Staples 2003 Annual Report Download - page 86

STAPLES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE J Employee Benefit Plans (Continued)
The following table summarizes information concerning currently outstanding and exercisable options for Staples
common stock:
Options Outstanding Options Exercisable
Weighted
Range of Average Weighted
Exercise Number Remaining Average Number Weighted Average
Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price
$ 0.00 - $ 9.17 5,452,642 3.53 $ 7.08 5,452,642 $ 7.08
$ 9.47 - $14.06 8,515,510 6.43 $12.38 6,368,403 $11.98
$14.08 - $14.62 6,171,206 8.41 $14.61 2,254,573 $14.61
$14.69 - $15.38 7,631,461 7.55 $15.17 4,483,630 $15.18
$15.38 - $15.94 8,117,031 9.46 $15.92 109,658 $15.66
$15.99 - $20.03 2,584,603 8.45 $18.46 699,051 $17.63
$20.08 - $20.08 7,503,821 5.41 $20.08 6,853,571 $20.08
$20.19 - $33.56 5,699,242 6.38 $28.01 5,112,483 $28.62
$ 0.00 - $33.56 51,675,516 6.95 $16.20 31,334,011 $16.40
The number of exercisable shares were 31.3 million shares of Staples Stock at February 1, 2003, 27.1 million shares
of Staples Stock at February 2, 2002 and 18.1 million shares of Staples RD Stock and 7.9 million shares of Staples.com
Stock at February 3, 2001.
On February 3, 2002, the Company issued 300,000 shares of restricted stock with a weighted average fair market
value of $17.93 per share. The shares are restricted in that they are not transferable (i.e., they may not be sold) until they
vest, which is upon the earlier of January 31, 2004 or a change in control of the Company. In connection with the
issuance of the restricted stock, Staples included $2.7 million in compensation expense in fiscal year 2002.
Performance Accelerated Restricted Stock (‘‘PARS’’)
PARS are shares of Staples common stock granted under the Company’s Equity Incentive Plan and Director Stock
Option Plan to employees and non-employee directors without cost to the employee or director. The shares, however,
are restricted in that they are not transferable (i.e., they may not be sold) by the employee or director until they vest,
generally after the end of five years. Such vesting date may accelerate if Staples achieves certain compound annual
earnings per share growth over a certain number of interim years. If the employee leaves Staples, or the director ceases
to serve as a director of Staples, prior to the vesting date for any reason, the PARS shares will be forfeited by the
employee or director, as the case may be, and will be returned to Staples. Once the PARS have vested, they become
unrestricted and may be transferred and sold.
As of February 1, 2003, Staples had 835,000, 770,000 and 540,000 shares of Staples common stock PARS that were
issued during fiscal years 2002, 2001 and 2000, respectively. Staples common stock PARS issued in fiscal year 2002 have a
weighted-average fair market value of $13.55 and initially vest on February 1, 2007 or will accelerate on May 1, 2004,
2005 or 2006. Staples common stock PARS issued in fiscal year 2001 have a weighted-average fair market value of $13.65
and will vest on May 1, 2003 as a result of Staples achieving its target earnings per share growth for the fiscal year ended
February 1, 2003. Staples common stock PARS issued in fiscal year 2000 have a weighted-average fair market value of
$14.19 and initially vest on February 1, 2005 or will accelerate on May 1, 2004. Staples common stock PARS issued in
fiscal year 1999 have a weighted average fair market value of $21.40 and will vest on February 1, 2004.
In connection with the issuance of the PARS, Staples included $16.2 million, $3.6 million and $4.3 million in
compensation expense for fiscal years 2002, 2001 and 2000, respectively.
Employees’ 401(k) Savings Plan
Under Staples’ Employees’ 401(k) Savings Plan (the ‘‘401(k) Plan’’) and Supplemental Executive Retirement Plan
(the ‘‘SERP Plan’’), Staples may contribute up to a total of 2.5 million shares of common stock to these plans. The 401(k)
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