Staples 2003 Annual Report Download - page 27

value of $18.30 per share for Staples common stock on January 1, 2003. In the event the fair market value of Staples
common stock is less than $18.30 per share on June 30, 2003, additional shares will be issued by us.
(3) Issued pursuant to our 1997 United Kingdom Company Share Option Plan.
(4) Includes 1,104,613 shares issuable under our 1997 United Kingdom Savings Related Share Option Plan, of which
56,247 shares are issuable in connection with the current outstanding options assuming associates elect to exchange
all of their savings for Staples common stock. Includes 116,714 shares issuable under our International Employee Stock
Purchase Plan, of which 53,476 shares are issuable in connection with the current offering period that ends on June 30,
2003, assuming that our associates enroll to the same extent they did during the offering period that ended on
December 31, 2002 and based on a fair market value of $18.30 per share for Staples common stock on January 1,
2003. In the event the fair market value of Staples common stock is less than $18.30 per share on June 30, 2003,
additional shares will be issued by us.
(5) Does not include shares issuable under our 401(k) Plan or Supplemental Executive Retirement Plan.
At the end of fiscal year 2002, we had in effect the following equity compensation plans, in addition to our 401(k)
Plan, that did not require stockholder approval:
1997 United Kingdom Company Share Option Plan
In August 1997, the Board of Directors adopted the 1997 United Kingdom Company Share Option Plan (the “UK Option
Plan”), pursuant to which stock options for up to 1,125,000 shares of Staples common stock may be granted to our associates
and our subsidiaries’ associates, other than executive officers and directors. We use the UK Option Plan to compensate
associates working in our United Kingdom businesses. Associates working in our United Kingdom businesses are also
eligible to receive options under our stockholder-approved Amended and Restated 1992 Equity Incentive Plan. We filed the
UK Option Plan with the SEC as an exhibit to our Annual Report on Form 10-K for the fiscal year ended January 31, 1998.
The UK Option Plan was designed to be approved by the United Kingdom’s Department of Inland Revenue so that associates
could avoid income tax on the difference between the exercise price of the option and fair market value of Staples common stock
at the option’s exercise date. The Department of Inland Revenue approved the UK Option Plan on January 29, 1998. Participants
in the UK Option Plan may be granted, in the aggregate over the life of the UK Option Plan, up to 30,000 British pounds of
tax-advantaged options. Eligible associates may receive additional non-tax advantaged options under the UK Option Plan.
The UK Option Plan is administered by our Board of Directors. The Board of Directors is authorized to adopt, amend and
repeal the administrative rules, guidelines and practices relating to the UK Option Plan and to interpret the provisions of the UK
Option Plan. The Board of Directors may amend, suspend or terminate the UK Option Plan at any time. The Board of Directors
has delegated to the Compensation Committee authority to administer certain aspects of the UK Option Plan.
The Board of Directors or the Compensation Committee selects the recipients of options under the UK Option Plan
and determines (i) the number of shares of Staples common stock covered by such options, (ii) the dates upon which such
options become exercisable (which is typically 25% on the first anniversary of the date of grant and 2.083% monthly
thereafter), (iii) the exercise price of options (which may not be less than the fair market value of Staples common stock
on the date of grant), and (iv) the duration of the options (which may not exceed 10 years). With respect to options granted
within the 30,000 British pound limit, preferential tax treatment generally may only be obtained on the exercise of the option
if the option is exercised after the third and before the tenth anniversary of the date of grant and more than three years after
the previous exercise of an option which has received preferential tax treatment.
If any option granted under the UK Option Plan expires or is terminated, surrendered, canceled or forfeited, the unused
shares of common stock covered by such option will again be available for grant under the plan. No option may be granted
under the UK Option Plan after August 25, 2007, but awards previously granted may extend beyond that date.
Our Board of Directors is required to make appropriate adjustments in connection with the UK Option Plan and any
outstanding options under the UK Option Plan to reflect stock splits, stock dividends, recapitalizations, spin-offs and other
similar changes in capitalization. The UK Option Plan also contains provisions relating to the disposition of options in the
event of a merger, consolidation, sale of all or substantially all of the assets, or liquidation of the Company.
As of February 1, 2003, approximately 154 associates were eligible to participate in the UK Option Plan.
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