Notice of Annual Meeting and Proxy Statement

®

Staples, Inc., 500 Staples Drive, Framingham, MA 01702 | 1-508-253-5000 | staples.com®

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2010 Annual Report

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Corporate Information

Corporate Headquarters Staples, Inc. 500 Staples DriveFramingham, MA 01702Telephone: 1-508-253-5000Internet address: www.staples.com

Transfer Agent and Registrar

BNY Mellon Shareowner Services is the Transfer Agent and Registrar for the Staples, Inc. common stock and maintains stockholder accounting records. Please contact the Transfer Agent directly concerning changes in address, name or ownership, lost certificates, and consolidation of multiple accounts. When corresponding with the Transfer Agent, stock-holders should reference the exact name(s) in which the Staples stock is registered as well as the certificate number.

BNY Mellon Shareowner Services

480 Washington Boulevard, Jersey City, NJ 07310Telephone: 1-888-875-9002 or 1-201-680-6578For Hearing Impaired: 1-800-231-5469 or 1-201-680-6610Internet address: www.bnymellon.com/shareowner/isd

Financial Information

To request financial documents such as this Annual Report, which contains Staples’ Form 10-K for the fiscal year ended January 29, 2011, as filed with the Securities and Exchange Commission, please visit Staples’ Web site, www.staples.com, call our toll-free investor hotline at 1-800-INV-SPL1 (1-800-468-7751), or send a written request to the attention of Investor Relations at Staples’ corporate address.

Investor Relations

Investor inquiries may be directed to: Laurel Lefebvre, Vice President, Investor RelationsTelephone: 1-800-468-7751Email: investor@staples.com

General Information

Members of the media or others seeking general information about Staples should contact the Corporate Communications Department. Telephone: 1-508-253-8530

Independent Registered Public Accounting Firm

Ernst & Young LLP200 Clarendon StreetBoston, MA 02116

Annual Meeting

The Annual Meeting of Stockholders of Staples, Inc. will be held on June 7, 2011, at 8:00 am, local time, at the Four Seasons Hotel, 57 East 57th Street, New York, New York.

Price Range of Common Stock

Staples, Inc. common stock is traded on the NASDAQ Global Select Market under the symbol “SPLS.”As of January 29, 2011, the number of holders of record of the Staples, Inc. common stock was 5,462.The following table sets forth, for the periods indicated, the high and low sale prices per share of Staples, Inc. common stock on the NASDAQ Global Select Market, as reported by NASDAQ.

Fiscal Year Ended January 29, 2011

First Quarter: High: $26.00 Low: $22.00Second Quarter: High: $23.97 Low: $18.82Third Quarter: High: $21.25 Low: $17.45Fourth Quarter: High: $23.75 Low: $19.96

Fiscal Year Ended January 30, 2010

First Quarter: High: $22.20 Low: $14.35Second Quarter: High: $21.95 Low: $18.72Third Quarter: High: $23.55 Low: $20.88Fourth Quarter: High: $26.00 Low: $21.43

Dividend

On March 8, 2011, Staples, Inc. announced that its Board of Directors had declared a quarterly cash dividend on Staples, Inc. common stock of $0.10 per share, an increase of 11% percent over the previous quarterly cash dividend of $0.09 per share. On an annualized basis, the quarterly dividend is equal to $0.40 per share compared to the $0.36 per share that the Company paid in 2010. The first quarter 2011 cash dividend was paid on April 14, 2011, to shareholders of record on March 25, 2011.

Direct Stock Purchase Plan and Dividend Reinvestment

Purchase of Staples, Inc. common stock can be made through a Direct Stock Purchase Plan administered by BNY Mellon Shareowner Services. Dividends on Staples, Inc. common stock may be automatically invested in additional shares. Contact BNY Mellon Shareowner Services at 1-888-875-9002 for more information.

Stock Splits

Record Date Effective Date Split 06/26/91 07/10/91 3 for 2 11/29/93 12/13/93 3 for 2 10/14/94 10/28/94 3 for 2 07/14/95 07/24/95 3 for 2 03/15/96 03/25/96 3 for 201/20/98 01/30/98 3 for 2 01/18/99 01/28/99 3 for 203/29/05 04/15/05 3 for 2

Debt Ratings

Staples, Inc. long-term corporate debt ratings as of March 1, 2011: Fitch BBBMoody’s Baa2Standard & Poors BBB

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

Staples, the world’s largest office products company, is committed to making it easy for customers to buy a wide range of office products and services. Our broad selection of office supplies, electronics, technology and office furniture, as well as business services, including computer repair and copying and printing, helps our customers run their offices efficiently. With 2010 sales of $25 billion and 89,000 associates worldwide, Staples operates in 26 countries throughout North America, Europe, Australia, South America and Asia, serving businesses of all sizes and consumers. Staples invented the office superstore concept in 1986 and today ranks second worldwide in eCommerce sales. The company is headquartered outside Boston. More information about Staples (Nasdaq: SPLS) is available at www.staples.com/media.

In 2006, Staples benefited from a 53rd week in the fiscal year.

1 - 2008 revenues include $4.2 billion of revenues from Corporate Express for the period July 2008–January 2009.

2 - 2008 revenue mix includes $2.3 billion of North American Delivery revenues and $1.9 billion of International revenues from Corporate Express for the period July 2008–January 2009.

3 - 2006 excludes a $10.8 million ($0.01 per share) charge related to the correction of prior years’ stock-based compensation, and a $33.3 million ($0.05 per share) benefit related to favorable tax events. 2007 excludes a $38.0 million ($0.04 per share) charge related to the settlement of California wage and hour class action litigation. 2008 excludes $173.5 million ($0.16 per share) of charges related to integration and restructuring associated with Corporate Express. 2009 excludes $84.2 million ($0.08 per share) of charges related to integration and restructuring associated with Corporate Express, and a $42.0 million ($0.04 per share) charge related to the settlement of wage and hour class action litigation. 2010 excludes $57.8 million ($0.06 per share) of charges related to integration and restructuring associated with Corporate Express. Staples adjusts its operating results for such matters to provide a more meaningful measure of our normalized operating performance and to assist with comparing prior periods and recognizing trends.

Please see the “Financial Measures & Other Data” section of the Investor Information portion of www.staples.com for further information, including a reconciliation.

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Fellow Shareholders,

As we celebrate Staples’ 25th anniversary this year, we look back with great pride on our team’s accomplishments. In 1986, Tom Stemberg and Leo Kahn founded our industry by opening the first office products superstore in Brighton, Massachusetts to serve the needs of small businesses. Since then, we’ve come a long way. Today, Staples employs 89,000 talented associates and provides office solutions through retail and delivery operations in 26 countries around the world.

Over the years, we’ve succeeded by staying focused on our customers and evolving to meet their needs. Our 2010 results reflect this focus. We got back to growing the top-line with $24.5 billion in sales, achieved solid operating margin expansion and earnings growth, and generated $1 billion in free cash flow. We also strengthened our foundation for long-term growth by investing in high-potential growth initiatives across each of our businesses.

In North American Delivery, we grew the top line 2 percent by acquiring and retaining customers, providing great customer service and offering new products and services. We took a big step forward with our initiative to accelerate growth in facilities and breakroom supplies. Investments in associate training, sharper pricing and a wider assortment all helped to position Staples as a leader in this category. Throughout 2010, we also made great progress with the Corporate Express integration, now in its third year. Despite the challenge of stubbornly high unemployment rates, we are encouraged by the top-line momentum that we’re seeing across each of our delivery businesses.

In North American Retail, we continued to grow market share in core office supplies through strong supplier partnerships, as well as innovative Staples® brand products. We also invested to become a leader in copy & print, business technology, and technology services. During 2010, we remodeled the technology area in about half of our stores to improve our assortment and service capabilities. We upgraded many of our Copy & Print Centers in conjunction with building a sales force, now 200 associates strong, to focus on this high-margin category. We also introduced a mobile phone offering in 100 stores. These investments helped to drive strong top-line growth in both the copy & print and technology businesses, and have positioned us well for continued growth in 2011 and beyond.

In International operations, we made good progress improving profitability despite soft sales. We strengthened our global position by acquiring the leading contract

207858_Staples_NARR_R1.indd 1 4/14/11 4:32 PM

stationer in Finland and increasing our ownership in Corporate Express Australia to 100 percent. We also launched a Contract offering to serve medium-sized businesses in the United Kingdom and a public Web site in Australia, and we laid out a detailed roadmap to get us to our long-term profit targets in the International business.

In addition to all the investments and operating improvements we made over the past year, we also stepped up our commitment to sustainability. Today, Staples offers customers several thousand eco-conscious products that not only differ-entiate the Staples® brand, but also allow us to grow profitably and responsibly. Last fall, we rolled out a new strategy to drive sustainability innovation in product manufacturing, packaging and distribution by challenging our key suppliers to join us in a “Race to The Top.” Going forward, sustainability will join price, quality and service as the key factors driving purchasing and assortment decisions.

We got a lot done during 2010, and have a lot of work ahead of us to accomplish our goals for 2011. We’ll continue investing in the business while carefully managing expenses to drive solid earnings growth. We’ll improve our competitive position in core office supplies as well as key categories like facilities and breakroom supplies, copy & print, and business technology. In our International business, we’ll streamline operations and continue to make solid progress on profit improvement plans. And most importantly, we’ll leverage our strong foundation to drive top-line growth across each of our businesses.

Over the past 25 years, Staples has evolved from an idea to an industry leader around the world. While our opportunities over the next 25 years will look very different than those of the past, we’ll continue to win by staying true to a proven formula for success: taking care of customers, striving for consistent execution, and investing wisely to drive long-term growth.

In closing, I would like to thank our customers, suppliers and stakeholders for their continued trust. I’d also like to thank our Board of Directors for their strong leadership and support. Finally, I’d like to recognize our associates around the world for bringing to life our vision to be the world’s most trusted source for office solutions. I’m proud of all that we’ve accomplished over the past 25 years, and I’m confident that the next 25 years will bring even greater success.

Ron SargentChairman of the Board and Chief Executive OfficerApril 2011

207858_Staples_NARR_R1.indd 2 4/14/11 4:32 PM

SUMMARY OF 2010 STAPLES SOUL ACCOMPLISHMENTS

Staples Soul is our commitment to making a difference and our belief that doing the right thing will make our company stronger. It recognizes the close connection between Staples’ success and our ability to make a positive impact — on our customers, our associates and the planet.

In the pages to follow, we’ve provided a snapshot of the progress we’ve made in all four of the Staples Soul pillars in 2010 — community, ethics, diversity, and environment. To learn more about Staples Soul, please visit www.staples.com/soul.

COMMUNITY

Staples brings education, hope and opportunity to communities where our customers and associates live and work. We contribute through large-scale initiatives as well as local, grassroots programs that promote goodwill and build strong community ties globally.

Progress update:

• Donated more than $25 million to nonprofit organizations around the world through Staples Foundation for Learning, corporate charitable giving programs and cause marketing efforts.1

• Enabled associates globally to donate more than $1.5 million to organizations they personally care about and support.

• Held Community Service Day where associates from 11 countries participated in volunteer activities in their communities.

• Increased success of the annual back-to-school cause marketing program, the Staples/Do Something School Supply Drive, by putting more than $800,000 worth of school supplies into the hands of youth who need them.

• Continued national partnership with Boys & Girls Clubs of America and provided character and leadership development opportunities for nearly 20,000 youth, a five percent increase over the previous year.

ETHICS

We believe that doing right is just as important as doing well. We hold ourselves to the highest standards of honesty, fairness and integrity, and continually implement strategies to ensure ethical conduct — from the boardroom to the supply chain to the store. Our strong ethical foundation, demonstrated in the daily actions of Staples’ associates around the world, builds the value of our brand, strengthens our relationships with our stakeholders, and ensures our continued success.

Progress update:

• Established a Global Code of Ethics with Q&As and other job aids to make it easy for associates around the globe to understand what they need to know and do to live up to our high standards of integrity.

1 Total giving for FY 2010 includes a one-time large donation of excess inventory from Corporate Express.

• Developed and launched new online and instructor-led training programs to meet the needs of associates by level, function, and geographic location. So far, these programs have been rolled out to thousands of associates in the U.S., Canada, India, China, Taiwan, Italy, Spain, and Portugal.

• Continued to enforce our Staples’ Supplier Code of Conduct, which is designed to ensure that workers making Staples brand products are treated fairly, with dignity and respect, and that the factories operate in an environmentally sustainable manner. We typically audit every Asian factory seeking to supply Staples brand products for compliance with our Code, and in 2010 we completed 290 Social Accountability factory certification audits.

DIVERSITY

Diversity is good for business. By fostering an inclusive environment — one that welcomes a wide variety of people, thought and experience — we enhance our success and drive shareholder value. Our goal is to reflect the diversity of our customers through our own associates, as well as the hundreds of suppliers and other businesses we work with every day. We consequently strive to enhance and leverage our workforce diversity and promote diversity among our suppliers.

Progress update:

• Piloted a formal mentoring program for associates. The mentoring program pairs cross-functional, cross-cultural high performing associates with vice presidents with a specific focus on working through individual development plans or core competencies.

• Created Associate Resource Groups, engaging hundreds of associates. Women, LGBT, Asian-American, and Hispanic/Latino networks of associates came together with a focus on professional development and associate engagement.

• Our Diversity One Program reached a milestone of $100 million in organic sales growth. The consolidated Diversity Supplier Program’s sales were $280 million.

• Two additional Diversity One suppliers were integrated onto our Diversity One Program.

• Hired a Senior Manager of Corporate Supplier Diversity to enhance and formalize internal supplier diversity practices.

• Hired a Manager of Diversity Sales to further support diversity customer requirements, educate and train Staples Business Advantage on diversity sales strategies, and be the first point of contact for diversity customer inquiries.

• Increased our spend with small and diverse businesses by more than 30%.

ENVIRONMENT

Staples generates business and environmental benefit – for our customers, our communities, and our company – by working to lead the way in how sustainable business gets done. We accomplish this through a continued focus on sourcing more sustainable products, improving our assortment of green services, maximizing energy efficiency and renewable energy use, and eliminating waste.

Progress update:

• To accelerate our commitment to product sustainability, in October 2010, Staples launched a “Race to the Top” with our key suppliers to drive eco-innovation in product manufacturing, packaging and distribution. As part of this strategy, we have asked our key suppliers to compete not only in terms of product quality, cost and features, but in finding innovative solutions for packaging, product design and manufacturing that significantly reduce environmental impacts.

• We recycled more than 61 million ink and toner cartridges and 10.4 million pounds of technology waste in the U.S.

• Our U.S. electricity use per square foot decreased by 12% from 2007 to 2010 due to our ongoing energy conservation work. We have 135 facilities in the U.S. that have received the ENERGY STAR® for buildings certification, and our goal is to have 500 locations certified by 2012.

• Staples currently has 53 all-electric trucks making deliveries to customers in multiple markets in the U.S. The trucks meet all of our performance requirements and help reduce fuel costs and air pollution.

SOUL AWARDS

Thanks to the collaborative effort of our leadership team and our associates globally to drive progress across all of our Soul pillars, several organizations recognized Staples in 2010 for excellence in corporate responsibility.

• For the seventh consecutive year, selected as a component of the Dow Jones Sustainability Indexes (DJSI) for 2010/11.

• Ranked #2 among retailers and #23 overall in the Newsweek Green Rankings for 2010, which ranks the environmental efforts of the largest 500 companies in the U.S.

• One of Diversity Inc’s Top 25 Companies to Watch for Diversity.

• Received a 100 (perfect score) on the Human Rights Campaign’s Corporate Equality Index.

• Corporate Responsibility Officer (CRO) Top 100 companies in 2010, ranked #60. The CRO list ranks the corporate responsibility efforts of large-cap companies from the Russell 1000 index.

• EPA Green Power Partner recognition: ranked #4 among all retailers, #6 among Fortune 500 companies and #8 in the U.S.

• Named to the 2010 Top 50 Companies for Diverse Managers to Work by Diversity MBA Magazine.

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17APR200822553667

STAPLES, INC.500 Staples Drive

Framingham, Massachusetts 01702

Notice of Annual Meeting of Stockholders to be heldon June 7, 2011

The Annual Meeting of Stockholders of Staples, Inc. will be held at the Four Seasons Hotel, 57 East 57th Street,New York, New York on June 7, 2011 at 8:00 a.m., local time, to consider and act upon the following matters:

(1) To elect twelve members of the Board of Directors to hold office until the next Annual Meeting ofStockholders or until their respective successors have been elected or appointed.

(2) To ratify the selection by the Audit Committee of Ernst & Young LLP as Staples’ independent registeredpublic accounting firm for the current fiscal year.

(3) To hold an advisory vote on executive compensation.

(4) To hold an advisory vote on the frequency of future executive compensation advisory votes.

(5) To act on a shareholder proposal regarding the ability of shareholders to act by majority written consent.

(6) To transact such other business as may properly come before the meeting or any adjournment orpostponement thereof.

Stockholders of record at the close of business on April 11, 2011 will be entitled to notice of and to vote at themeeting or any adjournment thereof.

By Order of the Board of Directors,

Kristin A. Campbell, Corporate Secretary

Framingham, MassachusettsApril 25, 2011

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING. THEREFORE,WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SUBMIT YOUR PROXY(1) OVER THE INTERNET, (2) BY TELEPHONE OR (3) BY MAIL. FOR SPECIFIC INSTRUCTIONS, PLEASEREFER TO THE QUESTIONS AND ANSWERS BEGINNING ON THE FIRST PAGE OF THE PROXY STATEMENTAND THE INSTRUCTIONS ON THE PROXY CARD RELATING TO THE ANNUAL MEETING.

‘‘STREET NAME’’ HOLDERS WHO PLAN TO ATTEND THE MEETING WILL NEED TO BRING A COPY OF ABROKERAGE STATEMENT REFLECTING THEIR STOCK OWNERSHIP IN STAPLES, INC. AS OF THERECORD DATE.

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STAPLES, INC.500 Staples Drive

Framingham, Massachusetts 01702

PROXY STATEMENTFor the Annual Meeting of Stockholders on June 7, 2011

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors(‘‘Board’’) of Staples, Inc. (‘‘we,’’ ‘‘Staples’’ or the ‘‘Company’’) for use at the Annual Meeting of Stockholders (‘‘2011Annual Meeting’’ or the ‘‘Annual Meeting’’) to be held on June 7, 2011 beginning at 8:00 a.m., local time, at the FourSeasons Hotel, 57 East 57th Street, New York, New York and at any adjournment or postponement of that meeting.On or about April 25, 2011, we are either mailing or providing notice and electronic delivery of these proxy materialstogether with an annual report, consisting of our Annual Report on Form 10-K for the fiscal year ended January 29,2011 (the ‘‘2010 fiscal year’’) and other information required by the rules of the Securities and Exchange Commission.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALSFor the Annual Meeting of Stockholders on June 7, 2011

This proxy statement and our 2010 Annual Report are available for viewing, printing and downloading atwww.proxyvote.com.

You may request a copy of the materials relating to our annual meeting, including the proxy statement and form ofproxy for our 2011 Annual Meeting and the 2010 Annual Report, at www.proxyvote.com, or by sending an email to ourInvestor Relations department at investor@staples.com or by calling (800) 468-7751.

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

What is the purpose of the Annual Meeting?

At our Annual Meeting, stockholders will act upon the matters outlined in the accompanying notice of meeting,including the election of directors, ratification of our independent registered public accounting firm, approval of anadvisory vote on executive compensation, determination of the frequency of future executive compensation advisoryvotes and consideration of a shareholder proposal. Stockholders may also consider such other business as mayproperly come before the meeting.

Who is entitled to vote?

Only stockholders of record at the close of business on the record date, April 11, 2011, are entitled to receivenotice of the Annual Meeting and to vote their shares of our common stock at the meeting, or any postponement oradjournment of the meeting. Holders of shares of our common stock are entitled to one vote per share and all voteswill be confidential.

Who can attend the meeting?

All stockholders as of the record date, or their duly appointed proxies, may attend the meeting. Please note that ifyou hold your shares in ‘‘street name’’ (through a bank, broker or other nominee), you will need to bring a copy of abrokerage statement reflecting your stock ownership in Staples as of the record date to be allowed into the meeting.You may obtain directions to the location of our 2011 Annual Meeting by writing, emailing or calling our InvestorRelations department at 500 Staples Drive, Framingham, Massachusetts 01702, email: investor@staples.com, ortelephone: (800) 468-7751.

What constitutes a quorum?

The presence at the meeting, in person or by proxy, of a majority of the shares of our common stock outstandingon the record date will constitute a quorum, permitting business to be conducted at the meeting. As of the recorddate, 716,076,457 shares of our common stock were outstanding and entitled to vote. Proxies that are received andmarked as abstentions and broker non-votes (where a broker or nominee does not exercise discretionary authority tovote on a matter) will be included in the calculation of the number of shares considered to be represented atthe meeting.

How do I vote?

If you received a paper copy of these proxy materials, included with such copy is a proxy card or a votinginstruction card from your bank, broker or other nominee for the Annual Meeting. If you received a notice of Internetavailability of proxy materials, the notice will contain instructions on how to access and review the proxy materialsonline and how to obtain a paper or electronic copy of the materials, which will include the proxy statement, the 2010Annual Report and a proxy card or voting instruction card, as well as instructions on how to vote either at our AnnualMeeting, over the Internet, by telephone or by mail.

If you complete, sign and return your proxy card, it will be voted as you direct. If no choice is specified on asigned proxy card, the persons named as proxies will vote ‘‘for’’ the election of all director nominees (and anysubstitute nominees selected by our Board if any present nominees should withdraw), ‘‘for’’ Proposals 2 and 3,‘‘1 year’’ for Proposal 4, ‘‘against’’ Proposal 5 and in their discretion as to all other matters which may be properlypresented at the Annual Meeting.

If the shares you own are held in ‘‘street name’’ by a bank, broker or other nominee, that person, as the recordholder of your shares, is required to vote your shares according to your instructions. Your bank, broker or othernominee will send you directions on how to vote those shares. Under applicable stock exchange rules, if you do notgive instructions to your bank, broker or other nominee, it will still be able to vote your shares with respect to certain‘‘discretionary’’ items, but will not be allowed to vote your shares with respect to certain ‘‘non-discretionary’’ items. Inthe case of ‘‘non-discretionary’’ items, the shares that do not receive voting instructions will be treated as ‘‘brokernon-votes.’’

Discretionary Items Non-Discretionary Items

• Proposal 2 — Ratification of Ernst & Young LLP as • Proposal 1 — Election of Directorsour Independent Registered Public Accounting Firm • Proposal 3 — Advisory Vote on Executive

Compensation• Proposal 4 — Advisory Vote on the Frequency of

Future Advisory Votes on Executive Compensation• Proposal 5 — Shareholder proposal regarding the

ability of shareholders to act by majority writtenconsent.

If you are a stockholder as of the record date and attend the meeting, you may personally deliver your completedproxy card or vote in person at the meeting.

Can I submit a proxy over the Internet or by telephone?

If you are a registered stockholder (meaning you hold your stock in your own name), you may submit a proxyover the Internet by following the instructions at www.proxyvote.com or by telephone by calling (800) 690-6903. Proxysubmissions over the Internet or by telephone are valid under Delaware law. If your shares are held in ‘‘street name,’’you will need to contact your bank, broker or other nominee to determine whether you will be able to submit a proxyover the Internet or by telephone.

Can I change my proxy after I return my proxy card?

Yes. Any proxy may be revoked by a stockholder at any time before it is exercised at the Annual Meeting bydelivering to our Corporate Secretary a written notice of revocation or a duly executed proxy bearing a later date, orby voting in person at the meeting.

What is the vote required to approve each matter?

Election of Directors. A nominee will be elected as a director at the Annual Meeting if the votes cast ‘‘for’’ suchnominee exceed the votes cast ‘‘against’’ such nominee, as long as the only director nominees are those individuals setforth in this proxy statement.

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Independent Registered Public Accounting Firm. The affirmative vote of the holders of shares of our commonstock representing a majority of the votes cast on the matter is required for the ratification of the selection of Ernst &Young LLP as our independent registered public accounting firm for the current fiscal year. This proposalis non-binding.

Advisory Vote on Executive Compensation. The affirmative vote of the holders of shares of our common stockrepresenting a majority of the votes cast on the matter is required for the approval of the advisory vote on executivecompensation. This proposal is non-binding.

Frequency of Future Advisory Votes on Executive Compensation. The affirmative vote of the holders of shares ofour common stock representing a majority of votes cast on one of the three frequency options under the advisory voteon the frequency of future executive advisory votes is required for the approval of the frequency. If none of the threefrequency options receives a majority of the votes cast, we will consider the frequency option (one year, two years orthree years) receiving the highest number of votes cast by stockholders to be the frequency that has beenrecommended by stockholders. However, because this proposal is non-binding, our Board may decide that it is in thebest interest of our stockholders and of Staples to hold future executive compensation advisory votes more or lessfrequently.

Shareholder Proposal. The affirmative vote of the holders of shares of our common stock representing amajority of the votes cast on the matter is required for the approval of the non-binding shareholder proposaldescribed in this proxy statement. Because the shareholder proposal presents a non-binding resolution, we will not berequired to take the requested action if the proposal is approved; however, we will reevaluate our recommendation ifsuch proposal is approved.

A properly executed proxy marked ‘‘abstain’’ and any ‘‘broker non-vote’’ with respect to the election of a director,or any of the other matters listed above, will not be counted as votes cast on the election of the director or on suchother matter, although they will be counted for purposes of determining whether there is a quorum.

Are there other matters to be voted on at the meeting?

As of the date of this proxy statement, our Board does not know of any other matters which may come before themeeting, other than the matters described in this proxy statement. Should any other matter requiring a vote of ourstockholders arise and be properly presented at the Annual Meeting, the proxy for the Annual Meeting confers uponthe persons named in the proxy and designated to vote the shares discretionary authority to vote, or otherwise act,with respect to any such matter in accordance with their best judgment.

Our Board encourages stockholders to attend the Annual Meeting. Whether or not you plan to attend, you areurged to submit your proxy. Prompt response will greatly facilitate arrangements for the meeting and your cooperationwill be appreciated. Stockholders who attend the Annual Meeting may vote their stock personally even though theyhave sent in their proxies.

Solicitation

All costs of soliciting proxies will be borne by Staples. We have engaged Broadridge Investor CommunicationSolutions to serve as the inspector of elections and to assist us with planning and organizational matters, along withcertain ministerial services, in connection with the proxy solicitation process at a cost of approximately $5,000. Inaddition to solicitations by mail, our directors, officers and employees, without additional remuneration, may solicitproxies by telephone, electronic communication and personal interviews. Brokers, custodians and fiduciaries will berequested to forward proxy soliciting material to the owners of stock held in their names and we will reimburse themfor their related out-of-pocket expenses.

We may also choose to retain a proxy soliciting firm, but to date we have not done so for the voting related to theproposals in this proxy statement.

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Shareholder Proposals

Other than the stockholder proposal set forth in Item 5 of this proxy statement, we did not receive any otherstockholder proposals or nominations for director candidates to be presented at our 2011 Annual Meeting. Thisproposal was received prior to December 28, 2010, the deadline for stockholders who wish to present proposals andwant such proposals to be included in the proxy materials. In accordance with our by-laws, in order for a stockholderto present a proposal or nominate a director candidate for election at our 2011 Annual Meeting but not have suchproposal included in the proxy materials, stockholders must provide us with advance written notice by March 9, 2011.If a stockholder gives us notice of a proposal or nomination after the March 9, 2011 deadline, the stockholder will notbe permitted to present the proposal or nomination to the stockholders for a vote at the 2011 Annual Meeting.

Stockholders who intend to present proposals at our 2012 Annual Meeting and want us to include such proposalsin our proxy materials relating to that meeting should contact our Corporate Secretary. Such proposals must bereceived at our principal corporate offices at 500 Staples Drive, Framingham, Massachusetts 01702 not later thanDecember 27, 2011 and must be in compliance with applicable laws and Rule 14a-8 under the Securities Exchange Actof 1934 in order to be considered for possible inclusion in the proxy statement and form of proxy for our 2012Annual Meeting.

If a stockholder wishes to present a proposal or nominate a director candidate for election at our 2012 AnnualMeeting and the proposal or nomination is not intended to be included in our proxy statement for such meeting, thestockholder must give us advance notice and provide the information required by our by-laws, including but notlimited to, information regarding the identity of the stockholder or beneficial owner, their holdings in Staplessecurities, agreements or compensation relating to such nomination or matter, and any derivatives or otherarrangements to mitigate risk or change voting power. If a stockholder gives notice of such a proposal or nominationafter the applicable deadline, the stockholder will not be permitted to present the proposal or nomination to thestockholders for a vote at the meeting. For our 2012 Annual Meeting, our Corporate Secretary generally must receivesuch a notice at 500 Staples Drive, Framingham, Massachusetts 01702 not later than 90 days and no earlier than120 days prior to the first anniversary of our 2011 Annual Meeting. However, if the date of our 2012 Annual Meetingis more than 30 days before or more than 70 days after such anniversary date, notice by the stockholder must bereceived not earlier than 120 days prior to the 2012 Annual Meeting and not later than the later of (i) the 90th dayprior to the 2012 Annual Meeting and (ii) the tenth day following the day on which public announcement of the dateof the 2012 Annual Meeting is made or notice for the 2012 Annual Meeting was mailed, whichever occurs first.

Householding of Annual Meeting Materials

Some banks, brokers and other nominee record holders may be participating in the practice of ‘‘householding’’proxy statements, annual reports and notices of Internet availability of proxy materials. This means that only one copyof our proxy statement, annual report or notice of Internet availability of proxy materials may be sent to multiplestockholders in a household, which helps us reduce our printing costs and postage fees and helps the environment byusing less paper. However, we will promptly deliver a separate copy of these documents to you if you write, email orcall our Investor Relations department at 500 Staples Drive, Framingham, Massachusetts 01702, email:investor@staples.com, or telephone: (800) 468-7751. If you want to receive separate copies of the proxy statement,annual report or notice of Internet availability of proxy materials in the future, or if you are receiving multiple copiesand would like to receive only one copy for your household, you should contact your bank, broker, or other nomineerecord holder, or you may contact us at the above address, email or phone number.

Electronic Delivery of Stockholder Communications

If you received a hard copy of your Annual Meeting materials by mail, we encourage you to conserve naturalresources, as well as help us reduce our printing and mailing costs, by signing up to receive or access your stockholdercommunications via e-mail. To sign up for electronic delivery or access, visit www.proxyvote.com. Your electronicdelivery or access enrollment will be effective until you cancel it, which you may do at any time by following theprocedures described at the web site listed above. If you have questions about electronic delivery or access, pleasewrite, email or call our Investor Relations department at 500 Staples Drive, Framingham, Massachusetts 01702, email:investor@staples.com, or telephone: (800) 468-7751.

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Beneficial Ownership of Common Stock

The following table sets forth the beneficial ownership of our common stock held as of April 8, 2011 by eachperson who is known by us based on schedule 13G filings to beneficially own more than 5% of the outstanding sharesof our common stock, and as of April 11, 2011 by (1) each current director and nominee for director; (2) each of thenamed executive officers listed in the Summary Compensation Table included elsewhere in this proxy statement; and(3) by all current directors and executive officers as a group:

Number of Percentage ofNumber of shares common

Shares acquirable stockbeneficially within 60 beneficially

Name of beneficial owner owned (1) days (2) owned (3)

5% Stockholders (4)Capital Research Global Investors (5) . . . . . . . . . . . . . . . . . . . . . . . . 72,885,300 0 10.1%

333 South Hope StreetLos Angeles, CA 90071

Wellington Management Company, LLP (6) . . . . . . . . . . . . . . . . . . . 65,947,720 0 9.12%280 Congress StreetBoston, MA 02210

Directors, Nominees for Director and Named Executive OfficersBasil L. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,353 (7) 91,367 *Arthur M. Blank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,263 164,492 *Mary Elizabeth Burton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,357 200,492 *Joseph G. Doody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336,660 516,145 *Justin King . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,407 74,492 *John J. Mahoney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369,782 (8) 1,383,724 *Carol Meyrowitz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,551 71,117 *Michael A. Miles, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,117 1,308,724 *Rowland T. Moriarty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416,607 (9) 132,992 *Robert C. Nakasone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293,331 (10) 200,838 *Demos Parneros . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361,267 (11) 768,644 *Ronald L. Sargent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,857,204 (12) 4,988,811 *Elizabeth A. Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,264 41,954 *Robert E. Sulentic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,235 (13) 74,492 *Vijay Vishwanath . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,635 83,492 *Paul F. Walsh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,662 (14) 200,492 *All current directors and executive officers as a group (18 persons) . . . 4,747,076 10,538,847 2.10%

* Less than 1%

(1) Each person listed has sole investment and/or voting power with respect to the shares indicated, except asotherwise noted. The inclusion herein of any shares as beneficially owned does not constitute an admission ofbeneficial ownership. Amounts listed in this column do not reflect shares issuable upon the exercise of stockoptions available on April 11, 2011 or within 60 days thereafter.

(2) Reflects shares issuable upon the exercise of stock options available on April 11, 2011 or within 60 daysthereafter.

(3) Number of shares deemed outstanding includes 716,076,457 shares of our common stock outstanding as ofApril 11, 2011 and any options for shares that are exercisable by such beneficial owner on April 11, 2011 or within60 days thereafter.

(4) Ownership percentages were obtained from schedule 13G filings and reflect the number of shares of commonstock held as of December 31, 2010 or March 31, 2011.

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(5) As set forth in Amendment No. 1 to Schedule 13G, filed on April 8, 2011, Capital Research Global Investors had,as of March 31, 2011, sole dispositive power and sole voting power with respect to all of the shares.

(6) As set forth in Amendment No. 3 to Schedule 13G, filed on February 14, 2011, Wellington ManagementCompany LLP had, as of December 31, 2010, shared dispositive power with respect to all of the shares andshared voting power with respect to 27,725,781 shares.

(7) Includes 12,000 shares owned by Mr. Anderson’s wife.

(8) Includes 33,848 shares owned by the John Mahoney 2008 Irrevocable Trust.

(9) Includes 25,235 shares owned by Dr. Moriarty’s children, of which Dr. Moriarty disclaims beneficial ownership.

(10) Includes 200,781 shares owned by NAK Staples GRAT LLC and 69,395 shares owned by the Robert C.Nakasone Trust.

(11) Includes 2,502 shares that may be distributed from a 401(k) plan account.

(12) Includes 654,887 shares owned by Sargent Partners LLC, 43,577 shares owned by Sargent Family LLC,15,793 shares owned by Ronald L. Sargent Grantor Retained Annuity Trust, 19,313 shares owned by Jill SargentIrrevocable Trust, 19,313 shares owned by Ronald L. Sargent Irrevocable Trust and 41,684 shares owned byRonald L. Sargent Revocable Trust. Includes 6,031 shares owned by Sargent Family Foundation of whichMr. Sargent disclaims beneficial ownership. Also includes 2,594 shares that may be distributed from a 401(k)plan account.

(13) Includes 300 shares held by Mr. Sulentic’s daughter.

(14) Includes 247 shares held by Paul F. Walsh, IRA and 145,400 shares held by the Walsh Family Trust.

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18APR200512032386

PROPOSAL 1 — ELECTION OF DIRECTORS

The members of our Board are elected for a term of office to expire at the next annual meeting (subject to theelection and qualification of their successors or the earlier of their death, resignation or removal). In consideringwhether to recommend any particular candidate for inclusion in our Board’s slate of recommended director nominees,the Nominating and Corporate Governance Committee applies the assessment criteria set forth in our CorporateGovernance Guidelines. These criteria include diversity, age and skills such as understanding of the office productsmarket, the retail industry, finance, accounting, marketing, technology, risk management, international business andother operational and business knowledge needed to oversee a global multi-channel business. The principalqualification of a director is the ability to act effectively on behalf of all of our stockholders. The Nominating andCorporate Governance Committee does not assign specific weights to particular criteria, and no particular criterion isa prerequisite for any prospective nominee. We believe that the specific skills, qualifications and experience of ourdirectors, considered as a group, should provide a mix of knowledge and abilities that will allow our Board to fulfill itsresponsibilities.

We believe each nominee in the slate presented below, through their own personal accomplishments anddedication to their profession and community, has demonstrated strong intellectual acumen, solid business judgment,strategic vision, integrity and diligence. The nominees are all current directors who consistently have demonstratedtheir strong work ethic and dedication to Staples, including coming prepared to meetings, asking insightful questions,focusing on long term business strategy, analyzing challenges, evaluating solutions and overseeing implementation.The slate of twelve nominees includes four nominees with over fifteen years of service on the Board, including twonominees who have served on the Board since our inception, as well as five directors who joined the Board within thelast four years. We believe that the composition of the Board combines institutional knowledge and understanding ofour business model, products and services and historical growth strategies balanced with an influx of new ideas andexposure to alternative approaches to business process, which promotes lively Board discussion and effective oversightand problem solving.

Many of the nominees are either current or former chief executive officers, chairmen or vice chairmen of otherlarge international corporations. As such, they have a deep understanding of, and extensive experience in, many areasthat are critical to our operation and success. For the purposes of our analysis, we have determined that nominees whohave served in these roles have extensive experience with financial statement preparation, compensationdeterminations, regulatory compliance (if their businesses are or were regulated), corporate governance, public affairsand legal matters. Set forth below is biographical information of each of the nominees, highlighting the particularexperience, qualifications, attributes or skills of each nominee that supports the conclusion of the Nominating andCorporate Governance Committee that these individuals should serve as directors of Staples.

Served as aDirector

Since

Basil L. Anderson, age 66Served as an independent director of Staples since 1997 until we asked him 1997to become our Vice Chairman from September 2001 until his retirement inMarch 2006. Mr. Anderson is also a director of Hasbro, Inc., Becton,Dickinson and Company, and Moody’s Corporation. He served as a directorof CRA International, Inc. until January 2010. Among his manyqualifications, Mr. Anderson has extensive executive experience incorporate finance gained in part from his position as Chief Financial Officerof Campbell Soup Company and, prior to that, Scott Paper Company.Mr. Anderson also brings to the Board valuable insight into oversight offinancial reporting and the audit process based on his experiences servingon the audit committees of multiple boards. Mr. Anderson also has strategicplanning expertise, as well as international business experience.

