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This excerpt taken from the DKS DEF 14A filed Apr 25, 2005. Independent
Directors. A majority of the Board
members should qualify as independent directors (the
“Independent Directors”) under the requirements
of the New York Stock Exchange (the “NYSE”) and
any other applicable regulatory authority.
The Board shall review annually the relationships that each director has with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). Following such annual review, only those directors who the Board affirmatively determines have no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company) will be considered Independent Directors, subject to any additional qualifications under the listing standards of the NYSE or the roles of any other applicable regulatory authority. A director will be deemed to have no material relationship with the Company and to be an Independent Director as long as: (i) the director is not or was not employed by the Company within the past three years and none of the director’s immediate family members is or was within the past three years an executive officer of the Company; (ii) neither the director nor any of his or her immediate family members receives or has during any 12 month period within the past three years received, more than $100,000 in direct compensation from the Company, other than (a) director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service)), or (b) compensation received by an immediate family member for services rendered as an employee of the Company (other than an executive officer); (iii) (a) neither the director nor an immediate family member of a director is a current partner of the Company’s internal or external auditor (the “Audit Firm”); (b) the director is not a current employee of the Audit Firm; (c) the director does not have a member of his/her immediate family who is a current employee of the Audit Firm and who participates in the Audit Firm’s audit, assurance or tax compliance (but not tax planning) practice; or (d) neither the director nor any member of his or her immediate family who is a former partner or former employee of the Audit Firm within the past three years personally worked on the Company’s audit ; (iv) neither the director nor any of his or her immediate family members is or was within the past three years employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee; (v) the director is not a current employee; nor is a member of his immediate family a current executive officer of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of (a) one million dollars ($1,000,000), or (b) two percent (2%) of such other company’s consolidated gross revenues; (vi) the director is not an executive officer, a partner or owner of more than ten percent of the equity interest of a company (a) to which the Company was indebted at the end of any fiscal quarter during the Company’s most recently completed fiscal year or current fiscal year in an amount in excess of five percent (5%) of Company’s total consolidated assets at the end of such fiscal quarter or (b) which was indebted to the Company, other than in the ordinary course of business or on terms available to the public, at the end of any fiscal quarter during the Company’s most recently completed fiscal year or current fiscal year in an amount in excess of $100,000 at the end of such fiscal quarter; (vii) the director is not an executive officer or partner of any investment banking firm that has performed services for the Company during the most recently completed fiscal year or current fiscal year in the amount of fees paid to the investment banking firm exceeds five percent (5%) of the investment banking firm’s gross revenues for that firm’s most recently completed fiscal year; (viii) the director is not a member or of counsel to a law firm that the Company has retained during the most recently completed fiscal year or current fiscal year in which the amount of fees paid to the law firm exceeds five percent (5%) of the law firm’s gross revenues for that firm’s most recently completed fiscal year; (ix) the director is not affiliated with a tax exempt entity that receives more than five percent (5%) of its total annual contributions from the Company (based on the tax exempt entity’s most recently completed fiscal year); and (x) neither the director nor any of his or her immediate family members (a) was indebted to the Company, other than in the ordinary course of business or on arms-length terms, at the end of any fiscal quarter during the Company’s most recently completed fiscal year or current fiscal year in an amount in excess of 21
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$100,000 at the end of such fiscal quarter or
(b) is during the current fiscal year or was during the
most recently completed fiscal year a party to or otherwise
engaged in a transaction or series of similar transactions with
the Company or its subsidiaries (excluding director fees,
directors expenses, stock options and other director
compensation and the conversion, repurchase and recapitalization
transactions which occurred prior to the Company’s initial
public offering) on terms not available to the public and in
which the amount involved exceeded $100,000. Immediate family
members of a director are the director’s spouse, parents,
children, siblings, mothers-in-law and fathers-in-law, sons and
daughters-in-law, brothers and sisters-in-law, and anyone (other
than domestic employees) who shares such director’s home.
When applying the three year look-back provisions, directors do
not need to consider individuals who are no longer immediate
family members as a result of legal separation or divorce, or
those who have died or become incapacitated.
The basis for any determination that a relationship is not material which does not meet the standards set forth in the immediately preceding paragraph will be explained in the Company’s annual proxy statement. However, no director shall be determined to be an Independent Director who has one of relationships described in clauses (i) through (v) of the preceding paragraph.
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