Staples 2007 Annual Report Download - page 21

Within 90 days after the beginning of each Plan Year, the Compensation Committee will establish specific
performance objectives for the payment of bonus awards for that Plan Year. The performance objectives for each Plan
Year will be based on one or more of the following measures: sales, earnings per share, return on net assets, return on
equity and customer service levels. These performance objectives are intended to establish the benchmark of success
for Staples. The Compensation Committee may determine that special one-time or extraordinary gains or losses,
including without limitation as a result of certain acquisitions or divestitures and changes in accounting principles,
should or should not be included in determining whether such performance objectives have been met. In addition,
customer service target levels will be based on pre-determined tests of customer service levels, including without
limitation scores on blind test (‘‘mystery’’) shopping, customer comment card statistics, customer relations statistics
(e.g., number of customer complaints), delivery response levels or customer satisfaction surveys conducted by a third
party.
For each Plan Year, a specified percentage of each Target Award will be based upon each of the performance
objectives selected by the Compensation Committee for that Plan Year. For the 2008 Plan Year, the performance
objectives are based on earnings per share, return on net assets and customer service goals. For each of the
performance objectives, a specified percentage of the portion of the Target Award that is based on that particular
performance objective will be paid based on the level of performance achieved. Each performance objective has a
threshold performance level that must be achieved for any of the bonus award to be paid for such objective. No bonus
will be paid under the Incentive Plan for a Plan Year if the minimum earnings per share goal established for such Plan
Year is not achieved, regardless of whether any other performance objective is achieved. If an executive officer dies
before the end of a Plan Year, however, a bonus award based on target performance will be paid within 60 days of the
executive officer’s death.
The maximum bonus award payable to any executive officer for any Plan Year will be $4 million. In addition, the
Compensation Committee presently intends to limit bonus awards to 200% of an executive officer’s Target Award.
Although the total amounts to be paid under the Incentive Plan are not determinable at this time, the table below
shows the 2008 fiscal year Target Awards for, and the threshold, target and maximum bonus amounts payable under,
the Incentive Plan based on current compensation levels.
2008 FISCAL YEAR EXECUTIVE OFFICER INCENTIVE PLAN BENEFITS
2008 Fiscal Year 2008 Fiscal Year Bonus Dollar Value
Target Award
(% of 2008 Base Threshold Target Maximum
Name and Position Salary) ($) ($) ($)
Named Executive Officers
Ronald L. Sargent ............................... 125% 139,000 1,390,000 2,780,000
Chairman & Chief Executive Officer
John J. Mahoney ................................ 75% 50,505 505,050 1,010,100
Vice Chairman & Chief Financial Officer
Michael A. Miles, Jr. ............................. 75% 50,505 505,050 1,010,100
President & Chief Operating Officer
Joseph G. Doody ................................ 60% 31,344 313,440 626,880
President, North American Delivery
Demos Parneros ................................. 60% 31,344 313,440 626,880
President, U.S. Retail
All current executive officers, as a group ................... 40% - 125% 329,603 3,296,030 6,592,060
All current directors who are not executive officers, as a group* ... — — — —
All current employees who are not executive officers, as a group* ... — — — —
* Not eligible to participate in the Executive Officer Incentive Plan.
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