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18APR200512031699

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7APR200815362726

Served as aDirector

Since

Arthur M. Blank, age 68Owner and Chief Executive Officer of the Atlanta Falcons, a National 2001Football League team, since February 2002. Mr. Blank is also Chairman,President and Chief Executive Officer of AMB Group, LLC, a businessmanagement company, since February 2001. In addition, in February 2010,Mr. Blank became majority owner of PGA Tour Superstore, a privately heldretailer of golf and tennis products. Mr. Blank was a co-founder of TheHome Depot, Inc., a home improvement retailer, and served as its Presidentfrom 1978 to 1997, its President and Chief Executive Officer from 1997 to2000, a director from 1978 to 2001, and Co-Chairman of the Board from2000 until his retirement in May 2001. Among many qualifications,Mr. Blank is a successful entrepreneur with extensive operationalknowledge of the retail industry. Mr. Blank also has wide-rangingexperience in merchandising and customer service.

Mary Elizabeth Burton, age 59Served as Interim Chief Executive Officer of Zale Corporation, a specialty 1993jewelry retailer, from January 2006 to July 2006 and as President and ChiefExecutive Officer from July 2006 to December 2007. Ms. Burton also hasbeen the Chief Executive Officer of BB Capital, Inc., a retail advisory andmanagement services company, since 1992. Ms. Burton serves as a directorof United Natural Foods, Inc. since August 2010. Prior directorships includeSports Authority, Inc. from 1999 to 2006, Aeropostale, Inc. from 2000 to2006, Rent-a-Center, Inc from 2002 to 2007 and Zale Corporation from2003 to 2007. Among many qualifications, Ms. Burton brings to the Boardextensive executive level experience within the retail industry, includinginsight into marketing, merchandising and operational management. Havingalso held positions as Interim CEO at both ToysRUs.com andiFlourish.com, Ms. Burton provides valuable ecommerce knowledge.

Justin King, age 49Chief Executive Officer of J Sainsbury plc, a food and non-food retailer, 2007since March 2004, where he is also Chairman of the Operating Board. Priorto joining J Sainsbury plc, he was an Executive Director of Marks andSpencer Group plc from September 2002 to March 2004. Mr. King hassignificant retail experience having held a number of senior positions atASDA/Wal-Mart in Trading, HR and Retail, as Managing Director ofHaagen Dazs UK and having spent much of his early career with MarsConfectionery and Pepsi International. He also serves on the PrimeMinister’s Business Advisory Group since November 2010. Mr. King bringsto the Board both strategic sales and marketing expertise, as well as anunderstanding of the complexities of operating international businesses.

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7APR200810570153

18APR200514384237

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Served as aDirector

Since

Carol Meyrowitz, age 57Chief Executive Officer of The TJX Companies, Inc., a retailer of apparel 2007and home fashions, since 2007 and a director since 2006. Ms. Meyrowitz wasPresident of TJX from October 2005 to January 2011. Prior to that,Ms. Meyrowitz was President of The Marmaxx Group, the largest division ofTJX, from January 2001 to January 2005, and was employed in an advisoryrole for TJX from January 2005 to October 2005 and consulted forBerkshire Partners L.L.C., a private equity firm, from June 2005 toOctober 2005. Ms. Meyrowitz is also a director of The TJX Companies, Inc.and Amscan Holdings, Inc. Previous directorships include Yankee CandleCompany from 2004 until 2007. Among many qualifications, Ms. Meyrowitzbrings to the Board extensive experience in all aspects of retail operationsand management, including real estate, ecommerce, supply chain andlogistics, marketing and customer service.

Rowland T. Moriarty, age 64Chairman of the Board of CRA International, Inc., a worldwide economic 1986and business consulting firm, since May 2002. He has been President andChief Executive Officer of Cubex Corporation, a privately-held consultingcompany, since 1992. From 1981 to 1992, Dr. Moriarty was a professor ofbusiness administration at Harvard Business School where he taught, amongother subjects, marketing. Dr. Moriarty is also a director of Wright ExpressCorporation and Virtusa Corporation. Until 2004, Dr. Moriarty served as adirector of Trammel Crow Company, which contributed to hiscomprehensive understanding of real estate matters. Among manyqualifications, Dr. Moriarty brings to the Board extensive internationalexperience and has also developed extensive skills and expertise incorporate governance matters having chaired eight governance committeesof various public and private boards.

Robert C. Nakasone, age 63Chief Executive Officer of NAK Enterprises, L.L.C., a family-owned 1986investment and consulting company, since January 2000. Prior to that,Mr. Nakasone served as Chief Executive Officer of Toys ‘‘R’’ Us, Inc. from1998 to 1999 and in other positions at that company from 1985 to 1998.While serving as Vice-Chairman, Worldwide Toy Stores and President andChief Operating Officer, Mr. Nakasone led the company’s internationalexpansion into 27 countries throughout Europe, Asia and the Middle East.Mr. Nakasone is also a director of Hormel Foods Corporation. Previously,Mr. Nakasone served as a director of eFunds Corporation from 2003 untilthe sale of the company to Fidelity National Information Services in 2007.Among many qualifications, Mr. Nakasone brings to the Board extensiveexecutive level public company experience, international businessdevelopment expertise, as well as strategic planning and skills relating tocompensation and corporate governance matters.

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14APR200919231749

14APR200922411212

4APR200813024389

Served as aDirector

Since

Ronald L. Sargent, age 55Chief Executive Officer of Staples, Inc. since February 2002 and Chairman 1999of the Board of Directors of Staples since March 2005. Prior to that,Mr. Sargent served in various positions at Staples since joining the companyin 1989. Mr. Sargent is also a director of The Kroger Co. and Mattel, Inc.,until May 2011. Previous directorships include Yankee Candle Companyfrom 1999 to 2007 and Aramark Corp. from 2002 until 2007. At Staples,Mr. Sargent has led worldwide operations, retail superstores and thedelivery business, and also brings to the Board much experience in supplychain management, merchandising and marketing initiatives. Mr. Sargent’sexperience with respect to human resources matters is also highly valued.

Elizabeth A. Smith, age 47Chief Executive Officer of OSI Restaurant Partners, LLC since 2008November 2009. Previously, she served as Avon Products, Inc.’s Presidentsince September 2007, and, prior to that, served as Avon’s Executive VicePresident, President North America and Global Marketing fromSeptember 2005 to September 2007, as well as Avon’s Executive VicePresident and Brand President from January 2005 to September 2005. Priorto joining Avon, she was with Kraft Foods, Inc. as Group Vice President andPresident U.S. Beverages and Grocery Sectors from January 2004 toNovember 2004. Previous directorships include Carter’s Inc. from 2004 to2008. Among many qualifications, Ms. Smith brings to the Board deepexperience in strategy, marketing and sales, as well as significant experiencein corporate finance and financial reporting developed in her executive levelroles where her responsibilities have included direct financial oversight ofmultinational companies with multiple business units. Ms. Smith also hasexperience in compensation matters, as well as wide-ranging operationalmanagement of all product-to-market processes.

Robert E. Sulentic, age 54President of CB Richard Ellis Group, Inc., a global commercial real estate 2007services company, since March 2010, and the President of the company’sDevelopment Services business since December 2006. Mr. Sulenticpreviously served as Chief Financial Officer of CB Richard Ellis Groupfrom March 2009 and Group President from July 2009, each untilMarch 2010. Mr. Sulentic was a member of CB Richard Ellis Group’s Boardand Group President of Development Services, Asia Pacific and Europe,Middle East and Africa from December 2006 through March 2009.Mr. Sulentic was a director of Trammell Crow Company fromDecember 1997 through December 2006, and served as its Chairman of theBoard from May 2002 through December 2006. He was President and ChiefExecutive Officer of Trammell Crow Company from October 2000 throughDecember 2006 and prior to that served as its Executive Vice President andChief Financial Officer from September 1998 to October 2000. Amongmany qualifications, Mr. Sulentic has extensive executive level managementexperience and currently oversees all day to day operations of the publiccompany’s five business units. Mr. Sulentic also brings to the Board asignificant financial background that qualifies him as an audit committeefinancial expert. His insight with respect to doing business globally is alsohighly valued.

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4APR200801011461

18APR200512045777

Served as aDirector

Since

Vijay Vishwanath, age 51Partner at Bain & Company, a management consulting firm, since 1993. 2007Mr. Vishwanath first joined Bain in 1986 and leads its consumer productspractice. Prior to joining Bain, Mr. Vishwanath worked at Procter &Gamble. Mr. Vishwanath previously served as a director of Yankee CandleCompany from 2005 to 2007. Among many qualifications, Mr. Vishwanathbrings to the Board expertise in consumer products and brands, as well asmarketing, gained in his position at Bain & Company counseling numerousFortune 500 companies and, previously, at Procter & Gamble. In addition,Mr. Vishwanath has valuable experience in strategic planning and corporategovernance.

Paul F. Walsh, age 61Served as Chairman and Chief Executive Officer of eFunds Corporation, a 1990transaction processing and risk management company, fromSeptember 2002 until eFunds was acquired by Fidelity National InformationServices in September 2007. Mr. Walsh also has been the owner and ChiefExecutive Officer of PFW Management, LLC, a consulting company, sinceFebruary 2008. PFW Management, LLC does business as Calera FinTechAdvisors and targets investments in the financial services and businessservices industry in concert with Calera Capital. Among many qualifications,Mr. Walsh brings to the Board extensive knowledge relating to risk oversightand management, compliance and regulatory matters. In addition,Mr. Walsh’s executive level management brings valuable experience inprocess excellence, capital markets and corporate finance.

Unless contrary instructions are provided, the persons named as proxies will, upon receipt of a properly executedproxy, vote for the election of Basil L. Anderson, Arthur M. Blank, Mary Elizabeth Burton, Justin King, CarolMeyrowitz, Rowland T. Moriarty, Robert C. Nakasone, Ronald L. Sargent, Elizabeth A. Smith, Robert E. Sulentic,Vijay Vishwanath and Paul F. Walsh as directors for a term expiring at our 2012 Annual Meeting. Proxies cannot bevoted for a greater number of persons than the number of nominees named. Each of the nominees is currently amember of our Board. All of the nominees have indicated their willingness to serve if elected, but if any should beunable or unwilling to stand for election, proxies may be voted for a substitute nominee designated by our Board.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THENOMINEES AS DIRECTORS.

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CORPORATE GOVERNANCE

We have a long history of being committed to following the best practices of corporate governance that are in thebest interests of our business and all of our stockholders.

You can learn more about our current corporate governance principles and review our Corporate GovernanceGuidelines, committee charters, Corporate Political Contributions Policy Statement, Code of Ethics and othersignificant policies at www.staples.com in the Corporate Governance section of the Investor Information portion of ourweb site. We comply with the corporate governance requirements imposed by the Sarbanes-Oxley Act, Securities andExchange Commission and NASDAQ Stock Market. We will continue to modify our policies and practices to meetongoing developments in this area. While we have discussed many features of our corporate governance principles inother sections of this proxy statement, some of the highlights are:

• Annual Election of Directors. Our directors are elected annually for a term of office to expire at the next AnnualMeeting (subject to the election and qualification of their successors).

• Majority Voting. Under our by-laws, in uncontested elections, our directors are elected if the votes cast ‘‘for’’ thedirector’s election exceed the votes cast ‘‘against’’ the director’s election. If an incumbent director in anuncontested election does not receive the required number of votes ‘‘for’’ his or her election, our CorporateGovernance Guidelines provide that such incumbent director must tender his or her resignation fromour Board.

• No Stockholder Rights Plan. We do not currently have a stockholder rights plan in effect and are notconsidering adopting one. Our Board has adopted a stockholder rights plan policy under which we will adopt astockholder rights plan only if the plan has been approved by stockholders either in advance or within12 months of its adoption by our Board.

• No Supermajority Provisions in our Certificate of Incorporation. We have no supermajority votingrequirements under our certificate of incorporation.

• 25% Threshold for Stockholders to Call Special Meetings. Our by-laws provide that stockholders who own inthe aggregate 25% or more of our outstanding stock may call special meetings.

• Annual Review of Board Leadership Structure. As described in more detail below, every year our Boardevaluates its leadership structure and based on a recommendation from the Nominating and CorporateGovernance Committee determines whether there should be an independent Chairperson of the Board or anindependent Lead Director.

• Strong Lead Director Role. Among many other responsibilities, our independent Lead Director ensures thatindependent directors meet in executive sessions, coordinates the annual performance review of our ChiefExecutive Officer, and works with the Chairperson of the Board to establish the agenda for each Boardmeeting. Additional information about the responsibilities of our independent Lead Director can be foundunder the section of this proxy statement called ‘‘Board Leadership Structure’’.

• Independent Board. Our Board is comprised of all independent directors, except for our Chief ExecutiveOfficer.

• Independent Board Committees. All members of our Audit, Compensation, Finance and Nominating andCorporate Governance Committees are independent directors, and none of such members receivescompensation from us other than for service on our Board of Directors or its committees.

• Committee Authority to Retain Independent Advisors. Each of the Audit, Compensation, Finance andNominating and Corporate Governance Committees has the authority to retain independent advisors, with allfees and expenses to be paid by Staples.

• Audit Committee Policies and Procedures. Under its charter, the Audit Committee’s prior approval is requiredfor all audit services and non-audit services (other than de minimis non-audit services as defined by theSarbanes-Oxley Act) to be provided by our independent registered public accounting firm. In conjunction withthe Audit Committee, we have adopted policies prohibiting (1) executive officers from retaining ourindependent registered public accounting firm to provide personal accounting or tax services and (2) Staples,

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without first obtaining the Audit Committee’s approval, from filling an officer level position in the financedepartment with a person who was previously employed by our independent registered public accounting firm.

• Audit Committee Financial Expert. Our Board has determined that Mr. Sulentic is an audit committee financialexpert under the rules of the Securities and Exchange Commission and is independent as defined by NASDAQlisting standards.

• Independent Compensation Committee Consultant. Under the Compensation Committee’s charter, we areprohibited from engaging any independent compensation advisor hired by the Compensation Committee.

• Corporate Governance Outreach Program. In late 2010, we conducted our annual corporate governanceoutreach program, where we had in-person and telephonic meetings with a variety of large and smallshareholders to understand what corporate governance issues were most important to them. We also met withproxy advisory groups and proxy solicitors to understand how we compared to other companies in terms ofcorporate governance. This outreach program was very beneficial to our understanding of the issues that wereimportant to our shareholders and also showed us the divergent opinions among our stockholders.

• Recoupment Policy. We have a recoupment policy whereby we provide for forfeiture and recovery of undeservedcash, equity and severance compensation from an employee that engages in harmful or unethical behavior suchas intentional deceitful acts resulting in improper personal benefit or injury to the company, fraud or willfulmisconduct that significantly contributes to a material financial restatement, violation of our Code of Ethics orbreach of employee agreements.

• Stock Ownership Guidelines. Our stock ownership guidelines require our non-employee directors to own aminimum level of equity in Staples worth at least five times the annual Board cash retainer (currently $75,000),or $375,000. These guidelines also require minimum equity ownership levels for the named executive officerslisted in this proxy statement, including our Chief Executive Officer, who must own equity in Staples worth atleast five times his annual salary.

• Political Contributions. Our Corporate Political Contributions Policy Statement sets forth basic principles that,together with our Code of Ethics and other policies and procedures, guide our approach to corporate politicalcontributions. As indicated in the policy statement, we make available on our website an annual report ofmonetary political contributions from corporate funds.

Director Independence

Our Board of Directors, in consultation with our Nominating and Corporate Governance Committee, determineswhich of our directors are independent. Our Corporate Governance Guidelines provide that directors are‘‘independent’’ if they (1) meet the definition of ‘‘independent director’’ under the NASDAQ listing standards (subjectto any further qualifications required of specific committee members under the NASDAQ listing standards) and (2) inour Board’s judgment, do not have a relationship with Staples that would interfere with the exercise of independentjudgment in carrying out the responsibilities of a director. Our Nominating and Corporate Governance Committeereviews the standards for independence set forth in our Corporate Governance Guidelines periodically andrecommends changes as appropriate for consideration and approval by our Board.

In accordance with our Corporate Governance Guidelines, our Board has determined that all of our directors areindependent except Mr. Sargent, who is employed as our Chief Executive Officer. In determining which of ourdirectors are currently independent, our Board considered all the available relevant facts and circumstances, includingthe following:

• Neither we nor any of our subsidiaries has employed or otherwise compensated the independent directorsother than for service on our Board and its committees during the past three years.

• We have not employed or otherwise compensated any family members (within the meaning of the NASDAQlisting standards) of the independent directors during the past three years.

• None of the independent directors or their family members is a partner of our independent registered publicaccounting firm or was a partner or employee of such firm who worked on our audit during the pastthree years.

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• None of our executive officers is on the compensation committee of the board of directors of a company thathas employed any of the independent directors or their family members during the past three years.

• No family relationships exist between any of our directors, nominees for director or executive officers.

• During the past three years, none of our directors has had a material direct or indirect business relationshipwith us or a ‘‘related party transaction’’ as described below.

Certain Related Business Transactions and Other Disclosures

Our written Code of Ethics sets forth the general principle that our directors, executive officers and otherassociates should avoid any situation that could be perceived as a conflict of interest, regardless of the dollar amountinvolved. This principle is also reflected in our written Corporate Governance Guidelines (‘‘Guidelines’’) and thewritten materials that we use to educate associates about conflict of interest guidelines. For example, under theGuidelines, if an actual or potential conflict of interest develops for any reason, including, without limitation, becauseof a change in business operations of the Company or because of a director’s circumstances, the director shouldimmediately report the matter to our General Counsel, who should then report the matter to the Nominating andCorporate Governance Committee (‘‘Committee’’) for review and determination. In the event there is a significantconflict, the director must resign or the conflict must be resolved. Additionally, under the Guidelines, any directorwho wishes to join the board of directors of another company must provide written notice to the chairperson of theCommittee. The chairperson of the Committee, after consultation with our General Counsel, will then respond to thedirector with a resolution. We also ask each of our executive officers and directors to fill out questionnaires every yearto help enable us to identify if a potential conflict of interest exists. Our Code of Ethics, Guidelines and the chartersfor all the committees of our Board are available at www.staples.com in the Corporate Governance section of theInvestor Information webpage.

There may be times when a commercial relationship involving our directors, executive officers or their familymembers is beneficial to us and is not likely to raise material conflict of interest issues. Our Code of Ethics providesthe following guidelines for certain types of commercial relationships:

• Executive officers cannot serve as a director for one of our customers or suppliers unless (1) the supplier’s orcustomer’s annual business with Staples is less than 5% of such company’s annual revenues, (2) the executiveofficer agrees not to participate or influence, directly or indirectly, any matter affecting the businessrelationship or transactions between Staples and the supplier or customer, and (3) the executive officer obtainswritten approval from our Chief Executive Officer (‘‘CEO’’) or, if the executive officer is the CEO, the writtenapproval from the Committee.

• Executive officers and directors must not make or hold financial investments in a company that is one of oursuppliers or customers unless (1) the annual sales to or purchases from us are less than 5% of such company’sannual revenues or (2) if such person’s ownership interest is both passive and insignificant and (3) for a privatecompany, such person obtains the written approval from our CEO or, if a board member, the written approvalfrom the Committee.

• Executive officers and directors must not make or hold financial investments in a company that is one of ourcompetitors unless the investment in publicly held competitors is insignificant (less than 1% of the company’sstock).

• Non-employee directors may work or consult for or serve on the board of a company that is one of oursuppliers or customers if (1) such company’s annual sales to or purchases from us are less than 5% of suchcompany’s annual revenues, (2) the director discloses the position to our General Counsel and the Committeeand (3) the director agrees not to participate or influence, directly or indirectly, any matter affecting thebusiness relationship or transactions between Staples and such company.

For fiscal year 2010, there were no exceptions to our Code of Ethics for our directors or executive officers.

Pursuant to the written charter of the Committee, the Committee is responsible for reviewing, approving orratifying any ‘‘related party transactions.’’ These are transactions which exceed $120,000 and in which (i) Staples andany of our directors, director nominees, executive officers, 5% shareholders and their immediate family members areparticipants, and (ii) such participants had or will have a direct or indirect material interest. In the course of reviewing

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potential related party transactions, the Committee considers the nature of the related person’s interest in thetransaction, if any; the presence of standard prices, rates, or terms consistent with arms-length dealings with unrelatedthird parties; the materiality of the transaction to each party; the reasons for entering into the transaction; thepotential effect of the transaction on the status of a independent director; and any other factors the Committee maydeem relevant. If a transaction is deemed to be a related party transaction, the procedures for approval or ratificationof such transaction for Staples, our directors, executive officers and 5% shareholders are the same as those listedabove for actual or potential conflicts of interests involving directors under the Guidelines.

For fiscal year 2010, although we did not have any ‘‘related party transactions,’’ we did provide office supplyproducts or related services, such as copying, branding of promotional products or technology services, to companiesor organizations affiliated with our directors and our executive officers. Below is a list of companies for which wereceived greater than $120,000 in fiscal year 2010 for providing our supplies or services.

AMB Realty CB Richard Ellis Group OSI Restaurant Partners, LLCBain & Company Hormel Foods Corporation TJX Companies, Inc.Casella Waste Systems Kroger Company

The amounts received by us in 2010 for the sale of office supplies and related services to these companies rangefrom approximately $120,000 to approximately $10.5 million and the median amount received from such sales wasapproximately $354,689. In each case, the amount was immaterial to the company purchasing the goods and services,as well as immaterial to Staples. The largest amount of approximately $10.5 million represents 0.04% of our revenuesbased on sales for fiscal year ended January 29, 2011 of approximately $25 billion.

In addition, in 2010 we also leased a facility from CB Richard Ellis and paid for leasehold improvements forapproximately $750,000. We also paid approximately $365,000 for employee background check services from aprivately held company for which one of our directors serves as the Chairman of such company’s board of directorsand approximately $1.2 million to Wright Express Corporation for fleet services.

In all instances, whether we provided the products/services, received the services or leased a facility, no directoror executive officer of the affiliated company participated in the negotiation of the transaction and the products,services or lease were provided on arm’s length terms and conditions and in the ordinary course of business. Nodirector or executive officer had a direct or indirect material interest in the transaction. The Committee determinedthat none of these transactions were ‘‘related party transactions’’ and that such transactions would not interfere withthe exercise of independent judgment in carrying out the responsibilities of a director.

Paul F. Walsh was the Chief Executive Officer of Clareon Corporation, a privately held electronic paymentsprovider, from March 2000 to September 2002. In October 2002, to facilitate its acquisition by Fleet Boston Corp.,Clareon Corporation filed for Chapter 11 bankruptcy protection.

Board Leadership Structure

Our Board of Directors determines its leadership structure on an annual basis based on a recommendation of theCommittee. The Board believes that it should not have a predetermined policy as to whether the Board should be ledby an independent Chairperson or independent Lead Director, but rather it is best for the Board to evaluate thestructure and determine what is best for Staples based on a number of factors such as the size of the Board,the number of independent directors, the established process for and record of Board and management interaction,the qualifications and skills of the individual directors considered for the roles and company performance. For thisyear, the Board determined that it was appropriate that Ronald Sargent, our Chief Executive Officer, should remainas Chairperson of the Board and that Arthur Blank should continue in his role as independent Lead Director. TheBoard believes that its current leadership structure assures the appropriate level of management oversight andindependence. The Board felt that Mr. Sargent’s knowledge of Staples and the office products industry uniquelypositioned him to lead the Board particularly as it focuses on strategic issues and risks facing the company.Mr. Blank’s leadership in fulfilling his role as independent Lead Director counterbalances any potential conflict ofinterest arising from having our Chief Executive Officer serve as the Board’s Chairperson.

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Our Lead Director has the following responsibilities:

• Assure that meetings with the independent directors are held in executive sessions typically, as was the case thisyear, after every Board meeting, but in all circumstances at least twice a year;

• Facilitate communications and serve as a liaison between independent directors and the Chairperson ofthe Board;

• Coordinate the annual performance review of our Chief Executive Officer;

• Work with the Chairperson of the Board in the preparation of the agenda for each board meeting and approvesuch agenda;

• Call, if needed, meetings of independent directors;

• Preside at all meetings of the Board where the Chairperson is not present, including executive sessions of theindependent directors;

• Represent the independent directors if a meeting is held with a major stockholder; and

• Otherwise consult with the Chairperson of the Board on matters relating to corporate governance and Boardperformance.

Meetings and Committees of our Board

Our Board of Directors held a total of four meetings during our 2010 fiscal year. The number of meetings held byeach of the committees of our Board during our 2010 fiscal year is set forth below under the description of eachcommittee. During our 2010 fiscal year, each incumbent director attended at least 75% of the combined Boardmeetings held while such person was a director and committee meetings held while such person was a member of suchcommittee. Our Corporate Governance Guidelines provide that directors are encouraged to attend the AnnualMeeting, and all of our directors attended our 2010 Annual Meeting.

Our Board has five standing committees: the Audit Committee, the Compensation Committee, the Nominatingand Corporate Governance Committee, the Finance Committee and the Executive Committee. The chair of eachcommittee, as a matter of regular practice and to the extent possible, reviews committee meeting materials withmanagement in advance of each Board committee meeting. Each of our standing Board committees operates under awritten charter adopted by our Board, a copy of which is available at www.staples.com in the Corporate Governancesection of the Investor Information webpage.

Committee membership as of April 11, 2011 was as follows:

Audit Committee Compensation CommitteeRobert Sulentic, Chairperson Carol Meyrowitz, ChairpersonJustin King Mary Elizabeth BurtonElizabeth A. Smith Robert C. Nakasone

Paul F. Walsh

Nominating and Corporate Governance Committee Finance CommitteeVijay Vishwanath, Chairperson Rowland T. Moriarty, ChairpersonArthur M. Blank Basil L. AndersonRowland T. Moriarty Paul F. Walsh

Executive CommitteeRonald L. Sargent, ChairpersonArthur M. BlankRowland T. MoriartyRobert C. Nakasone

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Audit Committee

The Audit Committee assists our Board in overseeing our compliance with legal and regulatory requirements, theintegrity of our financial statements, our independent registered public accounting firm’s qualifications andindependence, and the performance of our internal audit function and our independent registered public accountingfirm through receipt and consideration of certain reports from our independent registered public accounting firm. Inaddition, the Audit Committee discusses our risk management policies and reviews and discusses with managementand the independent registered public accounting firm our annual and quarterly financial statements and relateddisclosures. The Audit Committee is directly responsible for appointing, compensating, evaluating and, whennecessary, terminating our independent registered public accounting firm, and our independent registered publicaccounting firm reports directly to the Audit Committee. The Audit Committee also prepares the Audit CommitteeReport required under the rules of the Securities and Exchange Commission, which is included elsewhere in this proxystatement. The Audit Committee has established escalation and oversight procedures for the treatment of complaintsregarding accounting, internal accounting controls or auditing matters, including procedures for confidential andanonymous submission by our associates of concerns regarding questionable accounting, internal accounting controlsor auditing matters. The Audit Committee meets independently with our independent registered public accountingfirm, management and our internal auditors. The members of the Audit Committee are independent directors, asdefined by its charter and the rules of the Securities and Exchange Commission and NASDAQ Stock Market. TheAudit Committee met five times in person and three times by telephone during our 2010 fiscal year. Our Board hasdetermined that Mr. Sulentic is an audit committee financial expert under the rules of the Securities and ExchangeCommission and is independent as defined by NASDAQ listing standards.

Compensation Committee

The Compensation Committee’s responsibilities include setting the compensation levels of executive officers,including our Chief Executive Officer, reviewing, approving and providing recommendations to our Board regardingcompensation programs, administering our equity incentive, stock purchase and other employee benefit plans andauthorizing awards under our equity incentive plans. The Committee may delegate its authority to management as itdeems appropriate and may also delegate its authority relating to ministerial matters. The members of theCompensation Committee are independent directors, as defined by its charter and the rules of the NASDAQ StockMarket. The Compensation Committee met four times in person and one time by telephone during our 2010 fiscalyear. For more information about the responsibilities of our Compensation Committee, see the ‘‘CompensationDiscussion and Analysis’’ section of this proxy statement.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee’s responsibilities include providing recommendations toour Board regarding nominees for director, membership on our Board committees, and succession matters for ourChief Executive Officer. An additional function of the Nominating and Corporate Governance Committee is todevelop and recommend to our Board our Corporate Governance Guidelines and to assist our Board in complyingwith them. The Nominating and Corporate Governance Committee also oversees the evaluation of our Board and ourChief Executive Officer, reviews and resolves conflict of interest situations, reviews and approves related partytransactions and interprets and enforces our Code of Ethics. The Nominating and Corporate Governance Committeealso oversees our political contributions and recommends to our Board any proposed revisions to our CorporatePolitical Contributions Policy Statement. The members of the Nominating and Corporate Governance Committee areindependent directors, as defined by its charter and the rules of the NASDAQ Stock Market. The Nominating andCorporate Governance Committee met four times in person during our 2010 fiscal year.

Finance Committee

The Finance Committee’s responsibilities include being available, as needed, to evaluate and consult with andadvise our management and our Board with respect to capital structure and capital policies, events and actions thatcould impact capital structure, payment of dividends, share repurchases, borrowing practices, debt or equityfinancings, credit arrangements, investments, mergers, acquisitions, joint ventures, divestitures and other similartransactions. The Finance Committee met one time in person and one time by telephone during our 2010 fiscal year.

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Executive Committee

The Executive Committee is authorized, with certain exceptions, to exercise all of the powers of our Board in themanagement and affairs of Staples. It is intended that the Executive Committee will take action only when reasonablynecessary to expedite our interests between regularly scheduled Board meetings. A quorum can only be established bythe presence of both a majority of the members of the Executive Committee and two non-management members ofthe Executive Committee. The Executive Committee did not meet during our 2010 fiscal year.

Risk Oversight by the Board of Directors

The Board of Directors is ultimately responsible for reviewing and approving our risk management strategy,framework and key risk parameters. Approval and establishment of our risk management framework and significantpolicies resides with the Audit Committee under powers delegated by the Board. Our most senior executive officersare responsible for collaborating with the Audit Committee to provide oversight to the risk management process, andprioritize and validate key risks. Management, through its Enterprise Risk Committee, is then responsible forimplementing the Board and Board committee approved risk management strategy and for developing policies,controls, processes and procedures to identify and manage risks. Our Vice President of Internal Audit on behalf of theEnterprise Risk Committee periodically reports to the Audit Committee on the effectiveness of its management ofmaterial business risks.

The Audit Committee administers its risk oversight role through the Board committee structure as well. EachBoard committee is responsible for monitoring and reporting on the material risks associated with its respectivesubject matter areas. The Audit Committee is responsible for oversight of our accounting and financial reportingprocesses and the integrity of our financial statements, the Compensation Committee is responsible for the oversightof risks associated with our compensation practices, the Finance Committee is responsible for risks related to capitalpolicies and practices and financial transactions and the Nominating and Corporate Governance Committee isresponsible for corporate governance risks, including director independence and related party transactions. In termsof overseeing the broader enterprise risk management (‘‘ERM’’) program, the Audit Committee is responsible forensuring all risk areas are being monitored by senior management, reported to the Board or appropriate Boardcommittee and being addressed as needed. Additionally, the Board collectively reviews and is responsible for risksassociated with our strategic plans.

In 2010, management presented to the Audit Committee the results of its enterprise wide review of the majorfinancial, operational and legal risks facing the company. In doing so, management reviewed its ERM methodologiesfor identifying and prioritizing financial, operational and legal risks and discussed the top level risks and related riskmanagement. During 2010, management also regularly updated the Audit Committee on ERM matters. The ERMreview and related discussions with the Audit Committee were headed by our internal audit department. We willcontinue this review and report findings to the Audit Committee on an ongoing basis in the future, with managementpresenting a comprehensive ERM update at least twice a year.

Independent of the ERM process, the Audit Committee is briefed regularly by our Vice President of InternalAudit and our Vice President of Global Business Conduct & Ethics. The Audit Committee uses the results of itsdiscussions with our Vice President of Internal Audit to approve the proposed audit schedule for the internal auditgroup. Our internal audit group identifies, assesses and assists management in addressing and managing risks by usingthe Integrated Framework by the Committee of Sponsoring Organizations of the Treadway Commission, also knownas COSO framework. Our Vice President of Global Business Conduct & Ethics provides quarterly reports to theAudit Committee on compliance matters.

In December 2010, management provided to the Compensation Committee a summary of an assessment ofmultiple overall compensation program risks as they related to existing and proposed compensation programs. Amongthe risks discussed were pay mix, performance metrics, performance goals and payout curves, payment timing andadjustments, overall mix of equity incentives and stock ownership guidelines and trading policies. The CompensationCommittee also discussed the many factors that serve to mitigate the various risks and excessive risk taking such as abalanced mix of cash and equity incentives, the mix and quality of performance metrics in our annual cash incentiveprogram, executive officers being subject to share ownership guidelines, and an aggressive recoupment policy thatapplies to all employees. Based on the information and related discussion, recognizing all compensation programs areinherently risk laden, the Compensation Committee determined that our compensation programs will not have a

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material adverse affect on Staples. In addition, in connection with changes to our compensation program, theCompensation Committee regularly examines the risks and methods to mitigate such risks.

Diversity

Diversity has always been very important to us. It comprises one of the four pillars of what we call Staples’ Soul.We strive to offer an inclusive business environment that offers diversity of people, thought, experience, and suppliers.This also holds true for our Board of Directors. Although we have no formal separate written policy, pursuant to ourCorporate Governance Guidelines, the Board annually reviews the appropriate skills and characteristics of the Boardmembers in light of the current composition of the Board, and diversity is one of the factors used in this assessment.Additionally, the Board is provided with an annual report on diversity initiatives and Staples’ approach and progresson such initiatives.

Director Candidates

The process followed by the Nominating and Corporate Governance Committee to identify and evaluate directorcandidates includes requests to Board members and others for recommendations, engaging a professional recruitingfirm to help identify and recruit potential candidates, meetings from time to time to evaluate biographical informationand background material relating to potential candidates and interviews of selected candidates by members of theNominating and Corporate Governance Committee and our Board.

Stockholders may recommend an individual to the Nominating and Corporate Governance Committee forconsideration as a potential director candidate by submitting the following information: (1) the candidate’s name;(2) appropriate biographical information and background materials regarding the candidate; and (3) a statement as towhether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5%of our common stock for at least a year as of the date such recommendation is made. Such information should besubmitted to the Nominating and Corporate Governance Committee, c/o Corporate Secretary, Staples, Inc.,500 Staples Drive, Framingham, Massachusetts 01702. Assuming that appropriate biographical and backgroundmaterial has been provided on a timely basis, the Nominating and Corporate Governance Committee will evaluatestockholder recommended candidates by following substantially the same process, and applying substantially the samecriteria, as it follows for candidates submitted by others.

Stockholders also have the right under our by-laws to directly nominate director candidates, without any action orrecommendation on the part of the Nominating and Corporate Governance Committee or our Board, by followingthe relevant procedures summarized in this proxy statement under the caption ‘‘Shareholder Proposals.’’

Communicating with our Board

Our Board will give appropriate attention to written communications that are submitted by stockholders, and willrespond if and as appropriate. Absent unusual circumstances or as contemplated by the committee charters, theChairperson of the Board (if an independent director), or the Lead Director (if one is appointed), or otherwise theChairperson of the Nominating and Corporate Governance Committee, with the advice and assistance of our GeneralCounsel, is primarily responsible for monitoring communications from stockholders and other interested parties andfor providing copies or summaries of such communications to the other directors as he or she considers appropriate.

Under procedures approved by our independent directors and subject to the advice and assistance from ourGeneral Counsel, communications are forwarded to the Chairperson of the Board (if an independent director), theLead Director (if one is appointed), or otherwise the Chairperson of the Nominating and Corporate GovernanceCommittee, who monitor communications from stockholders and other interested parties. Copies or summaries ofsuch communications are provided to all directors, if such persons consider it important and appropriate for alldirectors to know. In general, communications relating to corporate governance and corporate strategy are morelikely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as towhich we tend to receive repetitive or duplicative communications. In addition, as provided by our CorporateGovernance Guidelines, if a meeting is held between a major stockholder (including institutional investors) and arepresentative of the independent directors, the Lead Director will serve, subject to availability, as such representativeof the independent directors.

Stockholders who wish to send communications on any topic to our Board should address such communicationsto The Board of Directors, c/o Corporate Secretary, Staples, Inc., 500 Staples Drive, Framingham, Massachusetts01702.

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DIRECTOR COMPENSATION

The Compensation Committee is responsible for reviewing and making recommendations to our Board withrespect to the compensation paid to our non-employee directors (‘‘Outside Directors’’). Our Outside Directors arepredominantly compensated through equity awards, reflecting the Compensation Committee’s philosophy thatdirector pay should be aligned with the interests of our stockholders. In addition, the Outside Directors receive a cashretainer. There were no changes to the amount of compensation received by our Outside Directors in fiscal year 2010from fiscal year 2009.

It is the Compensation Committee’s goal to maintain a level of Outside Director compensation above the medianof companies both within our peer group as well as similarly-sized companies in general industry. The CompensationCommittee annually reviews an extensive analysis of marketplace practices for outside director pay conducted bymanagement and reviewed by the Compensation Committee’s independent advisor. Consistent with changes to ourequity program for associates, the Outside Director compensation program also reflects a value-based approach toequity grants in which the amount of the awards made to Outside Directors is based on a fixed value rather than afixed number of shares.

During fiscal year 2010, on the second business day following the first regularly scheduled Board meeting, each ofour Outside Directors received an annual grant of (1) stock options with a value of $112,500 that vest after one year,the underlying shares of which may be sold upon vesting, and (2) shares of restricted stock with a value of $112,500that vest after one year and may be sold only upon leaving our Board. In addition, on the same day the annual grantwas awarded, (a) the Lead Director was granted restricted stock units with a value of $40,000, (b) each chairperson ofthe Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee wasgranted restricted stock units with a value of $32,000 and (c) the chairperson of the Finance Committee was grantedrestricted stock units with a value of $8,000. In each case, the restricted stock units vest on the date of each of the fourregularly scheduled quarterly Board meetings that such Lead Director or chairperson holds such position and are paidin shares on the one year anniversary of the award. The shares issued in connection with these restricted stock unitsmay be sold only upon leaving the Board. The number of shares of restricted stock or restricted stock units to begranted is determined by dividing the fixed value by the closing price of our common stock on the date of grant. Thenumber of stock options is determined by dividing the fixed value by the binomial value used by Staples for financialreporting purposes and then dividing that number by the closing price of our common stock on the date of grant.Stock options have an exercise price equal to the fair market value of the closing price of our common stock asreported on the Nasdaq Global Select Market on the date of grant. Upon a change-in-control of Staples or upon adirector leaving our Board after reaching the age of 72, all of such director’s outstanding unvested stock options andrestricted stock would fully vest and the restricted stock units would fully vest and be paid out.

