Office Depot 2003 Annual Report Download - page 98

Office Depot 2003 / Proxy Statement 96
The Governance Committee shall be responsible for
assessing the appropriate balance of skills and characteristics
required of Board members. The Board is committed to a diver-
sified membership, in terms of both the individuals involved
and their various experiences and areas of expertise.
6. Director Independence
An “ Independent” Director of the Corporation shall be
one who meets the qualification requirements for being an
independent Director under the corporate governance listing
standards of the NYSE, including the requirement that the
Board must have affirmatively determined that the Director
has no material relationships with the Corporation, either
directly or as a partner, shareholder, or officer of an organiza-
tion that has a relationship with the Corporation. To guide its
determination whether or not a business or charitable relation-
ship between the Corporation and an organization with which
a Director is so affiliated is material, the Board has adopted
the following categorical standards:
•An Independent Director shall have no direct business
relationship with the Corporation other than his or her
position on the Board and its Committees.
•The fact that a Director of the Corporation is employed
by a company or firm with which the Corporation does
business shall not per se disqualify that person from
being deemed Independent, provided that the Director
is not personally involved in making business deci-
sions related to the vendor or customer relationship
with the Corporation and is not directly compensated
based upon the size or nature of the relationship with
the Corporation.
•The fact that a Director of the Corporation is the
holder of five percent (5%) or more of the outstanding
stock (or ownership interest) of a material (involving
$10 million or more in annual sales) vendor or cus-
tomer of the Company shall cause such Director to be
deemed not Independent.
7. Percentage of Independent Directors on Board
Independent Directors shall constitute a majority of
the Board.
8. Chair of the Governance Committee
The Chair of the Governance Committee shall be an
Independent Director.
9. Retirement Age
No Director after having attained the age of 72 years shall
be nominated for re-election or reappointment to the Board,
without the prior approval of the Governance Committee.
10. Directors Who Change Their Present Job
Responsibility
The Governance Committee shall review the continued
appropriateness of Board membership if a Board member has
a material change in employment circumstances and the
affected Director shall be expected to act in accordance with
the Governance Committee’s recommendation. Each Director
shall promptly notify the Chair of the Governance Committee
if he or she changes position or company affiliation.
11. Term Limits
The Board does not mandate term limits for its Directors.
12. Board Compensation
A Director who is also an employee shall not receive
additional compensation for service as a Director. The Comp-
ensation Committee is charged with the responsibility for
reviewing (at least annually) and recommending to the full
Board the form and amounts of compensation and benefits for
non-employee Directors. In making its recommendation, the
Compensation Committee shall seek to fairly compensate
Directors at levels that are competitive with other companies
in the industries in which the Corporation competes and to
align Directors’ interests with the long-term interests of the
Corporation’s shareholders. In its deliberations, the Governance
Committee and the Board shall consider whether the levels of
Director compensation could impair independence and shall
critically evaluate any consulting, charitable contribution or
other potential indirect compensation arrangements.
13. Evaluation of Board
The Board shall be responsible for periodically conduct-
ing a self-evaluation of the Board as a whole. The Governance
Committee shall be responsible for establishing the evaluation
criteria and overseeing the implementation of the process for
such evaluation, which shall be conducted an annual basis.
14. Evaluation of Committees of the Board
As part of its role as the Corporation’s Nominating
Committee, the Governance Committee shall conduct periodic
reviews of each Committee’s contribution to the Corporation.
In its review of the Committees, the Governance Committee
shall review each Committee’s objectives, as stated at the
beginning of each fiscal year, and compare those stated objec-
tives to the results and time expended to achieve such results
at the end of that year. The Governance Committee shall also
consider the results of each such Committee’s self-evaluation
process in determining whether to re-nominate members to
each such Committee.