Staples 2007 Annual Report Download - page 26

We are required to make appropriate adjustments or substitutions in connection with the Equity Plan and any
outstanding awards to reflect stock splits, stock dividends, recapitalizations, spin-offs and other similar changes in
capitalization. The Equity Plan also contains provisions addressing the consequences of any ‘‘reorganization event,’’
which is defined as (1) any merger or consolidation of Staples with or into another entity as a result of which all of our
common stock is converted into or exchanged for the right to receive cash, securities or other property or (2) any
exchange of all of our common stock for cash, securities or other property pursuant to a share exchange transaction.
Except as noted below, if any award expires or is terminated, surrendered, canceled or forfeited, the unused
shares of our common stock covered by such award will again be available for grant under the Equity Plan, subject,
however, in the case of incentive stock options, to any limitations under the Code. The Equity Plan does not permit
the return of shares for reuse pursuant to new awards as a result of shares being tendered to Staples upon the exercise
of the award or to satisfy tax withholding obligations (including shares retained from the award creating the tax
obligation). In addition, all shares covered by a stock appreciation right, whether or not issued upon exercise of the
stock appreciation right, may not be returned to the Equity Plan for re-grant.
Transferability
Awards generally may not be sold, assigned, transferred, pledged or otherwise encumbered by the person to
whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution
or, other than in the case of an incentive stock option, pursuant to a qualified domestic relations order. During the life
of the participant, awards generally are exercisable only by the participant. However, our Board may permit or provide
in an award for the gratuitous transfer of the award to or for the benefit of certain family members where the sale of
the shares covered by the award following the transfer would continue to be eligible for registration by Staples on a
Form S-8.
Provisions for Foreign Participants
Our Board may modify awards granted to participants who are foreign nationals or employed outside the United
States or establish subplans or procedures under the Equity Plan to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.
Termination or Amendment
No award may be made under the Equity Plan after the completion of ten years from the date on which the
Equity Plan was approved by our stockholders, but awards previously granted may extend beyond that date. Our
Board may at any time amend, suspend or terminate the Equity Plan, except that no amendment requiring
stockholder approval under Sections 162(m) or 422 of the Code may become effective unless and until such
amendment shall have been approved by our stockholders. In addition, without the approval of our stockholders, no
amendment may (1) increase the number of shares authorized under the Equity Plan, (2) materially increase the
benefits provided under the Equity Plan, (3) materially expand the class of participants eligible to participate in the
Equity Plan, (4) expand the types of awards provided under the Equity Plan or (5) make any other changes which
require stockholder approval under the rules of the NASDAQ Stock Market. No award may be made that is
conditioned on the approval of our stockholders of any amendment to the Equity Plan.
Federal Income Tax Consequences
The following summarizes the U.S. federal income tax consequences that generally will arise with respect to awards
granted under the Equity Plan. This summary is based on the tax laws in effect as of the date of this proxy statement. This
summary assumes that all awards granted under the Equity Plan are exempt from, or comply with, the rules under
Section 409A of the Code related to nonqualified deferred compensation. Changes to these laws could alter the tax
consequences described below.
Incentive Stock Options. A participant will not have income upon the grant of an incentive stock option. Also,
except as described below, a participant will not have income upon exercise of an incentive stock option if the
participant has been employed by Staples or a 50% or more-owned corporate subsidiary at all times beginning with
the option grant date and ending three months before the date the participant exercises the option. If the participant
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