend or declare advisable or propose publicly to approve, recommend or declare advisable, any Company Acquisition Proposal; or

•

approve or recommend, or propose publicly to approve or recommend, or enter into, any acquisition agreement, letter of intent, agreement in principle or similar agreement with respect to a Company Acquisition Proposal.

•

the Board determined in good faith, after consultation with its outside legal counsel, that the failure to do so would reasonably be expected to be inconsistent with the Board’s fiduciary duties under applicable law;

•

the Board provided three business days’ prior written notice to Kroger that the Board was prepared to effect a Company Change in Recommendation, which notice would describe the Company Intervening Event in reasonable detail, and, if requested by Kroger in good faith, during such three business day period after providing notice, negotiated in good faith with respect to any revisions to the terms of the Merger Agreement proposed by Kroger so that a Company Change in Recommendation would no longer be necessary; and

•

after giving effect to the revisions contemplate above, if any, after consultation with financial advisors and outside counsel, the Board determined in good faith that failure to make a Company Change in Recommendation in response to the Company Intervening Event would reasonably be expected to be inconsistent with its fiduciary duties under applicable law.

•

satisfying the conditions to closing as promptly as reasonably practicable, as discussed below under “—Conditions to the Closing of the Merger” beginning on page 87;

•

avoiding, eliminating, and resolving any and all impediments under any antitrust law with respect to the Merger and the other transactions pursuant to the Merger Agreement, including without limitation preparing and filing promptly and fully all documentation to effect all necessary filings, notifications, notices, petitions, statements, registrations, submissions of information, applications and other documents;

•

obtaining promptly all consents, clearances, expirations or terminations of waiting periods, registrations, authorizations and other confirmations from any governmental entity or third party necessary, proper or advisable to consummate the Merger; and

•

defending, contesting and resisting any proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the Merger.

•

proposing, negotiating, committing to and effecting by consent decree, hold separate orders, or otherwise, the sale, divestiture, transfer, license, or disposition or hold separate (through the establishment of a trust or otherwise) of such of Kroger’s assets, properties or businesses or of the Company’s assets, properties or businesses to be acquired by it pursuant to the Merger (including the sale, divestiture, transfer, license or disposition to a third party buyer of the assets, properties or business allocable to SpinCo);

•

the entrance into such other arrangements, as are necessary in order to effect the dissolution of any injunction, temporary restraining order or other order in any suit or proceeding, which would otherwise have the effect of preventing the consummation of the Merger and the other transactions prior to January 13, 2024 (or a later outside date extended in accordance with the Merger Agreement);

•

changing or modifying any course of conduct regarding future operations of Kroger or its subsidiaries or affiliates or the assets, properties, or businesses to be acquired pursuant to the Merger Agreement; or

•

otherwise taking or committing to take any other action that would limit Kroger or its subsidiaries or affiliates’ freedom of action with respect to, or their ability to retain, one or more of their respective operations, divisions, businesses, product lines, customers, assets or rights or interests, or their freedom of action with respect to the assets, properties, or businesses to be acquired pursuant to the Merger Agreement.

•

the adoption of the Merger Agreement by Company stockholders, which occurred on October 18, 2022;

•

the absence of any order, whether preliminary, temporary or permanent, or other action taken by a governmental entity restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the Merger Agreement;

•

the absence of any law in effect making the consummation of the transactions contemplated by the Merger Agreement illegal or otherwise prohibited; and

•

the expiration or termination of any waiting period (or any extension thereof) applicable to the transactions contemplated by the Merger Agreement that is required under the HSR Act, and the expiration or termination of any agreement with any governmental entity not to close the transactions contemplated by the Merger Agreement.

•

Kroger’s and Merger Sub’s representations and warranties contained in the Merger Agreement shall be true and correct as of the date of the Merger Agreement and as of the Closing, except that the accuracy of representations and warranties that by their terms speak as of a different date or dates shall be true and correct as of such date(s);

•

Kroger’s and Merger Sub’s performance of and compliance with, in all material respects, all agreements and covenants required to be performed and complied with by them under the Merger Agreement at or prior to the Effective Time of the Merger; and

•

the Company shall have received a certificate from Kroger, signed by an executive officer of Kroger, confirming that the above conditions have been satisfied.

•

the Company’s representations and warranties contained in the Merger Agreement (including regarding the absence of a Company Material Adverse Effect) shall be true and correct (except, where applicable, the failure of such representations and warranties to be so true and correct would not reasonably be expected to have a material adverse effect) as of the date of the Merger Agreement and as of the Closing (or, if terminated due to Company’s breach, as of the date of such termination), except that the accuracy of representations and warranties that by their terms speak as of a different date or dates shall be true and correct as of such date(s);

•

the Company’s performance of and compliance with, in all material respects, all agreements and covenants required to be performed and complied with by the Company under the Merger Agreement at or prior to the Effective Time of the Merger; and

•

Kroger shall have received a certificate from the Company, signed by its executive officer, confirming that the above conditions have been satisfied.