Each Outside Director also received a quarterly cash payment of $18,750 and is reimbursed for reasonableexpenses incurred in attending meetings of our Board. The chairperson of the Audit Committee received anadditional quarterly cash payment of $3,750.

In March 2011, our Board elected to reduce the amount of its total compensation by $50,000 by eliminating theannual grant of stock options valued at $112,500 and increasing the value of the annual grant of shares of restrictedstock from $112,500 to $175,000. The shares of restricted stock for the annual grant vest after one year and may besold upon vesting. The Board also increased the stock ownership guideline from four to five times the annual Boardcash retainer. All Outside Directors are subject to the stock ownership guideline and have five (5) years after joiningthe Board to meet such ownership guideline.

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The table below sets forth certain information concerning our 2010 fiscal year compensation of our OutsideDirectors.

DIRECTOR COMPENSATION FOR 2010 FISCAL YEAR

Fees earned or Stock Option All Otherpaid in cash Awards Awards Compensation Total

Name* ($) ($) (1)(2) ($) (1)(3) ($) (4) ($)

Basil L. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 112,507 112,504 324 300,335Arthur M. Blank . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 152,516 112,504 527 340,547Mary Elizabeth Burton . . . . . . . . . . . . . . . . . . . . . 75,000 112,507 112,504 324 300,335Justin King . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 112,507 112,504 378 300,389Carol Meyrowitz . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 120,524 112,504 162 308,190Rowland T. Moriarty . . . . . . . . . . . . . . . . . . . . . . . 75,000 120,513 112,504 648 308,665Robert C. Nakasone . . . . . . . . . . . . . . . . . . . . . . . 75,000 144,509 (5) 112,504 648 332,661Elizabeth A. Smith . . . . . . . . . . . . . . . . . . . . . . . . 75,000 112,507 112,504 2,165 302,176Robert E. Sulentic . . . . . . . . . . . . . . . . . . . . . . . . . 90,000 144,509 112,504 324 347,337Vijay Vishwanath . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 144,509 112,504 378 332,391Paul F. Walsh . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 112,507 112,504 405 300,416

* Excludes Mr. Sargent, our Chief Executive Officer, who does not receive compensation for his services asdirector and whose compensation as a named executive officer is reported in the Summary Compensation Tableincluded in this proxy statement.

(1) The amounts shown in the Stock Awards and Option Awards columns represent the aggregate grant date fairvalue of awards computed in accordance with Financial Accounting Standards Board (‘‘FASB’’) AccountingStandards Codification (‘‘ASC’’) Topic 718 for awards granted during our 2010 fiscal year, not the actual amountspaid to or realized by our Outside Directors during our 2010 fiscal year.

(2) The aggregate fair value of these awards is based on the market price of our common stock on the date of grant.Fractional shares are rounded up to the nearest whole share. Awards made during 2010 represent:

• Annual grant of shares of restricted stock to each director with a grant date fair value of $112,500;

• for Mr. Blank, our Lead Director for fiscal year 2010, restricted stock units with a grant date fair valueof $40,000;

• for Messrs. Sulentic and Vishwanath, chair of our Audit Committee and chair of our Nominating andCorporate Governance Committee, respectively, for fiscal year 2010, restricted stock units with a grantdate fair value of $32,000 each;

• for Mr. Moriarty, chair of our Finance Committee for fiscal year 2010, restricted stock units with a grantdate fair value of $8,000;

• for Mr. Nakasone, chair of our Compensation Committee for three quarters of fiscal year 2010, restrictedstock units with a grant date fair value of $32,000; and

• for Ms. Meyrowitz, chair of our Compensation Committee for a quarter of fiscal year 2010, restrictedstock units with a grant date fair value of $8,000.

(3) The fair value of each stock option award is estimated as of the date of grant using a binomial valuation method.Fractional shares are rounded up to the nearest whole share. Awards made during 2010 represent stock optionseach with a grant date fair value of $112,500. Additional information regarding the assumptions used to estimatethe fair value of all stock option awards is included in Note J in the Notes to the Consolidated FinancialStatements contained in our Annual Report on Form 10-K for our 2010 fiscal year.

(4) Reflects payments of dividend equivalents on restricted stock. Beginning with awards granted after January 2009,dividend equivalents are not paid on unvested restricted stock.

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(5) Mr. Nakasone served as chairperson for only three quarters of fiscal year 2010 and, accordingly, one quarter ofthe award, equal to 346 restricted stock units ($8,000 grant date fair value), did not vest and was not paid out.

The table below supplements the Director Compensation table above by providing (1) the number of restrictedshares, restricted stock units and stock options awarded to our directors during our 2010 fiscal year and (2) the totalnumber of stock options, unvested restricted shares and outstanding restricted stock units held by our directors as ofJanuary 29, 2011, the end of our 2010 fiscal year.

OUTSTANDING DIRECTOR AWARDS

Total Options.Unvested

Restricted SharesNumber of and Restricted

Shares Stock UnitsAward Awarded in as of 2010 FYE

Name Grant Date Type FY 2010 (1)(2)(3)(4)

Basil L. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 OP 16,067 94,742

Arthur M. Blank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 RSU 1,729 1,7293/11/2010 OP 16,067 167,867

Mary Elizabeth Burton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 OP 16,067 226,367

Justin King . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 OP 16,067 82,367

Carol Meyrowitz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,86212/9/2010 RSU 361 3613/11/2010 OP 16,067 77,867

Rowland T. Moriarty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 RSU 346 3463/11/2010 OP 16,067 136,367

Robert C. Nakasone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 RSU 1,383 (5) 1,3833/11/2010 OP 16,067 203,867

Elizabeth Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 10,8773/11/2010 OP 16,067 41,954

Robert E. Sulentic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 RSU 1,383 1,3833/11/2010 OP 16,067 82,367

Vijay Vishwanath . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 RSU 1,383 1,3833/11/2010 OP 16,067 86,867

Paul F. Walsh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3/11/2010 RS 4,862 4,8623/11/2010 OP 16,067 203,867

RS = Restricted stockRSU = Restricted stock unitOP = Stock option

(1) All of our Outside Directors other than Messrs. King, Sulentic and Vishwanath, Ms. Meyrowitz and Ms. Smithare currently eligible for accelerated vesting of their stock and option awards granted between June 30, 2004 andDecember 13, 2007 based on age and service requirements under our Rule of 65, which is described under thecaption ‘‘Accelerated Vesting of Awards’’ following the Grants of Plan-Based Awards for 2010 Fiscal Year tableelsewhere in this proxy statement.

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(2) Restricted stock awards made during 2008, 2009 and 2010 vest in full on the first anniversary of the grant date,provided that the director then serves on our Board, and may be sold only upon leaving our Board. The shares ofrestricted stock awarded to a director will fully vest upon retirement or resignation should such director leave ourBoard after reaching the age of 72. Restricted stock awards made prior to 2008 vest in full on the thirdanniversary of the grant date, provided that the director then serves on our Board until that date. Shares ofrestricted stock awarded prior to 2008 to a director who meets the age and length of service requirements underour Rule of 65 will fully vest upon retirement or resignation should such director leave our Board before the endof the applicable vesting period.

(3) Restricted stock units awarded during 2010 to our Lead Director and each chairperson of the Audit Committee,Compensation Committee, Nominating and Corporate Governance Committee and Finance Committee vest onthe date of each of the four regularly scheduled quarterly Board meetings that such Lead Director or chairpersonheld such position and are paid on the one year anniversary of the award. The shares issued upon the vesting ofrestricted stock units may be sold only upon leaving the Board. The number of shares of restricted stock orrestricted stock units is determined by dividing the fixed value by the closing price of our common stock on thedate of grant. Prior to 2010, our Lead Director and each chairperson received restricted stock awards for servicein such positions.

(4) Stock options awarded during 2008, 2009 and 2010 vest in full on the first anniversary of the grant date, providedthat the director then serves on our Board. The stock option awarded to a director will fully vest upon retirementor resignation, should such director leave our Board after reaching the age of 72. Stock option awards made priorto 2008 represent stock option grants that vest ratably on an annual basis over a four-year vesting period,provided that the director then serves on our Board. The stock options awarded prior to 2008 to a director whomeets the age and length of service requirements under our Rule of 65 will fully vest upon retirement orresignation, should such director leave our Board before the end of the applicable vesting period.

(5) Mr. Nakasone served as chairperson for only three quarters of fiscal year 2010 and, accordingly, one quarter ofthe award, equal to 346 restricted stock units ($8,000 grant date fair value), did not vest and was not paid out.

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PROPOSAL 2 — RATIFICATION OF SELECTION OFINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of our Board has selected the firm of Ernst & Young LLP as our independent registeredpublic accounting firm for the current fiscal year. Ernst & Young LLP has served as our independent auditor since ourinception. Although stockholder approval of the Audit Committee’s selection of Ernst & Young LLP is not requiredby law, our Board believes that it is advisable to give stockholders an opportunity to ratify this selection. If thisproposal 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 theopportunity to make a statement if they desire to do so and will also be available to respond to appropriate questionsfrom stockholders.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF ERNST &YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THECURRENT FISCAL YEAR.

Report of the Audit Committee of the Board

The Audit Committee of the Board of Directors is composed of three members and acts under a written charteras amended and restated on December 7, 2010, a copy of which is available at our public web site at www.staples.comin the Corporate Governance section of the Investor Information webpage. The members of the Audit Committee areindependent Directors, as defined by its charter and the rules of the Commission and NASDAQ GlobalSelect Market.

The Audit Committee provides independent, objective oversight of Staples’ financial reporting process on behalfof the Board of Directors. Management has the primary responsibility for the preparation, presentation and integrityof Staples’ financial statements and for maintaining an adequate system of disclosure controls and procedures andinternal control over financial reporting for that purpose. In fulfilling its oversight responsibilities, the AuditCommittee reviewed and discussed with management the audited financial statements for the 2010 fiscal year, whichreview included a discussion of the quality, not just the acceptability, of the accounting principles, the reasonablenessof significant judgments, and the clarity of disclosures in the financial statements.

The Audit Committee reviewed and discussed with Ernst & Young LLP, Staples’ independent registered publicaccounting firm, which is responsible for expressing an opinion on the conformity of those audited financialstatements with generally accepted accounting principles, its judgments as to the quality, not just the acceptability, ofStaples’ accounting principles and such other matters as are required to be discussed with the Audit Committee undergenerally accepted auditing standards, including Statement on Auditing Standards No. 61 (Communication with AuditCommittees), as amended (AICPA Professional Standards, Vol.1 AU Section 380), as adopted by the Public CompanyAccounting Oversight Board in Rule 3200T. The Audit Committee also received the written disclosures and the letterfrom the independent registered public accounting firm required by applicable requirements of the Public CompanyAccounting Oversight Board regarding the registered public accounting firm’s communications with the AuditCommittee concerning independence. The Audit Committee discussed with the independent registered publicaccounting firm the independent registered public accounting firm’s independence from management and Staples andconsidered the compatibility of non-audit related services provided to Staples by the independent registered publicaccounting firm with the independent registered public accounting firm’s independence.

The Audit Committee discussed with Staples’ internal auditors and independent registered public accountingfirm the overall scope and plans for their respective audits. The Audit Committee met with the internal auditors andindependent registered public accounting firm, with and without management present, to discuss the results of theirexaminations, their evaluations of Staples’ internal controls, and the overall quality of Staples’ financial reporting.

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Based on the reviews and discussions referred to above, the Audit Committee recommended to Staples’ Board ofDirectors, and the Board approved, that Staples’ audited financial statements be included in Staples’ Annual Reporton Form 10-K for the year ended January 29, 2011 for filing with the Securities and Exchange Commission.

Audit Committee:

Robert Sulentic, ChairJustin KingElizabeth A. Smith

Independent Registered Public Accounting Firm’s Fees

Audit Fees

Ernst & Young LLP billed us an aggregate of approximately $8.2 million and $9.1 million in fiscal years 2010 and2009, respectively, for professional services rendered in connection with our annual audit, the audit of our internalcontrols over financial reporting, the review of our interim financial statements included in our Form 10-Q, statutoryfilings, registration statements, accounting consultation and compliance with regulatory requirements. For fiscal years2010 and 2009, approximately $1.3 million and $1.8 million, respectively, of these fees were related to the CorporateExpress integration.

Audit-Related Fees

Ernst & Young LLP billed us an aggregate of approximately $159,000 and $112,000 in fiscal years 2010 and 2009,respectively, for services related to assistance with internal control reporting, other reports required to satisfyregulatory requirements and employee benefit plan audits.

Tax Fees

Ernst & Young LLP billed us an aggregate of approximately $1.4 million and $1.6 million in fiscal years 2010 and2009, respectively, for services related to tax compliance, tax planning and tax advice. For fiscal years 2010 and 2009,approximately $203,000 and $150,000, respectively, of these fees was related to tax compliance.

All Other Fees

We did not receive any other services from Ernst & Young LLP; therefore, they did not bill us in fiscal years 2010and 2009 for other services.

Pre-Approval Policy and Procedures

The Audit Committee has adopted policies and procedures relating to the approval of all audit and non-auditservices that are to be performed by our independent registered public accounting firm. These policies provide that wewill not engage our independent registered public accounting firm to render audit or non-audit services (other than deminimus non-audit services as defined by the Sarbanes-Oxley Act) unless the service is specifically approved inadvance by the Audit Committee. All services provided to us by Ernst & Young LLP in each of fiscal years 2010 and2009 were approved in accordance with these policies.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Compensation Committee (the ‘‘Committee’’) of our Board of Directors (the ‘‘Board’’), which is comprisedentirely of independent directors, oversees our executive compensation program and determines all compensation forour executive officers. This section of the proxy statement focuses on the compensation program for our ChiefExecutive Officer (‘‘CEO’’), Chief Financial Officer (‘‘CFO’’) and three other most highly compensated executiveofficers, whom we refer to collectively as our ‘‘named executive officers.’’

Our executive compensation program is designed to meet three principal objectives:

• Attract, retain and reward executive officers who contribute to our long term success.

• Align compensation with short and long term business objectives.

• Motivate and reward high levels of individual and team performance.

These objectives collectively seek to link compensation to overall company performance, thereby ensuring that theinterests of our executives are aligned with the interests of our stockholders.

In December 2010, the Committee performed a broad based review of our executive compensation program. Aspart of this review, to assess whether our compensation program was aligned with our performance relative to ourpeer group, the Committee analyzed our named executive officers’ compensation against our overall performance,with a focus on earnings per share (‘‘EPS’’) and return on invested capital (‘‘ROIC’’). EPS and our internal measureof ROIC (return on net assets (‘‘RONA’’)) are the key performance metrics of our compensation program because ofour view that they are both critical to creating long term stockholder value. In addition, the Committee also reviewedother financial and performance metrics such as total shareholder return (‘‘TSR’’). When the Committee performedthis analysis, proxy based compensation data was only available through 2009 so the Committee’s analysis was limitedthrough such period. The Committee also considered 2010 year to date performance at the time of the review. Whilethe Committee believes financial performance should be the most significant driver of compensation, other factorsthat drive long term value for stockholders are also taken into account by the Committee, including achievement ofoperational, strategic and qualitative objectives.

Based on the above 2010 review of executive compensation, the Committee concluded that:

• The compensation program had achieved our desired objective of aligning compensation with short and longterm business objectives.

• The compensation program had promoted the retention of key executives and related succession planninggoals, as demonstrated by the average tenure of our named executive officers being 16 years.

• The compensation program was aligned with the marketplace.

• Overall individual compensation was appropriate in view of our performance which was strong during2007-2009 and mixed in 2009 and 2010.

• Each of the named executive officers had challenging and wide ranging responsibilities commensurate withtheir overall pay package.

Throughout this Compensation Discussion and Analysis, we refer to the sum of base salary, performance basedannual cash bonuses and long term incentives as ‘‘total direct compensation’’ (‘‘TDC’’) and we refer to the sum ofbase salary and performance based annual cash bonuses as ‘‘total cash compensation.’’

Executive Summary

CEO pay was aligned with performance. The following two tables which the Committee reviewed reflect, relative toour peer group, alignment between our CEO’s base salary, total cash compensation, and TDC and the Company’sperformance as measured by TSR, EPS growth and ROIC over the 2009 and 2007-2009 periods. In reviewing each ofthe components of compensation, the Committee placed greatest emphasis on realizable TDC, as opposed to theTDC reported in our proxy statement, since realizable TDC reflects the real value of the equity awards and increasesand decreases as the share price changes. The percentiles in the tables show, relative to our peer group, the CEO’s orStaples’ position with respect to each compensation element and with respect to each performance measure.

26

14APR201121494103

15APR201110023260

Percentile CEO BaseSalary

CEO TotalCash

CEO TDC(Realizable)(1)

1 Year Financial Performance Relative to Peer Group - Fiscal 2009

CEO TDC(As Reported)

TotalShareholder

Return

EPSGrowth

ROIC %

75th

ActualPerformance

Percentile vs.Peer Group

50th

25th

53% 31% 74%

49.2%

56%

-11.6%

34%

10.8%

57%39%

PercentileCEO Base

SalaryCEO Total

CashCEO TDC

(Realizable)(1)(2)

3 Year Financial Performance Relative to Peer Group - Fiscal 2007-2009

CEO TDC(As Reported)(2)

TotalShareholder

Return CAGR

EPSCAGR

ROICAverage

%

75th

ActualPerformance

Percentile vs.Peer Group

50th

25th

47% 30% 90%

-1.7%

81%

-3.8%

49%

11.4%

62%77%

(3)

(1) For both of the above tables, realizable TDC is the sum of base salary, cash bonus paid and the realizable value of equity, which is the sum ofthe market value on October 18, 2010 (the date of the analysis) of restricted stock grants awarded over the relevant period and the value ofstock options awarded over the relevant period as determined by subtracting the grant price from the closing price on October 18, 2010.

(2) Includes the impact of special equity awards. The CEO’s 2007 Special Performance Share Award is included, although management currentlybelieves that this award will not payout as it is extremely unlikely that the aggressive threshold performance levels will be achieved.

(3) Normalizing the value of special equity awards over the vesting periods results in realizable TDC at the 55th percentile relative to thepeer group.

27

13APR201101395795

The following graph illustrates how Staples’ CEO’s annual realizable pay over the last five fiscal years has beenaligned with performance. Base salary and annual performance based cash bonus are the same as reported in ourSummary Compensation Table for the respective fiscal year. The values for stock options and time based restrictedstock awards are the realizable value (described above) at the end of fiscal 2010. Special grants are normalized overtheir respective vesting periods, excluding the 2007 Special Performance Share Award which is extremely unlikely topayout. Cumulative TSR is represented by the line graph, consistent with the Stock Performance Graph shown in ourfiscal year 2010 Annual Report on Form 10-K.

Average annual realizable compensation for our CEO over the five year period is $7,819,534, while totalcompensation at target over the same period averaged $11,000,000. Realizable compensation only exceeded targetcompensation in 2009, when TSR growth was 49.5%.

CEO REALIZABLE TDC VS. TSR (FISCAL 2006-2010)

$14,000,000 120

100

80

60

40

20

0

100

113103

70

104 101$12,000,000

$10,000,000

$8,000,000

$6,000,000

$4,000,000

$2,000,000

$0

Base Salary Annual Performance Based Cash Bonus Long Term Incentives All Other Compensation TSR

2006 2007 2008 2009 2010

CEO Compensation 2006 2007 2008 2009 2010

Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . $1,070,192 $1,108,775 $1,112,000 $ 1,112,000 $ 1,145,400Annual Performance Based Cash Bonus . . . . . $1,523,018 $ 621,006 $ 0 $ 1,344,291 $ 1,633,639Long Term Incentives (paper value as of

1/28/11; SPLS=$22.32) . . . . . . . . . . . . . . . . $1,711,944 $3,228,365 $4,548,459 $ 9,111,969 $ 7,562,565Stock Option . . . . . . . . . . . . . . . . . . . . . . . $ 0 $ 0 $ 0 $ 1,428,733 $ 1,969,028Time based Restricted Stock . . . . . . . . . . . $1,711,944 $1,554,365 $1,562,043 $ 1,754,508 $ 2,632,666Performance based Share Payout . . . . . . . . $ 0 $ 0 $ 0 $ 2,942,312 $ 0Performance based Cash Accrual . . . . . . . . $ 0 $ 0 $ 0 $ 0 $ 814,371Special Grants: Normalized Value . . . . . . . $ 0 $1,674,000 $2,986,416 $ 2,986,416 $ 2,146,500

All Other Compensation . . . . . . . . . . . . . . . . $ 437,018 $ 471,292 $ 483,963 $ 393,796 $ 477,978

Total Actual Pay . . . . . . . . . . . . . . . . . . . . . . $4,742,172 $5,429,438 $6,144,422 $11,962,056 $ 10,819,582

Difference from Prior Year . . . . . . . . . . . . . . N/A $ 687,266 $ 714,984 $ 5,817,634 �$1,142,473% Change . . . . . . . . . . . . . . . . . . . . . . . . . . N/A 14.5% 13.2% 94.7% �9.6%

TSR 100 (base year) . . . . . . . . . . . . . . . . . . . 113 103 70 104 1011-Year TSR . . . . . . . . . . . . . . . . . . . . . . . . . 12.8% �8.5% �32.4% 49.5% �3.3%

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15APR201110023414

Our pay mix emphasizes ‘‘at risk’’ performance based compensation. To align our named executive officers’compensation with the interests of our stockholders, a substantial portion of compensation is ‘‘at risk’’ andperformance based. The five main elements of TDC are base salary, annual cash bonus, long term cash incentives,restricted stock and stock options. The chart below highlights the extent to which the total pay opportunity ischaracterized by ‘‘at risk’’ performance based compensation by illustrating the percentage of each element at targetand showing the ‘‘at risk’’ portion of TDC for each of our named executive officers.

The long term cash component of the long term incentive portfolio and the bonus earned under our ExecutiveOfficer Incentive Plan are performance based plans and represent ‘‘at risk’’ compensation since minimum levels ofperformance must be attained in order for any payout to occur. Similarly, the stock option component of our longterm equity incentives is performance based and ‘‘at risk’’ since the stock price at exercise must exceed the original fairmarket value grant price in order to provide any value to the executive.

* Target 2010 compensation does not include the 2010 Special Performance and Retention Share Awards because they are not part of ourongoing annual compensation program. The valuation information is consistent with the information presented in the SummaryCompensation Table included in this proxy statement.

We made progress in 2010 against key objectives. Some of our 2010 performance highlights include:

• The Company made steady progress growing EPS and RONA.

• EPS: Diluted EPS, on a GAAP basis, increased 19 percent to $1.21 from the $1.02 achieved in fiscal 2009.Adjusting for pre-tax integration and restructuring expense in fiscal years 2009 and 2010 and a class actionlawsuit settlement in fiscal 2009, adjusted EPS increased 11 percent to $1.27 from the $1.14 achieved infiscal 2009.

• RONA: Improved overall company RONA by $81.9 million year over year.

• Customer service metrics are at historical highs.

• We made great progress with the integration of Corporate Express which was our largest acquisition since thecompany was founded and is transformational in setting the stage for future growth.

• Growth initiatives have focused the organization, clarified capabilities and begun to show positive results.

While our stock did not perform up to our expectations, we expect that our 2010 achievements will enable us to drivelong term stock price appreciation.

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Commitment to best practices in executive compensation governance. Our commitment to what we view as bestpractices in executive compensation governance is reflected in much of the discussion contained in this CompensationDiscussion and Analysis. The highlights include the following practices:

• Our executive officers are subject to a compensation recoupment or ‘‘clawback’’ policy, stock ownershipguidelines and a no hedging policy.

• We have limited perquisites.

• The Committee’s independent compensation consultant, Exequity, is retained directly by the Committee andperforms services solely in support of the Committee.

• Our short and long term performance based cash programs are based on the achievement of objective metricsthat we view as critical long term value drivers. The Committee can decrease but not increase cash awardsunder our annual and long term cash incentive plans.

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Pay Philosophy and Pay Mix

We seek to achieve our executive compensation objectives by relying on the compensation philosophy articulatedbelow and through the use of the five compensation components which are summarized in the table that follows. TheCommittee relies upon its judgment and not upon rigid guidelines or formulas in determining the amount and mix ofcompensation elements for each named executive officer.

Pay Philosophy

The Committee periodically reviews its pay philosophy. Our current pay philosophy is as follows:

Our executive compensation philosophy is that a significant portion of compensation should be directly linked toStaples’ overall performance, specifically:

• Base salaries are targeted to approximate median salary levels of executives in our peer group.

• Annual cash incentive opportunities are targeted at the median of target annual incentive levels in our peer group.

• Long term incentives are targeted between the 50th and 75th percentile of target levels within our peer group. Theseincentives represent a significant portion of total compensation and are largely linked to Staples’ overallperformance. Top quartile company performance would likely result in delivery of top quartile total compensation.

Pay Mix

The table below summarizes the core elements of our annual compensation program for our named executiveofficers. Because special equity awards, such as the 2010 Special Performance and Retention Share Awards, areinfrequently issued, they are not included in the delineation of pay components.Compensation Principal Contributions toComponent Compensation Objectives Highlights

Base salary • Attracts, retains and rewards talented • Targeted to approximate median ofexecutives with annual salary that reflects comparable peer group positions.the executive’s performance, skill set andvalue in the marketplace. • The only fixed component of

compensation.

• In 2010, received 3% base salaryincreases consistent with the salaryincrease budget for all salariedassociates. This was the first increasesince 2007.

Performance based • Focuses executives on annual financial • Total annual cash compensation (baseannual cash bonus and operating results. salary + target bonus) is targeted at

median of comparable peer group• Links compensation to stockholder positions.

interests.

• Enables total cash compensation to • The average annual cash bonus payout,remain competitive within the as a percentage of salary, to the currentmarketplace for executive talent. named executive officers over the past

three fiscal years (2008-2010) has been63%.

• No cash bonus was paid in fiscal year2009 based on fiscal 2008 financialresults.

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Compensation Principal Contributions toComponent Compensation Objectives Highlights

Long term incentives • Rewards the achievement of long term • We compare our long term incentives atbusiness objectives that benefit our target to ensure that we are competitivestockholders. with our peer group, with a focus on

being between the 50th and• Retains a successful and tenured 75th percentile

management team.

• 2010 fiscal year long term incentiveportfolio was stock options (42%),tenure-based restricted stock (27%), anda long term performance based cashincentive (31%).

• In 2010, the long term performancebased cash incentive awards replaced ourperformance share awards.

Retirement and other • Helps to attract and retain talented • Includes a limited Company match, up tobenefits executives with benefits that are 4% of salary and bonus, to a

comparable to those offered by supplemental executive retirement plan.companies in our peer group and other The Company does not have a pensioncompanies with whom we compete for plan.talent.

Executive perquisites • We offer limited executive perquisites. • We provide limited reimbursement fortax, estate and financial planningservices. The amounts reimbursed arenot grossed up for taxes.

Base Salary

The Committee generally sets base salaries for the named executive officers at approximately the median(50th percentile) of comparable positions in our peer group. Changes in base salary are typically considered based onindividual performance during our annual performance review process, as well as in the event of a promotion orchange in responsibilities. In March 2010, Mr. Sargent recommended a 3% increase in base salary for the other namedexecutive officers, consistent with the planned salary increase budget for all salaried associates. This was the firstincrease in base salary for our named executive officers since 2007. The Committee, after consulting with itsindependent consultant, approved his recommendation and also decided to increase Mr. Sargent’s salary by 3%,effective May 1, 2010. As a result of the Committee’s action, Mr. Sargent’s base salary approximated the median ofbase salaries for Chief Executive Officers in our peer group. Mr. Sargent’s base salary is 10% of his annual TDC and is65% greater than the base salary of the next highest paid named executive officer. In general, the Committee allocatesa greater percentage of Mr. Sargent’s TDC to performance based and equity incentives because Mr. Sargent isuniquely situated to influence our short and long term performance.

Performance Based Annual Cash Bonus (Executive Officer Incentive Plan)

Each of the named executive officers was eligible to participate in our Executive Officer Incentive Plan duringour 2010 fiscal year. Under the terms of the Executive Officer Incentive Plan, each named executive officer has atarget bonus award for each plan year. Target bonus awards were set between 80% and 150% of the actual base salarypaid to the named executive officer. The target bonus percentages are determined by the Committee based upon ananalysis of annual cash incentive opportunities for similar positions in the peer group companies. The Committeegenerally selects target bonus percentages for the named executive officers such that target total cash compensationapproximates the median of comparable positions in our peer group.

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Within 90 days after the beginning of fiscal year 2010, the Committee established EPS, RONA dollars, andcustomer service level performance objectives for the payment of bonus awards. The Committee may determine thatspecial one-time or extraordinary gains or losses should or should not be included in determining whether suchperformance objectives have been met. The Committee believes that it is appropriate to vary the performanceobjectives over time since each fiscal year’s objectives should be important in that year to drive sustainable growth andincrease stockholder value.

For purposes of our 2010 Executive Officer Incentive Plan and our 2010 Long Term Cash Incentive Plan(see ‘‘Long Term Incentives’’), the performance objectives are calculated as follows:

• EPS — EPS is calculated using the amounts set forth in our financial statements.

• RONA — Return on net asset dollars are calculated as net operating profit after tax (‘‘NOPAT’’) for the mostrecent 12 months less a capital charge. The capital charge is calculated as the average of the most recent13 months’ net asset balance, multiplied by 11.7%, which is an estimate of our long-term cost of capital. Tomore accurately reflect the nature and performance of our business, we make certain adjustments to theamounts set forth in our financial statements to calculate RONA dollars. To calculate NOPAT, we begin withour business unit income, add back rent and deduct taxes on adjusted income. To calculate net assets, we beginwith our balance sheet net assets, add back interest bearing debt, net capitalized rent and implied goodwill anddeduct corporate cash. RONA dollar objectives exclude the difference between the actual and budgetedimpact of foreign currency exchange as well as stock-based compensation expense and one time restructuringexpenses.

• Customer Service Score — The customer service score is calculated by tabulating the total number of‘‘extremely satisfied’’ customers, reflecting a rating of five on a five point scale, divided by the total number ofsubmitted customer surveys. For retail, the survey invitations are randomly printed on the cash register receipt.For delivery, customers are invited to participate via their packing slip. In each case, the program isadministered by a third party. The corporate customer service score is an equally weighted composite of theretail and delivery customer service scores.

For each plan year, a specified percentage of each bonus award is based upon each of the performance objectivesselected by the Committee for that plan year. For each of the performance objectives that are met, a correspondingportion of the bonus award is paid. Each performance objective has an associated threshold level that must beachieved for any of the bonus award associated with such objective to be paid and there are also target and maximumlevels that are set with increased payouts for better than expected performance. Bonuses are not paid unless weachieve minimum EPS.

In March 2010, the Committee selected three performance objectives for our 2010 fiscal year which on acompany-wide basis were:

• EPS target of $1.25, representing 10% growth in EPS, which was weighted at 40% of the targeted bonus award.

• RONA dollars target of negative $20.3 million, representing an 86% improvement over our 2009 RONAdollars, which was weighted at 40% of the targeted bonus award.

• Customer service goal of 38 basis point improvement, which was weighted at 20% of the targeted bonus award.

The RONA dollars and customer service goals are business unit specific for Messrs. Doody and Parneros andreflect total Company performance for Messrs. Sargent, Mahoney and Miles. Mr. Doody’s RONA dollar goal was$114.8 million for North American Delivery, representing a 103% improvement over 2009 North American DeliveryRONA dollars. Mr. Parneros’ RONA dollar goal (which related to the U.S. portion of our North American Retailsegment) is not disclosed because it would cause us competitive harm. The undisclosed RONA dollar goal was set at alevel of difficulty comparable to that of the RONA dollar goals for other executives as disclosed above. During thepast three years, the undisclosed RONA dollar goal has been achieved above the target level on one occasion andbelow the target level on two occasions.

All of the performance goals were based on the financial plan for our 2010 fiscal year so that achievement wouldresult in the target payout. The Committee believed that all of the goals were set at a level that would be challengingto achieve given the uncertain economy, particularly since the minimum EPS required for any bonus payout was set at85% of target for fiscal year 2010 as opposed to 75% of target for fiscal year 2009. The maximum payout of twice thetarget award could only be achieved if we achieved at least 115% of all of our goals.

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14APR201101343121

14APR201101343299

14APR201101343786

The tables below illustrate the structure and results under our Executive Officer Incentive Plan in 2010 relative tothe targets for each component of the plan for our named executive officers, with Staples’ overall performance slightlybelow target, US Retail slightly above target and North American Delivery approximating target.

2010 Executive Officer Incentive Plan - Actual Performance

% of target

Total Company

EPS40% Weight

Maximum

Target

Threshold

RONA$40% Weight

Customer Service20% Weight

Based on the actual performance under the 2010 Executive Officer Incentive Plan, the payments forMessrs. Sargent, Mahoney, and Miles were $1,633,639, $659,509, and $659,509, respectively.

North American Delivery

EPS40% Weight

Maximum

Target

Threshold

RONA$40% Weight

Customer Service20% Weight

Based on the actual performance under the 2010 Executive Officer Incentive Plan, the payment for Mr. Doodywas $425,300.

US Retail

EPS40% Weight

Maximum

Target

Threshold

RONA$40% Weight

Customer Service20% Weight

Based on the actual performance under the 2010 Executive Officer Incentive Plan, the payment for Mr. Parneroswas $451,013.

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Changes to the 2011 Performance Based Cash Incentive Plans

We believe that top line sales growth is a major driver of shareholder value. Accordingly, beginning in 2011, themetrics and respective weightings for our annual Executive Officer Incentive Plan and Long Term Cash Incentive Planwill change from EPS (40%), RONA (40%) and customer satisfaction (20%) to EPS (40%), RONA (30%), and Sales(30%). The chart below reflects the new metrics and their respective weightings. This change supports ourcompany-wide initiatives to drive top line growth and to foster a stronger selling culture across the organization.

Cash Incentive Plans — Performance Metrics and Weightings

2010 EPS 40% RONA$ 40% Customer Satisfaction 20%

2011 EPS 40% RONA$ 30% Sales 30%

Plan Administration

The Committee has discretion that may be exercised in the granting of the awards under the Executive OfficerIncentive Plan. More specifically, the Committee has broad authority to administer the plan, including determiningtarget bonuses and selecting performance objectives, adopting rules and regulations relating to the plan, and makingdecisions and interpretations regarding the provisions of the plan. For instance, the Committee may determine towhat extent, if any, specific items are to be counted in the relevant financial measures for any particular business, thesatisfaction of performance objectives and the payment of awards under the plan. The Committee can decrease butnot increase cash awards under the plan.

Long Term Incentives

Our long term equity and cash incentives reward the achievement of long term business objectives that benefitour stockholders and help us retain a successful and tenured management team. With respect to the named executiveofficers, the Committee relied upon a portfolio approach to long term incentives in 2010 that included a mix of longterm cash incentive awards (31% of long term compensation target value), stock options (41-42% of total long termcompensation target value), and tenure-based restricted stock (27-28% of long term compensation target value). Wecompare our long term incentives at target to our peer group to ensure that we are competitive with our peer group,with a focus on being between the 50th and 75th percentile of target levels within our peer group. In the Committee’sview at the time of grant in 2010, the chosen mix of long term equity awards and long term cash struck the rightbalance in providing performance based incentives that were aligned with stockholder interests and supportedretention of our talented senior executive team in a challenging economic environment.

The Committee granted annual equity awards to all eligible associates, including the named executive officers, onJuly 1, 2010, pursuant to our policy that the annual grant date for the annual equity grant is the first business day afterJune 30. One of the reasons for having a formal policy of setting the date for the annual equity grant is to avoid anyperception that the stock option grants are timed in coordination with the release of material non-public information.Our annual grants of stock options and tenure-based restricted stock awards are awarded midyear around themid-point of our fiscal year (after our prior year performance appraisal and bonus award processes have beencompleted) to serve as an additional recognition event that may drive current year and future performance. The stockoptions were granted at the closing price on July 1 and vest ratably over a four-year period. The tenure-basedrestricted stock vests 50% on the second anniversary of the grant date and 50% on the third anniversary of the grantdate. Equity awards were issued to 8,300 equity eligible associates in 22 countries. The long term cash incentiveawards were also awarded on July 1.

In 2010, the Company introduced its Long Term Cash Incentive Plan to replace the Performance Share Program.The Committee set target cash payouts consistent with the award values under the former Performance ShareProgram and set annual company-wide performance based goals and relative weightings, along with the generalpayout structure, to track the total company portion of the Executive Officer Incentive Plan. See ‘‘Performance BasedAnnual Cash Bonus’’ section above for more detail. The Committee believes that aligning the Long Term CashIncentive Plan with the Executive Officer Incentive Plan is important to maintaining focus on the most criticalperformance objectives. Recognizing the current difficulty of setting appropriate long term incentive targets,

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company-wide performance goals are to be set at the beginning of each of the three years of the three yearperformance cycle (2010-2012), with actual payout determined at the end of the three year performance cycle and nopayouts (except in the event of death) to be made until the Committee certifies results in March 2013. One third ofthe target award is applied as a target amount for each of the three fiscal years within the performance cycle, and atthe end of the performance cycle, the Committee, upon certification of the results, will determine the amount of thepayment to be made to a participant by adding the amounts earned in each component year of the performanceperiod, with each year’s payment reflecting proven performance in relation to the goals achieved for that12 month period.

Prior Year Awards

2007 Performance Share Awards: The minimum three year (2007-2009) RONA dollar performance goals for our2007 performance share awards were not achieved; therefore, in March 2010, the Board, based on the Committee’srecommendation, determined that no payout would be awarded. The unearned compensation amount represented asizeable portion (30%) of the total target long term incentive opportunity that was extended to each named executiveofficer in 2007.

2009 Performance Share Awards: In March 2010, the Committee recommended and the Board approved apayout of the 2009 performance share awards at a level of 111.8% of target based on fiscal 2009 EPS of $1.14compared to a target of $1.12. The shares vest equally in three annual installments (2011-2013). Since we beganawarding the performance shares in 2006, this was the first payout of an award.

Plan Administration

The Board and the Committee, through delegated powers, have broad discretion in administering the Amendedand Restated 2004 Stock Incentive Plan. This discretion includes the authority to grant awards, and adopt, amend andrepeal such administrative rules, guidelines and practices relating to the Plan as either shall deem advisable. Inaddition, the Committee has broad discretion to modify awards and determine goal attainment, including the ability toestablish objective performance goals and determine whether special one-time or extraordinary gains and/or lossesand/or extraordinary events should or should not be included or considered in the calculation of such goals.

