Derivation of the EME couplingWe derive the low-energy effective Kondo lattice model with EME term starting from an Anderson-type model coupled to phonons; the Kondo term was already derived in Ref. [28]. The key new insight is as follows: the effective Kondo-like coupling that is generated between the Pd-electrons and Cr local moments involves an inter-layer hybridization, t cp,ij between sites i and j. If this coupling were to be affected by the fluctuations associated with the corresponding out-of-plane bond, t cp,ij will be renormalized by the displacement, ϕ