Staples 2007 Annual Report Download - page 73

D. Retirement, Disability or Death
Retirement: If a Plan Participant terminates his or her employment after attaining age 55 and if at the time of
such termination of employment the sum of the years of service (as determined by the Board of Directors of Staples)
completed by the associate plus the associate’s age is greater than or equal to 65, the associate will be eligible for a
prorated bonus award based on the number of days the associate was employed by Staples during the applicable Plan
Year.
Disability: If a Plan Participant’s employment is terminated due to permanent disability before the end of the
Plan Year, the associate will be eligible for a prorated bonus award based on the number of days the associate was
employed by Staples during the applicable Plan Year.
In each case described above, no prorated bonus will be paid unless all of the applicable requirements set forth in
the Incentive Plan are met, including without limitation that the Committee determines that Staples meets the
applicable performance objectives for a particular Plan Year and authorizes the payment of bonus awards.
Death: If a Plan Participant’s employment is terminated due to death before the end of the Plan Year, 100% of
the Plan Participant’s Target Award for such Plan Year will be paid within 60 days of such termination; provided, that
if such termination occurs during the Plan Participant’s first Plan Year under the Incentive Plan, the bonus award will
be prorated based on the number of days the associate was employed by Staples during the applicable Plan Year,
calculated as if the associate had been employed by Staples through the end of the Plan Year.
E. Employment and Compliance
As described under ‘‘General Eligibility Requirements,’’ and except as set forth in Section III. D, a Plan
Participant must be employed as of the last day of the Plan Year in order to be eligible for a bonus. If the employment
of a Plan Participant terminates during a Plan Year for any reason other than retirement (as defined above),
permanent disability or death, no bonus will be paid to the Plan Participant for that Plan Year.
In addition, a Plan Participant must comply with all applicable state and federal regulations and Staples’ policies
(the ‘‘Compliance Requirements’’) in order to be eligible to receive a bonus award under the Incentive Plan. A Plan
Participant who is terminated after the end of a Plan Year, but before bonus awards for such Plan Year are distributed,
for violating any of the Compliance Requirements will not be eligible to receive a bonus award for such Plan Year.
IV. The Plan
Within 90 days after the beginning of each Plan Year, the Committee will establish specific performance
objectives for the payment of bonus awards for that Plan Year. The performance objectives for each Plan Year will be
based on one or more of the following measures: sales, earnings per share, return on net assets, return on equity and
customer service levels. These performance objectives are intended to establish the benchmark of success for Staples.
The Committee may determine that special one-time or extraordinary gains or losses, including without limitation as a
result of certain acquisitions or divestitures and changes in accounting principles, should or should not be included in
determining whether such performance objectives have been met. In addition, customer service target levels will be
based on pre-determined tests of customer service levels, including without limitation scores on blind test (‘‘mystery’’)
shopping, customer comment card statistics, customer relations statistics (e.g., number of customer complaints),
delivery response levels or customer satisfaction surveys conducted by a third party.
For each Plan Year, a specified percentage (which may vary from Plan Year to Plan Year) of each Target Award
(as defined below) will be based upon each of the performance objectives selected by the Committee for that Plan
Year. For each of the performance objectives, a specified percentage of the portion of the Target Award that is based
on that particular performance objective will be paid based on the level of performance achieved. Each performance
objective has a threshold performance level that must be achieved for any of the bonus award to be paid for such
objective. Except as set forth in Section III. D with respect to a Plan Participant’s death, no bonus will be paid under
the Incentive Plan for a Plan Year if the minimum earnings per share goal established for such Plan Year is not
achieved, regardless of whether any other performance objective is achieved. The maximum bonus award payable to
an executive officer for any Plan Year is $4 million. In addition, the Committee presently intends to limit bonus
awards to 200% of a Plan Participant’s Target Award.
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