The Committee also has discretion that may be exercised in the granting of the awards under the Long TermCash Incentive Plan. More specifically, the Committee has broad authority to administer the plan, includingdetermining target awards and selecting performance objectives, adopting rules and regulations relating to the plan,and making decisions and interpretations regarding the provisions of the plan. For instance, the Committee maydetermine to what extent, if any, specific items are to be counted in the relevant financial measures for any particularbusiness, the satisfaction of performance objectives and the payment of awards under the plan. The Committee candecrease but not increase cash awards under the plan.

2010 Special Performance and Retention Share Awards

To ensure continuity of executive leadership talent in order to drive results over the next five years that increaseshareholder value, on July 1, 2010, the Committee granted special grants of performance shares under our Amendedand Restated 2004 Stock Incentive Plan to our named executive officers. The terms and conditions of the awards,including the applicable performance objectives described below, were determined and recommended by theCommittee and approved by the Board. The grant reflects our executive compensation program’s goal of linkingcompensation to overall company performance and is consistent with our historic practice of using long-term equityincentives to reward the achievement of long-term business objectives and help us retain a successful and tenuredmanagement team.

Each award recipient is eligible to receive shares following the satisfaction of certain performance objectives overa three year performance cycle, which includes fiscal years 2010, 2011 and 2012. The total number of shares at targetremains fixed for the balance of the performance cycle. One-third of the target award is applied as a target amount foreach of the fiscal years within the performance cycle.

36

13APR201102394640

Actual share payout will be determined at the end of the three year performance cycle and will be based on theextent to which certain EPS and company-wide RONA dollars objectives (each weighted 50%), which will beestablished by the Committee in each year of the performance cycle, are achieved. Share payout will be calculated byadding the awards earned in relation to the performance goals achieved in each plan year, with the total paymentequaling the sum of the amounts earned for each year. The actual shares earned could be less or greater than targetbased on performance with the maximum shares equal to 133% of target. For fiscal 2010, as with both cash incentiveplans, the EPS target goal was $1.25 and the RONA dollars target goal was negative $20 million. The performanceobjectives for each of the remaining fiscal years of the performance cycle will be established by the Committee within90 days of the beginning of the respective fiscal year.

No shares will be awarded until the Board, upon the recommendation of the Committee, certifies on the date ofits first regularly scheduled meeting following the end of the performance cycle (the ‘‘March 2013 Board MeetingDate’’) whether, and to what extent, the performance objectives have been achieved. Shares awarded uponcertification by the Board will vest as follows: 33% on the March 2013 Board Meeting Date, 33% on the firstanniversary of the March 2013 Board Meeting Date and 34% on the second anniversary of the March 2013 BoardMeeting Date.

The table below summarizes the key terms of the 2010 Special Performance and Retention Share Awards madeto our named executive officers.

2010 Special Performance and Retention Share Awards

Named Executive Officer VestingTarget Award

(shares)Performance

Cycle

Performance Metricsand Weighting

(company-wide)

Ronald L. SargentJohn MahoneyMichael A. MilesJoseph G. DoodyDemos Parneros

EPS 50%RONA 50%

3 Years:FY2010 -FY2012

33% March 201333% March 201434% March 2015

281,250100,000100,00060,00060,000

Retirement and Other Benefits

Our named executive officers are eligible to participate in health and welfare programs, such as medical, dental,vision, disability, and supplemental life insurance, on the same basis as our other salaried associates. They are alsoeligible to participate in our 401(k) qualified plan on the same basis as our other salaried associates; however, theircontributions are limited to 2% of eligible compensation. Due to the limitations on our officers’ ability to contributeto our 401(k) plan, we have a Supplemental Executive Retirement Plan (‘‘SERP’’), which is a non-qualified deferredcompensation plan generally intended to provide comparable benefits above the applicable limits of our 401(k)qualified plan. Under the SERP, officers of Staples may defer a total of up to 100% of their base salary, bonus, andlong term cash incentive awards and receive matching contributions up to a maximum of 4% of base salary and bonus.

We also have an Executive Benefits Program consisting of life insurance, long term care insurance, supplementallong term disability, a survivor benefit plan and an executive physical and registry program. This program wasimplemented to enhance our retirement and benefit offerings for senior management and to further support ourefforts to attract and retain top talent. All senior officers of Staples, including the named executive officers, areeligible to participate in this program. For each plan or policy described below that requires payment of periodicpremiums or other contributions, we generally pay such premiums or other contributions for the benefit of eachnamed executive officer.

Executive Perquisites

Our executive compensation program is relatively free of perquisites, and the Committee views our limitedexecutive perquisites as reasonable and competitive. To reinforce this position, as explained in more detail below, theCommittee has in past years adopted formal policies regarding personal use of our leased aircraft and reimbursement

37

for tax planning services for senior officers. Most recently, as described below, the Committee adopted a policyprohibiting any future compensation, severance or employment related agreement from providing for a gross uppayment to cover taxes triggered by a change in control.

Aircraft Policy. Under our aircraft policy, our CEO is permitted to use our leased aircraft for personal use solong as the incremental cost to Staples is treated as compensation income to our CEO. Subject to prior approval byour CEO and similar compensation treatment, other named executive officers may also use our leased aircraft forpersonal use. There was no personal use by our named executive officers of our leased aircraft during our 2010fiscal year.

Tax Services Reimbursement Program. We reimburse each named executive officer, other than our CEO, up to$5,000 each year for tax, estate or financial planning services or advice from a pre-approved list of service providersthat must not include our outside auditors. Our CEO is reimbursed up to $50,000 each year for these services. TheCommittee annually reviews the amounts paid under this policy for compliance. The reimbursements are not grossedup for taxes.

Policy against reimbursement of excise tax on change in control payments. In March 2011, the Committee adopteda policy that, unless required by law, prohibits Staples from entering into any future compensation, severance oremployment related agreement that provides for a gross up payment to cover taxes triggered by a change in control,including taxes payable under Section 280G of the U.S. Internal Revenue Code. Under the terms of Mr. Sargent’slong standing severance benefits agreement, we would reimburse Mr. Sargent for any excise tax due underSection 280G of the U.S. Internal Revenue Code incurred in connection with a termination without cause orresignation for good reason following a change in control of Staples. Mr. Sargent is the only executive withthis benefit.

The Committee’s Processes

The Committee has established a number of processes to help ensure that our executive compensation programmeets the objectives, and is consistent with the pay philosophy, described at the beginning of this CompensationDiscussion and Analysis.

Independent Compensation Consultant

Our Committee charter authorizes the Committee to engage independent legal and other advisors andconsultants as it deems necessary or appropriate to carry out its responsibilities and prohibits the Committee’scompensation consultants from serving as Staples’ regular advisors and consultants. Accordingly, in our 2010 fiscalyear, the Committee continued to use, pursuant to a written agreement, Exequity LLP as an independent advisorreporting to the Committee to advise on and assist with executive compensation matters. Under the terms ofExequity’s agreement, Exequity is responsible for, among other matters:

• Reviewing total compensation strategy and pay levels for executives.

• Performing competitive analyses of outside board member compensation.

• Examining all aspects of executive compensation programs to ensure that they support the business strategy.

• Preparing for and attending selected Committee and Board meetings.

• Supporting the Committee in staying current on the latest legal, regulatory and accounting considerationsaffecting executive compensation and benefit programs.

• Providing general counsel and advice to the Committee with respect to all compensation decisions pertainingto the CEO and all compensation recommendations submitted by management.

During our 2010 fiscal year, the independent consultant advised, and frequently made recommendations to, theCommittee on compensation matters for all officers and directors as requested by management or the Committee,advised on and made recommendations on all matters pertaining to compensation of our CEO, and met with theCommittee in executive session without the presence of management. Consistent with the terms of the written

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agreement and the Committee charter, Exequity has, with the knowledge and consent of the Committee, providedadvice and expertise to management on matters to be presented by management to the Committee, but Exequity hasnot performed services for Staples that were unrelated to Committee related matters. During 2010, Exequity assistedmanagement by performing Section 280G calculations and providing experience based executive market data relatedto executive and non-executive positions. Most of the data reviewed by the Committee is generated by managementand reviewed and advised upon by the compensation consultant. The principal consultant from Exequity attended allfive of the Committee meetings during our 2010 fiscal year. Exequity was paid $27,902 for services renderedduring 2010.

Benchmarking

In March 2010, the Committee set compensation for the named executive officers based on its September 2009review of 2006-2008 compensation, its assessment of our 2009 performance and general consideration of the totality ofthe data, advice and information provided by management and Exequity.

In December 2010, the Committee evaluated the competitiveness of our named executive officers’ compensationrelative to marketplace norms and practices by analyzing current proxy statement data from our peer group. Duringthe course of this analysis, the Committee focused on whether Staples’ pay practices were aligned with performance.This analysis was intended to inform the Committee as to whether any changes to the executive compensationprogram were needed.

The Committee evaluated, relative to the 2009 and three year (2007-2009, CEO, CFO and Chief OperatingOfficer (‘‘COO’’) only) proxy statement data for the peer group, the competitiveness of base salary, total cashcompensation (base salary plus annual cash bonus) and TDC, with a focus on total cash compensation and TDC. TheCommittee then analyzed its findings in relation to Company performance as measured by one year and three yearTSR, EPS, and ROIC.

TDC was reviewed in two ways. First, to provide a view of the ‘‘realizable TDC’’ in 2009, the value of TDC wasanalyzed by, at the date the data was analyzed (October 18, 2010, when our stock price was $20.61), taking the sum ofthe base salary, annual cash bonus, ‘‘in the money’’ value of annual stock option grants, and the value of restrictedstock awards or other long term incentives. Second, to provide the value of the ‘‘as reported’’ overall TDC at grant,the value of TDC was analyzed by taking the sum of base salary, annual cash bonus, value of annual stock options asreported in our proxy statement, value of the restricted stock awards as reported in the proxy statement, and the valueof long term incentive grants at target.

For the CEO, as discussed in the ‘‘Executive Summary’’, the Committee also reviewed the impact of specialequity awards on TDC by including, excluding and normalizing the full value of the awards to determine whethercompensation for our CEO is aligned with our focus on pay for performance.

Peer Group

The Committee plans to review our peer group every three years, with the most recent comprehensive review ofour peer group having been performed in 2008 soon after Staples became more of a delivery and internationalcompany due to the acquisition of Corporate Express in July 2008. The peer group analysis was reviewed by theCommittee’s independent consultant. The Committee selected the peer group from a universe of 345 potentialcompanies and analyzed potential members using various metrics related to business model, revenue, marketcapitalization, global reach, brand recognition and whether we compete for executive talent or customers. Based on its

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14APR201121494369

analysis of these criteria, the Committee determined that the following 20 companies were most similar to Staples andshould serve as our peer group.

Amazon.com, Inc. Kohl’s Corporation Starbucks Corp.Best Buy Co., Inc. Limited Brands, Inc. Sysco CorporationCostco Wholesale Corporation Lowe’s Companies, Inc. Target CorporationFedEx Corporation Macy’s, Inc. The TJX Companies, Inc.Gap Inc. Office Depot, Inc. Walgreen Co.Home Depot, Inc. OfficeMax Incorporated Xerox CorporationJ.C. Penney Company, Inc. Safeway Inc.

2009 and 2007-2009 Compensation Findings

Based on its review of the data, the Committee’s key findings for the named executive officers other than theCEO are summarized in the two tables below. Our findings for our CEO’s benchmarking review are presented earlierin the Executive Summary. The first table below reflects our findings, relative to our peers, of how our CFO, NorthAmerican Delivery (‘‘NAD’’) and US Retail (‘‘USR’’) Presidents’ base salary, total cash compensation, realizableTDC and TDC as reported in our proxy statement compared, over the 2009 period, to TSR, EPS growth and ROICpercentage. The second table below presents similar information over the 2007-2009 period for our CFO, with theperformance metrics being compounded growth rate in EPS and TSR, along with the three year average percentROIC. The Presidents of NAD and USR were not included in the second table, and our COO is not included in eithertable, because of insufficient comparable data. In the tables below, EPS is adjusted for all years to exclude specialitems, such as integration and restructuring costs, retail wage and hour settlements and special tax charges.

Percentile Base SalaryTotalCash

TDC(Realizable)(1)

1 Year Financial Performance Relative to Peer Group - Fiscal 2009

TDC(As Reported)

TotalShareholder

Return

EPSGrowth

ROIC %

75th

ActualPerformance

Vice Chairman & CFO President USR President NAD

Percentile vs. Peer Group

50th

25th

52%

9%9%

38%

26%22%

>90%

65%54%

49.2%

56%

-11.6%

34%

10.8%

57%41%

21%18%

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14APR201121494628

Percentile Base SalaryTotalCash

TDC(Realizable)(1)(2)

3 Year Financial Performance - Fiscal 2007 - 2009

TDC(As Reported)(2)

TotalShareholder

Return CAGR

EPSCAGR

ROICAverage

%

75th

ActualPerformance

Vice Chairman & CFO

Percentile vs. Peer Group

50th

25th

44% 15% >90%

-1.7%

81%

-3.8%

49%

11.4%

62%42%

(1) For both of the above tables, realizable TDC is the sum of base salary, cash bonus paid and the realizable value ofequity, which is the sum of the market value on October 18, 2010 (the date of the analysis) of restricted stockgrants awarded over the relevant period and the value of stock options awarded over the relevant period asdetermined by subtracting the grant price from the closing price on October 18, 2010.

(2) Includes the impact of a 2008 special equity award.

Analysis and Conclusions

In December 2010, the Committee reviewed the 2009 and 2007 — 2009 compensation levels of our namedexecutive officers in view of this data and determined that such levels were consistent with, and appropriate in relationto, our one year and three year relative and absolute performance, particularly given the compensation program’sfocus on median based total cash compensation and pay for performance driven TDC. The Committee also took intoconsideration, in comparison to the peer data, the officers’ respective roles and responsibilities within the Companyand in comparison to other similarly situated executives. The Committee’s key findings were:

• For all of our named executive officers, the realizable TDC is lower than the ‘‘as reported’’ values.

• For all of our named executive officers, the realizable TDC is below median, except for the CEO’s three yearvalue which is at the 77th percentile if the special equity awards are included. When the special equity awardsare normalized over the vesting period, CEO realizable TDC is at the 55th percentile.

• On an ‘‘as reported’’ basis, TDC on both a one and three year basis is in the upper quartile for the CEO andthe CFO.

• ‘‘As reported’’ TDC on a one year basis for the Presidents of USR and NAD is above the median.

• Our one year financial performance approximated the median, while our three year performance isabove median.

Accordingly, the Committee did not make any material changes to the compensation packages of our named executiveofficers.

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Tally Sheets/Termination Scenarios

For our named executive officers, the Committee reviews all components of compensation, including salary,bonus, current vested and unvested long term incentive compensation, the current value of owned shares, and cost tous of all perquisites and benefits. In addition, the Committee periodically reviews similar information for other seniorexecutives. The Committee also reviews the projected payout obligations under potential retirement, termination,severance, and change-in-control scenarios to fully understand the financial impact of each of these scenarios toStaples and to the executive. Documentation detailing the above components and scenarios with their respectivedollar amounts was prepared by management for each of our named executive officers and reviewed by theCommittee in March 2010. This information was prepared based on compensation data as of the end of fiscal 2009and assumed that the various scenarios occurred at the end of fiscal 2009. Similar termination scenario informationwith respect to our 2010 fiscal year is presented under the heading ‘‘Potential Payments upon Termination orChange-in-Control.’’ Based on this review and the views of the Committee’s independent compensation consultant,the Committee found the total compensation for each of our named executive officers under these various scenariosto be reasonable after taking into account many factors, including, but not limited to, the contributions of theexecutive to Staples, the financial performance of Staples, the marketplace, the particular contemplated scenario andthe guidance provided by the compensation consultant.

Input from Management

Certain officers within our Human Resources department regularly attend Committee meetings to provideinformation and recommendations regarding our executive compensation program, including the Executive VicePresident of Human Resources and Vice President of Compensation and Benefits. Among other things, these officerspresent our CEO’s recommendations regarding any change in the base salary, bonus, equity compensation, goalsrelated to performance based cash or equity compensation and other benefits of other senior executives, and theseofficers also compile other relevant data at the request of the Committee. The CEO’s recommendations are based inpart on the results of annual performance reviews of the other executives. The Committee is not bound by suchrecommendations but generally takes them into consideration before making final determinations about thecompensation of such executives other than our CEO. The CEO, at the discretion of the Committee, may be invitedto attend all or part of any Committee meeting to discuss compensation matters pertaining to the other executives,and in fiscal 2009, he attended three of the five meetings of the Committee. The Committee generally meets inexecutive sessions with its independent compensation consultant without any member of management present whendiscussing compensation matters pertaining to our CEO.

The Board has delegated authority to the Chairman and CEO to grant stock options, restricted stock units andrestricted stock to non-executive employees out of an annual pool of 600,000 shares. No awards from the annual poolwere granted by the Chairman and CEO in fiscal 2010. The annual pool is designed to be used between quarterlyCommittee meetings to facilitate making new hire and retention grants and to reward special accomplishments andachievements of associates. Awards from the annual pool are granted on the earlier of the first business day of themonth that follows appropriate approval or two business days after the Committee’s ratification of the award.

Related Policies and Considerations

Risk Assessment

In December 2010, the Committee conducted its annual risk assessment of our executive officer compensationprograms. The evaluation included an analysis of the appropriateness of our peer group, compensation mix,performance metrics, performance goals and payout curves, payment timing and adjustments, overall equityincentives, stock ownership guidelines/trading policies, performance appraisal process and leadership/culture. Inaddition, the Committee reviewed the major compensation plans with regard to the number and type of associatescovered, performance measures, total cost at target of each program and risk mitigators attributable to each of theprograms. The risk mitigators included the balanced mix of cash and equity incentives, the mix and quality of theperformance metrics, the stock ownership guidelines and an aggressive recoupment policy. Based on its evaluation,recognizing all compensation programs are inherently risk laden, the Committee determined that the level of riskwithin each of the compensation programs was appropriate and did not encourage excessive risk taking by our

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executives. Accordingly, the Committee concluded that our compensation programs will not have a material adverseeffect on the Company.

Recoupment Policy

In 2009, the Committee reviewed its recoupment capabilities and practices. The Committee determined that,while we historically have incorporated aggressive recoupment provisions in our equity award agreements andseverance arrangements that cover a wide range of conduct detrimental to the Company, including fraud, financialrestatements, and breaches of our code of ethics and key agreements covering the protection of proprietaryinformation, non-competition and non-solicitation, the Company needed to formalize, expand and refine itscapabilities and practices. Accordingly, the Company adopted a formal principles based recoupment policy statementin March 2010, added recoupment provisions to its annual and long term cash incentive plans, and refined certainexisting provisions in its equity award agreements and severance arrangements and related practices and processes.

Our principles based policy statement is as follows:

We view recoupment as a risk management and asset recovery tool for dealing with certain particularly harmful orunethical behaviors such as intentional deceitful acts resulting in improper personal benefit or injury to the Company, fraudor willful misconduct that significantly contributes to a material financial restatement, violation of the Code of Ethics andbreach of key associate agreements. Accordingly, in our annual bonus plans, long term incentive plans and/or agreementsand severance arrangements, we provide for forfeiture and recovery of undeserved cash, equity and severance compensationfrom any associate that engages in such misconduct.

In connection with the Dodd-Frank Act’s requirement that we implement a policy providing for the recovery oferroneously paid incentive based compensation following a required accounting restatement, we plan to revise ourrecoupment policy and related implementing provisions soon after final rules are issued by the Securities andExchange Commission.

Employment, Termination of Employment and Change-In-Control Agreements

We have not entered into any employment agreements with any of our named executive officers. We have enteredinto severance benefit agreements with each of our named executive officers, which are described under the heading‘‘Potential Payments upon Termination or Change-in-Control’’ later in this proxy statement.

Severance benefits agreements have historically been offered to our named executive officers in order to addresscompetitive concerns when the named executive officers were recruited, by providing those individuals with a fixedamount of compensation that would offset the potential risk of leaving their prior employer or foregoing otheropportunities in order to join Staples. Each of our named executive officers has executed a Non-Competition andNon-Solicitation Agreement and a Confidentiality Agreement that covers the two year period subsequent totermination of their employment.

Stock Ownership Guidelines and No Hedging Policy

Prior to five years after becoming an executive officer, each executive officer must hold shares of our commonstock equal in value to at least a defined multiple of his or her salary as follows:

Position Ownership Level

CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5�salaryCFO or COO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4�salaryPresident, NAD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3�salaryPresident, USR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3�salaryOther executive officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2�salary

43

All shares owned outright, unvested restricted stock and vested stock options are taken into consideration indetermining compliance with these ownership guidelines. The value of stock options for this purpose is the excess ofthe market price of the underlying stock over the exercise price. Each of our named executive officers met our stockownership guidelines in our 2010 fiscal year.

Our Insider Trading Policy prohibits, among many other actions, our associates and directors from entering intoderivative transactions such as puts, calls, or hedges with our stock. We also provide training and distribute quarterlyreminders to our associates regarding this policy.

Tax and Accounting Implications

Under Section 162(m) of the Internal Revenue Code, certain executive compensation in excess of $1 million paidto our CEO and to our three most highly compensated officers (other than the CEO and CFO) whose compensationis required to be disclosed to our stockholders under the Securities Exchange Act of 1934, is not deductible for federalincome tax purposes unless the executive compensation is awarded under a performance based plan approved bystockholders. To maintain flexibility in compensating executive officers in a manner designed to promote varyingcorporate goals, the Committee has not adopted a policy that all compensation must be deductible. The Committeeintends, to the extent practicable, to preserve deductibility under the Internal Revenue Code of compensation paid toour executive officers while maintaining compensation programs that support attraction and retention ofkey executives.

Cash bonuses paid under the Executive Officer Incentive Plan for our 2008 through 2012 fiscal years, which wasapproved by stockholders at our 2008 Annual Meeting, stock options awarded under our stock option plans, whichwere also approved by stockholders, long term cash awards awarded under our Long Term Cash Incentive Plan, whichwas approved by stockholders at our 2010 Annual Meeting, and the performance share awards granted in 2009 and2010 are all performance based and are potentially deductible for us. Time-based restricted stock does not qualify forthe performance based exception to Section 162(m), but the Committee believes that the retention benefit derivedfrom such awards outweighs any tax benefit to us.

The compensation that we pay to our named executive officers is expensed in our financial statements as requiredby U.S. generally accepted accounting principles. As one of many factors, the Committee considers the financialstatement impact in determining the amount of, and allocation among the elements of, compensation. Beginning withour 2006 fiscal year, we began accounting for stock-based compensation under our Amended and Restated 2004 StockIncentive Plan and all predecessor plans in accordance with the requirements of FASB Statement No. 123(R), which isnow known as FASB ASC Topic 718.

Compensation Committee Report

The Compensation Committee of Staples’ Board of Directors has reviewed and discussed the CompensationDiscussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on this review anddiscussion, recommended to the Board that the Compensation Discussion and Analysis be included in this proxystatement.

Compensation Committee:

Carol Meyrowitz, ChairpersonMary Elizabeth BurtonRobert NakasonePaul F. Walsh

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SUMMARY COMPENSATION TABLE

The following table sets forth, at the end of our 2010 fiscal year, certain information concerning thecompensation of our Chief Executive Officer, our Chief Financial Officer, and the three other most highlycompensated executive officers, who we refer to collectively as the ‘‘named executive officers.’’

Non-EquityStock Option Incentive Plan All Other

Awards Awards Compensation CompensationName and Principal Position Year Salary ($) ($) (1)(2) ($) (1)(3) ($) (4) ($) (5) Total ($)

Ronald L. Sargent . . . . . . . . . . . . . . 2010 1,145,400 7,692,604 3,401,201 2,448,010 477,978 15,165,193Chairman & Chief Executive Officer 2009 1,112,000 3,953,922 3,954,992 1,344,291 393,796 10,759,001

2008 1,112,000 6,789,326 4,251,506 0 483,963 12,636,795

John J. Mahoney . . . . . . . . . . . . . . . 2010 693,600 2,923,105 1,552,603 1,031,242 138,529 6,339,079Vice Chairman & Chief Financial 2009 673,400 1,804,905 1,805,368 488,442 131,901 4,904,016Officer 2008 673,400 3,330,475 1,940,721 0 151,050 6,095,646

Michael A. Miles, Jr. . . . . . . . . . . . . 2010 693,600 2,923,105 1,552,603 1,031,242 81,291 6,281,841President & Chief Operating Officer 2009 673,400 1,804,905 1,805,368 488,442 72,899 4,845,014

2008 673,400 3,330,475 1,940,721 0 97,757 6,042,353

Joseph G. Doody . . . . . . . . . . . . . . . 2010 538,100 1,733,818 909,403 643,060 92,345 3,916,726President, North American Delivery 2009 522,400 1,057,205 1,057,480 233,615 89,534 2,960,234

2008 522,400 2,155,359 1,136,759 0 115,905 3,930,423

Demos Parneros . . . . . . . . . . . . . . . 2010 538,100 1,733,818 909,403 668,773 81,443 3,931,537President, US Retail 2009 522,400 1,057,205 1,057,480 433,151 66,152 3,136,388

2008 522,400 2,155,359 1,136,759 0 83,354 3,897,872

(1) The amounts shown in the Stock Awards and Option Awards columns represent the aggregate grant date fairvalue of awards computed in accordance with Financial Accounting Standards Board (‘‘FASB’’) AccountingStandards Codification (‘‘ASC’’) Topic 718, not the actual amounts paid to or realized by the named executiveofficers during our 2010, 2009 and 2008 fiscal years. An explanation of the vesting of restricted stock awards andoption awards, as well as the methodology for performance share payouts is discussed in the footnotes to theGrants of Plan-Based Awards for 2010 Fiscal Year and Outstanding Equity Awards at 2010 Fiscal Year Endtables below.

(2) The fair value of these awards is based on the market price of our common stock on the date of grant and, forperformance share awards, is calculated at the target share payout as of the grant date. For the 2010 SpecialPerformance and Retention Share Awards, actual share payout will be determined at the end of the three yearperformance cycle covering fiscal years 2010, 2011 and 2012 based on the extent to which the performanceobjectives, which are established in each year of the performance cycle, are achieved. Our CompensationCommittee, based upon certification by the Board of the results, will calculate the share payout by adding theawards earned in relation to the performance goals achieved in each plan year, with the total payment equalingthe sum of the amounts earned for each year. Shares awarded are vested 33% in March 2013, an additional 33%vest in March 2014 and the remaining 34% vest in March 2015. The maximum grant date potential values for the2010 Special Performance and Retention Share Awards for Messrs. Sargent, Mahoney, Miles, Doody andParneros were $7,226,250, $2,569,327, $2,569,327, $1,541,600, and $1,541,600, respectively. Our 2008 and 2009performance share awards were granted under our performance share program that was replaced in 2010 by ourLong Term Cash Incentive Plan.

(3) The fair value of each stock option award is estimated as of the date of grant using a binomial valuation model.Additional information regarding the assumptions used to estimate the fair value of all stock option awards isincluded in Note J in the Notes to the Consolidated Financial Statements contained in our Annual Report onForm 10-K for our 2010 fiscal year.

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(4) Represents amounts earned under our Executive Officer Incentive Plan for our 2010, 2009 and 2008 fiscal yearsfor each named executive officer. Payments are generally made in March of each year based on the extent towhich the performance objectives for the previous plan year have been achieved and certified by ourCompensation Committee. For 2010, also includes amounts earned under the Long Term Cash Incentive Plan foreach named executive officer for fiscal year 2010, the first year of the performance cycle covering fiscal years2010, 2011 and 2012. Actual cash payouts will be determined at the end of the three year performance cycle basedon the extent to which the performance objectives for each of the three fiscal years are achieved. OurCompensation Committee will certify the results and determine the amount of the payment to be made to aparticipant by adding the amounts earned in each component year of the performance cycle.

(5) Includes the following items, as applicable to each named executive officer:

• Contributions made on a matching basis pursuant to the terms of our 401(k) plan and Supplemental ExecutiveRetirement Plan (‘‘SERP’’);

• Dividend equivalents paid on shares of restricted stock granted prior to January 2009;

• Premiums paid under our executive life insurance and long-term disability plans, and reimbursement of taxesowed with respect to such premiums, and also includes premiums paid under our long-term care plan. In fiscalyears 2008 through 2010, annual premiums paid under our executive life insurance plan for Messrs. Sargent,Mahoney, Doody and Parneros were $70,500, $40,294, $27,075, and $10,339, respectively. Annual premiumspaid under our executive life insurance plan for Mr. Miles were $2,955, $3,264 and $2,499 in fiscal years 2008through 2010, respectively. In fiscal years 2008 through 2010, annual premiums paid under our long-termdisability plans for Messrs. Sargent, Mahoney, Miles and Parneros were $16,836, $5,140, $3,697 and $3,569,respectively.

• Tax preparation services; and

• Executive physical and registry program.

The table below sets forth the dollar amounts that we paid for each applicable item listed above.

All Other Compensation

ExecutiveDividend Life Long-Term Long-Term Tax

Name Year 401(k) SERP Equivalents Insurance Disability Care Services Physical

Ronald L. Sargent . . . . . . . . . . . . 2010 $2,450 $99,142 $173,654 $121,030 $30,147 $1,555 $50,000 $ 02009 2,450 44,480 145,378 121,030 28,903 1,555 50,000 02008 2,301 69,324 210,850 121,030 28,903 1,555 50,000 0

John J. Mahoney . . . . . . . . . . . . . 2010 2,450 47,012 15,507 59,039 7,638 1,883 5,000 02009 2,450 26,936 17,633 69,174 8,825 1,883 5,000 02008 2,299 35,965 27,904 69,174 8,825 1,883 5,000 0

Michael A. Miles, Jr. . . . . . . . . . . 2010 2,450 47,012 16,652 2,499 6,472 1,206 5,000 02009 2,450 26,936 25,819 3,264 6,348 1,206 3,300 3,5762008 2,299 35,965 45,286 2,955 5,417 1,206 2,500 2,129

Joseph G. Doody . . . . . . . . . . . . . 2010 2,450 30,659 9,035 39,776 0 1,796 5,000 3,6292009 2,450 20,896 11,061 46,481 0 1,796 5,000 1,8502008 2,298 30,978 29,352 46,481 0 1,796 5,000 0

Demos Parneros . . . . . . . . . . . . . . 2010 2,450 38,641 10,145 17,749 6,252 1,206 5,000 02009 2,450 20,896 16,221 15,149 5,230 1,206 5,000 02008 2,298 25,162 29,352 15,149 5,230 1,206 4,957 0

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GRANTS OF PLAN-BASED AWARDS FOR 2010 FISCAL YEAR

The following table sets forth summary information regarding grants of plan-based awards made to the namedexecutive officers for our 2010 fiscal year.

All OtherAll Other Option

Estimated Future Stock Awards: Awards: ExerciseEstimated Possible Payouts Under Equity Number of Number of or Base Grant DatePayouts Under Non-Equity Incentive Shares of Securities Price of Fair ValueIncentive Plan Awards* Plan Awards (1)*Committee Stock or Underlying Option of StockGrant Approval Threshold Target Maximum Threshold Target Maximum Units Options Awards and Option

Name Date Date ($) ($) ($) (#) (#) (#) (#) (2)* (#) (3)* ($/Sh) Awards (4)

Ronald L. Sargent . . (5) 171,810 1,718,100 3,436,200(6) 255,090 2,550,900 5,101,800

7/1/2010 6/6/2010 70,313 281,250 375,000 5,419,6887/1/2010 6/6/2010 117,951 2,272,9167/1/2010 6/6/2010 645,583 19.27 3,401,201

John J. Mahoney . . . (5) 69,360 693,600 1,387,200(6) 116,440 1,164,400 2,328,800

7/1/2010 6/6/2010 25,000 100,000 133,333 1,927,0007/1/2010 6/6/2010 51,692 996,1057/1/2010 6/6/2010 294,700 19.27 1,552,603

Michael A.Miles, Jr. . . . . . . (5) 69,360 693,600 1,387,200

(6) 116,440 1,164,400 2,328,8007/1/2010 6/6/2010 25,000 100,000 133,333 1,927,0007/1/2010 6/6/2010 51,692 996,1057/1/2010 6/6/2010 294,700 19.27 1,552,603

Joseph G. Doody . . (5) 43,048 430,480 860,960(6) 68,210 682,100 1,364,200

7/1/2010 6/6/2010 15,000 60,000 80,000 1,156,2007/1/2010 6/6/2010 29,975 577,6187/1/2010 6/6/2010 172,614 19.27 909,403

Demos Parneros . . . (5) 43,048 430,480 860,960(6) 68,210 682,100 1,364,200

7/1/2010 6/6/2010 15,000 60,000 80,000 1,156,2007/1/2010 6/6/2010 29,975 577,6187/1/2010 6/6/2010 172,614 19.27 909,403

* Equity awards were granted pursuant to our Amended and Restated 2004 Stock Incentive Plan. Non-equity awards were granted pursuant toour Executive Officer Incentive Plan and our Long Term Cash Incentive Plan.

(1) The amounts shown reflect potential shares awarded pursuant to the 2010 Special Performance and Retention Share Awards granted onJuly 1, 2010 for the three year performance cycle covering fiscal years 2010, 2011, and 2012. Actual share payout will be determined at the endof the three year performance cycle based on the extent to which the performance objectives, which are established in each year of theperformance cycle, are achieved. Our Compensation Committee, based upon certification by the Board of the results, will calculate the sharepayout by adding the awards earned in relation to the performance goals achieved in each plan year, with the total payment equaling the sumof the amounts earned for each year. Shares awarded are vested 33% in March 2013, an additional 33% vest in March 2014 and the remaining34% vest in March 2015. Named executive officers are not subject to additional holding periods for such shares after equity awards vest.

The total number of shares at target remains fixed for the balance of the performance cycle. One-third of the target award is applied as atarget amount for each of the fiscal years within the performance cycle. For each of the two performance measures which are equallyweighted, the threshold payout is 50% of target and maximum payout is 133% of target. Performance below a threshold level for eachmeasure results in no payout under that measure. The Compensation Committee reviewed the results for 2010 and determined that, in theaggregate, the performance objectives had been achieved at 93.25% of target.

(2) Unless otherwise noted, restricted stock vests 50% on the second anniversary of the date of grant and 50% on the third anniversary of thedate of grant. The vesting of these restricted stock awards is accelerated in the circumstances described under the caption ‘‘AcceleratedVesting of Awards’’ below. For awards granted in 2010, no dividends will be paid on shares of unvested restricted stock. Named executiveofficers are not subject to additional holding periods after equity awards vest.

(3) Stock options vest 25% per year after the date of grant. The exercisability of the options is accelerated in the circumstances described underthe caption ‘‘Accelerated Vesting of Awards’’ below. Named executive officers are not subject to additional holding periods after such equityawards vest.

(4) The grant date fair value of the performance shares and restricted stock granted on July 1, 2010 is $19.27 per share. The grant date fair valueof the stock options granted on July 1, 2010 is $5.27 per share.

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(5) In March 2010, the Compensation Committee established the performance objectives for fiscal year 2010 under the Executive OfficerIncentive Plan, as well as the threshold, target and maximum payment levels. The performance objectives were achieved, and theCompensation Committee approved in March 2011 payments of $1,633,639, $659,509, $659,509, $425,300, and $451,013, for Messrs. Sargent,Mahoney, Miles, Doody, and Parneros, respectively.

(6) The amounts shown reflect potential cash payments pursuant to awards under our Long Term Cash Incentive Plan granted on July 1, 2010 forthe three year performance cycle covering fiscal years 2010, 2011, and 2012. Actual cash payouts will be determined at the end of theperformance cycle based on the extent to which the performance objectives for each of the three fiscal years are achieved. Our CompensationCommittee will certify the results and determine the amount of the payment to be made to a participant by adding the amounts earned ineach component year of the performance cycle. The target cash award remains fixed for the balance of the performance cycle. One-third ofthe target award is applied as a target amount for each of the fiscal years within the performance cycle. For each of the three performancemeasures, the threshold payout is 25% of the annual target and maximum payout is 200% of overall target. Performance below a thresholdlevel for each measure results in no payout for that measure, with no payout whatsoever if the minimum earnings per share threshold(weighted at 40%) is not achieved. The Compensation Committee reviewed the results for 2010 and determined, that, in the aggregate, theperformance objectives had been achieved at 95.8% of target.

Accelerated Vesting of Awards

Equity Awards. Under certain circumstances the vesting or payout of restricted stock, performance share awardsand stock options may be accelerated as described below.

• Rule of 65. If the named executive officer retires or resigns and the requirements of the ‘‘Rule of 65’’ havebeen satisfied, then all restricted stock and stock option awards vest in full. Once the named executive officermeets the age and service requirements of our Rule of 65, a number of unvested shares of restricted stock thatis sufficient to satisfy any tax obligations triggered by such event will vest. The only performance share awardssubject to the Rule of 65 are the 2008 performance share awards for the 2008-2010 performance period, whichdid not pay out. For awards granted after June 30, 2004, but prior to fiscal year 2010, the Rule of 65 is met ifthe sum of the named executive officer’s age (minimum age of 55) and years of service equals or exceeds 65.Effective the first day of fiscal year 2010, we changed the Rule of 65 in all restricted stock awards for associatesin North America and replaced it with a purely age 65 based retirement provision.

• Death or Disability. All restricted stock, performance shares and stock options vest in full upon the namedexecutive officer’s death or disability. Any payouts under any outstanding performance share awards will bebased on actual results at the end of the applicable performance period as if the named executive officer wereemployed throughout such period.

• Change-in-Control. Under our standard form of non-qualified stock option agreement, a change-in-controlwould result in a partial vesting acceleration of outstanding options and a termination without cause(or resignation for good reason) within one year after a change-in-control would result in acceleration ofvesting of all outstanding options. Under our standard form of restricted stock award agreement, achange-in-control would result in acceleration of vesting of all outstanding restricted shares if (1) thechange-in-control results in the named executive officer not being offered employment by the survivingcorporation under certain conditions or (2) within one year following the change-in-control, the namedexecutive officer’s employment is terminated without cause (or the officer resigns for good reason). Under ourperformance share award agreements, a change-in-control would entitle the named executive officer at the endof the performance period to the greater of the number of shares equal to target or the number of sharesearned based on actual achievement of the performance objectives if (a) the named executive officer does notaccept employment with the surviving corporation upon the change-in-control or (b) within one year followingthe change-in-control, the named executive officer’s employment is terminated without cause (or the officerresigns for good reason).

