Foot Locker 2005 Annual Report Download - page 105

DIRECTORS’ COMPENSATION AND BENEFITS
Non-employee directors receive an annual retainer fee, meeting fees for attendance at each Board
and committee meeting, and a stock option grant. Committee chairs receive an additional retainer fee.
We do not pay any additional compensation to any director who is also an employee of the Company
for service on the Board or any committee.
•Annual Retainer. We pay the directors an annual retainer fee of $80,000, payable one-half in
cash and one-half in shares of our Common Stock under the Foot Locker 2002 Directors Stock
Plan. Directors may elect to receive up to 100 percent of their annual retainer fees, including
committee chair retainer fees, in stock.
The number of shares paid to the directors for their annual retainer fee is determined by dividing
the applicable retainer fee by the average price of a share of our stock on the last business day
preceding the July 1 payment date.
•Committee Chair Retainers. The chair of the Audit Committee receives an additional annual
retainer of $10,000, and the chairs of each of the Compensation and Management Resources
Committee, the Nominating and Corporate Governance Committee, the Finance and Strategic
Planning Committee, and the Retirement Plan Committee receive an additional annual retainer
of $7,500. The committee chair retainers are paid in the same form as the directors’ annual
retainers. No additional annual retainer fee is paid to the chair of the Executive Committee.
•Meeting Fees. We pay a meeting fee of $1,500 to directors for each Board and committee
meeting attended.
•Stock Option Grants. Directors receive a stock option grant on the first business day of each
fiscal year. Directors who are initially elected to the Board after the first day of the fiscal year are
granted a stock option on the date of the first Board meeting that the director attends in the
fiscal year of his or her election. In both cases the number of options granted is calculated by
dividing $50,000 by the average of the high and low prices of a share of the Company’s Common
Stock on the date of grant. The per-share exercise price of each stock option granted may not be
less than the fair market value of a share of Common Stock on the date of grant. Options fully
vest one year following the date of grant. Vested options may remain exercisable for one year
following a director’s termination of service as a director. However, under no circumstances may
an option remain outstanding for more than ten years from its date of grant.
•Lead Director. J. Carter Bacot served as lead director until his death on April 7, 2005. We paid
him an additional cash retainer of $25,000 for his services in this capacity in 2005 and provided
him with an office and administrative support.
•Miscellaneous. Directors and their immediate families are eligible to receive discounts on
purchases of merchandise from our stores, catalogs and Internet sites. The Company reimburses
non-employee directors for their reasonable expenses in attending meetings of the Board and
committees, including their transportation expenses to and from meetings, hotel
accommodations, and meals.
Deferral Election. Non-employee directors may elect under the Foot Locker 2002 Directors Stock
Plan to receive all or a portion of the cash component of their annual retainer (including committee
chair retainers) in the form of deferred stock units or to have these amounts placed in an interest
account. Directors may also elect to receive all or part of the stock component of their annual retainers
in the form of deferred stock units. The interest account is a hypothetical investment account bearing
interest at the rate of 120 percent of the applicable federal long-term rate, compounded annually, and
set as of the first day of each plan year. A stock unit is an accounting equivalent of one share of the
Company’s Common Stock.
The amounts paid to each non-employee director for 2005, including amounts deferred under the
Foot Locker 2002 Directors Stock Plan, and the options granted to each director are reported in the
tables below.
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