OfficeMax 2015 Annual Report Download - page 95
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Table of Contents
(In millions)
Balance at December 28, 2013 $ 264 $ 8 $ 272
Other comprehensive loss activity before reclassifications (79) (88) (167)
Amounts reclassified from Accumulated other comprehensive income to Net loss 1 — 1
Tax impact — 1 1
Net year-to-date other comprehensive income (78) (87) (165)
Balance at December 27, 2014 $ 186 $ (79) $ 107
Amounts in parentheses indicate an increase to earnings.
Because of valuation allowances in U.S. and several international taxing jurisdictions, items other than deferred pension amounts generally have little or no
tax impact. The component balances are net of immaterial tax impacts, where applicable.
During 2015, the Company’s Board of Directors adopted, and the shareholders approved, the Office Depot, Inc. 2015 Long-Term Incentive Plan (the “Plan”).
The Plan replaces the Office Depot, Inc. 2007 Long-Term Incentive Plan, as amended, and the 2003 OfficeMax Incentive and Performance Plan (both referred
to as the “Prior Plans”). No additional awards will be granted under the Prior Plans effective April 27, 2015, the effective date of the Plan. The Plan permits
the issuance of stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and other
equity-based incentive awards. Employee share-based awards are generally issued in the first quarter of the year.
Each option to purchase OfficeMax common stock outstanding immediately prior to the effective time of the Merger was converted into an option to
purchase Office Depot common stock, on the same terms and conditions adjusted by the 2.69 exchange ratio provided for in the Merger Agreement. The fair
value of those options was measured using an option pricing model with the following assumptions: risk-free rate 0.42%; expected life 2.34; dividend yield
of zero; expected volatility 52.18% and forfeiture rate of 5%.
Similarly, each previously-existing OfficeMax restricted stock and restricted stock unit outstanding immediately prior to the effective time of the Merger was
converted into an Office Depot restricted stock or restricted stock unit, as appropriate, at the 2.69 exchange ratio. The fair value of these awards was allocated
to consideration and unearned compensation, based on the past and future service conditions. The assumed awards related to the Merger have been
identified, as applicable, in the tables that follow.
The Company’s stock option exercise price for each grant of a stock option shall not be less than 100% of the fair market value of a share of common stock
on the date the option is granted. Options granted under the Prior Plans have vesting periods ranging from one to five years and from one to three years after
the date of grant, provided that the individual is continuously employed with the Company. Following the date of grant, all options granted under the Prior
Plans expire no more than ten years. No stock options were granted in 2015 or 2014.
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