• Termination of employment by Staples. The 2010 Special Performance and Retention Share Award agreementsprovide that, if the named executive officer is terminated by Staples other than for ‘‘cause’’ (as defined in theaward agreement), the named executive officer is eligible for a prorated award based on completed years whileemployed during the performance cycle, provided that the prorated award will only be paid if theCompensation Committee certifies at the end of the performance cycle that the performance objectives wereachieved and payment is authorized. In the case of Mr. Sargent’s restricted stock award granted in March 2007,the shares would vest in full upon a termination other than for ‘‘cause’’ (as defined in the award agreement). Ifthe named executive officer is terminated by Staples for ‘‘cause’’, then he is not eligible for any award payment.

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Cash Awards. Payments of awards under the Executive Officer Incentive Plan and the Long Term CashIncentive Plan also may be accelerated as described below.

• Rule of 65. If the named executive officer terminates his employment before the end of the performanceperiod and if the sum of the named executive officer’s age (minimum age of 55) and years of service equals orexceeds 65, then the named executive officer is eligible for (i) a prorated award under the Executive OfficerIncentive Plan based on the number of days the named executive officer was employed during the plan year;and (ii) a prorated award under the Long Term Cash Incentive Plan based on the number of days employedduring the particular year of the performance cycle, if the performance goals and target award have beenestablished, and any completed years of the performance cycle. Under the Long Term Cash Incentive Plan,named executive officers that terminate employment before the end of the performance cycle, but have notmet the requirements of the Rule of 65, are eligible for a prorated award based on completed plan years. Ineach case of eligibility for a prorated award, such prorated award will only be paid if the CompensationCommittee determines that the performance objectives were achieved and payment is authorized.

• Death. Upon the named executive officer’s death before the end of any plan year or performance cycle, awardswill be paid at 100% of the target award, regardless of the amount that would have been earned based uponachievement of the performance goals.

• Disability. If the named executive officer’s employment is terminated due to disability before the end of anyplan year or performance cycle, then the named executive officer is eligible for a prorated award based on thenumber of days employed during the plan year or performance cycle, as applicable. In each case of eligibilityfor a prorated award, such prorated award will only be paid if the Compensation Committee determines thatthe performance objectives were achieved and payment is authorized. In addition, for prorated awards underthe Long Term Cash Incentive Plan, the performance objectives must have been established by theCompensation Committee prior to such disability.

• Change-in-Control. Under our Long Term Cash Incentive Plan, a change-in-control would entitle the namedexecutive officer at the end of the performance cycle to an award payment equal to the greater of 100% of thetarget award or the amount earned based on actual achievement of the performance objectives if (1) thenamed executive officer does not accept employment by the surviving corporation upon the change of controlor (2) within one year following the change-in-control, the named executive officer’s employment is terminatedwithout cause (or the officer resigns for good reason).

• Termination of employment. Under our Long Term Cash Incentive Plan, if the named executive officer isterminated by Staples other than for ‘‘cause’’ (as defined in the Long Term Cash Incentive Plan), the namedexecutive officer is eligible for a prorated award based on the number of days employed during the particularyear of the performance cycle, if the performance goals and target award have been established prior totermination, and any completed years of the performance cycle. The prorated award will only be paid if theperformance objectives were established by the Compensation Committee, the Compensation Committeecertifies the results and determines at the end of the performance cycle that the performance objectives wereachieved. If the named executive officer is terminated by Staples for ‘‘cause’’, then he is not eligible for anyaward payment.

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OUTSTANDING EQUITY AWARDS AT 2010 FISCAL YEAR END

The following table sets forth summary information regarding the outstanding equity awards held by each of thenamed executive officers as of the end of our 2010 fiscal year.

Option Awards Stock Awards

EquityEquity Incentive Plan

Incentive Plan Awards:Market Awards: Market orValue of Number of Payout Value

Number of Number of Shares or Unearned of UnearnedSecurities Securities Number of Units of Shares, Shares,

Grant Date/ Underlying Underlying Shares or Stock Units or Units orPerformance Unexercised Unexercised Option Option Units of Stock That Have Other Rights Other Rights

Share Options (#) Options (#) Exercise Expiration That Have Not Not Vested That Have Not That Have NotName Period Exercisable Unexercisable (1) Price ($) Date (2) Vested (#) (3) ($) (4) Vested (#) (5) Vested ($) (4)

Ronald L. Sargent . . . . . . . . . . 7/1/2010 0 645,583 19.27 7/1/2020 117,951 2,632,6667/1/2009 162,356 487,068 20.12 7/1/2019 45,788 1,021,9887/1/2008 301,966 301,966 24.30 7/1/2018 20,382 454,9267/2/2007 418,239 139,414 24.42 7/2/20173/8/2007 375,000 (10) 8,370,0007/3/2006 431,250 24.50 7/3/2016

6/30/2005 525,000 21.29 6/30/20157/1/2004 525,000 19.12 7/1/20147/1/2003 525,000 12.88 7/31/20138/1/2002 525,000 10.6266 8/31/20123/1/2002 37,500 13.46 3/31/2012

12/4/2001 1,125,000 11.60 1/3/20127/6/2001 412,500 9.7466 8/5/2011

1/30/2010 – 70,313 (7) 1,569,3862/2/2013

1/31/2009 – 131,824 (6) 2,942,3121/30/20102/2/2008 – 88,656 (8) 1,978,8021/29/20112/3/2007 – 187,500 (9) 4,185,0001/28/2012

John J. Mahoney . . . . . . . . . . . 7/1/2010 0 294,700 19.27 7/1/2020 51,692 1,153,7657/1/2009 74,112 222,336 20.12 7/1/2019 24,490 546,6177/1/2008 137,841 137,841 24.30 7/1/2018 9,304 207,6657/2/2007 190,917 63,640 24.42 7/2/20177/3/2006 33,979 24.50 7/3/20167/3/2006 196,875 24.50 7/3/2016

6/30/2005 150,000 21.29 6/30/20157/1/2004 150,000 19.12 7/1/20147/1/2003 150,000 12.88 7/31/20138/1/2002 150,000 10.6266 8/31/20127/6/2001 150,000 9.7466 8/5/2011

1/30/2010 – 25,000 (7) 558,0002/2/2013

1/31/2009 – 60,176 (6) 1,343,1281/30/20102/2/2008 – 40,470 (8) 903,2901/29/2011

Michael A. Miles Jr. . . . . . . . . 7/1/2010 0 294,700 19.27 7/1/2020 51,692 1,153,7657/1/2009 74,112 222,336 20.12 7/1/2019 35,883 800,9097/1/2008 137,841 137,841 24.30 7/1/2018 15,973 356,5177/2/2007 190,917 63,640 24.42 7/2/20177/3/2006 33,979 24.50 7/3/20167/3/2006 196,875 24.50 7/3/2016

6/30/2005 225,000 21.29 6/30/20157/1/2004 225,000 19.12 7/1/2014

10/1/2003 225,000 16.2666 10/31/20131/30/2010 – 25,000 (7) 558,000

2/2/20131/31/2009 – 60,176 (6) 1,343,128

1/30/20102/2/2008 – 40,470 (8) 903,2901/29/2011

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Option Awards Stock Awards

EquityEquity Incentive Plan

Incentive Plan Awards:Market Awards: Market orValue of Number of Payout Value

Number of Number of Shares or Unearned of UnearnedSecurities Securities Number of Units of Shares, Shares,

Grant Date/ Underlying Underlying Shares or Stock Units or Units orPerformance Unexercised Unexercised Option Option Units of Stock That Have Other Rights Other Rights

Share Options (#) Options (#) Exercise Expiration That Have Not Not Vested That Have Not That Have NotName Period Exercisable Unexercisable (1) Price ($) Date (2) Vested (#) (3) ($) (4) Vested (#) (5) Vested ($) (4)

Joseph G. Doody . . . . . . . . . . 7/1/2010 0 172,614 19.27 7/1/2020 29,975 669,0427/1/2009 43,410 130,232 20.12 7/1/2019 13,874 309,6687/1/2008 80,739 80,739 24.30 7/1/2018 5,450 121,6447/2/2007 111,828 37,276 24.42 7/2/20177/3/2006 14,843 24.50 7/3/20167/3/2006 115,325 24.50 7/3/2016

6/30/2005 75,000 21.29 6/30/20157/1/2004 75,000 19.12 7/1/2014

1/30/2010 – 15,000 (7) 334,8002/2/2013

1/31/2009 – 35,248 (6) 786,7351/30/20102/2/2008 – 23,705 (8) 529,0961/29/2011

Demos Parneros . . . . . . . . . . . 7/1/2010 0 172,614 19.27 7/1/2020 29,975 669,0427/1/2009 43,410 130,232 20.12 7/1/2019 21,018 469,1227/1/2008 80,739 80,739 24.30 7/1/2018 9,357 208,8487/2/2007 111,828 37,276 24.42 7/2/20177/3/2006 14,843 24.50 7/3/20167/3/2006 115,325 24.50 7/3/2016

6/30/2005 75,000 21.29 6/30/20157/1/2004 75,000 19.12 7/1/20147/1/2003 75,000 12.88 7/31/20138/1/2002 75,000 10.6266 8/31/20125/1/2002 9,499 13.3533 5/31/2012

4/29/2002 75,000 13.26 5/29/20127/6/2001 18,000 9.7466 8/5/2011

1/30/2010 – 15,000 (7) 334,8002/2/2013

1/31/2009 – 35,248 (6) 786,7351/30/20102/2/2008 – 23,705 (8) 529,0961/29/2011

(1) Stock options vest 25% per year after the date of grant. The exercisability of the options is accelerated in the circumstances described under the caption‘‘Accelerated Vesting of Awards’’ following the Grants of Plan-Based Awards for 2010 Fiscal Year table above.

(2) The expiration date is typically the tenth anniversary of the date of grant.

(3) Unless otherwise noted, restricted stock vests 50% on the second anniversary of the date of grant and 50% on the third anniversary of the date of grant. Thevesting of these restricted stock awards is accelerated in the circumstances described under the caption ‘‘Accelerated Vesting of Awards’’ following the Grants ofPlan-Based Awards for 2010 Fiscal Year table above.

(4) Based on the fair market value of our common stock on January 29, 2011 ($22.32 per share).

(5) The vesting of performance share awards, including the 2010 Special Performance and Retention Awards, is accelerated in the circumstances described under thecaption ‘‘Accelerated Vesting of Awards’’ following the Grants of Plan-Based Awards for 2010 Fiscal Year table above.

(6) Performance shares were paid out at 111.8% of target in March 2010 based on achievement of the performance objectives for fiscal year 2009. Awarded sharesvest 33% in March 2011, an additional 33% vest in March 2012 and the remaining 34% vest in March 2013.

(7) Threshold payout of 2010 Special Performance and Retention Share Award that vests subject to satisfaction of performance objectives for the performance cyclecovering fiscal years 2010, 2011, and 2012. Actual share payout will be determined at the end of the three year performance cycle based on the extent to which theperformance objectives, which are established in each year of the performance cycle, are achieved. Our Compensation Committee, based upon certification by theBoard of the results, will calculate the share payout by adding the awards earned in relation to the performance goals achieved in each plan year, with the totalpayment equaling the sum of the amounts earned for each year. Shares awarded are vested 33% in March 2013, an additional 33% vest in March 2014 and theremaining 34% vest in March 2015. The performance objectives set for fiscal year 2010 were reviewed by the Compensation Committee and determined to beachieved at 93.25% of target.

(8) Threshold payout of performance share award that would have been paid out in shares subject to satisfaction of performance objectives for the 2008-2010performance period, with a payout date in March 2011. These performance objectives were not achieved, and the Board did not approve any share payouts underthis award.

(9) Threshold payout of 2007 Special Performance Share Award payable in shares subject to satisfaction of performance objectives for the 2007-2011 performanceperiod, with a payout date in March 2012. Management currently believes that it is extremely unlikely that the aggressive performance objectives will be achievedfor the 2007-2011 performance period, resulting in no payout under such performance share awards.

(10) Restricted stock award vesting in full on March 8, 2012.

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OPTION EXERCISES AND STOCK VESTED DURING 2010 FISCAL YEAR

The following table summarizes the option exercises and vesting of stock awards for each of the named executiveofficers during our 2010 fiscal year.

Option Awards Stock Awards

Number of Number ofShares Acquired Value Realized Shares Acquired Value Realized

Name of Executive Officer on Exercise (#) Upon Exercise ($) (1) Upon Vesting (#) (2) on Vesting ($) (3)

Ronald L. Sargent . . . . . . . . . . . . . . . . . 0 0 242,211 (4) 5,247,325John J. Mahoney . . . . . . . . . . . . . . . . . . 0 0 0 (5) 0Michael A. Miles, Jr. . . . . . . . . . . . . . . . 0 0 64,068 1,369,525Joseph G. Doody . . . . . . . . . . . . . . . . . . 0 0 0 (6) 0Demos Parneros . . . . . . . . . . . . . . . . . . . 0 0 42,267 913,568

(1) Represents the difference between the exercise price and the fair market value of our common stock on the dateof exercise.

(2) Shares acquired upon vesting include shares for which the Rule of 65 age and service requirements have beenmet. These shares are considered vested for tax purposes, but have not been released to the named executiveofficer. The Rule of 65 is described under the caption ‘‘Accelerated Vesting of Awards’’ following the Grants ofPlan-Based Awards for 2010 Fiscal Year table.

(3) Represents the fair market value of the stock award on the date of vesting.(4) In December 2010, Mr. Sargent met the age and years of service requirements of the Rule of 65. The shares

reported in this table as vested include 113,599 shares under awards granted prior to fiscal year 2010 with theRule of 65. These shares will be released to Mr. Sargent only upon satisfying the time vesting requirements or hisearlier retirement or resignation.

(5) Mr. Mahoney met the age and years of service requirements of the Rule of 65 prior to fiscal year 2010. Sharesunder awards granted prior to fiscal year 2010 with the Rule of 65 were reported in the table for such year.

(6) Mr. Doody met the age and years of service requirements of the Rule of 65 prior to fiscal year 2010. Shares underawards granted prior to fiscal year 2010 with the Rule of 65 were reported in the table for such year.

NONQUALIFIED DEFERRED COMPENSATION FOR 2010 FISCAL YEAR

The following table sets forth summary information with respect to each of the named executive officersregarding contributions to our Supplemental Executive Retirement Plan (‘‘SERP’’) for our 2010 fiscal year.

Executive Company Aggregate Aggregate AggregateContributions Contributions Earnings in Withdrawals/ Balance at

Name in Last FY ($) in Last FY ($) * Last FY ($) Distributions ($) Last FYE ($)

Ronald L. Sargent . . . . . . . . . . . . . . . . . . 339,098 99,142 364,049 0 4,300,487John J. Mahoney . . . . . . . . . . . . . . . . . . . 94,159 47,012 202,591 0 1,395,545Michael A. Miles . . . . . . . . . . . . . . . . . . . 47,080 47,012 17,624 0 577,895Joseph G. Doody . . . . . . . . . . . . . . . . . . . 276,432 30,659 580,718 0 4,270,576Demos Parneros . . . . . . . . . . . . . . . . . . . 51,997 38,641 79,028 0 677,926

* These contribution amounts are included in the All Other Compensation column of the Summary CompensationTable included in this proxy statement.

Our SERP is a non-qualified deferred compensation plan which is generally intended to provide comparablebenefits above the applicable limits of our 401(k) qualified plan. Our SERP provides participants with a range of welldiversified investment options similar to our 401(k) plan. Eligible executives, including the named executive officers,may contribute up to 100% of their base salary and key management bonus and will receive matching contributions incash equal to 100% of each dollar saved, up to a maximum of 4% of base salary and bonus. The matchingcontributions generally vest 20% per year during the first five years of service based on hours worked during acalendar year. After five years of service, participants are generally fully vested in all matching contributions. All ofour named executive officers are fully vested in their SERP balances. Benefits generally are paid to the participant inaccordance with a predefined distribution schedule based on the requirements of Section 409A under the InternalRevenue Code. Executives may also contribute a portion of their Long Term Cash Incentive Plan payments; however,they will not receive matching contributions from us.

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Potential Payments Upon Termination or Change-in-Control

The tables below show the estimated incremental value transfer to each current named executive officer undervarious scenarios relating to a termination of employment. The tables below and the discussion that follows assumethat such termination occurred on January 29, 2011. The actual amounts that would be paid to any named executiveofficer can only be determined at the time of an actual termination of employment and would vary from those listedbelow. The estimated amounts listed below are in addition to any retirement, welfare and other benefits that areavailable to associates generally.

FISCAL 2010 TERMINATION SCENARIOS*

TerminationResignation Following Change-

Retirement or Termination Termination for Good Change-in- in-Control Death orResignation for Cause Without Cause Reason Control Only Disability (1)

Ronald L. SargentCash Severance Payment . . . . . . . . . . . $ 0 $ 0 $ 3,600,988 $ 3,600,988 $ 5,401,482 $ 0 $ 0Value of Accelerated Vesting of Incentive

Compensation . . . . . . . . . . . . . . . . $3,854,949 $ 0 $19,751,186 $ 3,854,949 $25,813,956 $ 2,236,916 $25,813,956SERP Lump Sum Value Payout . . . . . . . $4,300,486 $4,300,486 $ 4,300,486 $ 4,300,486 $ 4,300,486 $ 0 $ 4,300,486Continuation of Benefits . . . . . . . . . . . $ 14,500 $ 14,500 $ 277,704 $ 277,704 $ 410,153 $ 0 $ 751,512Survivor Death Benefit Payout . . . . . . . $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 7,445,100 (2)Excise and 409A Tax (Grossed-up) . . . . . $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0Total . . . . . . . . . . . . . . . . . . . . . . . . $8,169,935 $4,314,986 $27,930,364 $12,034,127 $35,926,077 $ 2,236,916 $38,311,054

Termination TerminationWithout Cause or Following Change-

Retirement or Termination Resignation Change-in- in-Control Death orResignation for Cause for Good Reason Control Only Disability(1)

John J. MahoneyCash Severance Payment . . . . . . . . . . . . $ 0 $ 0 $1,397,441 $ 1,863,255 $ 0 $ 0Value of Accelerated Vesting of Incentive

Compensation . . . . . . . . . . . . . . . . . . $1,759,707 $ 0 $4,950,396 $ 7,281,268 $346,994 $ 7,281,268SERP Lump Sum Value Payout . . . . . . . . $1,395,544 $1,395,544 $1,395,544 $ 1,395,544 $ 0 $ 1,395,544Continuation of Benefits . . . . . . . . . . . . $ 9,800 $ 9,800 $ 113,588 $ 272,741 $ 0 $ 0Survivor Death Benefit Payout . . . . . . . . . $ 0 $ 0 $ 0 $ 0 $ 0 $ 3,468,000 (2)Total . . . . . . . . . . . . . . . . . . . . . . . . . $3,165,051 $1,405,344 $7,856,969 $10,812,808 $346,994 $12,144,812

Michael A. MilesCash Severance Payment . . . . . . . . . . . . $ 0 $ 0 $1,397,441 $ 1,863,255 $ 0 $ 0Value of Accelerated Vesting of Incentive

Compensation . . . . . . . . . . . . . . . . . . $ 371,733 $ 0 $1,065,528 $ 8,438,694 $346,994 $ 8,438,694SERP Lump Sum Value Payout . . . . . . . . $ 577,894 $ 577,894 $ 577,894 $ 577,894 $ 0 $ 577,894Continuation of Benefits . . . . . . . . . . . . $ 0 $ 0 $ 17,961 $ 23,699 $ 0 $ 0Survivor Death Benefit Payout . . . . . . . . . $ 0 $ 0 $ 0 $ 0 $ 0 $ 3,468,000 (2)Total . . . . . . . . . . . . . . . . . . . . . . . . . $ 949,627 $ 577,894 $3,058,824 $10,903,542 $346,994 $12,484,588

Joseph G. DoodyCash Severance Payment . . . . . . . . . . . . $ 0 $ 0 $ 700,020 $ 1,050,030 $ 0 $ 0Value of Accelerated Vesting of Incentive

Compensation . . . . . . . . . . . . . . . . . . $1,030,743 $ 0 $2,902,788 $ 4,290,060 $203,246 $ 4,290,060SERP Lump Sum Value Payout . . . . . . . . $4,270,576 $4,270,576 $4,270,576 $ 4,270,576 $ 0 $ 4,270,576Continuation of Benefits . . . . . . . . . . . . $ 9,142 $ 9,142 $ 55,205 $ 78,409 $ 0 $ 0Survivor Death Benefit Payout . . . . . . . . . $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,367,640 (2)Total . . . . . . . . . . . . . . . . . . . . . . . . . $5,310,461 $4,279,718 $7,928,589 $ 9,689,075 $203,246 $10,928,276

Demos ParnerosCash Severance Payment . . . . . . . . . . . . $ 0 $ 0 $ 718,065 $ 1,077,098 $ 0 $ 0Value of Accelerated Vesting of Incentive

Compensation . . . . . . . . . . . . . . . . . . $ 217,760 $ 0 $ 634,028 $ 4,968,030 $203,246 $ 4,968,030SERP Lump Sum Value Payout . . . . . . . . $ 677,926 $ 677,926 $ 677,926 $ 677,926 $ 0 $ 677,926Continuation of Benefits . . . . . . . . . . . . $ 0 $ 0 $ 27,719 $ 41,853 $ 0 $ 0Survivor Death Benefit Payout . . . . . . . . . $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,367,640 (2)Total . . . . . . . . . . . . . . . . . . . . . . . . . $ 895,686 $ 677,926 $2,057,738 $ 6,764,907 $203,246 $ 8,013,596

(1) Value of Accelerated Vesting of Incentive Compensation in the case of death or disability includes the payout at death for the Long TermCash Incentive Plan since the death benefit is higher than the disability benefit. All other values are the same for death or disability.

(2) Includes 1 year Key Management Bonus payout at target in addition to any Survivor Death Benefit Payout.

* Payouts subject to 409A regulations.

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See below for additional explanation of the terms of these payments and our assumptions calculating them. Inaddition, please see the Compensation Discussion and Analysis section of this proxy statement.

Retirement or Resignation

If a named executive officer who satisfies the conditions of our ‘‘Rule of 65’’ retires or resigns, all restricted stockand stock option awards granted to such named executive officer will vest in full. A named executive officer whosatisfies the conditions of our Rule of 65 may exercise any vested options within three years of his retirement orresignation (but in no event after the expiration date). Our Rule of 65 is described under the caption ‘‘AcceleratedVesting of Awards’’ following the Grants of Plan-Based Awards for 2010 Fiscal Year table earlier in this proxystatement. As of January 29, 2011, Messrs. Sargent, Mahoney and Doody met the age and service requirements underour Rule of 65 applicable to equity based awards granted between June 30, 2004 and the beginning of fiscal year 2010and no named executive officer has met the purely age 65 based retirement provision applicable to awards grantedafter the first day of fiscal year 2010. The value of accelerated vesting of incentive compensation listed in the tableabove represents unvested restricted stock and stock option awards held by Messrs. Sargent, Mahoney and Doody.The values exclude all performance share awards because (i) the 2007 Special Performance Share Award toMr. Sargent is forfeited upon termination of employment other than for death or disability; (ii) the 2008 performanceshare awards to the named executive officers did not pay out; and (iii) the 2010 Special Performance and RetentionShare Awards to the named executive officers are forfeited upon voluntary termination of employment. For the LongTerm Cash Incentive Plan, a prorated payment of one completed plan year for each award for the performance cyclecovering fiscal years 2010, 2011 and 2012 is included.

The named executive officer’s benefits under our SERP, which include contributions by us and the namedexecutive officer and any investment gains, generally will be paid in accordance with the plan provisions and anypredefined distribution schedule based on the requirements of Section 409A of the Internal Revenue Code.Messrs. Sargent’s, Mahoney’s and Doody’s continuation of benefits represents the provision of long-term carecoverage beginning at age 65 under a group long-term care insurance plan.

Termination for Cause

In the event of a termination for cause, the named executive officer is entitled to his contributions and ourmatching contributions to our SERP and any investment gains on such contributions. Messrs. Sargent’s, Mahoney’sand Doody’s continuation of benefits represents the provision of long-term care coverage beginning at age 65 under agroup long-term care insurance plan.

Termination without Cause or Resignation for Good Reason

We have entered into severance benefit agreements with each of the named executive officers that providecompensation following a termination without cause or resignation for good reason. The circumstances constitutingcause or good reason are specifically described in the severance benefits agreements for the named executive officers,which are listed as exhibits to our most recent Annual Report on Form 10-K. In general,

• a termination will be for cause if the named executive officer has willfully failed to perform his duties, breachedany confidentiality or non-compete agreement with us, or engaged in misconduct that harms us; and

• the named executive officer will have good reason to resign if we significantly diminish his authority orresponsibilities, reduce his salary or eligibility for bonus and other benefits, or require that he relocate hisoffice more than 50 miles following a change-in-control of Staples.

Under the severance benefits agreements, following our termination of the named executive officer’semployment without cause or the named executive officer’s resignation for good reason:

• Mr. Sargent is entitled to continuation of salary, bonus and certain health and welfare benefits for 24 months.

• Messrs. Mahoney and Miles are entitled to continuation of salary, bonus and certain health and welfarebenefits for 18 months.

• Messrs. Doody and Parneros are entitled to continuation of salary, bonus and certain health and welfarebenefits for 12 months.

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In addition, under Mr. Sargent’s severance benefits agreement, if we terminate Mr. Sargent’s employmentwithout cause (but not if Mr. Sargent resigns for good reason), all of his stock options become exercisable in full andany restrictions on the vesting of his restricted stock awards lapse.

The cash severance payments listed in the tables above represent the value of salary and bonus continuation tothe named executive officers under the severance benefits agreements. Under our Rule of 65, Messrs. Sargent’s,Mahoney’s and Doody’s unvested restricted stock and stock option awards are accelerated. In addition, under ourRule of 65, any vested stock options may be exercised by the named executive officer within three years followingtermination without cause or resignation for good reason (but in no event after the expiration date). The 2010 SpecialPerformance and Retention Share Award agreements and the Long Term Cash Incentive Plan each provide that, if thenamed executive officer is terminated by Staples other than for cause, the named executive officer is eligible for aprorated award or payment, as applicable, based on completed years while employed during the performance cycle,provided that the prorated award or payment will only be paid if the performance objectives are achieved andappropriately certified and payment is authorized. The values of accelerated vesting of incentive compensation listedin the tables above represent unvested restricted stock and stock option awards held by Messrs. Sargent, Mahoney andDoody. The values also include: (i) for the 2010 Special Performance and Retention Share Awards to the namedexecutive officers for the three year performance cycle covering fiscal years 2010, 2011 and 2012, prorated awards ofone completed fiscal year at 93.25%, which is the amount determined by the Compensation Committee to be achievedfor fiscal 2010 and (ii) for the Long Term Cash Incentive Plan awards to the named executive officers for the threeyear performance cycle covering fiscal years 2010, 2011 and 2012, prorated awards of one completed fiscal year at95.8%, which is the amount determined by the Compensation Committee to be achieved in fiscal 2010. The valuesexclude (i) the 2007 Special Performance Share Award to Mr. Sargent; and (ii) the 2008 performance share awards tothe named executive officers, each of which is forfeited upon termination of employment other than deathor disability.

The named executive officer’s benefits under our SERP, which include contributions by us and the namedexecutive officer and any investment gains, generally will be paid in accordance with the plan provisions and anypredefined distribution schedule based on the requirements of Section 409A of the Internal Revenue Code. Thecontinuation of benefits listed in the tables above include health, dental and executive life insurance coverageprovided under the severance benefits agreements and, for Messrs. Sargent, Mahoney and Doody, the provision oflong-term care coverage beginning at age 65 under a group long-term care insurance plan. The amounts listed areestimates based on the current policies in place after applying a reasonable benefit cost trend.

Termination Following Change-in-Control

Under our severance benefits agreements with the named executive officers, if we terminate the named executiveofficer’s employment without cause or the named executive officer resigns for good reason within two years followinga change-in-control of Staples, the named executive officer would receive payments in addition to those triggered by atermination without cause or resignation for good reason. The circumstances constituting a change-in-control ofStaples are specifically described in the severance benefits agreements for the named executive officers, which arelisted as exhibits to our most recent Annual Report on Form 10-K. In general, a change-in-control will occur ifanother person becomes the owner of 30% or more of the combined voting power of our stock, there is an unwelcomechange in a majority of the members of our Board, or our stockholders approve a merger with another entity in whichour stockholders fail to own more than 75% of the combined voting power of the surviving entity. Upon a terminationfollowing a change-in-control, Mr. Sargent would receive an additional 12 months of salary, bonus, and certain healthand welfare benefits, and each other named executive officer would receive an additional six months of salary, bonusand health and welfare benefits. Under the terms of Mr. Sargent’s severance benefits agreement, we will alsoreimburse Mr. Sargent for any excise tax under Section 280G of the Internal Revenue Code incurred in connectionwith a termination without cause or resignation for good reason following a change-in-control of Staples. In addition,the vesting or payout of the named executive officers’ restricted stock awards, stock option awards and performanceshare awards is accelerated, and the named executive officers are eligible for awards under the Long Term CashIncentive Plan following a change-in-control, as described under the caption ‘‘Accelerated Vesting of Awards’’following the Grants of Plan-Based Awards for 2010 Fiscal Year table earlier in this proxy statement.

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The cash severance payments listed in the tables above represent the value of salary and bonus continuation tothe named executive officers under the severance benefits agreements. The values of accelerated vesting of incentivecompensation listed in the tables above represent unvested restricted stock and stock option awards held by thenamed executive officers. The named executive officer may exercise any vested options within three years of thetermination date under our Rule of 65 and otherwise within 6 months of the termination date (but in no event afterthe expiration date). Performance share awards and awards under the Long Term Cash Incentive Plan typically arepaid at the greater of 100% of the target award or the payout based on actual results at the end of the performancecycle. As we are unable to calculate actual results at this time, values of accelerated vesting of incentive compensationinclude an amount equal to the target award for the 2010 Special Performance and Retention Share Award and theLong Term Cash Incentive Plan award for the performance cycle covering fiscal years 2010, 2011 and 2012. The valuesexclude (i) the 2007 Special Performance Share Award to Mr. Sargent because management currently believes that itis extremely unlikely that the aggressive performance objectives will be achieved for the 2007-2011 performanceperiod, resulting in no payout; and (ii) the 2008 performance share awards to the named executive officers becausethey did not pay out.

The named executive officer’s benefits under our SERP, which include contributions by us and the namedexecutive officer and any investment gains, generally will be paid in accordance with the plan provisions and anypredefined distribution schedule based on the requirements of Section 409A of the Internal Revenue Code. OurBoard may also direct that our SERP be terminated within 12 months of the change-in-control, with assets beingdistributed within 12 months of the termination date. The continuation of benefits listed in the tables above includehealth, dental and executive life insurance coverage provided under the severance benefits agreements and, forMessrs. Sargent, Mahoney and Doody, the provision of long-term care coverage beginning at age 65 under a grouplong-term care insurance plan. The amounts listed are estimates based on the current policies in place after applying areasonable benefit cost trend.

Change-in-Control Only

Under our non-qualified stock option agreements with all of our associates, including the named executiveofficers, a change-in-control would result in a partial vesting acceleration of outstanding options. Specifically, thevesting schedule of such options would accelerate such that an additional 25% of the underlying shares would becomeimmediately exercisable and the remaining unvested shares would vest ratably on each vesting date following suchchange-in-control. The circumstances constituting a change-in-control of Staples are specifically described in our formof non-qualified stock option agreement, which is listed as an exhibit to our most recent Annual Report onForm 10-K. In general, a change-in-control will occur if another person becomes the owner of 30% or more of thecombined voting power of our stock, there is an unwelcome change in a majority of the members of our Board ofDirectors, or our stockholders approve a merger with another entity in which our stockholders prior to the merger failto own more than 75% of the combined voting power of the surviving entity.

Death or Disability

Termination due to death or disability would result in vesting acceleration of certain equity awards, which isdescribed under the caption ‘‘Accelerated Vesting of Awards’’ following the Grants of Plan-Based Awards for 2010Fiscal Year table earlier in this proxy statement. The values of accelerated vesting of equity compensation listed in thetables above represent unvested restricted stock and stock option awards held by the named executive officers. Ingeneral, any vested stock options may be exercised by the named executive officer or his estate within one yearfollowing termination for death or disability (but in no event after the expiration date). For the 2010 SpecialPerformance and Retention Share Awards, an amount equal to 100% of the target award is included. A target levelaward payment under the named executive officers’ awards under our Long Term Cash Incentive Plan for theperformance cycle covering fiscal years 2010, 2011 and 2012 is also included (for disability, the named executiveofficer is eligible for a prorated award based on number of days employed during the performance cycle). The valuesexclude: (i) the 2007 Special Performance Share Award to Mr. Sargent because management currently believes that itis extremely unlikely that the aggressive performance objectives will be achieved for the 2007-2011 performanceperiod, resulting in no payout; and (ii) the 2008 performance share awards to the named executive officers becausethey did not pay out.

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If the termination is due to the named executive officer’s death, his beneficiaries or estate would be entitled to alump sum payment under our SERP, target level award payment from the Executive Officer Incentive Plan andpayments from our survivor death benefit plan. Payouts under our survivor death benefit plan which includes 100% ofbase salary for the first year and 50% of base salary for the second and third years are made monthly over a period ofthree years. Not included in the table above are the death benefit payouts from insurance policies for which thenamed executive officers pay the premiums. Payouts under these policies would be $2,080,800, $2,080,800, $1,614,300,and $1,614,300 for Messrs. Mahoney, Miles, Doody, and Parneros, respectively. Mr. Sargent’s life insurance coverageis in the form of a second-to-die policy providing for payments either upon the latter of his death or his wife’s death.For purposes of the table above, we have assumed that payments under this policy (which would amount toapproximately $12,690,000) are not triggered. In the event that Mr. Sargent were to die first, we would continue to paythe executive life insurance premiums needed to support the $12,690,000 death benefit.

If the termination is due to the named executive officer’s disability, he would be entitled to receive a distributionfrom our SERP, generally in accordance with the plan provisions and any predefined distribution schedule based onthe requirements of Section 409A of the Internal Revenue Code. The named executive officer would also be entitledto receive disability payments from our disability carriers, if the named executive officer has enrolled in such policy.Disability coverage is generally designed to replace 60% of the named executive officer’s compensation up to $600,000for each of the named executive officers who participated in the group disability plan on July 1, 2005. The disabilitybenefit payouts from disability insurance policies for which the named executive officer pays the premiums are notincluded in the table above. In addition, executive life insurance premiums will be continued to age 65 as necessary tosupport the life insurance coverage in place at the time of disability.

Agreements Affecting Payments

We provide for forfeiture and recovery of undeserved cash, equity and severance compensation from anyassociate that engages in such misconduct. We also view recoupment as a risk management and asset recovery tool fordealing with particularly harmful or unethical behaviors such as intentional deceitful acts resulting in improperpersonal benefit or injury to the company, fraud or willful misconduct that significantly contributes to a materialfinancial restatement, violation of the Code of Ethics and breach of key associate agreements. For instance, each ofthe named executive officers has executed a Non-Competition and Non-Solicitation Agreement and a ConfidentialityAgreement that cover the two year period subsequent to termination of his employment. Violation of any of the termsof these agreements entitles us to recover any severance payments and value received in connection with anyequity awards.

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EQUITY COMPENSATION PLAN INFORMATION AT 2010 FISCAL YEAR END

Number of SecuritiesRemaining Available for

Number of Securities Weighted-Average Future Issuance underto be Issued upon Exercise Price Equity Compensation

Exercise of of Outstanding Plans (excludingOutstanding Options, Options, securities reflected inWarrants and Rights Warrants and Rights column (a))

Plan category (a) (b) (1) (c) (2)

Equity compensation plans approved by securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,428,413 (3) $19.86 25,924,428 (4)

Equity compensation plans not approved by securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,836 (5) $12.81 0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,442,249 $19.86 25,924,428

(1) Weighted-average exercise price calculation excludes outstanding performance share awards and restricted stockunits, which do not have an exercise price.

(2) Does not include up to a maximum of approximately 7,886,082 additional shares that may become available forissuance under the 2004 Plan through the expiration, termination, surrendering, cancellation, forfeiture orsettlement of awards granted under the Amended and Restated 1992 Equity Incentive Plan (the ‘‘1992 Plan’’), asprovided in the 2004 Plan. One-half of the total number of shares of common stock covered by the 2004 Plan(including any shares that may become available through the 1992 Plan, as described above) may be granted inthe form of restricted stock or other stock-based awards other than options or stock appreciation rights.

(3) Issued pursuant to our Amended and Restated 1990 Director Stock Option Plan, the 1992 Plan and our 2004Plan. We continue to grant equity awards only under the 2004 Plan. Includes a number of shares estimated as ofour 2010 fiscal year end issuable under performance share awards described under the heading ‘‘Long-TermEquity Incentives’’ in the Compensation Discussion and Analysis section of this proxy statement.

(4) Includes 3,350,803 shares available for issuance under our Amended and Restated 1998 Employee StockPurchase Plan (the ‘‘ESPP’’) and 567,724 shares available for issuance under our Amended and RestatedInternational Employee Stock Purchase Plan (the ‘‘IESPP’’) of which 829,098 shares and 210,806 shares,respectively are issuable in connection with the current offering period that ends June 30, 2011, assuming that ourassociates enroll to the same extent they did during the offering period that ended on December 31, 2010 andbased on a fair market value of $23.35 per share for our common stock on January 3, 2011 (the first business dayof the current offering period). In the event the fair market value of our common stock is less than $23.35 pershare on June 30, 2011, we will issue additional shares for the current offering period.

(5) Includes 1,804 shares issuable in connection with the current outstanding options assuming associates elect to useall of their savings under the 1997 United Kingdom Savings Related Share Option Plan to purchase options. Alsoincludes 12,032 shares issuable in connection with current outstanding options under our 1997 United KingdomCompany Share Option Plan.

The following two option plans have not been approved by our stockholders. We no longer issue any optionsunder either plan, although options remain outstanding under each plan.

