Foot Locker 2005 Annual Report Download - page 103

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Audit Committee Financial Expert. The Board of Directors has determined that the Company has
at least one audit committee financial expert, as defined under the rules of the Securities Exchange Act
of 1934, serving on the Audit Committee. David Y. Schwartz has been designated as the audit
committee financial expert. Mr. Schwartz is independent under the rules of The New York Stock
Exchange and the Securities Exchange Act of 1934.
Finance and Strategic Planning Committee. The committee held three meetings in 2005.
This committee (i) reviews the overall strategic and financial plans of the Company, including
capital expenditure plans, (ii) considers proposed debt or equity issues of the Company, (iii) considers
and makes recommendations to the Board of Directors concerning dividend payments and share
repurchases, and (iv) reviews acquisition and divestiture proposals.
Compensation and Management Resources Committee. The committee held five meetings in 2005.
The committee’s report appears on Page 27.
This committee determines compensation for the Company’s officers and some aspects of
compensation for certain other executives of the Company and its operating divisions. The committee,
or its sub-committee, also administers Foot Locker’s various compensation plans, including the incentive
plans, the equity-based compensation plans, the employees stock purchase plan, and the deferred
compensation plan. Members of the committee are not eligible to participate in any of these plans.
The committee has retained an outside compensation consultant, reporting directly to the
committee, to assist it in evaluating executive compensation and benefits matters. The committee
periodically reviews, and makes recommendations to the Nominating and Corporate Governance
Committee concerning, the form and amount of directors’ compensation. The committee also reviews
and makes recommendations to the Board of Directors regarding executive development and
succession, including for the position of Chief Executive Officer.
Nominating and Corporate Governance Committee. The committee held three meetings in
2005.
This committee has responsibility for overseeing matters of corporate governance affecting the
Company, including developing and recommending criteria and policies relating to service and tenure of
directors. The committee is responsible for collecting the names of potential nominees to the Board,
reviewing the background and qualifications of potential candidates for Board membership, and making
recommendations to the Board for the nomination and election of directors. The committee also
reviews membership on the committees of the Board and makes recommendations with regard to
committee members and chairs. In addition, the committee periodically reviews recommendations from
the Compensation and Management Resources Committee concerning the form and amount of
directors’ compensation.
The Nominating and Corporate Governance Committee may, from time to time, establish criteria
for candidates for Board membership. These criteria may include area of expertise, diversity of
experience, independence, commitment to representing the long-term interests of the Company’s
stakeholders, and other relevant factors, taking into consideration the needs of the Board and the
Company and the mix of expertise and experience among current directors. From time to time the
committee may retain the services of a third party search firm to identify potential director candidates.
The committee will consider nominees to the Board of Directors recommended by shareholders
that comply with the provisions of the Company’s By-Laws and relevant law, regulation, or stock
exchange rules. The procedures for shareholders to follow to propose a potential director candidate are
described on Page 38.
After a potential nominee is identified, the committee chair will review his or her biographical
information and discuss with the other members of the committee whether to request additional
information about the individual or to schedule a meeting with the potential candidate. The committee’s
screening process for director candidates is the same regardless of the source who identified the
potential candidate. The committee’s determination on whether to proceed with a formal evaluation of
a potential candidate is based on the person’s experience and qualifications, as well as the current
composition of the Board and its anticipated future needs.
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