Staples 2005 Annual Report Download - page 66

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14
Most of the existing facilities are leased by us with initial lease terms expiring on dates between 2006 and 2025. In
most instances, we have renewal options at increased rents. Leases for 164 of the existing stores provide for contingent
rent based upon sales.
Our Framingham, Massachusetts corporate office is owned by us and consists of approximately 650,000 square feet.
Item 3. Legal Proceedings
From time to time, we may be subject to routine litigation incidental to our business.
As previously disclosed, various class action lawsuits have been brought against us for alleged violations of what is
known as California’s “wage and hour” law. The first of these lawsuits was filed on October 21, 1999. These cases were
subsequently consolidated as the “Staples Overtime Cases,” Superior Court for the State of California, County of Orange,
Civil Complex Center (Judicial Council Coordination Proceeding No. 4235, Lead Case No. 816121). The plaintiffs have
alleged that we improperly classified both general and assistant store managers as exempt under the California wage and
hour law, making such managers ineligible for overtime wages. The plaintiffs are seeking to require us to pay overtime
wages to the putative class for the period from October 21, 1995 to the present. The court has granted class certification to
the plaintiffs. The court’s ruling is procedural only and does not address the merits of the plaintiffs’ allegations. We
believe that the class was improperly certified and intend to appeal the decision. If the case goes to trial, we believe we
have meritorious defenses in the litigation and expect to prevail. If, however, there is an adverse judgment from which
there is no successful appeal, damages could range from $10 million to $150 million, excluding interest and attorney’s fees.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of our security holders during the fourth quarter of fiscal 2005.
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our common stock is traded on the NASDAQ National Market under the symbol “SPLS”.
At February 24, 2006, the number of holders of record of our common stock was 7,283.
The following table sets forth for the periods indicated the high and low sales prices per share of our common stock
on the NASDAQ National Market, as reported by NASDAQ and reflecting the three-for-two common stock split that
was effected in the form of a common stock dividend distributed on April 15, 2005.
While we will continue to retain earnings for use in the operation and expansion of our business, in 2004 we decided
to return cash to our stockholders by initiating an annual cash dividend. The first cash dividend of $0.13 per outstanding
share of our common stock was paid on May 17, 2004 to all shareholders of record on April 26, 2004. In 2005, we paid a
cash dividend of $0.17 per share of our outstanding common stock on April 14, 2005 to shareholders of record on
March 28, 2005. On February 28, 2006, we announced that we would pay a cash dividend of $0.22 per share on April 20,
2006, to shareholders of record on March 31, 2006. Our payment of annual dividends is permitted under our revolving
credit agreement, which only restricts the payment of dividends in the event we are in default under the agreement or
such payout would cause a default under the agreement. While it is our current intention to pay annual cash dividends in
years following 2006, any decision to pay future cash dividends will be made by our Board of Directors and will depend
upon our earnings, financial condition and other factors.
High Low
Fiscal Year Ended January 28, 2006
First Quarter.......................................................... $22.02 $18.64
Second Quarter........................................................ 23.84 18.87
Third Quarter......................................................... 23.24 20.36
Fourth Quarter........................................................ 24.14 21.90
High Low
Fiscal Year Ended January 29, 2005
FirstQuarter.......................................................... $18.49 $15.79
SecondQuarter........................................................ 20.33 15.83
ThirdQuarter......................................................... 20.43 17.25
FourthQuarter........................................................ 22.59 18.53