Staples 2004 Annual Report Download - page 49

As of January 29, 2005, approximately 2,500 associates were eligible to participate in the UK Savings Plan, under
which options cannot be granted after August 2007. The purchase of shares under the UK Savings Plan is
discretionary, and we cannot now determine the number of shares to be purchased in the future by any particular
person or group.
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 1,687,500 shares of Staples common stock could be
granted to our associates and our subsidiaries’ associates, other than executive officers and directors. Since June 17,
2004, when our stockholders approved our 2004 Stock Incentive Plan, we stopped granting stock options under the
UK Option Plan. We used the UK Option Plan to compensate associates working in our United Kingdom businesses.
Associates working in our United Kingdom businesses were also eligible to receive options under our stockholder-
approved equity plans. 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 would not be obligated to pay 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 in January, 1998. Participants in the UK Option Plan could 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 could
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. As noted above, our Board terminated the UK Option Plan, effective June 17, 2004, with respect to future
awards. 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 selected the recipients of options under the UK Option
Plan and determined (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.
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 January 29, 2005, approximately 249 associates participated in the UK Option Plan.
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