Staples 2007 Annual Report Download - page 22

Amendments and Termination
The Incentive Plan may be amended or terminated by either our Board or the Compensation Committee,
provided that (1) no amendment or termination of the Incentive Plan after the end of a Plan Year may adversely
affect the rights of executive officers with respect to their bonus awards for that Plan Year and (2) no amendment
which would require stockholder approval under Section 162(m) of the Code may be effected without such
stockholder approval.
Federal Income Tax Consequences
Payments received by executive officers under the Incentive Plan will be income subject to tax at ordinary income
rates when received. Since the Incentive Plan is intended to comply with the requirements of Section 162(m) of the
Code, if the Incentive Plan is approved by stockholders at the Annual Meeting, the bonus payments made in
accordance with the terms of the Incentive Plan will be deductible for Staples and not subject to disallowance under
Section 162(m) of the Code.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF OUR EXECUTIVE
OFFICER INCENTIVE PLAN.
PROPOSAL 4 — APPROVAL OF AMENDMENT TO 2004 STOCK INCENTIVE PLAN
In March 2008, upon the recommendation of the Compensation Committee, our Board of Directors adopted an
amendment to our Amended and Restated 2004 Stock Incentive Plan (the ‘‘Equity Plan’’) to increase the total
number of shares of our common stock authorized for issuance under the Equity Plan by 15,100,000 shares, from
62,330,000 shares to 77,430,000 shares.
As required by the Equity Plan and Nasdaq Stock Market rules, our Board is submitting the Equity Plan
amendment for approval by our stockholders, and has specifically conditioned the effectiveness of the amendment on
such approval.
The Amendment
The Compensation Committee recommended, and our Board adopted, the amendment because they believe that
there may not be enough shares currently available under the Equity Plan to satisfy our equity compensation needs
beyond the end of our current fiscal year. As of April 14, 2008, there were 16,099,195 shares of our common stock
available for future awards. We anticipate granting between 10.8 million and 13.5 million shares during our 2008 fiscal
year under the Equity Plan. Our estimate for 2008 is based in part on the number of equity awards that we have
granted under the Equity Plan during the past three fiscal years, which is set forth in the table below.
Awards Under Equity Plan
2005 2006 2007
Total Shares Awarded ............................ 18,107,954 9,830,522 11,550,417
No. of Participants .............................. 6,274 6,797 7,593
If the proposed amendment is approved by our stockholders, there would be approximately 31,200,000 shares of our
common stock available for future awards under the Equity Plan.
Based on our history of granting equity awards, the anticipated growth in the number of our stock eligible
associates, and our intentions for using equity as part of our total compensation program, we anticipate that the
amendment to the Equity Plan, if approved by our stockholders, would support our equity program needs through our
2009 fiscal year. This estimate does not reflect the potential impact to our equity program of our proposal to acquire
all of the outstanding ordinary shares of Corporate Express, NV, a Dutch office products distributor with operations in
North America, Europe, Australia and New Zealand and approximately 18,000 employees. If the amendment is not
approved by our stockholders, we will experience a shortfall of shares available for issuance under the Equity Plan that
will adversely affect our ability to attract, retain and reward associates who contribute to our long term success.
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