Staples 2007 Annual Report Download - page 56

Committee, may be invited to attend all or part of any Compensation Committee meeting to discuss compensation
matters pertaining to the other named executive officers. The Chief Executive Officer did not attend any of the
meetings in 2007. The Compensation 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 Compensation Committee has delegated authority to the Chairman and Chief Executive Officer to grant
stock options, restricted stock units and restricted stock to non-executive employees out of an annual pool of 600,000
shares. The annual pool is designed to be used to facilitate making new hire and retention grants and to reward special
accomplishments and achievements of associates between quarterly Compensation Committee meetings. Awards from
the annual pool that are granted by the Chairman and Chief Executive Officer are granted on the earlier of the first
business day of the month that follows such approval or two business days after the Compensation Committee’s next
quarterly meeting. All of the awards from the annual pool that were granted by the Chairman and Chief Executive
Officer in 2007 were subsequently ratified by the Compensation Committee.
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.
Severance benefits agreements have historically been offered to our named executive officers in order to address
competitive concerns when the named executive officers were recruited, by providing those individuals with a fixed
amount of compensation that would offset the potential risk of leaving their prior employer or foregoing other
opportunities in order to join Staples. In December 2006, the Compensation Committee had its independent
compensation consultant conduct a benchmarking and best practice study of severance arrangement practices,
including change in control protections, at Fortune 200 companies. The finding of the study was that our severance
arrangements were deemed to be similar to those extended to senior executives at other leading companies in the
external market.
Each of the named executive officers has executed a Non-Competition and Non-Solicitation Agreement and a
Confidentiality Agreement that cover the two year period subsequent to termination of his employment. Violation of
any of the terms of these agreements entitles us to recover any severance payments and value received in connection
with any equity awards.
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....................................................... 5ǂsalary
CFO or COO................................................. 4ǂsalary
President, North American Delivery ................................ 3ǂsalary
President, U.S. Retail ........................................... 3ǂsalary
Other executive officers ......................................... 2ǂsalary
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 2007 fiscal year.
46