1997 United Kingdom Savings Related Share Option Plan

In August 1997, our Board adopted the 1997 United Kingdom Savings Related Share Option Plan (the ‘‘UKSavings Plan’’), pursuant to which an aggregate of 1,687,500 shares of common stock may be issued to eligibleassociates whose employment relationship with Staples or a participating subsidiary is subject to United Kingdomincome tax law. After August 2007, options were no longer granted pursuant to the UK Savings Plan. The UK SavingsPlan, which was approved by the Department of Inland Revenue of the United Kingdom in December 1997, isdesigned to encourage eligible associates to save money and purchase shares of our common stock at a discounted

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price. We filed the UK Savings Plan with the Securities and Exchange Commission as an exhibit to our Annual Reporton Form 10-K for the fiscal year ended February 1, 2003.

Each associate, including an officer or director who is also an associate, may participate in the UK Savings Plan,provided he or she is eligible to participate in such plan under applicable United Kingdom tax law and (1) has beenemployed by us or a participating subsidiary for at least 90 continuous days on the invitation date or (2) is designatedby our Board of Directors as an eligible associate.

The UK Savings Plan, which is implemented through invitations, provides eligible associates with the opportunityto make monthly deductions from their pay of between 5 British pounds and 250 British pounds over a three-yearperiod for investment in an interest bearing tax-free account. The associates’ savings are used to purchase ourcommon stock at a discounted price equal to 15% less than the fair market value of our common stock on theinvitation date. Subject to limited exceptions, at the end of the three-year period, associates have six months to decidewhether to withdraw their savings and guaranteed bonus in cash, purchase all of their options at the discounted price,or buy some of their options at the discounted price and keep some of the cash accumulation.

The UK Savings Plan is administered by our Board of Directors and the Compensation Committee of our Boardof Directors. Our Board of Directors and our Compensation Committee have the authority to make rules andregulations for the administration of the UK Savings Plan. Pursuant to the terms of the UK Savings Plan, our Board ofDirectors has appointed the Compensation Committee to administer certain aspects of the UK Savings Plan. OurBoard of Directors may at any time amend or terminate the UK Savings Plan as long as the amendment ortermination does not prejudice the rights of any participant without the prior consent of such participant. The UKSavings Plan contains provisions relating to the exercise or disposition of options in the event of the illness, disability,retirement, involuntary separation of service or death of the associate or a change-in-control, reconstruction orwinding up of Staples.

As of January 29, 2011, 8 associates have outstanding awards under the UK Savings Plan.

1997 United Kingdom Company Share Option Plan

In August 1997, our Board adopted the 1997 United Kingdom Company Share Option Plan (the ‘‘UK OptionPlan’’), pursuant to which stock options for up to 1,687,500 shares of our common stock could be granted to ourassociates and our subsidiaries’ associates, other than executive officers and directors. On June 17, 2004, when ourstockholders approved our Amended and Restated 2004 Stock Incentive Plan, we ceased granting stock options underthe UK Option Plan. We used the UK Option Plan to compensate associates working in our United Kingdombusinesses. Associates working in our United Kingdom businesses were also eligible to receive options under ourstockholder-approved equity plans. We filed the UK Option Plan with the Securities and Exchange Commission as anexhibit 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 sothat associates would not be obligated to pay income tax on the difference between the exercise price of the optionand fair market value of our common stock at the option’s exercise date. The Department of Inland Revenueapproved the UK Option Plan in January 1998. Participants in the UK Option Plan could be granted, in the aggregateover the life of the UK Option Plan, up to 30,000 British pounds of tax-advantaged options. Eligible associates couldreceive additional non-tax advantaged options under the UK Option Plan.

The UK Option Plan is administered by our Board. Our Board is authorized to adopt, amend and repeal theadministrative rules, guidelines and practices relating to the UK Option Plan and to interpret the provisions of the UKOption Plan. Our Board of Directors may amend, suspend or terminate the UK Option Plan at any time. As notedabove, our Board terminated the UK Option Plan, effective June 17, 2004, with respect to future awards. Our Boardof Directors has delegated to the Compensation Committee authority to administer certain aspects of the UKOption Plan.

Our Board or the Compensation Committee selected the recipients of options under the UK Option Plan anddetermined (1) the number of shares of our common stock covered by such options, (2) the dates upon which suchoptions become exercisable (which is typically 25% on the first anniversary of the date of grant and 2.083% monthlythereafter), (3) the exercise price of options (which may not be less than the fair market value of our common stock on

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the date of grant), and (4) the duration of the options (which may not exceed 10 years). With respect to optionsgranted within the 30,000 British pound limit, preferential tax treatment generally may only be obtained on theexercise of the option if the option is exercised after the third and before the tenth anniversary of the date of grantand more than three years after the previous exercise of an option which has received preferential tax treatment.

Our Board is required to make appropriate adjustments in connection with the UK Option Plan and anyoutstanding options under the UK Option Plan to reflect stock splits, stock dividends, recapitalizations, spin-offs andother similar changes in capitalization. The UK Option Plan also contains provisions relating to the disposition ofoptions in the event of a merger, consolidation, sale of all or substantially all of the assets, or liquidation of Staples.

As of January 29, 2011, approximately 11 associates have outstanding awards under the UK Option Plan.

Compensation Committee Interlocks and Insider Participation

During our 2010 fiscal year, Ms. Meyrowitz, Ms. Burton, Mr. Nakasone and Mr. Walsh served on theCompensation Committee and were independent directors during such service. None of our executive officers hasserved as a director or member of the compensation committee (or other committee serving an equivalent function)of any other entity whose executive officers served on our Compensation Committee. In addition, none of ourexecutive officers has served as a member of the compensation committee (or other committee serving an equivalentfunction) of any other entity whose executive officers served on our Board of Directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely on our review of copies of reports filed by the directors, executive officers and beneficial owners ofmore than 10% of our common stock required to file such reports pursuant to Section 16(a) of the SecuritiesExchange Act of 1934, we believe that all of our directors and executive officers complied with the reportingrequirements of Section 16(a) of the Securities Exchange Act of 1934 with the following two exceptions. Due to anadministrative oversight by Staples the following Form 4 transactions were not reported within the two-day timeframe: 1) the automatic sale of shares for taxes upon a vesting event for Ms. Kristin Campbell on June 13, 2010 and2) a grant of restricted stock to Ms. Christine Komola on September 15, 2010. The Form 4 filings for Ms. Campbelland Ms. Komola were filed on July 29, 2010 and September 23, 2010, respectively.

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PROPOSAL 3 — ADVISORY VOTE ON EXECUTIVE COMPENSATION

Our Board recognizes that it is appropriate to seek the views of stockholders on the design and effectiveness ofStaples’ executive compensation program. Our Board is providing stockholders with the opportunity to approve anadvisory vote on the compensation of our named executive officers as disclosed in this proxy statement.

Our executive compensation program is designed to attract, retain and reward executive officers who contributeto our long term success, align compensation with short and long term business goals, and motivate and reward highlevels of individual and team performance. The program contains elements of performance based cash and equity-based compensation. Our executive pay philosophy is predicated on our view that a significant portion ofcompensation should be ‘‘at risk’’ and directly linked to our overall performance, thereby ensuring that the interests ofour named executive officers are aligned with the interests of our stockholders. We believe that Staples hassuccessfully achieved these objectives as demonstrated by our performance over time. At the same time, we believeour program does not encourage excessive risk taking by management.

The ‘‘Executive Compensation’’ section of this proxy statement, including the ‘‘Compensation Discussion andAnalysis’’ discussion, describes in detail our executive compensation programs and the decisions made by theCompensation Committee with respect to the 2010 fiscal year ended January 29, 2011. Highlights from our executivecompensation program include the following:

• Our named executive officers’ compensation was aligned with performance. In relation to our peer group, ourperformance as measured by earnings per share growth, return on invested capital and total shareholder returngenerally exceeded our pay positioning based on realizable total direct compensation.

• Our pay mix emphasized ‘‘at risk’’ performance based compensation, with our named executive officers’ ‘‘atrisk’’ performance based portion of their annual target total direct compensation ranging from 64% to 70%.

• Our compensation program promoted the retention of key executives and related succession planning goals, asdemonstrated by the average tenure of our named executive officers being 16 years.

• Our executive compensation governance includes many best practices, such as stock ownership guidelines, a nohedging policy, and limited perquisites.

In assessing 2010 pay for performance, the Compensation Committee took into account the progress we made in2010 against key objectives. Some of our 2010 performance highlights include:

• The Company made steady progress growing EPS and RONA, both of which we view as being key indicators oflong term value creation for stockholders.

1. EPS: Diluted EPS, on a GAAP basis, increased 19% to $1.21 from the $1.02 achieved in fiscal 2009.Adjusting for pre-tax integration and restructuring expense in fiscal years 2009 and 2010 and a classaction lawsuit settlement in fiscal 2009, adjusted EPS increased 11% to $1.27 from the $1.14achieved in fiscal 2009.

2. RONA: Improved overall company RONA by $81.9 million year over year.

• Customer service metrics are at historical highs.

• We made great progress with the integration of Corporate Express which was our largest acquisition since thecompany was founded and is transformational in setting the stage for future growth.

• Growth initiatives have focused the organization, clarified capabilities and begun to show positive results.

Our Board is asking stockholders to approve the compensation of Staples’ named executive officers as disclosedpursuant to the SEC’s compensation disclosure rules (which includes the Compensation and Discussion Analysis, thecompensation tables and the narrative disclosures). As an advisory vote, this proposal is not binding upon Staples. TheCompensation Committee values the opinions expressed by our stockholders in their vote on this proposal and willconsider the outcome of the vote when making future compensation decisions for named executive officers.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THECOMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED PURSUANT TO THE SEC’SCOMPENSATION DISCLOSURE RULES.

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PROPOSAL 4 — ADVISORY VOTE ON THE FREQUENCY OFFUTURE EXECUTIVE COMPENSATION ADVISORY VOTES

As described in proposal 3 above, stockholders are provided an opportunity to cast an advisory vote on Staples’executive compensation. This proposal 4 provides stockholders with an opportunity to cast a non-binding advisoryvote regarding the frequency of future executive compensation advisory votes. Stockholders may vote for a frequencyof every one, two or three years, or may abstain from casting a vote.

The Board believes that advisory votes should be conducted every year so that stockholders may annually expresstheir views on Staples’ executive compensation program. This is consistent with management’s and the CompensationCommittee’s annual review of our executive compensation program. The Board also believes that an annual vote willfacilitate more direct stockholder input about executive compensation, as well as, reflect Staples’ generally open andresponsive attitude towards stockholders’ concerns.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR A FREQUENCY OF 1 YEAR FORFUTURE EXECUTIVE COMPENSATION ADVISORY VOTES.

PROPOSAL 5 — SHAREHOLDER PROPOSAL ON MAJORITY WRITTEN CONSENT

We have been advised that the following non-binding shareholder proposal will be presented at the AnnualMeeting. The proposal will be voted on at the Annual Meeting if the proponent, or qualified representative, is presentat the meeting and submits the proposal for a vote. Our statement of opposition follows the shareholder proposal. Theshareholder proposal was submitted by John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278.Mr. Chevedden holds 300 shares of our common stock.

FOR THE REASONS SET FORTH BELOW IN OUR BOARD’S STATEMENT IN OPPOSITION TO THESHAREHOLDER PROPOSAL, OUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 5.

The text of the shareholder proposal and supporting statement appear below as received by us, and we assume noresponsibility for its content or accuracy.

5 — Shareholder Action by Written Consent

RESOLVED, Shareholders hereby request that our board of directors undertake such steps as may be necessaryto permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary toauthorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting (to thefullest extent permitted by law).

We also gave 56%-support to the 2010 shareholder proposal on this same topic. This 56%-support eventranslated into 47%-support from all shares outstanding. The Council of Institutional Investors www.cii.orgrecommends that management adopt a shareholder proposal receiving its first 50%-plus vote.

This proposal topic also won majority shareholder support at 13 major companies in 2010. This included 67%-support at both Allstate and Sprint. Hundreds of major companies enable shareholder action by written consent.

Taking action by written consent in lieu of a meeting is a means shareholders can use to raise important mattersoutside the normal annual meeting cycle. A study by Harvard professor Paul Gompers supports the concept thatshareholder dis-empowering governance features, including restrictions on shareholder ability to act by writtenconsent, are significantly related to reduced shareholder value.

The merit of this Shareholder Action by Written Consent proposal should also be considered in the context of theneed for additional improvement in our company’s 2010 corporate governance status:

The Corporate Library www.thecorporatelibrary.com, an independent investment research firm, rated ourcompany ‘‘D’’ with ‘‘High Governance Risk,’’ ‘‘High Concern’’ regarding our board of directors and ‘‘ModerateConcern’’ regarding Executive Pay.

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By switching to easier goals, CEO Ronald Sargent was able to gain non-equity incentive pay in 2009 of$1.3 million — compared to nothing in 2008. A portion of executive long-term equity saw its performance periodreduced from three years to just one year — nowhere close to long-term and there were low stock ownershipguidelines.

Half of Staples’ board had long-tenure of 11 and 24 years — independence concerns. Three-fourths of ourExecutive Pay Committee had 17 to 24 years tenure and the final member was a CEO.

Our board was the only significant directorship for five of our directors. This could indicate a significant lack ofcurrent transferable director experience for almost half of our directors. We had no proxy access, no cumulative votingand no independent board chairman.

Please encourage our board to respond positively to this proposal to initiate the improved corporate governanceand financial performance that we deserve: Shareholder Action by Written Consent — Yes on 5.

Board’s Statement in Opposition.

The Board unanimously recommends AGAINST this proposal for the following reasons:

It is important to determine whether our stockholders’ position on this issue has changed. Last year, we, along with alimited number of other companies, received a similar written consent proposal. Although the proposal was supportedby a majority of the votes cast at our 2010 annual meeting, it failed to receive a majority of support from our totaloutstanding shares. After the annual meeting and during our corporate governance outreach program, we asked someof our stockholders what they thought of the proposal. We learned that many of our stockholders and proxy advisorswere revisiting their voting practices based on their reconsideration of this issue, which had not been presented tomany companies in recent years. In fact, even ISS revised its voting policy with respect to this issue. Some of ourstockholders expressed their view that majority written consent was not a practical method for approving importantactions for a widely-held public company, acknowledged that one corporate governance structure is not appropriatefor all companies, and agreed that Staples had other more effective governance tools available to stockholders. Inlight of the feedback we received, our Board decided to poll our stockholders again on this issue.

Our stockholders are already empowered by our strong corporate governance features to raise important matters at anytime. We provide our stockholders with strong corporate governance mechanisms and practices designed to providemeaningful and appropriate access to our company, including management and our Board, and which are in the bestinterests of our business and our stockholders.

• Annual Meetings — Stockholders can vote annually on important matters, including the election of all of ourdirectors. Our directors are elected using a majority voting standard, and our certificate of incorporationcontains no supermajority voting provisions.

• Special Meetings — In the event important matters arise between annual meetings, stockholders holding anaggregate of 25% or more of our common stock can call a special meeting, debate and vote on matters outsidethe annual meeting cycle.

• Governance Outreach Program — We have an ongoing corporate governance outreach program where wehave in-person and telephonic meetings with a variety of stockholders, proxy advisory groups and governanceratings agencies to learn their views on current topics, such as this one, and receive direct feedback which isshared with management and our Board.

• Advisory Vote on Executive Compensation — Beginning this year, stockholders will be able to tell us how theyview our executive compensation practices through an advisory vote, which our Board recommends be heldevery year.

• Ongoing Communications — Outside the context of formal action, we welcome dialogue with stockholders ongovernance matters and routinely meet and correspond with stockholders.

Our practices have been praised by our stockholders, and we have historically received high scores fromindependent third parties, such as GovernanceMetrics International, which has provided us with a global ranking of10.0, which is its highest rating and assigned to only 1% of over 4,200 companies.

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All stockholders should be afforded a vote and an opportunity to be informed about important matters. We currentlyhave two stockholders that each own close to 10% of our common stock. We also have approximately 5,500 holders ofrecord and significantly more beneficial owners of our common stock. Each of these stockholders should have theopportunity to consider and vote on important actions. We do not believe that it is appropriate for stockholdersrepresenting 50% of our common stock to take action affecting all stockholders without first giving advance notice,informing stockholders of the issues on the ballot, and allowing all stockholders to voice their concerns. In addition,we believe our Board has fiduciary obligations to all stockholders equally and should always be allowed theopportunity to evaluate a proposal and give its recommendation. Important matters, such as replacing some or all ofour directors or selling our company, presented through a written consent could become effective without all of ourstockholders’ knowledge or consent and without evaluation of what is in the best interest of all stockholders, not onlythe majority of stockholders.

Our Board believes that our current governance structure strikes the appropriate balance between permittingstockholders to raise important matters at any time and protecting the deliberative process that allows for accurateinformation, full transparency and that the views of all stockholders, as well as our management and our Board, tobe considered.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 5.

Securities and Exchange Commission Filings

We file annual, quarterly and current reports, as well as other information with the Securities and ExchangeCommission. You may read and copy any document that we file with the Securities and Exchange Commission at itsInternet Web site at www.sec.gov or at its Public Reference Room at 100 F Street, N.E., Washington, DC 20549. If youwould like to receive a copy of our Annual Report on Form 10-K for our 2010 fiscal year, or any of the exhibits listedtherein, please call or submit a request in writing to Investor Relations, Staples, Inc., 500 Staples Drive, Framingham,MA 01702, telephone (800) 468-7751, and we will provide you with the Annual Report without charge, or any of theexhibits listed therein upon the payment of a nominal fee (which fee will be limited to the expenses we incur inproviding you with the requested exhibits).

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13JAN200917353391

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K(Mark one)

� ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

or

� TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period from to

For the fiscal year ended: Commission File Number:January 29, 2011 0-17586

STAPLES, INC.(Exact name of registrant as specified in its charter)

Delaware 04-2896127(State or other jurisdiction of (I.R.S. Employerincorporation or organization) Identification No.)

Five Hundred Staples Drive,Framingham, MA 01702

(Address of principal executive office and zip code)

508-253-5000(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registeredCommon Stock, par value $0.0006 per share The NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act:None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes � No �

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes � No �

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and(2) has been subject to such filing requirements for the past 90 days. Yes � No �

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during thepreceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes � No �

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will notbe contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III ofthis Form 10-K or any amendment to this Form 10-K. �

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smallerreporting company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ and ‘‘smaller reporting company’’ in Rule 12b-2 ofthe Exchange Act. (Check one):

Large accelerated filer � Accelerated filer � Non-accelerated filer � Smaller reporting company �(Do not check if a smaller

reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes � No �The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the last sale price of Staples’ common

stock on July 31, 2010, as reported by NASDAQ, was approximately $14.8 billion. In determining the market value of non-affiliate votingstock, shares of Staples’ common stock beneficially owned by each executive officer and director have been excluded. This determination ofaffiliate status is not necessarily a conclusive determination for other purposes.

The registrant had 719,466,365 shares of common stock, par value $0.0006, outstanding as of February 28, 2011.

Documents Incorporated By Reference

Listed below is the document incorporated by reference and the part of the Form 10-K into which the document is incorporated:

Portions of the Proxy Statement for the 2011 Annual Meeting of Stockholders Part III

PART I

Item 1. Business

Staples

Staples, Inc. and its subsidiaries (‘‘we’’, ‘‘Staples’’ or the ‘‘Company’’), the world’s leading office products company,is committed to making it easy for customers to buy a wide range of office products and services. We pioneered the officeproducts superstore concept by opening the first office products superstore in Brighton, Massachusetts in 1986 to servethe needs of small businesses, and currently serve customers of all sizes in 26 countries throughout North America,Europe, Australia, South America, and Asia. We operate three business segments: North American Delivery, NorthAmerican Retail, and International Operations. Additional information regarding our operating segments is presented inManagement’s Discussion and Analysis of Financial Condition and Results of Operations contained in this AnnualReport on Form 10-K, and financial information regarding these segments is provided in Note N in the Notes to theConsolidated Financial Statements contained in this Annual Report on Form 10-K.

Business Strategy

We view the office products market as a large, diversified market for office supplies and services, business machinesand related products, computers, technology and related products, and office furniture. We reach each sector of theoffice products market through sales channels which are designed to be convenient to our contract, catalog, on-line andretail store customers. Our businesses attract different customer groups with distinct purchasing behaviors. Our contractbusiness targets mid-size businesses and organizations with between 20 and 500 office workers as well as Fortune 1000companies. Our catalog and on-line customers are generally small businesses and organizations with up to 20 officeworkers which we target through our catalogs and web sites. Our retail stores target small businesses, home offices andconsumers. Our ability to address customer groups with different needs expands our available market opportunities andincreases awareness of the Staples brand among customers in all segments, who often shop across multiple saleschannels; and allows us to benefit from a number of important economies of scale, such as enhanced efficiencies inpurchasing, distribution, advertising, and general and administrative expenses.

We provide superior value to our customers through a combination of low prices, a broad selection of officeproducts, a wide range of technology and copy and print services, high quality and innovative Staples brand products,convenient store locations, easy to use web sites, reliable and fast order delivery, and excellent customer service. Ourstrategy is to maintain our leadership in the office products industry by delivering on our new brand promise: we bringeasy to your office.

North American Delivery

Our strategies for North American Delivery focus on customer service, customer acquisition and retention, andselling a broader assortment of products and services to our customers to grow sales and increase profitability. The 2008acquisition of Corporate Express N.V. (‘‘Corporate Express’’), a leading supplier of office products to businesses andinstitutions, expanded our offerings into new areas and enhanced our offerings in existing areas, including facilities andbreakroom supplies, printing, promotional products, furniture, and data center supplies. We continue to focus onimproving our perfect order metric, which measures the number of orders that we fulfill on time and without error. Wehave established industry leading customer service standards to improve recovery of service failures and to make it easyfor customers to resolve any issues with their orders. Since acquiring Corporate Express, we have achieved significantpurchasing synergies, integrated the sales forces, reduced overhead expense, and worked to consolidate our distributionnetwork. Over the next few years we will continue with the integration of Corporate Express. These efforts includefurther consolidation of distribution facilities and consolidation of systems and websites.

Our North American Delivery segment consists of the U.S. and Canadian business units that sell and deliver officeproducts and services directly to consumers and businesses, and includes Staples Advantage, Staples.com and Quill.com.The majority of our delivery customers place their orders on-line, making Staples the second largest Internet reseller inthe world.

Staples Advantage: Our contract operations focus on serving the needs of mid—sized businesses and organizationsthrough Staples Business Advantage and Fortune 1000 companies through Staples Enterprise Advantage. Theacquisition of Corporate Express significantly increased the size of our contract business in the United States, andestablished our contract business in Canada. Contract customers often require more service than is provided by atraditional retail or mail order business. Through our contract sales force, we offer customized pricing and payment

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terms, usage reporting, the stocking of certain proprietary items, a wide assortment of products with variousenvironmental attributes and services, and full service account management.

Staples.com: Staples.com operations combine the activities of our U.S. and Canadian Internet sites as well as ourdirect mail catalog business. Staples.com is primarily designed to reach small businesses and home offices, offering nextbusiness day delivery for most office supply orders in a majority of our markets. We market Staples.com through Internetand other broad-based media advertising, direct mail advertising, catalog mailings, and a telesales group generating newbusiness and growing existing accounts.

Quill.com: Acquired by Staples in 1998, Quill.com is an Internet and catalog business with a targeted approach toservicing the needs of small and medium-sized businesses in the United States. To attract and retain its customers,Quill.com offers outstanding customer service, Quill brand products, and special services. Quill.com also operatesMedical Arts Press, Inc., a specialty Internet and catalog business offering products for medical professionals.

North American Retail

Our strategy for North American Retail focuses on offering an easy-to-shop store with quality products that arein-stock and easy to find, with fast checkout and courteous, helpful and knowledgeable sales associates. Our goals are tocontinue to be a destination for core supplies categories like ink and toner, to become an authority for businesstechnology through redesigned stores, an expanded technology assortment; and our fast growing EasyTech service,offering expert technology assortment such as installations and repairs; and to establish leadership in copy and printservices. Store sales associates are trained to deliver excellent service through our ‘‘Inspired Selling’’ service model,which encourages engagement with customers and solution selling. As a result of our focus on service, training programs,and offering incentives to reward excellent customer service, we achieved record customer satisfaction survey scores in2010.

Our North American Retail segment consisted of 1,575 stores in the United States and 325 stores in Canada at theend of fiscal 2010. We operate a portfolio of four retail store formats, tailored to the unique characteristics of eachlocation. The ‘‘Dover’’ superstore represents the majority of our U.S. store base. The customer friendly ‘‘Dover’’ designappeals to the customer with an open store interior that provides a better view of our wide selection and makes it easierto find products. In an effort to improve store productivity and effectively manage our cost structure we have reduced thesize of our ‘‘Dover’’ new store format over time from 24,000 square feet to 18,000 square feet. We also operate a 14,600square foot store format designed for rural markets and a 10,000 square foot store suited to dense urban markets such asNew York City. Additionally, we operate 26 stand alone copy and print shops to address the attractive quick print marketopportunity. This 3,000 to 4,000 square foot store is designed for locations with high customer density and offers a fullservice copy and print shop and a broad assortment of core office supplies.

Our real estate strategy is to expand our store base in a steady and disciplined fashion to produce strong sales andhigh returns on our investments. We believe that our network of stores and delivery businesses enhances our profitabilityby allowing us to leverage marketing, distribution and supervision costs. In determining where to open new retail stores,we assess potential real estate sites through a stringent approval process which evaluates the financial return of eachstore. Our evaluations consider such factors as the concentration of small and mid-sized businesses and organizations,the number of home offices, household income levels, our current market presence, proximity to competitors, theavailability of quality real estate locations and other factors.

We plan to open approximately 40 new stores in North America in 2011, compared to 41 new stores in 2010 and 48new stores in 2009. The growth program for 2011 will continue to focus on adding stores to existing markets as well asexpansion into select new markets. In addition to new store openings, we intend to drive increased productivity throughour on-going store remodel program, with a focus on upgrading our technology product and service offerings, as well asour copy and print offerings.

International Operations

Our International Operations segment consists of businesses in 24 countries in Europe, Australia, South America,and Asia.

Our European Office Products business represents a balanced multi-channel portfolio serving contract, retail andcatalog customers in 18 countries. We operate 332 retail stores, with the largest concentration of stores in the UnitedKingdom, Germany, the Netherlands and Portugal. We operate a catalog business, with a significant concentration of

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sales in France and Italy. The acquisition of Corporate Express added a large European contract business to ourportfolio, including sizable operations in Scandinavia and Germany.

Our strategies for our European Office Products business focus on increasing profitability by reducing overheadexpense, achieving purchasing synergies, increasing sales of Staples brand products, improving the performance of oursupply chain and increasing the mix of higher margin service businesses.

We also operate a European printing systems business which we acquired as part of the Corporate Expressacquisition. This business is a leading value added reseller of printing equipment and related services, supplies, and spareparts, and is the largest independent distributor of Heidelberg offset printing presses.

In 2010, we acquired the remaining shares in Corporate Express Australia Limited, increasing our ownership fromthe 59% we acquired with the acquisition of Corporate Express. This primarily contract business is a leading supplier ofoffice, warehouse and factory essentials in Australia and New Zealand. During 2010, we also launched a catalog andonline business in Australia, leveraging our global experience to provide small business customers with differentiatedofferings.

We continue to establish a foundation for growth in Asia and South America, where our businesses are in variousstages of development. We operate retail and delivery businesses in China, a delivery business in Taiwan through a jointventure with UB Express, and a multi-channel business in India through a joint venture with Pantaloon Retail Limited.We also operate delivery businesses in Argentina and Brazil and operate two stores in Argentina.

Merchandising

We sell a wide variety of office supplies and services, business machines and related products, computers and relatedproducts, and office furniture. Our merchandising staff uses integrated systems to perform the vast majority of ourmerchandise planning and product purchasing centrally. However, some of our business units, particularly Quill.com, ourCanadian operations, and our multiple international businesses, leverage our global buying and merchandising staffalong with local staff to meet their specific buying and merchandising needs. We purchase products from several hundredvendors worldwide, and we believe that competitive sources of supply are available to us for substantially all of theproducts we carry.

We have approximately 15,000 SKUs stocked in our North American Delivery fulfillment centers and approximately8,000 SKUs stocked in each of our typical North American retail stores. Our merchandising team constantly reviews andupdates our product assortment to respond to changing customer needs and to maximize the performance of our keycategories. Ink and toner remain important product categories, and we offer our customers a wide assortment, anin-stock guarantee, and a strong pricing message which communicates the benefits of our loyalty program, includingcartridge recycling rebates, and multi-pack discounts. We continue to enhance our product offering beyond core officesupplies, particularly in the areas of technology and facilities and breakroom supplies.

Our product offering includes Staples, Quill, and other proprietary branded products, which representedapproximately 24% of our sales in 2010. We offer more than 2,000 own brand products, including an assortment ofproducts with various environmental attributes, which includes our ‘‘Sustainable Earth’’ brand products. Own brandproducts deliver value to our customers with prices that are on average 10% to 15% lower than the national brand, whilegenerating higher gross margin rates on average than national brands. Our own brand strategy focuses on offeringnational brand quality at lower prices with a full range of marketing initiatives, including clear and impactful packaging,in-store displays, sampling and advertising. We have brought to market hundreds of new own brand products, many ofwhich are innovative and exclusive to Staples. Our long-term goal is to grow own brand products to more than 30% oftotal product sales. Our sourcing office in Shenzhen, China supports our own brand strategy by driving high quality andlower costs and by bringing new products to market more quickly.

We also offer an array of services, including high-speed, color and self-service copying, other printing services, faxingand pack and ship. The multi-billion dollar copy and print market is highly fragmented, and we believe we have asignificant opportunity to gain share in this market. Over the past several years, we have upgraded the technology,signage, labor, training and quality processes in our retail copy and print centers. We are investing in new services, salesforce, marketing, and pricing to drive greater customer awareness of our capabilities. Our copy and print business ishighly profitable, and growth in this area contributes meaningfully to gross margin. We also offer copy and print servicesto our contract customers in North America, leveraging our contract sales force and delivery network.

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Technology services represent a significant growth opportunity. We provide a full range of installation, upgrade, andrepair services, as well as data protection, privacy, and security services through our ‘‘EasyTech’’ offering. We currentlyoffer EasyTech services in all of our North American stores, and we continue to drive rapid growth in this business byinvesting in training, labor, infrastructure and customer awareness.

The following table shows our sales by each major product line as a percentage of total sales for the periodsindicated:

Fiscal Year Ended

January 29, 2011 January 30, 2010 January 31, 2009

Office supplies and services . . . . . . . . . . . . . . . . . 49.0% 47.9% 47.3%Business machines and related products . . . . . . . . 30.6% 31.8% 28.2%Computers and related products . . . . . . . . . . . . . 15.3% 15.0% 17.6%Office furniture . . . . . . . . . . . . . . . . . . . . . . . . . 5.1% 5.3% 6.9%

100.0% 100.0% 100.0%

Supply Chain

We operate two distinct networks to fulfill the majority of our replenishment and delivery needs in North America.Our network of 67 delivery fulfillment centers supports our North American Delivery operations. A key component ofthe integration of Corporate Express is the multi-year process of balancing or restructuring the combined fulfillmentcenter network. Our integration plan is designed to increase supply chain productivity, improve customer service andsave costs. We have enabled a number of warehouses in North America to fill orders from both Corporate Expresscustomers and Staples customers.

We operate a separate network of four large distribution centers to support our U.S. retail operations. Our retaildistribution centers provide us with significant labor and merchandise cost savings by centralizing receiving and handlingfunctions, and by enabling us to purchase in full truckloads and other economically efficient quantities from suppliers.Reducing the number of purchase orders and invoices processed results in significant administrative cost savings. Ourcentralized purchasing and distribution systems also permit our store associates to spend more time on customer serviceand store presentation. Since our distribution centers maintain backup inventory, our in-store inventory requirements arereduced, allowing us to operate smaller stores. A smaller store reduces our rental costs and provides us with greateropportunity to locate stores closer to our target customers.

In Europe, we are in the process of implementing a multi-year supply chain plan to reduce the complexity andredundancy of our distribution network. We are standardizing all of our supply chain processes and systems architecture,and continuing to consolidate facilities. These efforts are expected to improve customer service and quality, drive costsavings, and increase overall operating efficiency.

Marketing

We pursue a variety of marketing strategies to maintain high brand awareness and attract and retain our targetcustomers. These strategies include broad-based media advertising such as television, radio, newspaper circulars, print,and Internet advertising, as well as catalogs, e-mail marketing, loyalty programs, and sophisticated direct marketingcapabilities. In addition, we market to larger customers through a combination of direct mail catalogs, customizedcatalogs, and a field sales force. We change our level of marketing spend, as well as the mix of media employed,depending upon market, customer value, seasonal focus, competition, and cost factors. This flexible approach allows usto optimize the effectiveness and efficiency of our marketing expenditures.

Our marketing message focuses on the communication of our brand promise: we bring easy to your office. The lookand feel of our advertising vehicles reflect our ‘‘Easy’’ brand promise, and we are consistently communicating the brandacross all channels and customer touch points, including our signage, television commercials, catalogs, web sites,circulars, direct marketing, and store uniforms. During the past two years we have transitioned to a global Staples brand,with a few exceptions such as Quill in the United States, Bernard in France and Pressel in Austria. This transition willstrengthen Staples’ brand, while reducing the costs associated with managing multiple brands.

Our retail, catalog and Staples.com marketing efforts generally focus on small businesses and home offices. Ourmarketing strategies emphasize our strong brand and leverage all of our retail and delivery marketing vehicles to send a

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consistent message to our core customers. We also target our back-to-school, holiday, January back-to-business andtax-time selling seasons, and drive greater awareness and promote the trial of important growth initiatives such as copyand print services and Staples EasyTech. We continue to improve our systems and capabilities to track our customers’multi-channel purchasing behaviors and to execute more effective direct marketing and customer loyalty programs todrive higher sales across all our channels.

Associates

We have a strong corporate culture that values ethics, high performance, entrepreneurship, and teamwork. We placegreat importance on recruiting, training, retaining, and providing the proper incentives for high quality associates.Offering attractive growth and development opportunities and a commitment to a diverse and safe work environment,we pride ourselves on being a great place to work.

We consider customer relations and our associates’ knowledge of our product and service offering to be significantto our marketing approach and our ability to deliver customer satisfaction. Associates are trained in a number of areas,including, where appropriate, sales techniques, management skills, and product knowledge.

As of January 29, 2011, Staples employed 52,919 full-time and 36,100 part-time associates.

Corporate Values

Staples is committed to responsible corporate citizenship, or what we refer to internally as Staples Soul. Staples Soulis a holistic approach to business that recognizes the close connection between our financial success and our desire tomake a positive impact on our associates, communities, and the planet. We believe that by practicing sound ethics,sustaining the environment, embracing diversity, and giving back to the community, we will solidify our place as theworld’s best office products company.

Ethics—Ethics at Staples is part of our culture. Staples maintains ethical business practices by encouraging open andhonest communication and fostering an environment where it’s safe to speak up without fear of retaliation. Through ourCode of Ethics and ongoing communications and training programs, we make it easy for associates around the world tounderstand what they need to know and do to make sound decisions in the best interests of our company andshareholders. These efforts help ensure that our associates build trusting relationships with customers and otherstakeholders, thus strengthening and protecting Staples’ brand reputation.

Environment—Staples seeks to make it easy for our customers, suppliers and associates to make a difference. We arecommitted to offering a broad selection of environmentally responsible products, providing easy recycling solutions forcustomers and associates, investing in operational improvements such as energy conservation and green buildingpractices, and working with our global suppliers to drive environmental improvements.

To accelerate our commitment to supplier sustainability, in 2010 we challenged our key suppliers to join us in a‘‘Race to the Top’’ strategy to drive innovation in product manufacturing, packaging and distribution. As part of thisstrategy, Staples has asked its key suppliers to compete not only in terms of product quality, cost and features, but infinding innovative solutions for packaging and product design and manufacturing that significantly reduce environmentalimpacts. In addition to the launch of the ‘‘Race to the Top’’ strategy, we continue to drive improvements in our otherexisting environmental initiatives. Some highlights of our 2010 performance in the U.S. include:

• Recycling more than 61 million ink and toner cartridges and 10.4 million pounds of office electronics for ourcustomers;

• Committing to have 500 locations designated as ENERGY STAR qualified for energy efficiency by 2012, withmore than 140 locations already designated;

• Hosting 33 solar systems on the rooftops of stores and distribution centers nationally

Diversity—Staples understands that diversity is good for business. We believe that by reflecting the face of ourcustomers through our associates as well as the hundreds of suppliers and other businesses we work with everydayinspires us to think more creatively as a company. Therefore, we strive to offer an inclusive business environment thatoffers a diversity of people, thought, and experiences globally to our customers, associates and suppliers. Our diverseworkforce and network of suppliers strengthens relationships with our customers, and gives us the flexibility to adapt tothe ever changing marketplace.

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Community—Staples is committed making a difference in the communities where we operate by supportingcharitable endeavors that focus on education and job skills for underserved populations. Through our private charitablefoundation, Staples Foundation for Learning, as well as national charitable partnerships, cause marketing and monetaryand in-kind donations, we help provide educational opportunities for all people, with a special emphasis ondisadvantaged youth. Some of Staples Foundation for Learning’s partners include Boys and Girls Clubs of America,Ashoka, Earth Force and the Initiative for a Competitive Inner City.

Competition

We compete with a variety of retailers, dealers and distributors in the highly competitive office products market. Wecompete in most of our geographic markets with other high-volume office supply providers, including Office Depot,OfficeMax, and Lyreco, as well as mass merchants such as Wal-Mart, Target and Tesco, warehouse clubs such as Costco,computer and electronics superstores such as Best Buy, specialty technology stores such as Apple, copy and printbusinesses such as FedEx Office, online retailers such as Amazon.com and other discount retailers. In addition, our retailstores and delivery operations both compete with numerous mail order firms, contract stationers, electronic commercedistributors, regional and local dealers and direct manufacturers. Many of our competitors have increased their presencein our markets in recent years. Some of our current and potential competitors are larger than we are and havesubstantially greater financial resources.

We believe we are able to compete favorably against other high-volume office supply providers, mass merchants andother retailers, dealers and distributors because of the following factors: our focus on the business and home officecustomer; our tenured management team’s ability to respond to the dynamic markets in which we operate and thechanging needs of our customers; courteous, helpful and knowledgeable associates focused on making it easy forcustomers to buy office products and services; a wide assortment of office supplies and services that are in-stock and easyto find; fast checkout; easy to use web sites; reliability and speed of order shipment; convenient store locations;hassle-free returns and competitive prices.

