Office Depot 2003 Annual Report Download - page 52

The following table summarizes information about options outstanding at December 27, 2003.
Options Outstanding Options Exercisable
Weighted Average
Remaining Weighted Weighted
Range of Number Contractual Life Average Number Average
Exercise Prices Outstanding (in years) Exercise Price Exercisable Exercise Price
$4.43–$ 6.64 . . . . . . . . . . . . . . . . 239,260 6.0 $ 6.35 237,260 $ 6.35
6.65– 9.97 . . . . . . . . . . . . . . . . 4,265,349 6.5 8.67 2,619,208 8.37
9.98– 14.96 . . . . . . . . . . . . . . . . 9,064,961 6.0 11.68 4,044,775 11.84
14.97– 22.45 . . . . . . . . . . . . . . . . 14,063,838 5.1 17.79 9,340,408 17.96
22.46– 25.00 . . . . . . . . . . . . . . . . 1,819,530 4.4 24.19 1,813,030 24.19
$ 4.43–$25.00 . . . . . . . . . . . . . . . . 29,452,938 5.5 $14.89 18,054,681 $16.67
OFFICE DEPOT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Employee Stock Purchase Plan
The Employee Stock Purchase Plan, which was approved
by the Company’s stockholders, permits eligible employees to
purchase our common stock at 85% of its fair market value. A
similar plan is available to employees in the United Kingdom.
Effective April 2002, essentially all share needs under this
plan are now satisfied through open market purchases.
However, the Company is authorized to issue up to 1,860,379
shares under this plan.
Retirement Savings Plans
The Office Depot Retirement Savings Plan, which was
approved by the Board of Directors, allows eligible employ-
ees to contribute up to 18% of their salary, commissions and
bonuses, up to $12,000 in 2003, to the plan on a pretax basis
in accordance with the provisions of Section 401(k) of the
Internal Revenue Code. Employer matching contributions,
which are allocated in shares of Office Depot common stock,
are equivalent to 50% of the first 6% of an employee’s contri-
butions and within the limits of the plan. Discretionary match-
ing common stock contributions in addition to the normal
match may be made. 4Sure.com employees participate in the
Office Depot 401(k) plan. The 4Sure.com 401(k) plan will be
merged into the Office Depot 401(k) plan in 2004. The
Company also has a deferred compensation plan that permits
eligible employees who are limited in the amount they can
contribute to the 401(k) plan to alternatively defer compensa-
tion of up to 18% of their salary, commissions and bonuses to
this plan. Employer matching contributions to the deferred
compensation plan are the same as those under our 401(k)
Retirement Savings Plan described above. During 2003, 2002,
and 2001, $10.1 million, $8.4 million and $4.0 million,
respectively, was recorded as compensation expense for
Company contributions to these programs.
Pension Plans
The acquisition of Guilbert included two defined benefit
pension plans that cover a limited number of employees in
Europe. The aggregate information for these foreign plans
from the date of acquisition is as follows:
(Dollars in thousands) 2003
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,404
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,279
Expected return on plan assets. . . . . . . . . . . . . . . (2,276)
Net periodic pension cost. . . . . . . . . . . . . . . . . $ 4,407
Changes in projected benefit obligation:
Obligation at acquisition date . . . . . . . . . . . . . . . $142,313
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,404
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,279
Member contributions . . . . . . . . . . . . . . . . . . . . . 866
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . (544)
Actuarial gain. . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,570)
Currency translation. . . . . . . . . . . . . . . . . . . . . . . 2,798
Obligation at October 31 . . . . . . . . . . . . . . . . . . . 144,546
Changes in plan assets:
Fair value at acquisition date . . . . . . . . . . . . . . . . 78,794
Actual return on plan assets. . . . . . . . . . . . . . . . . 5,009
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,470
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . (544)
Currency translation. . . . . . . . . . . . . . . . . . . . . . . 1,623
Plan assets at October 31 . . . . . . . . . . . . . . . . . . . 88,352
Plan assets less benefit obligation . . . . . . . . . . . . (56,194)
Unrecognized gain . . . . . . . . . . . . . . . . . . . . . . . . (10,549)
Post-valuation contributions. . . . . . . . . . . . . . . . . 690
Currency translation. . . . . . . . . . . . . . . . . . . . . . . (3,923)
Net amount recognized at December 27, 2003 . . $ (69,976)
The net unfunded amount is classified as a non-current
liability in the caption deferred taxes and other long-term lia-
bilities in the Consolidated Balance Sheet at December 27,
2003. Assumptions used in calculating the funded status
included: weighted average discount rate of 5.1%; average
salary increase of 4.35%; and expected average rate of return
on plan assets of 6.25%. The transition provisions of FAS
132, Employers’ Disclosures about Pensions and Other Post-
retirement Benefits, allow foreign plans until fiscal year 2004
to provide information about the anticipated timing of benefit
Office Depot 2003 / Form 10-K 50