Staples 2014 Annual Report Download - page 58

EXECUTIVE COMPENSATION AND COMPENSATION DISCUSSION AND ANALYSIS
54 STAPLES Notice of Annual Meeting of Stockholders
Vesting Provisions of Plan-Based Awards
2014 Compensation Program:
Annual Cash Incentive Plan Awards. Payments of annual cash
incentive plan awards under the Executive Officer Incentive
Plan are determined based on achievement of performance
goals and continued service to Staples. In addition, the
following provisions apply:
• Retirement. If a NEO terminates his employment before
the end of a performance period and if the NEO has
satisfied the “Rule of 65” requirements (attainment of age
55 plus years of service to Staples is equal to or greater
than 65), then the NEO is eligible for a prorated award
based on the number of days the NEO was employed
during the plan year. A prorated award will only be paid out
if the Compensation Committee certifies achievement of
the objectives and the payouts at the end of the plan year.
• Death. Upon a NEO’s death before the end of the plan
year, annual cash incentive plan awards will be paid out at
100% of the target award, regardless of the amount that
would have been earned based upon achievement of the
performance goals.
• Disability. If a NEO’s employment is terminated due to
disability before the end of the plan year, then the NEO
is eligible for a prorated award based on the number
of days the NEO was employed during the plan year.
Prorated awards will only be paid out if the Compensation
Committee certifies achievement of the objectives and the
payouts at the end of the plan year.
• Termination of Employment. Other than as described
above, all annual cash incentive plan awards are forfeited
upon termination of employment.
Performance Shares. Performance share awards are earned
based on achievement of performance objectives for each
year of the performance period, but do not fully vest until the
three-year performance period is completed. In addition, the
following provisions apply:
• Termination of Employment by Staples, Retirement or
Resignation. If a NEO is terminated other than for “cause”
(as defined in the award agreement) or the NEO retires
or resigns and the age and years of service requirements
of our Rule of 65 have been satisfied, then the NEO may
be eligible to receive (i) shares earned for completed
fiscal years within the performance period and, for partial
fiscal years during which the named executive officer was
employed by Staples, a pro rata portion based on the
days employed by Staples, as adjusted by (ii) the TSR
multiplier. Prorated awards will only be paid out if the
Compensation Committee certifies achievement of the
objectives and the payouts will be made at the end of the
applicable performance period.
• Termination for “Cause” by Staples. All performance
shares are forfeited if a NEO is terminated for cause.
• Death or Disability. In the event of a NEO’s death or
disability, performance shares will vest and be paid out
at the end of the performance period, to the extent the
performance objectives are met, as if the NEO were
employed on such date.
• Change-in-Control. If, in connection with a change-in-
control, (a) the NEO does not accept employment with
the surviving corporation upon the change-in-control or
(b) within one year following the change-in-control, the
NEO’s employment is terminated without cause (or the
NEO resigns for good reason), the NEO is entitled to
receive the greater of the target number of shares or the
shares earned based on achievement of the performance
objectives and TSR multiplier.
Legacy Compensation Programs:
Long Term Cash Awards. Payments of long term cash awards
under the Amended and Restated Long Term Cash Incentive
Plan are determined based on achievement of performance
goals and continued service to Staples. In addition, the
following provisions apply:
• Retirement or Resignation. If a NEO terminates his
employment before the end of a performance period and
if the NEO has satisfied the Rule of 65 requirements, then
the NEO is eligible for a prorated award based on the
number of days employed during the performance cycle.
For long term cash awards granted prior to fiscal 2013,
a NEO that terminates employment before the end of the
performance cycle that has not met the requirements of
the Rule of 65 is eligible for a prorated long term cash
award based on completed years in the performance
cycle. Prorated awards will only be paid out if the
Committee certifies achievement of the objectives and the
payouts at the end of the applicable performance period.
• Termination of Employment by Staples. If a NEO is
terminated by Staples other than for “cause” (as defined
in the Amended and Restated Long Term Cash Incentive
Plan), the NEO is eligible for a prorated award based on the
number of days employed during the performance cycle.
Prorated awards will only be paid out if the Compensation
Committee certifies achievement of the objectives and the
payouts at the end of the performance cycle.
• Termination for “Cause” by Staples. All long term cash
awards are forfeited if a NEO is terminated for cause.
• Death. Upon a NEO’s death before the end of a
performance period, long term cash awards will be paid
out at 100% of the target award, regardless of the amount
that would have been earned based upon achievement of
the performance goals.