Trademarks, Patents, Copyrights and Domain Names

We own or have applied to register numerous trademarks and service marks in the United States and throughoutthe world in connection with our businesses. Some of our principal global and regional marks include Staples, the Staplesred brick logo, Staples the Office Superstore, the Easy Button logo, ‘‘that was easy’’, Staples EasyTech, Quill.com,Corporate Express, and many other marks incorporating ‘‘Staples’’ or another primary mark, which in the aggregate weconsider to be of material importance to our business. While the duration of trademark registrations varies from countryto country, trademarks are generally valid and may be renewed indefinitely so long as they are in use and theirregistrations are properly maintained.

We own and maintain a number of patents internationally on certain products, systems and designs. We also owncopyrights for items such as packaging, training materials, promotional materials, in-store graphics and multi-media. Inaddition, we have registered and maintain numerous Internet domain names, including many that incorporate ‘‘Staples’’.

Available Information

We maintain a web site with the address www.staples.com. We are not including the information contained on ourweb site as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free ofcharge through our web site our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reportson Form 8-K, and amendments to these reports, as soon as reasonably practicable after we electronically file suchmaterial with, or furnish such material to, the Securities and Exchange Commission (SEC).

We were organized in 1985 and are incorporated in Delaware.

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EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers, their respective ages and positions as of February 28, 2011 and a description of their businessexperience is set forth below. There are no family relationships among any of the executive officers named below.

Kristin A. Campbell, age 49

Ms. Campbell has served as Senior Vice President, General Counsel and Secretary since June 2007. Prior to that,she served as Senior Vice President and Deputy General Counsel since March 2002. She has held other roles withinStaples since joining in December 1993.

Joseph G. Doody, age 58

Mr. Doody has served as President—Staples North American Delivery since March 2002. Prior to that, he served asPresident—Staples Contract & Commercial from November 1998, when he first joined Staples, until March 2002.

Christine T. Komola, age 43

Ms. Komola has served as Senior Vice President and Corporate Controller since July 2004. Prior to that, she servedas the Senior Vice President, General Merchandise Manager for furniture from January 2002 to July 2004. She hasalso held other roles within Staples since joining in April 1997, including Assistant Controller, Vice President ofPlanning, Margin and Control, and Chief Financial Officer of Staples.com.

John J. Mahoney, age 59

Mr. Mahoney has served as Vice Chairman and Chief Financial Officer since January 2006. Prior to that, he servedas Executive Vice President, Chief Administrative Officer and Chief Financial Officer since October 1997, and asExecutive Vice President and Chief Financial Officer from September 1996, when he first joined Staples, to October1997.

Michael A. Miles, age 49

Mr. Miles has served as President and Chief Operating Officer since January 2006. Prior to that, he served as ChiefOperating Officer since September 2003. Prior to joining Staples in September 2003, Mr. Miles was Chief OperatingOfficer, Pizza Hut for Yum! Brands, Inc. from January 2000 to August 2003.

Demos Parneros, age 48

Mr. Parneros has served as President—U.S. Stores since April 2002. Prior to that, he served in various capacitiessince joining Staples in October 1987, including Senior Vice President of Operations from March 1999 to March2002 and Vice President of Operations from October 1996 to February 1999.

Ronald L. Sargent, age 55

Mr. Sargent has served as Chairman since March 2005, as Chief Executive Officer since February 2002 and as aDirector since 1999. Prior to that, he served in various capacities since joining Staples in March 1989, includingPresident from November 1998 to January 2006, Chief Operating Officer from November 1998 to February 2002,President—North American Operations from October 1997 to November 1998, and President—Staples Contract &Commercial from June 1994 to October 1997.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K and, in particular, the description of our Business set forth in Item 1 and ourManagement’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Appendix B(‘‘MD&A’’) contain or incorporate a number of forward-looking statements within the meaning of Section 27A of theSecurities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (‘‘the Exchange Act’’).

Any statements contained in or incorporated by reference into this report that are not statements of historical factshould be considered forward-looking statements. You can identify these forward-looking statements by use of the words‘‘believes,’’ ‘‘expects,’’ ‘‘anticipates,’’ ‘‘plans,’’ ‘‘may,’’ ‘‘will,’’ ‘‘would,’’ ‘‘intends,’’ ‘‘estimates’’, and other similarexpressions, whether in the negative or affirmative. These forward-looking statements are based on current expectations,estimates, forecasts and projections about the industry and markets in which we operate and management’s beliefs andassumptions and should be read in conjunction with our MD&A and our consolidated financial statements and notes toconsolidated financial statements included in Appendix C. We cannot guarantee that we actually will achieve the plans,

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intentions or expectations disclosed in the forward-looking statements made. There are a number of important risks anduncertainties that could cause our actual results to differ materially from those indicated by such forward-lookingstatements. These risks and uncertainties include, without limitation, those set forth below under the heading ‘‘RiskFactors’’ as well as risks that emerge from time to time that are not possible for us to predict. Forward-lookingstatements, like all statements in this report, speak only as of the date of this report (unless another date is indicated).We disclaim any obligation to update publicly any forward-looking statements whether as a result of new information,future events or otherwise.

Item 1A. Risk Factors

Global economic conditions could adversely affect our business and financial performance.

Our operating results and performance depend significantly on worldwide economic conditions and their impact onbusiness and consumer spending. Increases in the levels of unemployment, energy and commodities costs, healthcarecosts, higher interest rates and taxes, a return to tighter credit markets, lower consumer confidence and other factorscould result in a decline in business and consumer spending. Although there has been some improvement in some ofthese measures, the level of business and consumer spending across the globe is not where it was prior to the globalrecession. Our business and financial performance may continue to be adversely affected by current and future economicconditions if there is a renewed decline in business and consumer spending or such spending remains stagnant.

Our market is highly competitive and we may not be able to continue to compete successfully.

The office products market is highly competitive. We compete with a variety of local, regional, national andinternational retailers, dealers and distributors for customers, associates, locations, products, services, and otherimportant aspects of our business. In most of our geographic markets, we compete with other high-volume office supplyproviders such as Office Depot, OfficeMax and Lyreco, as well as mass merchants such as Wal-Mart, Target and Tesco,warehouse clubs such as Costco, computer and electronics superstores such as Best Buy, specialty technology stores suchas Apple, copy and print businesses such as FedEx Office, online retailers such as Amazon.com, and other discountretailers. Our retail stores and delivery operations also compete with numerous mail order firms, contract stationerbusinesses, electronic commerce distributors, regional and local dealers and direct manufacturers.

We strive to differentiate ourselves from our competitors in part by executing our brand promise: we bring easy toyour office. This involves providing our customers with solutions through a broad selection of products and services atcompetitive prices that meet customers’ changing needs and purchasing habits. For example, technology has changedhow people work and conduct business which impacts the types of office supplies being purchased. We offer, amongother things, convenient store locations, helpful associates, and reliable and fast order delivery. Many of our competitorshave increased their presence in our markets in recent years by expanding their assortment of office products andservices, opening new stores near our existing stores, and offering direct delivery of office products. Some of our currentand potential competitors are larger than we are or may have more experience in selling certain products or deliveringservices and may have substantially greater financial resources. If we fail to execute on our brand promise, offer theappropriate product mix at competitive prices or are otherwise unable to differentiate ourselves from our competitors,we may be unable to attract and retain customers.

Our growth may strain our operations.

Our business has grown dramatically over the years, and we expect our business to continue to grow organically andthrough strategic acquisitions. Sales of our products and services, the types of our customers, the nature of our contracts,the mix of our businesses, the number of countries in which we conduct business, the number of stores that we operateand the number of our associates have grown and changed, and we expect they will continue to grow and change over thelong-term. This growth places significant demands on management and operational systems. If we cannot effectivelymanage our growth, it is likely to result in operational inefficiencies and ineffective management of our business. Inaddition, as we grow, our business is subject to a wider array of complex state, federal and international regulations, andmay be increasingly the target of private actions alleging violations of such regulations. This increases the cost of doingbusiness and the risk that our business practices could unknowingly result in liabilities that may adversely affect ourbusiness and financial performance. To the extent we grow through strategic acquisitions, our success will depend onselecting the appropriate targets, integrating such acquisitions quickly and effectively and realizing any expectedsynergies and cost savings related to such acquisitions.

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We may be unable to continue to enter new markets successfully.

An important part of our business plan is to increase our presence in new markets, which could include addingdelivery operations or stores in new geographic markets or selling new products and services. For example, we plan toopen approximately 50 new stores in 2011. For our strategy to be successful, we must identify favorable store sites,negotiate leases on acceptable terms, hire and train qualified associates and adapt management and operational systemsto meet the needs of our expanded operations. These tasks may be difficult to accomplish, especially as we allocate timeand resources to managing the profitability of our large existing portfolio of stores and renewing our existing store leaseswith acceptable terms. In addition, local zoning and other land use regulations may prevent or delay the opening of newstores in some markets. If we are unable to open new stores as efficiently as we planned, our future sales and profits maybe adversely affected.

Our expansion strategy also includes providing new products and service offerings. We may have limited experiencein these newer markets such as technology services and such offerings may present new and difficult challenges. Inaddition, customers may not be familiar with our brand, we may not carry the correct assortment of products, we may notbe able to meet customer preferences at competitive prices or our competitors may have a larger, more establishedmarket presence. Even if we succeed in entering new markets, our sales or profit levels in newer activities may not besuccessful enough to recoup our investments in them and may reduce our overall profitability.

Our expanding international operations expose us to risks inherent in foreign operations.

We currently operate in 25 countries outside the United States and plan to continue to grow internationally.Operating in multiple countries requires that we comply with multiple foreign laws and regulations that may differsubstantially from country to country and may conflict with corresponding U.S. laws and regulations. Cultural differencesabroad and local practices of conducting business may conflict with our own business practices and ethics standards.Ensuring compliance with foreign and U.S. laws and our own policies may require that we implement new operationalsystems and financial controls, conduct audits or internal investigations, train our associates and third parties on ourexisting compliance methods, and take other actions, all of which may be expensive, divert management’s time andimpact our operations. There are also different employee/employer relationships and in some cases the existence ofworkers’ councils that may delay or impact the implementation of some of these operational systems. In addition,differences in business practices in our international markets may cause customers to be less receptive to our businessmodel than we expect.

Risks inherent in international operations also include, among others, the costs and difficulties of managinginternational operations, adverse tax consequences, and greater difficulty in enforcing intellectual property rights. Otherfactors that may also have an adverse impact on our international operations include limitations on the repatriation andinvestment of funds and foreign currency exchange restrictions, complex import and export schemes, increased localcompetition, unfavorable foreign trade policies, unstable political or economic conditions, and geopolitical events,including war and terrorism.

Our effective tax rate may fluctuate.

We are a multi-national, multi-channel provider of office products and services. As a result, our effective tax rate isderived from a combination of applicable tax rates in the various countries, states and other jurisdictions in which weoperate. Our effective tax rate may be lower or higher than our tax rates have been in the past due to numerous factors,including the sources of our income, any agreements we may have with taxing authorities in various jurisdictions, changesin the laws and the tax filing positions we take in various jurisdictions. We base our estimate of an effective tax rate at anygiven point in time upon a calculated mix of the tax rates applicable to our company and to estimates of the amount ofbusiness likely to be done in any given jurisdiction. The loss of one or more agreements with taxing jurisdictions, achange in the mix of our business from year to year and from country to country, changes in rules related to accountingfor income taxes, adverse outcomes from tax audits that we may be subject to in any of the jurisdictions in which weoperate, or changes in tax laws in any of the multiple jurisdictions in which we operate could result in an unfavorablechange in our effective tax rate which could have an adverse effect on our business and results of our operations.

Fluctuations in foreign exchange rates could lead to lower earnings.

As we have expanded our international operations, our exposure to exchange rate fluctuations has increased. Salesfrom our delivery operations and stores outside the U.S. are denominated in the currency of the country in which theseoperations or stores are located and changes in foreign exchange rates affect the translation of the sales and earnings of

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these businesses into U.S. dollars for financial reporting purposes. Additionally, merchandising agreements may also bedenominated in the currency of the country where the vendor resides. Although we attempt to mitigate such risks, wemay not be entirely successful in our strategy.

We may be unable to attract and retain qualified associates.

Our customers value courteous and knowledgeable associates, and an important part of our ‘‘Easy’’ brand strategy isa positive customer service experience. Accordingly, our performance depends on attracting and retaining a largenumber of qualified associates. We face intense competition for qualified associates. We face even tighter labor marketsas we expand into emerging markets such as India and China. Many of our associates are in entry-level or part-timepositions with historically high rates of turnover. Our ability to meet our labor needs while controlling our labor costs issubject to numerous external factors, including the availability of a sufficient number of qualified persons in theworkforce, unemployment levels, prevailing wage rates, changing demographics, health and other insurance costs and thecost of compliance with local labor laws and regulations. If we are unable to attract and retain a sufficient number ofqualified associates, our business and financial performance may be adversely affected.

Our quarterly operating results are subject to significant fluctuation.

Our operating results have fluctuated from quarter to quarter in the past, and we expect that they will continue to doso in the future. Historically, sales and profitability are generally stronger in the second half of our fiscal year than thefirst half of our fiscal year due in part to back-to-school, holiday and back-to-business seasons. Factors that could alsocause these quarterly fluctuations include: the mix of products sold; pricing actions of competitors; the level ofadvertising and promotional expenses; the outcome of legal proceedings; severe weather; and the other risk factorsdescribed in this section. Most of our operating expenses, such as occupancy costs and associate salaries, do not varydirectly with the amount of sales and are difficult to adjust in the short term. As a result, if sales in a particular quarterare below expectations, we may not proportionately reduce operating expenses for that quarter, and therefore such asales shortfall would have a disproportionate effect on our net income for the quarter.

If we are unable to manage our debt, it could materially harm our business and financial condition and restrict our operatingflexibility.

We have long-term debt and debt service requirements, with $1.5 billion 9.75% notes due in January 2014,$500 million 7.75% notes due in April 2011 and $325 million 7.375% notes due in October 2012. Our consolidatedoutstanding debt as of January 29, 2011 was $2.56 billion. If we are unable to satisfy our debt service requirements, wemay default under one or more of our credit facilities or the indentures governing our notes. If we default or breach ourobligations, we could be required to pay a higher rate of interest or lenders could require us to accelerate our repaymentobligations, and such a default could materially harm our business and financial condition. Our level of indebtedness mayalso place us at a competitive disadvantage against less leveraged competitors.

Our business may be adversely affected by the actions of and risks associated with our third-party vendors.

The products we sell are sourced from a wide variety of third-party vendors. We derive benefits from vendorallowances and promotional incentives which may not be offered in the future. We also cannot control the supply, design,function or cost of many of the products that we offer for sale and are dependent on the availability and pricing of keyproducts, including paper, ink, toner, technology and printing equipment. Some of the products we offer are supplied tous on an exclusive basis and may be difficult to replace in a timely manner. Disruptions in the availability of raw materialsused in the production of these products may also adversely affect our sales and result in customer dissatisfaction.

Global sourcing of many of the products we sell is an important factor in our financial performance. Our ability tofind qualified vendors and access products in a timely and efficient manner is a significant challenge, especially withrespect to goods sourced outside the United States. Political instability, the financial instability of suppliers, traderestrictions, tariffs, foreign currency exchange rates, transport capacity and costs, inflation and other factors relating toforeign trade are beyond our control. In addition, merchandise quality issues could cause us to initiate voluntary ormandatory recalls for our proprietary branded products or other products we sell which may then damage ourreputation. These and other issues affecting our vendors could adversely affect our business, financial performance andreputation.

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Our expanded offering of proprietary branded products may not improve our financial performance and may expose us tointellectual property and product liability claims.

Our product offering includes Staples, Quill and other proprietary branded products, which representedapproximately 24% of our sales in fiscal 2010. Our proprietary branded products compete with other manufacturers’branded items that we offer. An increase in our proprietary branded product offerings also exposes us to risk that thirdparties will assert infringement claims against us with respect to such products. The more proprietary brand productofferings we sell, the more this risk increases. In addition, if any of our customers are harmed by our proprietary brandedproducts, they may bring product liability and other claims against us or we may have to issue voluntary or mandatoryrecalls. Any of these circumstances could damage our reputation and have an adverse effect on our business andfinancial performance.

Technological problems may impact our operations.

We rely heavily on technology to sell and deliver our office products. Our ability to attract and retain customers,compete and operate effectively depends in part on a reliable and easy to use technology infrastructure. Any disruptionto the Internet or our technology infrastructure, including those affecting our Web sites and computer systems, maycause a decline in our customer satisfaction, impact our sales volumes or result in increased costs. Although we continueto invest in our technology, if we are unable to continually add software and hardware, effectively manage and upgradeour systems and network infrastructure, and develop effective system availability, disaster recovery plans and protectionsolutions, our business may be adversely affected.

Our information security may be compromised.

Through our sales and marketing activities, we collect and store certain personal information that our customersprovide to purchase products or services, enroll in promotional programs, register on our web site, or otherwisecommunicate and interact with us. We also gather and retain information about our associates in the normal course ofbusiness. We may share information about such persons with vendors that assist with certain aspects of our business.Despite instituted safeguards for the protection of such information, we cannot be certain that all of our systems areentirely free from vulnerability to attack. Computer hackers may attempt to penetrate our or our vendors’ networksecurity and, if successful, misappropriate confidential customer or business information. In addition, a Staples associate,contractor or other third party with whom we do business may attempt to circumvent our security measures in order toobtain such information or inadvertently cause a breach involving such information. Loss of customer or businessinformation could disrupt our operations, damage our reputation, and expose us to claims from customers, financialinstitutions, regulators, payment card associations, employees and other persons, any of which could have an adverseeffect on our business, financial condition and results of operations. In addition, compliance with tougher privacy andinformation security laws and standards may result in significant expense due to increased investment in technology andthe development of new operational processes.

Various legal proceedings, third party claims, investigations or audits may adversely affect our business and financialperformance.

We are involved in various private legal proceedings, which include consumer, employment, intellectual property,tort and other litigation. As our workforce expands, we are subject to potentially increasing challenges by private litigantsregarding compliance with local, state and national labor regulations, whether meritorious or not. In addition, companieshave increasingly been subject to employment related class action litigation, and we have experienced an increase in‘‘wage and hour’’ class action lawsuits. We expect that these trends will continue to affect us.

As our operations grow, we are subject to claims that the technology we use or the products we sell infringeintellectual property rights of third parties. Such claims, whether meritorious or not, involve significant managerialresources and can become costly. Generally, we have indemnification protections in our agreements which our vendorsor licensors have historically honored; however, there are no assurances that such vendors or licensors will continue to doso in the future.

In addition, we may be subject to investigations or audits by governmental authorities and regulatory agencies,which can occur in the ordinary course of business or which can result from increased scrutiny from a particular agencytowards an industry, country or practice. The resolution of these legal proceedings, third party claims, investigations oraudits could require us to pay substantial amounts of money or take actions that adversely affect our operations. Inaddition, defending against these claims may involve significant time and expense. Given the large size of our operations

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and workforce, the visibility of our brand and our position as an industry leader, we may regularly be involved in legalproceedings, third party claims, investigations or audits that could adversely affect our business and financialperformance.

Changes in federal, state or local regulations may increase our cost of doing business.

We are subject to federal, state and local regulations. Over the last couple of years in the U.S. there have been anumber of new legislative and regulatory initiatives and reforms, which have resulted in new legislation. We mayexperience an increase in costs in complying with such new legislation. Changes affecting our workforce such as raisingthe local minimum wage, healthcare mandates, environmental regulations, and other wage or workplace regulationscould increase our costs. In addition, proposed changes in tax regulations may also change our effective tax rate as ourbusiness is subject to a combination of applicable tax rates in the various jurisdictions in which we operate as described inmore detail above.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

As of January 29, 2011, we operated a total of 2,281 superstores in 48 states and the District of Columbia in theUnited States, 10 provinces and 2 territories in Canada, and in Belgium, Finland, Germany, The Netherlands, Norway,Portugal, Sweden, the United Kingdom, China, Argentina and Australia. As of that same date, we also operated125 distribution and fulfillment centers in 29 states in the United States, 7 provinces in Canada, and in Austria, Belgium,Denmark, Finland, Germany, Ireland, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, the United Kingdom,China, Argentina, Brazil and Australia. The following table sets forth the locations of our facilities as of January 29, 2011.

RETAIL STORES

Country/State/Province/Region/ Number of Country/State/Province/Region/ Number of Country/State/Province/Region/ Number ofTerritory Stores Territory Stores Territory Stores

United States Nevada . . . . . . . . . . . . . . 6 CanadaAlabama . . . . . . . . . . . . . 12 New Hampshire . . . . . . . . 23 Alberta . . . . . . . . . . . . . . 37Arizona . . . . . . . . . . . . . . 43 New Jersey . . . . . . . . . . . 89 British Columbia . . . . . . . . 42Arkansas . . . . . . . . . . . . . 8 New Mexico . . . . . . . . . . . 10 Manitoba . . . . . . . . . . . . . 10California . . . . . . . . . . . . 218 New York . . . . . . . . . . . . 142 New Brunswick . . . . . . . . . 10Colorado . . . . . . . . . . . . . 21 North Carolina . . . . . . . . . 50 Newfoundland . . . . . . . . . 4Connecticut . . . . . . . . . . . 39 North Dakota . . . . . . . . . . 2 Nova Scotia . . . . . . . . . . . 13Delaware . . . . . . . . . . . . . 7 Ohio . . . . . . . . . . . . . . . . 62 Northwest Territories . . . . . 1District of Columbia . . . . . 2 Oklahoma . . . . . . . . . . . . 17 Ontario . . . . . . . . . . . . . . 126Florida . . . . . . . . . . . . . . 102 Oregon . . . . . . . . . . . . . . 21 Prince Edward Island . . . . 2Georgia . . . . . . . . . . . . . . 40 Pennsylvania . . . . . . . . . . 94 Quebec . . . . . . . . . . . . . . 70Idaho . . . . . . . . . . . . . . . 8 Rhode Island . . . . . . . . . . 10 Saskatchewan . . . . . . . . . . 9Illinois . . . . . . . . . . . . . . . 56 South Carolina . . . . . . . . . 21 Yukon . . . . . . . . . . . . . . . 1Indiana . . . . . . . . . . . . . . 30 South Dakota . . . . . . . . . . 1 Total Canada . . . . . . . . 325Iowa . . . . . . . . . . . . . . . . 16 Tennessee . . . . . . . . . . . . 21Kansas . . . . . . . . . . . . . . 4 Texas . . . . . . . . . . . . . . . 58

Belgium . . . . . . . . . . . . . . 6Kentucky . . . . . . . . . . . . . 17 Utah . . . . . . . . . . . . . . . . 14Finland . . . . . . . . . . . . . . 7Louisiana . . . . . . . . . . . . . 1 Vermont . . . . . . . . . . . . . 7Germany . . . . . . . . . . . . . 59Maine . . . . . . . . . . . . . . . 13 Virginia . . . . . . . . . . . . . . 43The Netherlands . . . . . . . . 47Maryland . . . . . . . . . . . . . 44 Washington . . . . . . . . . . . 30Norway . . . . . . . . . . . . . . 21Massachusetts . . . . . . . . . . 77 West Virginia . . . . . . . . . . 6Portugal . . . . . . . . . . . . . 35Michigan . . . . . . . . . . . . . 42 Wisconsin . . . . . . . . . . . . 11Sweden . . . . . . . . . . . . . . 18Minnesota . . . . . . . . . . . . 7 Wyoming . . . . . . . . . . . . . 4United Kingdom . . . . . . . . 139Mississippi . . . . . . . . . . . . 2 Total United States . . . . 1,575 China . . . . . . . . . . . . . . . 28Missouri . . . . . . . . . . . . . 11Argentina . . . . . . . . . . . . 2Montana . . . . . . . . . . . . . 8Australia . . . . . . . . . . . . . 19Nebraska . . . . . . . . . . . . . 5

13

DISTRIBUTION AND FULFILLMENT CENTERS

Country/State/Province/Region/ Number of Country/State/Province/Region/ Number of Country/State/Province/Region/ Number ofTerritory Centers Territory Centers Territory Centers

United States Ohio . . . . . . . . . . . . . . . . 1 Austria . . . . . . . . . . . . . . 1Arizona . . . . . . . . . . . . . . 2 Oregon . . . . . . . . . . . . . . 3 Belgium . . . . . . . . . . . . . . 2Arkansas . . . . . . . . . . . . . 1 Pennsylvania . . . . . . . . . . 2 Denmark . . . . . . . . . . . . . 2California . . . . . . . . . . . . 7 South Carolina . . . . . . . . . 1 Finland . . . . . . . . . . . . . . 1Colorado . . . . . . . . . . . . . 2 Tennessee . . . . . . . . . . . . 1 Germany . . . . . . . . . . . . . 2Connecticut . . . . . . . . . . . 2 Texas . . . . . . . . . . . . . . . 6 Ireland . . . . . . . . . . . . . . 2Delaware . . . . . . . . . . . . . 1 Virginia . . . . . . . . . . . . . . 1 Italy . . . . . . . . . . . . . . . . 1Florida . . . . . . . . . . . . . . 2 Washington . . . . . . . . . . . 1 The Netherlands . . . . . . . . 1Georgia . . . . . . . . . . . . . . 3 Wisconsin . . . . . . . . . . . . 2 Norway . . . . . . . . . . . . . . 3Idaho . . . . . . . . . . . . . . . 1 Portugal . . . . . . . . . . . . . 1Total United States . . . . 58Illinois . . . . . . . . . . . . . . . 3 Spain . . . . . . . . . . . . . . . 1Indiana . . . . . . . . . . . . . . 1 Sweden . . . . . . . . . . . . . . 1

CanadaIowa . . . . . . . . . . . . . . . . 1 United Kingdom . . . . . . . . 4Alberta . . . . . . . . . . . . . . 3Kansas . . . . . . . . . . . . . . 1 China . . . . . . . . . . . . . . . 4British Columbia . . . . . . . . 2Maryland . . . . . . . . . . . . . 2 Argentina . . . . . . . . . . . . 3Manitoba . . . . . . . . . . . . . 1Massachusetts . . . . . . . . . . 2 Brazil . . . . . . . . . . . . . . . 1New Foundland . . . . . . . . 1Michigan . . . . . . . . . . . . . 1 Australia . . . . . . . . . . . . . 24Nova Scotia . . . . . . . . . . . 2Minnesota . . . . . . . . . . . . 2Ontario . . . . . . . . . . . . . . 2New Jersey . . . . . . . . . . . 2Quebec . . . . . . . . . . . . . . 2New York . . . . . . . . . . . . 2

North Carolina . . . . . . . . . 2 Total Canada . . . . . . . . 13

Most of the existing facilities, including those acquired in connection with our acquisition of Corporate Express, areleased by us with initial lease terms expiring between 2011 and 2025. In most instances, we have renewal options atincreased rents. Leases for 163 of the existing stores provide for contingent rent based upon sales.

We own our Framingham, Massachusetts corporate office, which consists of approximately 650,000 square feet.

Item 3. Legal Proceedings

From time to time, we may be subject to routine litigation incidental to our business.

Item 4. Removed and Reserved

14

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities

NASDAQ

Our common stock is traded on the NASDAQ Global Select Market under the symbol ‘‘SPLS’’. The following tablesets forth for the periods indicated the high and low sales prices per share of our common stock on the NASDAQ GlobalSelect Market, as reported by NASDAQ.

High Low

Fiscal Year Ended January 29, 2011First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.00 $22.00Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.97 18.82Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.25 17.45Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.75 19.96

Fiscal Year Ended January 30, 2010First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22.20 $14.35Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.95 18.72Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.55 20.88Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.00 21.43

Cash Dividend

Since 2004, we have returned cash to our stockholders through a cash dividend. We paid quarterly dividends of $0.09per share on April 15, 2010, July 15, 2010, October 24, 2010 and January 13, 2011, resulting in a total dividend paymentfor 2010 of $258.7 million or $0.36 per share on an annualized basis. We paid quarterly dividends of $0.0825 per share onApril 10, 2009, July 10, 2009, October 15, 2009 and January 14, 2010, resulting in a total dividend payment for 2009 of$236.9 million or $0.33 per share on an annualized basis.

Our payment of dividends is permitted under our public notes and existing financing agreements, although ourrevolving credit agreement restricts the payment of dividends in the event we are in default under such agreement orsuch payout would cause a default under such agreement. While it is our intention to continue to pay quarterly cashdividends for 2011 and beyond, any decision to pay future cash dividends will be made by our Board of Directors and willdepend upon our earnings, financial condition and other factors.

15

23FEB201122512807

Stock Performance Graph

The following graph compares the cumulative total stockholder return on Staples’ common stock, the Standard &Poor’s 500 Index and the Standard & Poor’s Retail Index during our 2006 through 2010 fiscal years, assuming theinvestment of $100.00 on January 28, 2006 with dividends being reinvested.

$0

$20

$40

$60

$80

$100

$120

$140

1/28/06 2/3/07 2/2/08 1/31/09 1/30/10 1/29/11

Staples, Inc. S&P 500 S&P Retail

TOTAL RETURN TO STOCKHOLDERS

28-Jan-06 3-Feb-07 2-Feb-08 31-Jan-09 30-Jan-10 29-Jan-11

Staples, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100.00 $112.85 $103.24 $69.76 $104.28 $100.89S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100.00 $114.51 $111.87 $68.66 $ 91.41 $111.69S&P Retail Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100.00 $113.80 $ 98.81 $62.47 $100.53 $128.28

Issuer Purchases of Equity Securities

The following table provides information about our purchases of our common stock during the fourth quarter offiscal 2010 :

Total Number ofShares Approximate

Purchased Dollar Value ofas Part of Shares that May

Total Number of Average Price Publicly Yet Be PurchasedShares Paid per Share Announced Plans Under the Plans or

Fiscal Period Purchased(1) (2) or Programs(3) Programs(3)

October 31, 2010—November 27, 2010 . . . . . . . . . . 1,060,000 $20.69 1,060,000 $728,060,000November 28, 2010—January 1, 2011 . . . . . . . . . . . 2,334,735 22.55 2,270,000 676,874,000January 2, 2011—January 29, 2011 . . . . . . . . . . . . . 1,654,756 23.17 1,574,295 640,394,000

Total for fourth quarter of 2011 . . . . . . . . . . . . . 5,049,491 $22.35 4,904,295 $640,394,000

(1) Includes a total of 145,196 shares of our common stock withheld during the fourth quarter of our 2010 fiscal year tosatisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awardsgranted pursuant to our equity incentive plans.

(2) Average price paid per share includes commissions paid in connection with our publicly announced sharerepurchase programs and is rounded to the nearest two decimal places.

(3) On June 7, 2010, we announced that we were resuming the share repurchase program approved by the Board ofDirectors in June 2007. Under the repurchase program the Board of Directors authorized the repurchase of up to$1.5 billion shares of common stock. The share repurchase program has no expiration date and may be suspended ordiscontinued at any time.

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Other Information

For information regarding securities authorized for issuance under our equity compensation plans, please see Note Jin the Notes to the Consolidated Financial Statements contained in this Annual Report on Form 10-K.

At February 28, 2011, we had 5,425 holders of record of our common stock.

Item 6. Selected Financial Data

The information required by this Item is attached as Appendix A.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information required by this Item is attached as part of Appendix B.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The information required by this Item is attached as part of Appendix B under the caption ‘‘Quantitative andQualitative Disclosures about Market Risks.’’

Item 8. Financial Statements and Supplementary Data

The information required by this Item is attached as Appendix C.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

1. Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s chief executive officer and chief financialofficer, evaluated, as of January 29, 2011, the effectiveness of the Company’s disclosure controls and procedures, whichwere designed to be effective at the reasonable assurance level. The term ‘‘disclosure controls and procedures,’’ asdefined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a companythat are designed to ensure that information required to be disclosed by a company in the reports that it files or submitsunder the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSecurities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation,controls and procedures designed to ensure that information required to be disclosed by a company in the reports that itfiles or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.Management recognizes that any controls and procedures, no matter how well designed and operated, can provide onlyreasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating thecost-benefit relationship of possible controls and procedures. Based on the evaluation of the Company’s disclosurecontrols and procedures as of January 29, 2011, management, the chief executive officer and the chief financial officerconcluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level at thatdate.

2. Internal Control over Financial Reporting

(a) Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financialreporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f)promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’sprincipal executive and principal financial officers and effected by the company’s board of directors,management and other personnel, to provide reasonable assurance regarding the reliability of financial

17

reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles and includes those policies and procedures that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactionsand dispositions of the assets of the company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles, and that receipts and expenditures ofthe company are being made only in accordance with authorizations of management and directors of thecompany; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use ordisposition of the company’s assets that could have a material effect on the financial statements.

Staples’ internal control system was designed to provide reasonable assurance to the Company’s managementand Board regarding the preparation and fair presentation of published financial statements. All internalcontrol systems, no matter how well designed, have inherent limitations which may not prevent or detectmisstatements. Therefore, even those systems determined to be effective can provide only reasonable assurancewith respect to financial statement preparation and presentation. Projections of any evaluation of effectivenessto future periods are subject to the risk that controls may become inadequate because of changes in conditions,or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of Staples’ internal controls over financial reporting as ofJanuary 29, 2011. In making this assessment, it used the criteria set forth in Internal Control-IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Based on our assessment, we conclude that, as of January 29, 2011, the Company has maintained effectiveinternal control over financial reporting based on those criteria.

The independent registered public accounting firm, Ernst & Young LLP, has audited the ConsolidatedFinancial Statements and has issued an attestation report on Staples Inc.’s internal controls over financialreporting as of January 29, 2011 as stated in its reports which are included herein.

18

(b) Attestation Report of the Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders ofStaples, Inc.

We have audited Staples, Inc.’s internal control over financial reporting as of January 29, 2011, based oncriteria established in Internal Control—Integrated Framework issued by the Committee of SponsoringOrganizations of the Treadway Commission (the COSO criteria). Staples, Inc.’s management is responsible formaintaining effective internal control over financial reporting, and for its assessment of the effectiveness ofinternal control over financial reporting included in the accompanying Management’s Annual Report onInternal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’sinternal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessingthe risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk, and performing such other procedures as we considered necessary in thecircumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. A company’s internal control overfinancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles, and that receipts and expenditures ofthe company are being made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’s assets that could have a material effect on the financialstatements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detectmisstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk thatcontrols may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.

In our opinion, Staples, Inc. maintained, in all material respects, effective internal control over financialreporting as of January 29, 2011, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting OversightBoard (United States), the consolidated balance sheets of Staples, Inc. and subsidiaries as of January 29, 2011and January 30, 2010 and the related consolidated statements of income, stockholders’ equity, and cash flowsfor each of the three years in the period ended January 29, 2011 of Staples, Inc. and our report dated March 2,2011 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Ernst & Young LLP

Boston, MassachusettsMarch 2, 2011

19

(c) Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)under the Exchange Act) occurred during the fiscal quarter ended January 29, 2011 that has materially affected, or isreasonably likely to materially affect, the Company’s internal control over financial reporting.

PART III

Certain information required by Part III is omitted from this Annual Report on Form 10-K and incorporated hereinby reference to the definitive proxy statement with respect to our 2011 Annual Meeting of Stockholders (the ‘‘ProxyStatement’’), which we will file with the Securities and Exchange Commission not later than 120 days after the end of thefiscal year covered by this Report.

Item 10. Directors, Executive Officers and Corporate Governance

Certain information required by this Item is contained under the heading ‘‘Executive Officers of the Registrant’’ inPart I of this Annual Report on Form 10-K. Other information required by this Item will appear under the headings‘‘Proposal 1—Election of Directors’’ and ‘‘Corporate Governance’’ in our Proxy Statement, which sections areincorporated herein by reference.

The information required by this Item pursuant to Item 405 of Regulation S-K will appear under the heading‘‘Section 16(a) Beneficial Ownership Reporting Compliance’’ in our Proxy Statement, which section is incorporatedherein by reference.

We have adopted a written code of ethics that applies to our principal executive officer, principal financial officer,and principal accounting officer or controller, or persons performing similar functions. Our code of ethics, which alsoapplies to our directors and all of our officers and associates, can be found on our web site, which is located atwww.staples.com, and is also an exhibit to this report. We intend to make all required disclosures concerning anyamendments to, or waivers from, our code of ethics by filing a Form 8-K disclosing such waiver, or to the extentpermitted by applicable NASDAQ regulations, by posting such information in the Investor Information section of ourweb site.

Item 11. Executive Compensation

The information required by this Item will appear under the headings ‘‘Corporate Governance’’, ‘‘DirectorCompensation’’, and ‘‘Executive Compensation’’ including ‘‘Compensation Discussion and Analysis’’, ‘‘CompensationCommittee Interlocks and Insider Participation’’ and ‘‘Compensation Committee Report’’ in our Proxy Statement, whichsections are incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item will appear under the headings ‘‘Beneficial Ownership of Common Stock’’and ‘‘Securities Authorized for Issuance under Equity Compensation Plans’’ in our Proxy Statement, which sections areincorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item will appear under the headings ‘‘Certain Relationships and RelatedTransactions’’ and ‘‘Director Independence’’ in our Proxy Statement, which sections are incorporated herein byreference.

Item 14. Principal Accountant Fees and Services

The information required by this Item will appear under the heading ‘‘Independent Registered Public AccountingFirm’s Fees’’ in our Proxy Statement, which section is incorporated herein by reference.

Item 15. Exhibits and Financial Statement Schedules

(a) Index to Consolidated Financial Statements.

20

1. Financial Statements. The following financial statements and schedules of Staples, Inc. are included as Appendix Cof this Report:

• Consolidated Balance Sheets—January 29, 2011 and January 30, 2010.

• Consolidated Statements of Income—Fiscal years ended January 29, 2011, January 30, 2010 and January 31, 2009.

• Consolidated Statements of Stockholders’ Equity—Fiscal years ended January 29, 2011, January 30, 2010 andJanuary 31, 2009.

• Consolidated Statements of Cash Flows—Fiscal years ended January 29, 2011, January 30, 2010 and January 31,2009.

• Notes to Consolidated Financial Statements.

2. Financial Statement Schedules.

• Schedule II—Valuation and Qualifying Accounts.

All schedules for which provision is made in the applicable accounting regulations of the Securities and ExchangeCommission other than the one listed above are not required under the related instructions or are not applicable, and,therefore, have been omitted.

3. Exhibits. The exhibits which are filed or furnished with this report or which are incorporated herein by referenceare set forth in the Exhibit Index on page D-1, which is incorporated herein by reference.

