Albertsons Six Sigma Program Cap November 24, 2003

Albertsons Breakthrough Value Program Cap Albertsons requires a Program Cap - to establish maximum potential payment to SSA Cap must not compromise BVS program performance: –Need to focus and drive SSA & Albertsons to breakthrough performance –Cap must be high enough to support and enable us to achieve exceptional results Other program controls must be considered when establishing Program Cap: –Individual Project Cap ($750K maximum payment to SSA for any single project) –Maximum 24 months of benefits used to determine SSA fee –Steering Committee controls project selection Cap Should be a Stretch to Achieve During Engagement Period

Albertsons Breakthrough Value Program Cap Cap Should Be $45M, Or Higher, To Set Stretch Goals $300 $600 SSA Fixed Fee Pricing “Risk” premium & Time-Value of Money “Stretch” Goal $24 $48 SSA Fee ($M) Albertsons Benefits ($M) Based on “Accelerated Deployment” pricing proposal for 24 Month Deployment

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