Staples 2006 Annual Report Download - page 49

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33
Input from Management
Certain officers within our human resources department regularly attend Compensation Committee meetings to
provide information and recommendations regarding our executive compensation program, including the Executive
Vice President of Human Resources, the Vice President of HR Services and Development and the Vice President of
Compensation, Benefits and HR Planning. Among other things, these officers present our Chief Executive Officer’s
recommendations regarding any change in the base salary, bonus, equity compensation and other benefits of other
executive officers and compile other relevant data at the request of the Compensation Committee. The Committee is
not bound by such recommendations, but generally takes them into consideration before making final determinations
about the compensation of executive officers other than our Chief Executive Officer. The Committee generally meets
in executive sessions with its independent compensation advisor without any member of management present when
discussing compensation matters pertaining to our Chief Executive Officer. The Committee has delegated authority to
the Chairman and Chief Executive Officer to grant stock options and restricted stock to non-executive employees out
of an annual pool of 600,000 shares, although the Chairman and Chief Executive Officer generally will make such
awards subject to the Compensation Committee’s approval at its next quarterly meeting. The annual pool is generally
used to facilitate making new hire grants and to reward special accomplishments and achievements of associates
between quarterly Compensation Committee meetings. At each quarterly meeting, the Committee will review and, if
appropriate, ratify or approve the awards recommended by the Chairman and Chief Executive Officer for the current
quarter. Awards from the annual pool made pursuant to the Chairman and Chief Executive Officer’s delegated
authority could be granted on dates selected by the Chairman and Chief Executive Officer. Awards from the annual
pool recommended by the Chairman and Chief Executive Officer for Committee approval are granted two days
following the applicable quarterly Compensation Committee meeting.
Related Policies and Considerations
Employment, Termination of Employment and Change-In-Control Agreements
We have not entered into any employment agreements with any of our named executive officers. We have
entered into severance benefit agreements with each of our named executive officers, which are described under the
heading “Potential Payments Upon Termination or Change-in-Control” later in this proxy statement. During 2006,
the Committee retained Hewitt Associates to conduct a competitive and best practice review of our severance
benefits, including change-in-control protections. Based on that review, Hewitt Associates suggested minor changes
which were adopted by the Committee with respect to future severance agreements.
Stock Ownership Guidelines
Prior to the later of December 7, 2009 or five years after becoming an executive officer, each executive officer
must hold shares of our common stock equal in value to at least a defined multiple of his or her salary as follows:
Position Ownership Level
CEO............................................................ 5X salary
COO or CFO.................................................... 4X salary
President, North American Delivery................................ 3X salary
President, U.S. Retail............................................. 3X salary
Other executive officers........................................... 2X salary
All shares owned outright, unvested restricted stock and vested stock options are taken into consideration in
determining compliance with these ownership guidelines. The value of stock options for this purpose is the excess of
the market price of the underlying stock over the exercise price. Each of the named executive officers met our stock
ownership guidelines in our 2006 fiscal year.