Staples 2002 Annual Report Download - page 21

exercisable on a cumulative basis over four years in four equal annual installments, commencing on the first anniversary
of the date of grant.
The recipients of restricted stock under the Amended and Restated Director Plan own shares of Staples common stock
(which may be issued on a deferred basis) that vest five years from the first day of the fiscal year during which the shares
are granted. Should the recipient cease to be a Director, Staples may at its option repurchase any unvested shares at a price
equal to their original purchase price (if any). Except as otherwise determined by the Board of Directors, all shares of
restricted stock issued under the Amended and Restated Director Plan will be issued without the payment of any cash
purchase price by the recipient.
Report of the Audit Committee of the Board of Directors
The Audit Committee of the Company’s Board of Directors is composed of three members and acts under a written
charter first adopted and approved by the Board of Directors on March 16, 1995 and most recently amended on March 4,
2003. The members of the Audit Committee are independent Directors, as defined by its charter and the rules of the SEC
and NASDAQ.
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial statements and the reporting process, including the systems of
internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements
in the Annual Report on Form 10-K for the fiscal year ended February 1, 2003 with management, which review included
a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments,
and the clarity of disclosures in the financial statements.
The Audit Committee reviewed with Ernst & Young LLP, the Company’s independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting
principles, their judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other
matters as are required to be discussed with the Audit Committee under generally accepted auditing standards. In addition,
the Audit Committee discussed with the independent auditors the auditors’ independence from management and the
Company, including the matters in the written disclosures required by the Independence Standards Board, and considered
the compatibility of non-audit related services provided to the Company by Ernst & Young LLP with the auditors’
independence.
The Audit Committee discussed with the Company’s internal and independent auditors the overall scope and plans for
their respective audits. The Audit Committee meets with the internal and independent auditors, with and without management
present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall
quality of the Company’s financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Company’s
Board of Directors (and the Board has approved) that the Company’s audited financial statements be included in the Annual
Report on Form 10-K for the year ended February 1, 2003 for filing with the SEC.
Audit Committee:
Paul F. Walsh, Chairman
Brenda C. Barnes
Mary Elizabeth Burton
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