Staples 2015 Annual Report Download - page 61

EXECUTIVE COMPENSATION AND COMPENSATION DISCUSSION AND ANALYSIS
www.staplesannualmeeting.com STAPLES 57
The “Termination Following Change-in-Control” column
includes:
• Cash Severance Payments. For Mr. Sargent, amounts
represent the continuation of salary and bonus for
36 months and for Ms. Komola and Messrs. Doody,
Parneros and Wilson, amounts represent the continuation
of salary and bonus for 18 months.
• Value of Accelerated Vesting of Incentive Compensation.
For all NEOs, amounts represent the target value of the
2015-2017, 2014-2016 and 2013-2015 performance
share awards. For all NEOs other than Mr. Wilson,
amounts also include 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.
Change-in-Control Only
The “Change-in-Control Only” column includes:
• Value of Accelerated Vesting of Incentive Compensation. For all NEOs other than Mr. Wilson, amounts represent 25% of the
intrinsic value of all unvested stock options as of fiscal year end.
Death or Disability
The “Death or Disability” column includes:
• Value of Accelerated Vesting of Incentive Compensation.
For all NEOs, amounts represent the target value of the
2015-2017, 2014-2016, and 2013-2015 performance
share awards, minus amounts earned for completed plan
years. In addition, for all NEOs other than Mr. Wilson,
amounts include the intrinsic value of all unvested stock
options as of fiscal year end.
• Survivor Death Benefit Payout. For all NEOs, amounts
represent payouts of 100% of base salary for the first year
and 50% of base salary for the second and third years,
made monthly over a period of three years. Not included
in the table above are the death benefit payouts from
insurance policies for which the NEOs pay the premiums.
Payouts under these policies would be $2,095,182,
$2,156,805, and $2,100,000 for Messrs. Doody and
Parneros and Ms. Komola, respectively. Mr. Sargent’s
life insurance coverage is in the form of a second-to-die
policy providing for payments either upon the latter of
his death or his wife’s death. 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.
• Continuation of Benefits. For Mr. Sargent, amount
represents the costs of continuation of executive life
insurance premiums needed to support the $12,690,000
death benefit.
If the termination is due to the NEO’s disability, he or she
would be entitled to receive a distribution from our SERP,
generally in accordance with the plan provisions and any
predefined distribution schedule based on the requirements
of Section 409A of the Internal Revenue Code. The NEO
would also be entitled to receive disability payments from our
disability carriers, if the named executive officer has enrolled
in such policy. Disability coverage is generally designed to
replace 60% of the NEO’s compensation up to $600,000 for
each of the named executive officers who participated in the
group disability plan on July 1, 2005. The disability benefit
payouts from disability insurance policies for which the named
executive officer pays the premiums are not included in the
table above. In addition, executive life insurance premiums
will be continued to age 65 as necessary to support the life
insurance coverage in place at the time of disability.
Agreements Affecting Payments
We provide for forfeiture and recovery of undeserved cash,
equity and severance compensation from any associate
that engages in misconduct. We also view recoupment as
a risk management and asset recovery tool for dealing with
particularly harmful or unethical behaviors such as intentional
deceitful acts resulting in improper personal benefit or injury
to the company, fraud or willful misconduct that significantly
contributes to a material financial restatement, violation of the
Code of Ethics and breach of key associate agreements. For
instance, each of the named executive officers has executed
a Proprietary and Confidential Information Agreement that
covers the two year period subsequent to termination of his
employment. Violation of any of the terms of these agreements
entitles us to recover any severance payments and value
received in connection with any equity awards.