Staples 2012 Annual Report Download - page 42

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Retirement and Other Benefits
We do not have a defined benefit pension plan in which our NEOs participate. However, our NEOs are eligible to
participate in defined contribution plans. These plans include a standard 401(k) qualified plan and a Supplemental Executive
Retirement Plan ("SERP"). Both plans are fully funded by the NEOs and supported by Staples through limited matching
contributions. They are also eligible to participate in our 401(k) qualified plan on the same basis as our other salaried associates;
however, their contributions are limited to 2% of eligible compensation. Due to the limitations on our officers' ability to contribute
to our 401(k) plan, we have the SERP, which is a non-qualified deferred compensation plan generally intended to provide comparable
benefits above the applicable limits of our 401(k) qualified plan. Under the SERP, officers of Staples may defer a total of up to
100% of their base salary, bonus, and long term cash incentive awards and receive matching contributions up to a maximum of
4% of base salary and bonus.
Additionally, the NEOs are eligible to participate in standard health and welfare programs on the same basis as our other
salaried associates. These programs include medical, dental, vision, disability, and supplemental life insurance. We also have an
Executive Benefits Program consisting of life insurance, long term care insurance, supplemental long term disability, a survivor
benefit plan, and an executive physical and registry program. This program was implemented to enhance our retirement and benefit
offerings for senior management and to further support our efforts to attract and retain top talent. All senior officers of Staples,
including the NEOs, are eligible to participate in this program. For each plan or policy described above that requires payment of
periodic premiums or other contributions, we generally pay such premiums or other contributions for the benefit of each NEO.
Executive Perquisites
Our executive compensation program is relatively free of perquisites. The Committee views our limited executive
perquisites as reasonable and very limited compared to our peer group companies. To reinforce this position, the Committee has
in past years adopted formal policies regarding personal use of our leased aircraft and reimbursement for tax planning services
for senior officers. Most recently, the Committee adopted a policy prohibiting gross up payments to cover taxes triggered by a
change in control in any future compensation, severance, or employment-related agreement.
Aircraft Policy. Under our aircraft policy, our CEO is permitted to use our leased aircraft for personal use so long as
the incremental cost to Staples is treated as compensation income to our CEO. Subject to prior approval by our CEO and similar
compensation treatment, other NEOs may also use our leased aircraft for personal use. There was no personal use of our leased
aircraft during our 2012 fiscal year.
Tax Services Reimbursement Program. We reimburse each NEO, other than our CEO, up to $5,000 each year for tax,
estate, or financial planning services or advice from a pre-approved list of service providers that must not include our outside
auditors. Our CEO is reimbursed up to $50,000 each year for these services. The Committee annually reviews the amounts paid
under this policy for compliance. The reimbursements are not grossed up for taxes.
Policy against reimbursement of excise tax on change in control payments. In March 2011, the Committee adopted a
policy that, unless required by law, prohibits Staples from entering into any future compensation, severance, or employment-
related agreement that provides for a gross up payment to cover taxes triggered by a change in control, including taxes payable
under Section 280G of the U.S. Internal Revenue Code. Under the terms of Mr. Sargent's long standing severance benefits
agreement, we would reimburse Mr. Sargent for any excise tax due under Section 280G of the U.S. Internal Revenue Code incurred
in connection with a termination without cause or resignation for good reason following a change in control of Staples. Mr. Sargent
is the only executive with this benefit.
2012 Compensation for Departing NEOs
John Mahoney. In September 2011, Staples announced that, effective February 2, 2012, Ms. Komola would succeed
John Mahoney as CFO, however Mr. Mahoney remained Vice Chairman until his retirement on July 6, 2012. In connection with
his departure, Staples entered into an agreement with Mr. Mahoney for advisory services as a consultant. Pursuant to the agreement,
Mr. Mahoney agreed to provide advisory services for a period of eight months beginning, July 7, 2012 and continuing until March
6, 2013, at a rate of $37,500 per month for a total compensation of $300,000. As a consultant, Mr. Mahoney is not eligible for
any additional health or welfare benefits. Mr. Mahoney did not receive any 2012 equity awards.
Michael Miles. Staples announced the resignation of Mr. Miles in December 2012, effective on the last day of our 2012
fiscal year. This event entitled Mr. Miles to severance pay and benefits under his existing severance agreement. See “Payments
Upon Termination or Change-in-Control” in this proxy statement for a discussion of the severance benefits paid to Mr. Miles. In
addition, beginning on February 3, 2013, Mr. Miles is employed on a part time basis to consult on transitional matters related to