•

by the Company’s and Kroger’s mutual written consent;

•

by either Kroger or the Company, if:

•

any governmental entity having jurisdiction has issued a final non-appealable order or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger, or any law that permanently makes consummation of the Merger illegal or otherwise prohibited is in effect; provided that such order or law is not primarily due to a breach by the terminating party; and

•

Closing does not occur on or before January 13, 2024 (as may be extended pursuant to the Merger Agreement), but this right to terminate the Merger Agreement will not be available to the Company or Kroger if such party’s action or failure to act (or Merger Sub’s action or failure to act in the case of Kroger) has been a principal cause of or resulted in the failure of the Merger to occur on or before such date and such action or failure to act constitutes a breach of the Merger Agreement;

•

by the Company, if:

•

Kroger or Merger Sub breaches a representation or warranty or fails to perform a covenant or other agreement contained in the Merger Agreement so that the related closing conditions cannot be satisfied and such breach or failure to perform cannot be cured or is not cured by Kroger or Merger Sub by the earlier of (x) January 13, 2024 (or a later outside date extended in accordance with the Merger Agreement) or (y) thirty days after Kroger’s receipt of notice from the Company of such breach; or

•

Kroger or Merger Sub fails to consummate the Merger within three business days following the later of (i) the date on which the Closing should have occurred and (ii) the delivery of confirmation by the Company that all other closing conditions under the Merger Agreement have been satisfied and the Company is ready, willing and able to consummate the Merger; or

•

by Kroger, if:

•

the Company breaches a representation or warranty or fails to perform a covenant or other agreement contained in the Merger Agreement so that the related closing conditions cannot be satisfied and such breach or failure to perform cannot be cured or is not cured by the Company by the earlier of (x) January 13, 2024 (or a later outside date extended in accordance with the Merger Agreement) or (y) thirty days after its receipt of notice from Kroger of such breach;

•

the Company failed to deliver the written consents of Company stockholders adopting the Merger Agreement by 5:01 PM New York City time on October 18, 2022; or

•

prior to the adoption of the Merger Agreement by Company stockholders, the Board shall have effected a Company Change in Recommendation or the Company is in breach in any material respect of its non-solicitation obligations.

•

prior to the termination of the Merger Agreement, a Company Acquisition Proposal is publicly submitted, publicly proposed, publicly disclosed prior to, and not withdrawn prior to, the receipt of the Written Consent, the Merger Agreement is terminated by the Company or Kroger because the Closing does not occur on or before January 13, 2024 (or a later outside date not later than October 13, 2024 to which the termination date is extended in accordance with the Merger Agreement) or for failure to obtain the Written Consent and within twelve months after the Merger Agreement is terminated, the

•

the Merger Agreement is terminated by Kroger for the failure of the Company to deliver the written consents of Company stockholders adopting the Merger Agreement by 5:01 PM New York City time on October 18, 2022; or

•

the Merger Agreement is terminated by Kroger, if, prior to the adoption of the Merger Agreement by Company stockholders, the Board shall have effected a Company Change in Recommendation or the Company is in breach in any material respect of its non-solicitation obligations.

•

Kroger terminates, or the Company terminates, the Merger Agreement because Closing does not occur on or before January 13, 2024 (or a later outside date extended in accordance with the Merger Agreement), and at the time of such termination (i) the closing conditions under the Merger Agreement have been satisfied (except for the failure to be satisfied resulting from an injunction or order entered or issued by a governmental entity under any antitrust law or the adoption, enactment or promulgation by a governmental entity of any antitrust law) and (ii) the applicable waiting period under the HSR Act has not expired or been terminated;

•

Kroger terminates, or the Company terminates, the Merger Agreement as a result of a final non-appealable injunction or order entered or issued by a governmental entity under any antitrust law permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger or the adoption, enactment or promulgation by a governmental entity of any antitrust law that permanently makes consummation of the Merger illegal or otherwise prohibited (provided that such order or law is not primarily due to a breach by the terminating party); or

•

(i) the Company terminates the Merger Agreement because Kroger or Merger Sub fails to consummate the Merger within three business days following the later of the date on which the Closing should have occurred and the delivery of confirmation by the Company that all other closing conditions under the Merger Agreement have been satisfied and the Company is ready, willing and able to consummate the Merger or (ii) the Company or Kroger terminate the Merger Agreement because Closing does not occur on or before January 13, 2024 (or a later outside date extended in accordance with the Merger Agreement) at a time when the Company could have terminated the Merger Agreement pursuant to clause (i) herein or as a result of a final non-appealable injunction or order described in the previous paragraph.

