Staples 2014 Annual Report Download - page 14

CORPORATE GOVERNANCE
10 STAPLES Notice of Annual Meeting of Stockholders
the director should immediately report the matter to our
General Counsel, who should then report the matter to the
Nominating and Corporate Governance Committee for review
and determination. In the event there is a significant conflict,
the director should resign or the conflict must be resolved.
Additionally, under the Guidelines, any director who wishes to
join the board of directors of another company must provide
written notice to the chairperson of the Nominating and
Corporate Governance Committee. The chair of the Nominating
and Corporate Governance Committee, after consultation with
our General Counsel, will then respond to the director with
a resolution. We also ask each of our executive officers and
directors to fill out questionnaires every year to help enable us
to identify if a potential conflict of interest exists. Our Code of
Ethics, Guidelines and the charters for all the committees of
our Board are available at www.staples.com in the Corporate
Governance section of the Investor Information webpage.
The Nominating and Corporate Governance Committee is
responsible for reviewing, approving or ratifying any related
party transactions. We define “related party transactions”
as transactions with a value of more than $120,000 and in
which (i) Staples and any of our directors, director nominees,
executive officers, 5% shareholders and their immediate family
members are participants, and (ii) such participants have a
direct or indirect material interest. In the course of reviewing
whether or not the participants should be deemed to have
a direct or indirect material interest, the Nominating and
Corporate Governance Committee reviews the presence of
standard prices, rates, or terms consistent with arms-length
dealings with unrelated third parties; the materiality of the
transaction to each party; the reasons for entering into the
transaction; the potential effect of the transaction on the
status of an independent director; and any other factors the
Nominating and Corporate Governance Committee deems
relevant. If a transaction is deemed to be a related party
transaction, the procedures for approval or ratification of such
a transaction are the same as for actual or potential conflicts of
interests involving directors and are set forth in the Guidelines.
For fiscal year 2014:
• We had no related-party transactions.
• There were no transactions that affected our directors’
independence.
• There were no violations or waivers of our Code of Ethics
with respect to our directors or executive officers.
In an effort to provide greater transparency to our shareholders,
we provide the following additional information about sales of
office supply products or related services, such as copying,
branding of promotional products or technology services,
to companies or organizations affiliated with our directors
and our executive officers. All transactions reported with
director-affiliated companies were in the ordinary course of
business, without involvement of the director and on arm’s
length business terms. Below is a list of companies and
institutions with which our independent directors who are
being considered for election were affiliated in fiscal year 2014
and for which we received greater than $120,000 for providing
our supplies or services.
• Bain & Company • CRA International, Inc. • Hormel Foods Corporation
• Becton Dickinson & Company • Harvard University • Progreso Financiero (Oportun)
• CBRE Group, Inc. • Hasbro, Inc. • Sears Holdings Corporation
• Cottage Health Systems, Inc. • Joslin Diabetes Center • TJX Companies, Inc.
The amounts received by us in fiscal year 2014 for the sale
of office supplies and related services to these companies
range from approximately $150,000 to approximately
$18 million and the median amount received from such sales
was approximately $457,000. In each case, the amount was
immaterial to both Staples and the company purchasing the
goods and services. The largest amount of approximately $18
million represents 0.053% of our revenues based on sales for
fiscal year ended January 31, 2015 of approximately $23.1
billion. The largest amount includes $15 million of purchases
under a global corporate service agreement that benefited and
provided for purchases by third parties.
In addition, in 2014 we also paid approximately $730,000 for
employee background check services from a privately held
company for which one of our directors serves as chairman
of the board of directors and approximately $710,000 for
fleet services to WEX Inc., a company for which one of our
directors also serves as a director. We also paid approximately
$13 million for customized delivery boxes to a privately held
company for which one of our directors serves as a director,
approximately $490,000 to Sears Holdings Corporation for
rental payments and approximately $62 million to Google, Inc.
for marketing, IT services and products that we purchase for
re-sale.
In all instances, whether we provided the products/services
or received the services, no director or executive officer
had a direct or indirect material interest in the transaction.
The Nominating and Corporate Governance Committee
determined that none of these transactions were “related party
transactions” and that such transactions would not interfere
with the exercise of independent judgment in carrying out the
responsibilities of a director.
BOARD LEADERSHIP STRUCTURE
Our Board of Directors determines its leadership structure
annually based on a recommendation of the Nominating and
Corporate Governance Committee. In January 2015, we
adopted a policy to require that we have an independent Chair
of the Board, whenever possible. The policy is prospective,
and begins to apply when Ronald L. Sargent, our current
Chairman and CEO, retires or no longer serves as Chairman
of the Board. For this year, the Board determined that it
was appropriate that Mr. Sargent, our CEO, should remain
as Chairman of the Board. Our current Independent Lead
Director Robert Nakasone will be retiring at the end of his
term at the 2015 Annual Meeting. The Board intends for