Staples 2014 Annual Report Download - page 33

www.staplesannualmeeting.com STAPLES 29
i APPROVE AN AMENDMENT TO THE
2012 EMPLOYEE STOCK PURCHASE PLAN
(ITEM 2 ON THE PROXY CARD)
INTRODUCTION
We are asking our shareholders to approve an amendment to
the 2012 Employee Stock Purchase Plan (the “2012 ESPP”),
which was adopted, subject to shareholder approval, by the
Board on March 3, 2015. If approved, the amendment would
authorize a 12,000,000 share increase in the number of shares
of common stock available for issuance under the 2012 ESPP
from 15,000,000 to 27,000,000 shares. The Board believes that
the future success of Staples depends, in large part, upon our
ability to maintain a competitive position in attracting, retaining
and motivating key personnel. The Compensation Committee
recommended, and our Board adopted, the amendment to
increase the shares of common stock authorized for issuance
under the 2012 ESPP because there may not be enough
shares currently available under the 2012 ESPP to satisfy
offerings to associates beyond the current offering period. We
believe the opportunity for our associates to purchase shares
of our common stock through the 2012 ESPP is a recruiting
and retention tool, and also increases associate engagement
by encouraging associates to “act like an owner.”
DESCRIPTION OF THE AMENDED 2012 ESPP
The following is a summary of the material terms of the 2012
ESPP, as amended assuming that shareholders approve this
Proposal. This summary is qualified in its entirety by reference
to the full text of the 2012 ESPP, included as Appendix A to
this proxy statement.
General
The purpose of the 2012 Employee Stock Purchase Plan, as
amended, is to provide eligible employees of Staples and of
its designated subsidiaries and affiliates with opportunities to
purchase shares of our common stock through a series of
offerings.
The 2012 ESPP provides eligible employees with opportunities
to purchase shares of our common stock during one or
more consecutive offering periods, which, unless the plan
administrator provides otherwise, will coincide with a purchase
period. During each offering period, participants will accrue
funds in an account through payroll deductions. On the last
trading day of each purchase period, the funds in the account
will be applied to the purchase of our common stock, up to the
maximum number of shares for which the option was granted,
currently at a 15% discount from the fair market value of our
common stock on the last trading day of the purchase period.
The 2012 ESPP has two components in order to give us
increased flexibility in the granting of stock purchase rights to
U.S. and to non-U.S. employees. Specifically, the 2012 ESPP
authorizes the grant of options that are intended to qualify for
favorable U.S. federal tax treatment (the “423 Component”)
under Section 423 of the U.S. Internal Revenue Code of
1986, as amended (the “Code”). To facilitate participation for
employees located outside of the U.S. in light of non-U.S. law
and other considerations, the 2012 ESPP also provides for
the grant of options that are not intended to be tax-qualified
under Code Section 423 (the “Non-423 Component”). The
plan administrator will designate offerings made under the
Non-423 Component and, except as otherwise noted below,
the 423 Component and the Non-423 Component generally
will be operated and administered in the same way.
Authorized Shares
The maximum aggregate number of shares of our common
stock that may be issued under the amended 2012 ESPP
is 27,000,000, all of which may be issued under the 423
Component or the non-423 Component, and any such shares
issued upon exercise may consist of authorized and unissued
shares or of treasury shares. In order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made under the 2012 ESPP, the plan administrator will make
equitable adjustments to the number of shares approved for
the 2012 ESPP (as well as to the per share purchase price
and number of shares subject to outstanding options) upon
changes in our corporate structure that affect our common
stock, including a dividend or other distribution (in common
stock or cash or other property) recapitalization, stock split,
reverse stock split, reorganization, merger consolidation, split-
up, spin-off or combination or repurchase or exchange of
common stock or other securities of Staples.