•

each person known by the Company to own beneficially 5% or more of the Company’s outstanding shares of Common Stock;

•

each of the Company’s directors;

•

each of the NEOs; and

•

the Company’s directors and executive officers as a group.

*

Less than 1% of the outstanding shares of Common Stock.

(1)

Based on statements in Schedule 13G filed by the Sponsors on February 16, 2021. Cerberus may be deemed to beneficially own the reported shares of Common Stock and filed the Schedule 13G on behalf of Cerberus Albertsons Incentive LLC (“Cerberus Albertsons”) and Cerberus Iceberg LLC (“Cerberus Iceberg”), each of which are funds managed by Cerberus and/or one or more of its affiliates. Cerberus Albertsons and Cerberus Iceberg are parties to the Stockholders Agreement. Pursuant to the Stockholders Agreement, the Sponsors have agreed to act in concert and vote together on certain matters relating to the Company. As a result, each

(2)

Based on statements in Schedule 13G filed by the Sponsors on February 16, 2021. Klaff Realty may be deemed to beneficially own the reported shares of Common Stock and filed the Schedule 13G on behalf of certain of its affiliates, each of which is a fund managed by Klaff Realty (“Klaff Funds”). The Klaff Funds are parties to the Stockholders Agreement. Klaff Realty and the Klaff Funds do not have a pecuniary interest in the Common Stock held by the other Sponsors.

(3)

Based on statements in Schedule 13G filed by the Sponsors on February 16, 2021. The reported shares consist of 12,515,316 shares of common stock held directly by L-A V ABS, LLC (“L-A V ABS”), 474,065 shares of common stock held directly by Lubert-Adler Real Estate Fund V, L.P. (“L-A RE Fund V”), 5,672,291 shares of common stock held directly by Lubert- Adler Real Estate Fund VI, L.P. (“L-A RE Fund VI”), 1,608,363 shares of common stock held directly by Lubert-Adler Real Estate Fund VI-A, L.P. (“L-A RE Fund VI-A”), 4,314,996 shares of common stock held directly by Lubert-Adler Real Estate Fund VI-B, L.P. (“L-A RE Fund VI-B”), 33,157,624 shares of common stock held directly by L-A Saturn Acquisition, L.P. (“L-A Saturn”), and 386,099 shares of common stock held directly by L-A Asset Management Services, L.P. (“L-A Asset Management Services”). L-A V ABS is managed by its members, Dean Adler and Gerald Ronon, who can be removed and replaced by L-A RE Fund V, the controlling member of L-A V ABS, with the consent of ABS Opportunities, LLC. Lubert-Adler Group V, L.P. (“L-A Group V”) is the general partner of L-A RE Fund V, and Lubert-Adler Group V, LLC (“L-A Group V LLC”) is the general partner of L-A Group V. Lubert-Adler Group VI, L.P. (“L-A Group VI”) is the general partner of L-A RE Fund VI and L-A RE Fund VI-A, and Lubert-Adler Group VI, LLC (“L-A Group VI LLC”) is the general partner of L-A Group VI. Lubert-Adler Group VI-B, L.P. (“L-A Group VI-B”) is the general partner of L-A RE Fund VI-B, and Lubert-Adler Group VI-B, LLC (“L-A Group VI-B LLC”) is the general partner of L-A Group VI-B. L-A Group Saturn, LLC (“L-A Group Saturn”) is the general partner of L-A Saturn. Lubert-Adler GP- West, LLC (“L-A GP-West”) is the general partner of L-A Asset Management Services. Ira M. Lubert and Dean S. Adler are the members of L-A Group V LLC, L-A Group VI LLC, L-A Group VI-B LLC, L-A Group Saturn and L-A GP-West. As a result, each of Mr. Lubert, Mr. Adler, L-A Group V LLC, L-A Group VI LLC, L-A Group VI-B LLC, L-A Group V, L-A Group VI, L-A Group VI-B, L-A Group Saturn and L-A GP-West may be deemed to share beneficial ownership of the shares. Each of the foregoing persons expressly disclaims beneficial ownership of the shares except to the extent of his or its pecuniary interest therein. The address for L-A RE Fund V, L-A RE Fund VI, L-A RE Fund VI-A and L-A RE Fund VI-B, L-A Group V, L-A Group V LLC, L-A Group VI, L-A Group VI LLC, L-A Group VI-B and L-A Group VI-B LLC is 2400 Market Street, Suite 301, Philadelphia, Pennsylvania 19103-3033. The address for L-A Saturn and L-A Group Saturn is The FMC Tower, 2929 Walnut Street, Suite 1530, Philadelphia, Pennsylvania 19104. The address for L-A Asset Management Services and L-A GP-West is 435 Devon Park Drive, Building 500, Wayne, Pennsylvania 19087. The address for L-A V ABS is 171 17th Street NW, Suite 1575, Atlanta, Georgia 30363. The address for Ira Lubert, Dean Adler and Gerald Ronon is 2400 Market Street, Suite 301, Philadelphia, Pennsylvania 19103-3033. Funds affiliated with Lubert-Adler do not have a pecuniary interest in the Common Stock held by the other Sponsors.

