Staples 2007 Annual Report Download - page 67

The cash severance payments listed in the tables above represent the value of salary and bonus continuation to
the named executive officers under the severance benefits agreements. The values of accelerated vesting of equity
compensation listed in the tables above represent unvested restricted stock and stock option awards held by the
named executive officers and the unearned shares covered by their performance share awards. The named executive
officer may exercise any vested options within three years of the termination date under our rule of 65 and otherwise
within 6 months of the termination date. The named executive officer’s benefits under our SERP, which include
contributions by us and the named executive officer and any investment gains, generally will be paid in accordance
with the plan provisions and any predefined distribution schedule based on the requirements of Section 409A of the
Internal Revenue Code. Our Board of Directors may also direct that our SERP be terminated within 12 months of the
change-in-control and that all participants be fully vested in their accounts, with assets being distributed within
12 months of the termination date. The continuation of benefits listed in the tables above include health, dental and
executive life insurance coverage provided under the severance benefits agreements and, for Mr. Mahoney, the
provision of long-term care coverage beginning at age 65 under a group long-term care insurance plan. The amounts
listed are estimates based on the current policies in place after applying a reasonable benefit cost trend. The
individual components comprising the continuation of benefits are set forth in the table below.
Continuation of Benefits — Termination Following Change-in-Control
Executive Life Long-Term
Name Health Dental Insurance Care
Ronald L. Sargent ......................... $25,928 $1,457 $363,090 0
John J. Mahoney ......................... 16,450 1,060 138,348 $10,254
Michael A. Miles, Jr. ...................... 16,450 1,060 3,634 0
Joseph G. Doody ......................... 7,566 385 69,722 0
Demos Parneros .......................... 11,972 781 26,624 0
Change-in-Control Only
Under our non-qualified stock option agreements with all of our associates, including the named executive
officers, a change-in-control would result in a partial vesting acceleration of outstanding options. Specifically, the
vesting schedule of such options would accelerate such that an additional 25% of the underlying shares would become
immediately exercisable and the remaining unvested shares would vest ratably on each vesting date following such
change-in-control. The circumstances constituting a change-in-control of Staples are specifically described in our form
of non-qualified stock option agreement, which is listed as an exhibit to our most recent Annual Report on
Form 10-K. In general, a change-in-control will occur if another person becomes the owner of 30% or more of the
combined voting power of our stock, there is an unwelcome change in a majority of the members of our Board of
Directors, or our stockholders approve a merger with another entity in which our stockholders prior to the merger fail
to own more than 75% of the combined voting power of the surviving entity.
Death or Disability
If the termination is due to the named executive officer’s death, his beneficiaries or estate would be entitled to a
lump sum payment from our life insurance carrier, payments from our survivor benefit plan and a lump sum payment
under our SERP which, for Mr. Miles, would include otherwise unvested amounts. Payments under our survivor
benefit plan would be made monthly over a period of three years. Mr. Sargent’s life insurance coverage is in the form
of a second-to-die policy providing for payments upon his death only if his wife’s death precedes his or occurs at the
same time. For purposes of the table above, we have assumed that payments under this policy (which would amount to
approximately $12,690,000) are not triggered. In the event that Mr. Sargent were to die first, we would continue to pay
the executive life insurance premiums needed to support the $12,690,000 death benefit.
If the termination is due to the named executive officer’s disability, he would be entitled to receive a distribution
from our SERP which, for Mr. Miles, would include otherwise unvested amounts, generally in accordance with the
plan provisions and any predefined distribution schedule based on the requirements of Section 409A of the Internal
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