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APPENDIX C
STAPLES C-27
STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
The agreements entered into in March 2014 pertain to fiscal
years 2014, 2015 and 2016. The aggregate target number
of shares for each year is 0.6 million. Vesting for the 2014
tranche is 50% based on satisfaction of certain sales growth
metrics and 50% based on achievement of certain return on
net assets percentage targets in 2014. The 2014 tranche had
an aggregate grant-date fair value of $7.2 million. For the 2014
tranche, 87.3% of the target shares were earned based on
the extent to which the performance targets were achieved,
subject to adjustment based on TSR at the end of the three
year performance period.
The agreements entered into in April 2013 pertained to fiscal
years 2013, 2014 and 2015, with an aggregate targeted
number of shares for each year of 0.5 million. Vesting for the
2013 and 2014 tranches is 50% based on satisfaction of
certain sales growth metrics and 50% based on achievement
of certain return on net assets percentage targets. The 2013
and 2014 tranches had aggregate grant-date fair values of
$6.7 million and $6.0 million, respectively. For the tranches
relating to fiscal years 2013 and 2014, 49.74% and 87.3%
of the target shares, respectively, were earned based on
the extent to which the performance targets were achieved,
subject to adjustment based on TSR at the end of the three
year performance period.
Restricted Shares
The following table summarizes the Company’s grants of Restricted Shares in 2014 (amounts exclude unvested
performance shares):
Number of
Shares
Weighted-Average
Grant Date Fair
Value Per Share
Nonvested at February 1, 2014 10,174,432 $14.66
Granted 5,199,254 11.73
Vested (4,805,804) 14.61
Canceled (1,062,636) 14.07
Nonvested at January 31, 2015 9,505,246 $13.14
The total market value of Restricted Shares vested during 2014, 2013 and 2012 was $54.1 million, $96.2 million and $71.4 million,
respectively.
Stock Options
The Company did not grant any stock options during 2013 or 2014. The weighted-average fair value of options granted in 2012
was $2.94. Information with respect to stock options granted in 2012 and prior is as follows:
Number of
Shares
Weighted-Average
Exercise Price
Per Share
Weighted-Average
Remaining
Contractual
Term in Years
Aggregate Intrinsic
Value(1)
(in thousands)
Outstanding at February 1, 2014 36,252,522 $20.35
Granted — —
Exercised (710,812) 15.65
Canceled (133,835) 15.31
Expired (8,778,130) 20.33
Outstanding at January 31, 2015 26,629,745 $20.51 3.67 $12,978
Exercisable at January 31, 2015 24,570,347 $21.04 3.40 $7,338
Vested or expected to vest at January 31, 2015 26,420,683 $20.56 3.65 $12,692
(1) The intrinsic value of the non-qualified stock options is the amount by which the market value of the underlying stock exceeds
the exercise price of an option.
The total intrinsic value of options exercised during
2014, 2013 and 2012 were $1.3 million, $5.5 million and
$5.2 million, respectively.
The fair values of options granted in 2012 were estimated
at the date of grant using the following weighted-
average assumptions:
2012
Risk free interest rate 1.0%
Expected dividend yield 1.7%
Expected stock volatility 30%
Expected life of options 5.6 years