Staples 2005 Annual Report Download - page 47

Download and view the complete annual report

Please find page 47 of the 2005 Staples annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

31
The following table shows the potential incremental value transfer to each executive under various employment
related scenarios.
Incremental Value Transfer
Ronald L.
Sargent
John J.
Mahoney
Michael A.
Miles
Basil L.
Anderson
Joseph G.
Doody
If Retirement or Voluntary Termination
Occurs during FY2006 (1)........... $ 1,596,527 $ 6,103,863 $ 106,799 $4,977,009 $ 1,798,962
If Termination for Cause Occurs during
FY2006 (2)........................ $ 1,596,527 $ 633,063 $ 106,799
Retired
effective 3/1/06 $ 1,798,962
If Termination Without Cause Occurs
during FY2006 (3).................. $30,259,998 $ 7,526,103 $1,499,279
Retired
effective 3/1/06 $ 2,528,862
If “Change In Control” Termination
Occurs during FY2006 (4)........... $32,590,999 $ 8,926,491 $7,526,761
Retired
effective 3/1/06 $ 6,688,693
If Death Occurs during FY2006 (5) ..... $ 43,229,998 $ 10,704,291 $ 9,026,761
Retired
effective 3/1/06 $ 8,513,443
(1) Includes a) Supplemental Executive Retirement Plan lump sum payout, and b) “in the money” value on
January 28, 2006 of any accelerated vesting of stock options and restricted stock under the “Rule of 65” (which
requires that the sum of the executive’s age and years of company service equals or exceeds 65, with a minimum
age of 55), under which all restricted stock and stock option grants issued after July 2004 fully vest for eligible
executives.
(2) Includes the Supplemental Executive Retirement Plan lump sum payout only.
(3) Includes a) severance payout, b) Supplemental Executive Retirement Plan lump sum payout, c) “in the money”
value on January 28, 2006 of any accelerated vesting of stock options and restricted stock under the Rule of 65,
under which all restricted stock and stock option grants issued after July 2004 fully vest for eligible executives and
d) per Mr. Sargent’s severance agreement, all unvested equity vests 100%.
(4) Includes a) severance payout, b) “in the money” value of accelerated vesting of stock options and restricted stock
as of January 28, 2006, and c) Supplemental Executive Retirement Plan lump sum payout.
(5) Includes a) “in the money” value of accelerated vesting of stock options and restricted stock as of January 28,
2006, b) Supplemental Executive Retirement Plan lump sum payout, c) life insurance payout, and d) survivor
death benefit payout. The life insurance and survivor death benefit payouts are not liabilities of the Company.
Tax Considerations
Under Section 162(m) of the Internal Revenue Code of 1986, as amended, certain executive compensation in
excess of $1 million paid to a public company’s chief executive officer and four other most highly-paid executives is not
deductible for federal income tax purposes unless the executive compensation is awarded under a performance-based
plan approved by the stockholders. To maintain flexibility in compensating executive officers in a manner designed to
promote varying corporate goals, the Committee has not adopted a policy that all compensation must be deductible.
The Committee intends, to the extent practicable, to preserve deductibility under the Internal Revenue Code of
compensation paid to its Senior Executives while maintaining compensation programs that support attraction and
retention of key executives.