Staples 2015 Annual Report Download - page 60

EXECUTIVE COMPENSATION AND COMPENSATION DISCUSSION AND ANALYSIS
56 STAPLES Notice of Annual Meeting of Stockholders
See below for additional explanation of the terms of these payments and our assumptions calculating them. Each of these
payments complies with our policy adopted in October 2015, limiting severance benefits payable under a NEO’s employment or
severance agreement (excluding equity awards) to 2.99 times the sum of an executive’s salary and target annual cash incentive
award, under all scenarios other than death or disability. In addition, please see the “CD&A” section of this proxy statement.
Retirement or Resignation
The “Retirement or Resignation” column includes:
• Value of Accelerated Vesting of Incentive Compensation.
For Messrs. Sargent and Doody, who have met the
age and service requirement under our Rule of 65 (as
described under the caption “Accelerated Vesting of
Awards” following the “Grants of Plan Based Awards for
2015 Fiscal Year” table earlier in this proxy statement),
amounts represent the intrinsic value of all unvested stock
options as of fiscal year end.
• Continuation of Benefits. The continuation of benefits for
Messrs. Sargent and Doody represents the provision of
long-term care coverage beginning at age 65 under a
group long-term care insurance plan.
Termination for Cause
The “Termination for Cause” column includes:
• Continuation of Benefits. The continuation of benefits for Messrs. Sargent and Doody represents the provision of long-term
care coverage beginning at age 65 under a group long-term care insurance plan.
Termination without Cause or Resignation for Good Reason
In addition to our equity and cash incentive award agreements
that provide for the acceleration of vesting upon a termination
without cause, we have entered into severance benefits
agreements with each of the NEOs that provide compensation
following a termination without cause or resignation for good
reason. The circumstances constituting cause or good reason
are specifically described in the severance benefits agreements
for the named executive officers, which are listed as exhibits
to our most recent Annual Report on Form 10-K and our cash
and equity incentive plans, if applicable. In general, under the
severance benefit agreements and our incentive plans:
• a termination will be for cause if the NEO has willfully failed
to perform his or her duties, breached any confidentiality
or non-compete agreement with us, or engaged in
misconduct that harms us; and
• the NEO will have good reason to resign if we significantly
diminish his or her authority or responsibilities, reduce his
or her salary or eligibility for bonus and other benefits,
or require that he or she relocate their office more than
50 miles following a change-in-control of Staples.
The “Termination without Cause” and “Resignation for Good
Reason” columns include:
• Cash Severance Payments. For Mr. Sargent, the amount
represents the continuation of salary and bonus for
24 months and for Ms. Komola and Messrs. Doody,
Parneros and Wilson, amounts represent the continuation
of salary and bonus for 12 months.
• Value of Accelerated Vesting of Incentive Compensation.
For Mr. Sargent, pursuant to his severance benefit
agreement, the amount includes the actual value of
all unvested stock options as of fiscal year end. For
Mr. Doody, who has met the age and service requirement
under our Rule of 65, the amount includes the intrinsic
value of all unvested stock options as of fiscal year end.
• Continuation of Benefits. The continuation of benefits
represents health, dental and vision insurance coverage
for the severance period, as well as executive life
insurance. For Messrs. Sargent and Doody, amounts
also include 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.
Termination Following Change-in-Control
Under our severance benefits agreements with the NEOs, if we
terminate the NEO’s employment without cause or the NEO
resigns for good reason within two years following a change-
in-control of Staples, the NEO would receive payments in
addition to those triggered by a termination without cause or
resignation for good reason. The circumstances constituting a
change-in-control of Staples are specifically described in the
severance benefits agreements for the NEOs, which are listed
as exhibits 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 a change in a majority of the members of the then-
incumbent Board, or
• our shareholders approve a merger with another entity in
which our shareholders fail to own more than 75% of the
combined voting power of the surviving entity.