Staples 2004 Annual Report Download - page 29

participant will have compensation income equal to the value of the stock less the purchase price. When the stock is
sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of
the stock on the date of grant. If the participant does not make an 83(b) election, then when the stock vests the
participant will have compensation income equal to the value of the stock on the vesting date less the purchase price.
When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the
stock on the vesting date. Any capital gain or loss will be long-term if the participant held the stock for more than one
year from the vesting date and otherwise will be short-term.
Restricted Stock Units. A participant will have income from a restricted stock unit equal to the difference of the
fair market value of the stock on the date of delivery of the stock less the purchase price. A participant is not
permitted to make a Section 83(b) election for a restricted stock unit.
Stock Appreciation Rights and Other Stock-Based Awards. The tax consequences associated with stock
appreciation rights and any other stock-based awards granted under the Restated Plan will vary depending on the
specific terms of such award. Among the relevant factors are whether or not the award has a readily ascertainable fair
market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, the nature of the
property to be received by the participant under the award and the participant’s holding period and tax basis for the
award or underlying Staples common stock.
Tax Consequences to Us. There will be no tax consequences to us except that we will be entitled to a deduction
when a participant has compensation income. Any such deduction will be subject to the limitations of Section 162(m)
of the Code.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF
THE STAPLES’ AMENDED AND RESTATED 2004 STOCK INCENTIVE PLAN.
PROPOSAL 3 — RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has selected the firm of Ernst & Young LLP as our independent
registered public accounting firm for the current fiscal year. Ernst & Young LLP has served as our independent
registered public accounting firm since our inception. Although stockholder approval of the Audit Committee’s
selection of Ernst & Young LLP is not required by law, the Board of Directors believes that it is advisable to give
stockholders an opportunity to ratify this selection. If this proposal is not approved at the Annual Meeting, the Audit
Committee may reconsider its selection.
Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting. They will have the
opportunity to make a statement if they desire to do so and will also be available to respond to appropriate questions
from stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
RATIFICATION OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR.
PROPOSAL 4 — SHAREHOLDER PROPOSAL ON REDEEM OR VOTE POISON PILL
The Company has been advised that the following non-binding shareholder proposal will be presented at the
Annual Meeting. The proposal will be voted on at the Annual Meeting if the proponent, or a qualified representative,
is present at the meeting and submits the proposal for a vote. The proposal and the supporting statement appear
below as received by us. Following the shareholder proposal is our statement in opposition. We will provide promptly
to stockholders the name, address and number of shares of Staples’ voting securities held by the proponent upon
receiving an oral or written request.
FOR THE REASONS SET FORTH BELOW IN THE BOARD’S STATEMENT IN OPPOSITION TO THE
STOCKHOLDER PROPOSAL, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
AGAINST PROPOSAL 4.
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