(4)

Based on statements in Schedule 13G filed by the Sponsors on February 16, 2021. The reported shares are held by Jubilee ABS Holding LLC (“Jubilee”) which is a party to the Stockholders Agreement. Jubilee does not have a pecuniary interest in the Common Stock held by the other Sponsors.

(5)

Based on statements on Form 4 filed Kimco on October 14, 2022. Kimco is the parent corporation of each of KRSX Merge, LLC and KRS ABS, LLC, parties to the Stockholders Agreement, and has sole voting and dispositive power over (i) 176,811 shares of Common Stock held by KRSX Merge, LLC and (ii) 28,161,294 shares of Common Stock held by KRS ABS, LLC.

(6)

This information is based solely on a Schedule 13D filed by HPS with the SEC on July 9, 2020. Consists of (i) 4,481,017 shares of common stock issuable upon conversion of 77,173.77 shares of Series A preferred stock held by Assured Offshore L.P.; (ii) 1,934,353 shares of common stock issuable upon conversion of 33,314.16 shares of Series A preferred stock held by Mezzanine Partners III, L.P.; (iii) 1,011,721 shares of common stock issuable upon conversion of 17,424.24 shares of Series A preferred stock held by HPS Fund Offshore Subsidiary XI, L.P.; (iv) 784,235 shares of common stock issuable upon conversion of 13,506.40 shares of Series A preferred stock held by AP Mezzanine Partners III, L.P.; (v) 9,674,120 shares of common stock issuable upon conversion of 166,611.33 shares of Series A preferred stock held by MP 2019 Offshore AB Subsidiary, L.P.; (vi) 7,258,000 shares of common stock issuable upon conversion of 125,000.00 shares of Series A preferred stock held by Bronco Co-Invest, L.P.; (vii) 5,050,278 shares of common stock issuable upon conversion of 86,977.79 shares of Series A preferred stock held by MP 2019 Onshore Mezzanine Master, L.P. (viii) 2,052,767 shares of common stock issuable upon conversion of 35,353.54 shares of Series A preferred stock held by HN Co-Invest AIV, L.P.; (ix) 879,669 shares of common stock issuable upon conversion of 15,150.00 shares of Series A preferred stock held by HPS VG Co-Investment Fund, L.P.; and (x) 783,212 shares of common stock issuable upon conversion of 13,488.78 shares of Series A preferred stock held by MP 2019 AP Mezzanine Master, L.P. Assured Offshore L.P., Mezzanine Partners III, L.P., HPS Fund Offshore Subsidiary XI, L.P., AP Mezzanine Partners III, L.P., MP 2019 Offshore AB Subsidiary, L.P., Bronco Co-Invest, L.P., MP 2019 Onshore Mezzanine Master, L.P., HN Co-Invest AIV, L.P, HPS VG Co-Investment Fund, L.P. and MP 2019 AP Mezzanine Master, L.P. are collectively referred to as the “Funds.”

(7)

Includes 645,594 shares of restricted shares held by Mr. Sankaran individually and 1,291,188 shares of common stock held by Sankaran Family Ltd., a Texas limited partnership of which Mr. Sankaran is a limited partner. The address of the partnership is 2430 Victory Park Lane #3203, Dallas, Texas 75219.

(8)

Includes 2,000 shares of common stock held by the Richard and Sharon Allen Trust (the “Allen Trust”). Sharon Allen, as trustee, is deemed to have voting and dispositive power over the securities held by the Allen Trust.

(9)

Certain of the shares are held by The Alan H. Schumacher Declaration of Trust Dated October 19, 2001 (the “Schumacher Trust”). Alan Schumacher, as trustee, is deemed to have voting and dispositive power over the shares held by the Schumacher Trust. The address for the Schumacher Trust is 10 Little Tomaka Way, Ormond Beach, Florida 32174.

•

the Company’s Annual Report on Form 10-K for the fiscal year ended February 26, 2022;

•

the Company’s definitive proxy statement on Schedule 14A for the 2022 annual meeting of stockholders filed with the SEC on June 21, 2022 as supplemented or amended by filings on July 15, 2022 and August 2, 2022;

•

the Company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended June 18, 2022 and September 10, 2022; and

•

the Company’s Current Reports on Form 8-K filed with the SEC on March 29, 2022, April 12, 2022, April 27, 2022, May 27, 2022, June 22, 2022, June 27, 2022, July 15, 2022, August 2, 2022, August 9, 2022, September 9, 2022, October 14, 2022, October 17, 2022, October 19, 2022 and November 4, 2022.