21

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 1, 2011.

STAPLES, INC.

By: /s/ RONALD L. SARGENT

Ronald L. Sargent,Chairman of the Board and Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Capacity Date

/s/ RONALD L. SARGENT Chairman of the Board and Chief Executive Officer March 1, 2011(Principal Executive Officer)Ronald L. Sargent

/s/ BASIL L. ANDERSONDirector March 1, 2011

Basil L. Anderson

/s/ ARTHUR M. BLANKDirector March 1, 2011

Arthur M. Blank

/s/ MARY ELIZABETH BURTONDirector March 1, 2011

Mary Elizabeth Burton

/s/ JUSTIN KINGDirector March 1, 2011

Justin King

/s/ CAROL MEYROWITZDirector March 1, 2011

Carol Meyrowitz

/s/ ROWLAND T. MORIARTYDirector March 1, 2011

Rowland T. Moriarty

/s/ ROBERT C. NAKASONEDirector March 1, 2011

Robert C. Nakasone

/s/ ELIZABETH A. SMITHDirector March 1, 2011

Elizabeth A. Smith

22

Signature Capacity Date

/s/ ROBERT E. SULENTICDirector March 1, 2011

Robert E. Sulentic

/s/ VIJAY VISHWANATHDirector March 1, 2011

Vijay Vishwanath

/s/ PAUL F. WALSHDirector March 1, 2011

Paul F. Walsh

/s/ JOHN J. MAHONEY Vice Chairman and Chief Financial Officer March 1, 2011(Principal Financial Officer)John J. Mahoney

/s/ CHRISTINE T. KOMOLA Senior Vice President and Corporate Controller March 1, 2011(Principal Accounting Officer)Christine T. Komola

23

APPENDIX A

STAPLES, INC. AND SUBSIDIARIESSELECTED FINANCIAL DATA

(Dollar Amounts in Thousands, Except Per Share Data)

Fiscal Year Ended

January 29, January 30, January 31, February 2, February 3,2011(1) 2010(2) 2009(3) 2008(4) 2007(5)

(52 weeks) (52 weeks) (52 weeks) (52 weeks) (53 weeks)

Statement of Income Data:Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,545,113 $24,275,451 $23,083,775 $19,372,682 $18,160,789Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . 6,606,155 6,473,903 6,246,936 5,550,671 5,194,001Net income attributed to Staples, Inc. . . . . . . 881,948 738,671 805,264 995,670 973,677Basic earnings per common share . . . . . . . . . . 1.23 1.04 1.15 1.41 1.35Diluted earnings per common share . . . . . . . . 1.21 1.02 1.13 1.38 1.32Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.36 $ 0.33 $ 0.33 $ 0.29 $ 0.22Statistical Data:

Stores open at end of period . . . . . . . . . . . 2,281 2,243 2,218 2,038 1,884Balance Sheet Data:

Working capital . . . . . . . . . . . . . . . . . . . . . $ 2,174,574 $ 2,392,448 $ 951,704 $ 1,945,484 $ 1,642,980Total assets . . . . . . . . . . . . . . . . . . . . . . . . 13,911,667 13,717,334 13,073,055 9,036,344 8,397,265Total long-term debt, less current portion . . 2,014,407 2,500,329 1,968,928 342,169 316,465Noncontrolling interest . . . . . . . . . . . . . . . . 7,471 83,054 58,224 10,227 9,109Stockholders’ equity . . . . . . . . . . . . . . . . . . $ 6,951,181 $ 6,854,940 $ 5,622,431 $ 5,728,234 $ 5,030,774

The Company’s fiscal year is the 52 or 53 weeks ending the Saturday closest to January 31. Results of operations includethe results of acquired businesses since the relevant acquisition date.

(1) Results of operations for this period reflect $57.8 million ($36.8 million, net of taxes) of integration andrestructuring costs associated with the acquisition of Corporate Express N.V. (‘‘Corporate Express’’).

(2) Results of operations for this period reflect $84.2 million ($55.2 million, net of taxes) of integration andrestructuring costs associated with the acquisition of Corporate Express and a $42.0 million ($27.5 million, net oftaxes) charge related to the settlement of retail wage and hour class action lawsuits.

(3) Results of operations for this period reflect $173.5 million ($113.7 million, net of taxes) of integration andrestructuring costs associated with the acquisition of Corporate Express. The results of Corporate Express have beenincluded since its acquisition in July 2008.

(4) Results of operations for this period reflect a $38.0 million ($24.3 million, net of taxes) charge related to thesettlement of California wage and hour class action litigation.

(5) Results of operations for this period reflect a $33.3 million reduction in income taxes related to the favorableresolution of certain foreign and domestic tax matters and a $10.8 million ($8.6 million, net of taxes) charge tocorrect the measurement dates used to calculate prior years’ stock-based compensation.

A-1

APPENDIX B

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations

General

Our fiscal year is the 52 or 53 weeks ending on the Saturday closest to January 31. Fiscal year 2010 (‘‘2010’’)consisted of the 52 weeks ended January 29, 2011, fiscal year 2009 (‘‘2009’’) consisted of the 52 weeks ended January 30,2010, and fiscal year 2008 (‘‘2008’’) consisted of the 52 weeks ended January 31, 2009.

Results of Operations

We have provided below an overview of our operating results as well as a summary of our consolidated performanceand details of our segment performance. Net income is presented in our Consolidated Performance, in accordance withaccounting principles generally accepted in the United States (‘‘U.S. GAAP’’) and as adjusted for certain items as notedin the reconciliation tables below. Management uses adjusted net income, among other metrics, to measure operatingperformance. We have added this information because we believe it helps in understanding the results of our operationson a comparative basis. This adjusted information supplements and is not intended to replace performance measuresrequired by U.S. GAAP.

Overview

Major contributors to our 2010 results, as compared to the results for 2009, are reviewed in detail in theConsolidated Performance and Segment Performance discussions and are summarized below:

• On a consolidated basis, we generated $24.5 billion in sales, with sales growth of 1.1% compared to 2009;

• Our annual income tax rate returned to 34.5% in the fourth quarter of 2010 as a result of the enactment of TheTax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010;

• North American Delivery sales increased 2.2%, and the business unit income rate increased to 8.5% from 8.2%;

• North American Retail sales increased 1.8%, comparable store sales decreased 1% and the business unit incomerate decreased to 8.1% from 8.3%; and

• International Operations sales decreased 2.0%, while the business unit income rate increased to 3.2% from 2.3%.

We continue to invest in strategic growth initiatives to drive our long term success, including technology productsand services, copy and print services, and facility and breakroom supplies, while maintaining our focus on customerservice and expense control. Our results for 2010 reflect our investments in these initiatives as well as the negative impactof inclement weather and the resulting promotional activities, primarily in North America, late in the fourth quarter.

Outlook

Our expectations for 2011 assume a modest improvement in the economy that will encourage existing customers toincrease spending on office products and services, reversing the declining trend experienced throughout the recession. Inaddition, we are continuing to invest in technology and service initiatives and expanding into new and adjacent productcategories to meet additional customer needs. These sales initiatives will be combined with our ongoing investment inimproving profitability in all of our businesses.

For the first quarter of 2011, we expect sales to increase in the low single-digits compared to the same period of 2010and we expect to achieve diluted earnings per share on a U.S. GAAP basis in the range of $0.30 to $0.32. For the full year2011, we expect sales to increase in the low to mid single-digits compared to 2010 and we expect to achieve dilutedearnings per share on a U.S. GAAP basis in the range of $1.50 to $1.60. Our guidance for full year 2011 includes $0.05 to$0.06 per share of earnings benefit, primarily from a lower share count as a result of our share buyback program andlower interest expense as a result of the repayment of our April 2011 Notes.

As with all forward looking statements made in this Annual Report on Form 10-K, we do not intend to publiclyupdate any of the forward looking statements above.

B-1

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

Consolidated Performance:

2010 Compared with 2009

Net income attributed to Staples, Inc. for 2010 was $881.9 million or $1.21 per diluted share compared to$738.7 million or $1.02 per diluted share for 2009. Our results for 2010 include integration and restructuring costs andour results for 2009 include integration and restructuring costs and a settlement for wage and hour class action lawsuits.A reconciliation of net income adjusted to remove these items, net of taxes, is shown below (amounts in thousands,except per share data):

2010 2009

Per Diluted Per DilutedNet income Share Net income Share

Net income as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $881,948 $1.21 $738,671 $1.02Adjustments, net of taxes:(1)

Integration and restructuring costs(2) . . . . . . . . . . . . . . . . . . . . . . 36,780 0.06 55,180 0.08Retail wage and hour settlement(3) . . . . . . . . . . . . . . . . . . . . . . . . — — 27,510 0.04

Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $918,728 $1.27 $821,361 $1.14

(1) The tax effect of all adjustments is based on the effective tax rate in effect for the period the expenses were incurred.

(2) See Note C to the Notes to the Consolidated Financial Statements.

(3) See Note H to the Notes to the Consolidated Financial Statements.

Sales: Sales for 2010 were $24.5 billion, an increase of 1.1% from 2009. Our sales growth for 2010 reflects thepositive impact of foreign exchange rates of $222.1 million, growth in our North American Delivery business and, to alesser extent, non-comparable store sales for stores opened in the last twelve months, partially offset by negativecomparable store sales in North America and Europe, in part related to the impact of the inclement weather andresulting promotional activities late in the fourth quarter.

Gross Profit: Gross profit as a percentage of sales was 26.9% for 2010 compared to 26.7% for 2009. The increase ingross profit rate for 2010 was primarily driven by improvements in product margin and, to a lesser extent, supply chainefficiencies.

Selling, General and Administrative Expenses: Selling, general and administrative expenses were 20.0% of sales for2010 compared to 20.2% for 2009. This decrease reflects the settlement of several retail wage and hour class actionlawsuits in 2009, reduced stock-based compensation and lower retirement plan expenses, mostly offset by investments ingrowth initiatives, primarily labor.

Integration and Restructuring Costs: Integration and restructuring costs were $57.8 million for 2010 compared to$84.2 million for 2009. Integration and restructuring costs for 2010 included $37.6 million of consulting and other costs,$10.0 million for severance and retention, and $10.2 million for facility closures and other asset write-downs. Integrationand restructuring costs for 2009 included $46.1 million of consulting and other costs, $30.5 million for severance andretention, and $7.6 million for facility closures and other asset write-downs.

Amortization of Intangibles: Amortization of intangibles was $61.7 million for 2010 compared to $100.1 million for2009. Amortization expense reflects the amortization of certain tradenames, customer relationships and non-competitionagreements. Amortization expense relating to intangibles resulting from our acquisition of Corporate Express N.V.(‘‘Corporate Express’’) was $50.1 million for 2010 compared to $69.1 million for 2009.

Interest Income: Interest income increased to $7.7 million for 2010 compared to $6.1 million for 2009. This increasewas due to an increase in our average cash balance, partially offset by a reduction in interest rates.

Interest Expense: Interest expense decreased to $214.8 million for 2010 compared to $237.0 million for 2009. Thisdecrease was primarily due to expenses recognized in 2009 related to fees associated with borrowings used to fund the

B-2

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

acquisition of Corporate Express as well as the positive impact of our interest rate swap agreements. These positivechanges partially offset the inclusion of interest on our April 2011 Notes, as defined below. Excluding the impact of ourinterest rate swap agreements, interest expense would have been $240.1 million for 2010 compared to $245.2 million for2009.

Other (Expense) Income: Other expense was $(9.8) million for 2010. Other income was $4.5 million for 2009. Theseamounts primarily reflect foreign exchange gains and losses recorded in the respective periods.

Income Taxes: Our effective tax rate was 34.5% for 2010 and 2009. In the fourth quarter of fiscal 2010 The TaxRelief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 was enacted, extending certainprovisions in the Internal Revenue Code which allowed for the deferral of United States income tax on certainunremitted foreign earnings. Prior to the enactment of The Tax Relief, Unemployment Insurance Reauthorization andJob Creation Act of 2010, we had anticipated that our tax rate for fiscal 2010 would have been 37.5%.

A reconciliation of the federal statutory tax rate to our effective tax rate on historical net income was as follows:

2010 2009

Federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0%State effective rate, net of federal benefit . . . . . . . . . . . . . . . . . 3.3 2.9Effect of foreign taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.5) (3.4)Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.4) (0.7)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 0.7

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.5% 34.5%

The effective tax rate in any year is impacted by the geographic mix of earnings. Income taxes have not beenprovided on certain undistributed earnings of foreign subsidiaries of approximately $761.3 million, net of thenoncontrolling interest, because such earnings are considered to be indefinitely reinvested in the business. Thedetermination of the amount of the unrecognized deferred tax liability related to the undistributed earnings is notpracticable because of the complexities associated with its hypothetical calculation.

2009 Compared with 2008

Net income attributed to Staples, Inc. for 2009 was $738.7 million or $1.02 per diluted share compared to$805.3 million or $1.13 per diluted share for 2008, which includes the results of the Corporate Express business acquiredon July 2, 2008. Our results for 2009 and 2008 include integration and restructuring costs and a settlement for wage andhour class action lawsuits in 2009. A reconciliation of net income adjusted to remove these items, net of taxes, is shownbelow (amounts in thousands, except per share data):

2009 2008

Per Diluted Per DilutedNet income Share Net income Share

Net income as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $738,671 $1.02 $805,264 $1.13Adjustments, net of taxes:(1)

Integration and restructuring costs(2) . . . . . . . . . . . . . . . . . . . . . . 55,180 0.08 113,658 0.16Retail wage and hour settlement(3) . . . . . . . . . . . . . . . . . . . . . . . . 27,510 0.04 — —

Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $821,361 $1.14 $918,922 $1.29

(1) The tax effect of all adjustments is based on our effective tax rate of 34.5%.

(2) See Note C to the Notes to the Consolidated Financial Statements.

(3) See Note H to the Notes to the Consolidated Financial Statements.

B-3

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

Sales: Sales for 2009 were $24.3 billion, an increase of 5.2% from 2008. Our sales growth for 2009 is mainlyattributed to non-comparable sales from our acquisition of Corporate Express. This sales growth was partially offset bylower sales to existing customers in our delivery businesses and, to a much lesser extent, a decrease in comparable storesales in our retail businesses on lower average order size and the negative impact of foreign exchange rates of$80.4 million.

Gross Profit: Gross profit as a percentage of sales was 26.7% for 2009 compared to 27.1% for 2008. The decreasein gross profit rate for 2009 primarily reflects the inclusion of the full year results of Corporate Express, whose grossprofit rate was lower than our pre-existing businesses and, to a lesser extent, an unfavorable product mix as customerspurchased fewer discretionary products with higher margins, partially offset by increased buying synergies.

Selling, General and Administrative Expenses: Selling, general and administrative expenses as a percentage of salesfor 2009 were 20.2% compared to 20.1% for 2008. This increase was primarily driven by an increase in incentivecompensation and, to a lesser extent, the settlement of several retail wage and hour class action lawsuits. This increasewas partially offset by the inclusion of the full year results of Corporate Express, whose selling, general andadministrative expense rate was lower than our pre-existing businesses and, to a lesser extent, reduced marketingexpense.

Integration and Restructuring Costs: Integration and restructuring costs were $84.2 million for 2009 and$173.5 million for 2008. Integration and restructuring costs for 2009 included $46.1 million of consulting and other costs,$30.5 million for severance and retention, and $7.6 million for facility closures and other asset write-downs. Integrationand restructuring costs for 2008 include $123.8 million related to the write-down of indefinite lived intangibletradenames associated with our European catalog business. The tradename write-down was the result of our decision tomove toward one global brand with the acquisition of Corporate Express, eliminating, over time, the legacy brands usedin our European catalog business. Integration and restructuring costs for 2008 also include $26.3 million related to thewrite-down of software and facilities whose use was expected to be limited as a result of the acquisition and $23.4 millionof consulting and other costs.

Amortization of Intangibles: Amortization of intangibles was $100.1 million for 2009 compared to $70.3 million for2008. Amortization expense reflects the amortization of certain tradenames, customer relationships and non-competitionagreements. Amortization expense relating to intangibles resulting from our acquisition of Corporate Express was$69.1 million for 2009 compared to $50.8 million for 2008.

Interest Income: Interest income decreased to $6.1 million for 2009 from $28.5 million for 2008. This decrease wasthe result of a reduction in interest rates and our average cash balance, resulting from the use of cash to acquireCorporate Express.

Interest Expense: Interest expense increased to $237.0 million for 2009 from $149.8 million for 2008. This increasewas primarily due to borrowings under our January 2014 Notes, and our April 2011 Notes which was partially offset bydecreases in interest expense associated with our Commercial Paper Program, our Prior Revolving Credit Facility andour 2008 Agreement (each as defined below) relating to our acquisition of Corporate Express. We use interest rate swapagreements to convert a portion of our fixed rate debt obligations into variable rate obligations and a portion of ourvariable rate obligations into fixed rate obligations. Excluding the impact of our interest rate swap agreements, interestexpense would have been $245.2 million for 2009 compared to $152.1 million for 2008.

Other (Expense) Income: Other income was $4.5 million for 2009 compared to other expense of $7.6 million for2008. These amounts primarily reflect foreign exchange gains and losses recorded in the respective periods.

B-4

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

Income Taxes: Our effective tax rate was 34.5% for 2009 and 2008. A reconciliation of the federal statutory tax rateto our effective tax rate on historical net income was as follows:

2009 2008

Federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0%State effective rate, net of federal benefit . . . . . . . . . . . . . . . . . . . 2.9 2.5Effect of foreign taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.4) (2.9)Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.7) (0.4)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7 0.3

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.5% 34.5%

Segment Performance

We have three reportable segments: North American Delivery, North American Retail and InternationalOperations. Our North American Delivery segment consists of the U.S. and Canadian business units that sell and deliveroffice products and services directly to customers and businesses, and includes Staples Advantage, Staples.com andQuill.com. Our North American Retail segment consists of the U.S. and Canadian business units that operate officeproducts stores. Our International Operations segment consists of business units that operate office products stores andthat sell and deliver office products and services directly to customers in 24 countries in Europe, Australia, SouthAmerica and Asia. Additional geographic information about our sales is provided in Note N in the Notes to theConsolidated Financial Statements.

The following tables provide a summary of our sales and business unit income by reportable segment and storeactivity for the last three fiscal years. Business unit income excludes integration and restructuring costs, stock-basedcompensation, interest and other expense, net, non-recurring items and the impact of changes in accounting principles(see reconciliation of total segment income to consolidated income before income taxes in Note N in the Notes to theConsolidated Financial Statements):

2010 2009(Amounts in thousands) Increase (Decrease) Increase (Decrease)Sales: 2010 2009 2008 From Prior Year From Prior Year

North American Delivery . . . . . . . . . $ 9,849,218 $ 9,640,390 $ 8,929,924 2.2% 8.0%North American Retail . . . . . . . . . . . 9,529,757 9,364,190 9,489,510 1.8% (1.3)%International Operations . . . . . . . . . . 5,166,138 5,270,871 4,664,341 (2.0)% 13.0%

Total segment sales . . . . . . . . . . . . $24,545,113 $24,275,451 $23,083,775 1.1% 5.2%

(Amounts in thousands) 2010 2009 2008Business Unit Income: 2010 2009 2008 % of Sales % of Sales % of Sales

North American Delivery . . . . . . . . . . . . $ 841,429 $ 786,723 $ 802,523 8.5% 8.2% 9.0%North American Retail . . . . . . . . . . . . . . 770,122 774,529 769,695 8.1% 8.3% 8.1%International Operations . . . . . . . . . . . . . 166,606 122,028 153,886 3.2% 2.3% 3.3%

Business unit income . . . . . . . . . . . . . . $1,778,157 $1,683,280 $1,726,104 7.2% 6.9% 7.5%Stock-based compensation . . . . . . . . . . . . (146,879) (174,691) (180,652) (0.6)% (0.7)% (0.8)%

Total segment income . . . . . . . . . . . . . $1,631,278 $1,508,589 $1,545,452 6.6% 6.2% 6.7%

B-5

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

Stores StoresOpen at Open at

Beginning Stores Stores Stores EndStore Activity of Period Acquired Opened Closed of Period

2010 North American Retail . . . . . . . . . . . . . . . . . . . . . . . . . . 1,871 — 41 12 1,9002010 International Operations . . . . . . . . . . . . . . . . . . . . . . . . . 372 9 12 12 381

2010 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,243 9 53 24 2,281

2009 North American Retail . . . . . . . . . . . . . . . . . . . . . . . . . . 1,835 — 48 12 1,8712009 International Operations . . . . . . . . . . . . . . . . . . . . . . . . . 383 — 8 19 372

2009 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,218 — 56 31 2,243

North American Delivery

2010 Compared with 2009

Sales increased 2.2% for 2010 compared to 2009. This increase was driven by our customer acquisition and retentionefforts. This was most notable in our Contract businesses, which experienced growth primarily in our promotionalproducts and printing businesses. To a lesser extent, our sales growth was positively impacted by foreign exchange rates of$65.0 million. These increases were partially offset by lower sales to existing customers.

Business unit income as a percentage of sales increased to 8.5% for 2010 from 8.2% for 2009, primarily driven by astrong performance in our Contract business. For total North American Delivery, the increase in business unit income asa percentage of sales was driven primarily by improved product margins and, to a lesser extent, reduced amortizationexpense, partially offset by investments in marketing and pricing to support growth initiatives.

2009 Compared with 2008

Sales increased 8.0% for 2009 compared to 2008. This increase was the result of non-comparable sales from ouracquisition of Corporate Express and, to a much lesser extent, the impact of our customer acquisition and retentionefforts, which was partially offset by lower sales to existing customers.

Business unit income as a percentage of sales decreased to 8.2% for 2009 from 9.0% for 2008. This decrease wasprimarily due to the inclusion of the full year results of Corporate Express, whose business unit income rate was lowerthan our pre-existing business. The decrease also reflects an unfavorable product mix as customers purchased fewerdiscretionary products with higher margins and, to a lesser extent, increased incentive compensation. These items werepartially offset by buying synergies and, to a lesser extent, reduced marketing expense and improvements in supply chainproductivity.

North American Retail

2010 Compared with 2009

Sales increased 1.8% for 2010 compared to 2009. This increase was driven by the positive impact of foreignexchange rates of $175.9 million and, to a lesser extent, non-comparable sales for stores opened in the past twelvemonths, offset by a 1% decrease in comparable store sales reflecting lower average order size and promotional activitiesconducted to offset the impact of inclement weather late in the fourth quarter. Our comparable store sales decrease for2010 reflects a decline in durable products, driven by computer accessories and business machines, partially offset by aslight increase in consumables. The slight increase in consumables reflects positive performance in our service offerings.

Business unit income as a percentage of sales decreased to 8.1% for 2010 from 8.3% for 2009. The slight decrease inbusiness unit income as a percentage of sales for 2010 primarily reflects investments in labor and deleverage of fixedoverhead costs. This was partially offset by lower depreciation and marketing expenses.

B-6

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

2009 Compared with 2008

Sales decreased 1.3% for 2009 compared to 2008. This decrease was primarily driven by a 2% decrease incomparable store sales, reflecting lower average order size. The decrease also reflects the negative impact of foreignexchange rates of $60.3 million, partially offset by slightly positive customer traffic and non-comparable sales for newstores opened in the past twelve months. Our comparable store sales decrease for 2009 reflects a significant decline indurable products, partially offset by a slight increase in consumables. The decline in durables was driven by businessmachines and furniture partially offset by positive performance in computers. The slight increase in consumables reflectspositive performance in ink and toner and technology services substantially offset by core office supplies.

Business unit income as a percentage of sales increased to 8.3% for 2009 from 8.1% for 2008. This slight increaseprimarily reflects expense improvements in marketing and, to a lesser extent, supply chain improvements and our focuson expense control, partially offset by an increase in incentive compensation and, to a lesser extent, deleverage in fixedoccupancy costs.

International Operations

2010 Compared with 2009

Sales decreased 2.0% for 2010 compared to 2009. This decrease was driven by a 6% decrease in comparable storesales in Europe and, to a lesser extent, lower sales in our European Printing Systems business and the negative impact offoreign exchange rates of $18.7 million, partially offset by sales growth in our European delivery and South Americanbusinesses.

Business unit income as a percentage of sales increased to 3.2% from 2.3% in 2009. The increase for 2010 reflectsimprovement in supply chain costs in our European delivery businesses, reduced amortization expense, reducedretirement expenses and the release of a foreign capital duty reserve, due to the lapse in the statute of limitations. Theseincreases were partially offset by deleverage in rent and labor costs in our European retail businesses.

2009 Compared with 2008

Sales increased 13.0% for 2009 compared to 2008. This increase was the result of non-comparable sales from ouracquisition of Corporate Express partially offset by lower sales in our Europe delivery businesses and in China and, to alesser extent, a 9% decrease in comparable store sales in Europe and the negative impact of foreign exchange rates of$24.0 million.

Business unit income as a percentage of sales decreased to 2.3% for 2009 from 3.3% for 2008. This decrease reflectsdeleverage of fixed expenses on lower sales volume in our pre-existing businesses, increased losses in China, and losses inour European Printing Systems business. These decreases were slightly offset by buying synergies as well as the inclusionof Corporate Express whose business unit income was higher than our pre-existing businesses and, to a lesser extent,improvements in marketing expense.

Stock-Based Compensation

2010 Compared with 2009

Stock-based compensation decreased to $146.9 million for 2010 from $174.7 million for 2009. Stock-basedcompensation includes expenses associated with our employee stock purchase plans and the issuance of stock options,restricted shares and performance share awards. The decrease in the expense for 2010 primarily relates to changes in ourequity compensation structure, including the elimination of certain retirement acceleration clauses in our restricted shareawards, as well as the proceeds received from the settlement of stock option derivative litigation.

B-7

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

2009 Compared with 2008

Stock-based compensation decreased to $174.7 million in 2009 from $180.7 million in 2008. This decrease wasprimarily related to changes in the mix of equity awards granted, with the most significant change related to the Staples’Employees’ 401(k) Savings Plan (the ‘‘401(k) Plan’’). Prior to fiscal 2009, our contributions to the 401(k) Plan were madein the form of common stock, beginning in 2009, these contributions are made in cash, and therefore, are now classifiedwithin business unit income.

Critical Accounting Policies and Significant Estimates

Our financial statements have been prepared in accordance with U.S. GAAP and are based on the application ofsignificant accounting policies (see Note A in the Notes to the Consolidated Financial Statements). Preparation of thesestatements requires management to make significant judgments and estimates. We believe that the following are some ofthe more critical judgment areas in the application of our accounting policies that currently affect our financial conditionand results of operations.

Inventory: We record inventory at the lower of weighted-average cost or market value. We reserve for obsolete,overstocked and inactive inventory based on the difference between the weighted-average cost of the inventory and theestimated market value using assumptions of future demand and market conditions. If actual market conditions are lessfavorable than those projected by management, additional reserves may be required.

Purchase and Advertising Rebates: We earn rebates from our vendors, which are based on various quantitativecontract terms that can be complex and subject to interpretation. Amounts expected to be received from vendors relatingto the purchase of merchandise inventories and reimbursement of incremental costs, such as advertising, are recognizedas a reduction of inventory cost and realized as part of cost of goods sold as the merchandise is sold. Several controls arein place, including direct confirmation with vendors, which we believe allows us to ensure that these amounts arerecorded in accordance with the terms of the contracts.

Impairment of Long-Lived Assets: We review our long-lived assets for impairment when indicators of impairmentare present and the undiscounted cash flow estimated to be generated by those assets is less than the assets’ carryingamount. Our policy is to evaluate long-lived assets for impairment at a store level for retail operations and an operatingunit level for our other operations. If actual market conditions are less favorable than management’s projections, futurewrite-offs may be necessary.

Impairment of Goodwill and Indefinite Lived Intangible Assets: We review goodwill and other intangible assets thathave indefinite lives for impairment annually and when events or changes in circumstances indicate the carrying value ofthese assets might exceed their current fair values. We determine fair value using discounted cash flow analysis, whichrequires us to make certain assumptions and estimates regarding industry economic factors and future profitability ofacquired businesses. It is our policy to allocate goodwill and conduct impairment testing at a business unit level based onour most current business plans, which reflect changes we anticipate in the economy and the industry. The keyassumptions used in the discounted cash flow approach include:

• The reporting unit’s four year projections of financial results, except certain emerging markets which is ten years,which were based on our long-range plans at constant foreign exchange rates. The ten year projections are basedon management’s expectations of the development time for emerging markets. Sales growth and operating profitrates represent estimates based on our current and projected sales mix, profit improvement opportunities andmarket conditions.

• The projected terminal value, which is used to determine the total present value of projected cash flows beyondthe last period in the discounted cash flow analysis. This value is based on several factors, including the maturityof the business, market opportunity, local economic factors and future growth plans.

• The discount rate is set using a weighted average cost of capital method that considers market and industry dataas well as our specific risk factors.

B-8

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

Based on our calculations this year, the fair value of all reporting units exceeded their respective carrying values.The underlying assumptions used in the fair value calculations, as discussed above, represent our best estimate. If actualresults are not consistent with our assumptions and judgments, we could be exposed to a material impairment charge.Although we closely monitor our emerging markets, we do not believe an impairment is reasonably possible at this time.

Pension Benefits: Our pension costs and obligations are dependent on various assumptions. Our major assumptionsrelate primarily to expected long-term rates of return on plan assets, discount rates and inflation. In estimating theexpected return on plan assets, we take into account the historical performance for the major asset classes held, oranticipated to be held, by the applicable pension funds and current forecasts of future rates of return for those assetclasses. We base the discount rate on the interest rate on high quality (AA rated) corporate bonds that have a maturityapproximating the term of the related obligations. We also make assumptions regarding employee demographic factorssuch as retirement patterns, mortality, turnover and the rate of compensation increases.

Our major assumptions are described in Note K to the Notes to the Consolidated Financial Statements.

Income Taxes: The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign taxauthorities, which may result in proposed assessments. Our estimate for the potential outcome for any uncertain tax issueis highly judgmental. We assess our income tax positions and record tax benefits for all years subject to examinationbased upon our evaluation of the facts, circumstances and information available at the reported date. For those taxpositions for which it is more likely than not that a tax benefit will be sustained, we record the largest amount of taxbenefit likely of being realized upon settlement with a taxing authority that has full knowledge of all relevantinformation. Interest is accrued, where applicable. We recognize net tax-related interest and penalties in income taxexpense. If we do not believe that it is more likely than not that a tax benefit will be sustained, no tax benefit isrecognized. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilitiesdue to closure of income tax examinations, new regulatory or judicial pronouncements, or other relevant events. As aresult, our effective tax rate may fluctuate significantly on a quarterly and annual basis.

We record deferred income tax assets for timing differences related to tax payments. We record a valuationallowance to reduce our deferred income tax assets to the amount that is more likely than not to be realized. We haveconsidered estimated future taxable income and ongoing tax planning strategies in assessing the amount needed for thevaluation allowance. If actual results differ unfavorably from those estimates used, we may not be able to realize all orpart of our net deferred tax assets and additional valuation allowances may be required.

New Accounting Pronouncements

In June 2009, a pronouncement was issued relating to information a company needs to provide regarding the salesof securitized financial assets and similar transactions, particularly if the company has continuing exposure to the risksrelated to transferred financial assets (Financial Accounting Standards Board Accounting Standards Codification(‘‘ASC’’) Topic 860). This pronouncement eliminates the concept of a ‘‘qualifying special-purpose entity,’’ changes therequirements for derecognizing financial assets and requires additional disclosures. This pronouncement is effective forfiscal years beginning after November 15, 2009. We adopted this pronouncement as of January 31, 2010. Thispronouncement did not have any impact on our consolidated financial condition, results of operations or cash flows.

In June 2009, a pronouncement was issued that clarified how a company determines whether an entity, that isinsufficiently capitalized or not controlled through voting (or similar rights), should be capitalized (ASC Topic 810). Thisdetermination of whether a company is required to consolidate an entity is based on, among other things, an entity’spurpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’seconomic performance. This pronouncement requires an ongoing reassessment of whether a company is the primarybeneficiary of a variable interest entity. This pronouncement also requires additional disclosures about a company’sinvolvement in variable interest entities and any significant changes in risk exposure due to that involvement. Thispronouncement is effective for fiscal years beginning after November 15, 2009. We adopted this pronouncement as ofJanuary 31, 2010. This pronouncement did not have any impact on our consolidated financial condition, results ofoperations or cash flows.

B-9

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

In October 2009, a pronouncement was issued that amended the rules on revenue recognition for multiple-deliverable revenue arrangements. This amendment eliminated the residual method of allocation for multiple-deliverable revenue arrangements, and requires that arrangement consideration be allocated at the inception of anarrangement to all deliverables using the relative selling price method (ASC Topic 605). This pronouncement establishesa selling price hierarchy for determining the selling price of a deliverable, which includes: (1) vendor-specific objectiveevidence if available, (2) third-party evidence if vendor-specific objective evidence is not available, and (3) estimatedselling price if neither vendor-specific nor third-party evidence is available. In addition, this pronouncement expands thedisclosure requirements related to a vendor’s multiple-deliverable revenue arrangements. This pronouncement iseffective for revenue arrangements entered into or materially modified in fiscal years beginning after June 15, 2010. Wewill adopt this pronouncement as of January 30, 2011. We do not expect the implementation of this pronouncement willhave a material impact on our consolidated financial condition, results of operations or cash flows.

In January 2010, a pronouncement was issued to improve the disclosures about fair value measurements as requiredunder ASC Topic 820 (Accounting Standards Updated (‘‘ASU’’) No. 2010-06). This amendment requires an entity to:(i) disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements anddescribe the reasons for the transfers, (ii) disclose separately the reasons for any transfers in and out of Level 3, and(iii) present separate information for Level 3 activity pertaining to gross purchases, sales, issuances, and settlements. Thisamendment is effective for interim and annual reporting periods beginning after December 15, 2009, with one newdisclosure effective after December 15, 2010. We adopted this pronouncement as of May 1, 2010. As this pronouncementrelates to disclosure only, the adoption did not impact our consolidated financial condition, results of operations or cashflows.

In December 2010, a pronouncement was issued that modified the process used to test goodwill for impairment. Thepronouncement impacted reporting units with zero or negative carrying amounts and required an additional test to beperformed to determine whether goodwill has been impaired and to calculate the amount of that impairment. Thisamendment is effective for fiscal years beginning after December 15, 2010. We will adopt this pronouncement as ofJanuary 30, 2011. We are currently evaluating the potential impact, if any, the adoption of this pronouncement will haveon our consolidated financial condition, results of operations or cash flows.

Liquidity and Capital Resources

Cash Flows

2010 Compared to 2009

Cash provided by operations was $1.45 billion for 2010 compared to $2.08 billion for 2009. The decrease inoperating cash flow from 2009 to 2010 is primarily due to changes in working capital, offset by an increase in net incomeadjusted for non-cash expenses. The most significant changes in working capital relate to income taxes and inventory,where we derived material benefits in 2009 as a result of the acquisition of Corporate Express, which did not recur in2010.

Cash used in investing activities was $472.0 million for 2010 compared to $313.2 million for 2009. The increase from2009 to 2010 is primarily due to an increase in capital expenditures in 2010, driven by investments in facility and systemsintegration activities and the acquisition of Oy Lindell Ab (‘‘Lindell’’), an office products distributor based in Finland for31 million Euros (approximately $39 million based on foreign exchange rates on the acquisition date).

Cash used in financing activities was $938.4 million for 2010 compared to $1.04 billion for 2009. The change in cashfrom financing activities from 2009 to 2010 is due to the 2009 repayments and refinancing of the debt we entered into orassumed in connection with the Corporate Express acquisition, offset by the 2010 purchase of additional shares ofCorporate Express Australia Limited (‘‘Corporate Express Australia’’) and the resumption of our share repurchaseprogram during 2010. During 2010, we repurchased 18.0 million shares for $367.4 million under our share repurchaseprogram. During 2009, our financing activities primarily consisted of repayments made on our Commercial PaperProgram and the termination of our 2008 Agreement offset by the proceeds from the April 2011 Notes (each as definedbelow).

B-10

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

2009 Compared with 2008

Cash provided by operations was $2.08 billion for 2009 compared to $1.69 billion for 2008. The increase in operatingcash flow from 2008 to 2009 is primarily due to improvements in working capital, including reductions in income taxpayments resulting from the use of net operating losses associated with the Corporate Express acquisition, partially offsetby a reduction in net income adjusted for non-cash expenses.

Cash used in investing activities was $313.2 million for 2009 compared to $4.73 billion for 2008. The decrease from2008 to 2009 is primarily due to the July 2008 acquisition of Corporate Express for 2.8 billion Euros (approximately$4.4 billion, net of cash acquired).

Cash used in financing activities was $1.04 billion for 2009 compared to cash provided by financing activities of$2.51 billion for 2008. The change in cash from financing activities from 2008 to 2009 is primarily related to therepayment or refinancing of the debt we entered into or assumed in connection with the Corporate Express acquisition.In 2009, our financing activities primarily consisted of repayments made on our Commercial Paper Program and thetermination of our 2008 Agreement offset by the proceeds from the April 2011 Notes (each as defined below). In 2008,our financing cash flows primarily consisted of the proceeds from the financing of our acquisition of Corporate Express.

Sources of Liquidity

We utilize cash generated from operations, short-term investments and our November 2014 Revolving CreditFacility (as defined below) to cover seasonal fluctuations in cash flows and to support our various growth initiatives. AtJanuary 29, 2011, we had $2.67 billion in total cash and funds available through credit agreements, which consisted of$1.21 billion of available credit and $1.46 billion of cash and cash equivalents.

A summary, as of January 29, 2011, of balances available under our credit agreements and contractual obligations ispresented below (amounts in thousands):

Payments Due By PeriodTotalAvailable Outstanding Less than More than

Contractual Obligations(1)(2) Credit Obligations 1 Year 1-3 Years 3-5 Years 5 Years

April 2011 Notes . . . . . . . . . . . . . . . . . . $ — $ 500,000 $500,000 $ — $ — $ —October 2012 Notes . . . . . . . . . . . . . . . — 325,000 — 325,000 — —January 2014 Notes . . . . . . . . . . . . . . . . — 1,500,000 — 1,500,000 — —November 2014 Revolving Credit Facility . 1,000,000 — — — — —Lines of credit . . . . . . . . . . . . . . . . . . . 205,179 218,689 83,014 135,675 — —Other notes and capital leases . . . . . . . . — 13,701 4,342 5,835 2,325 1,199

Total . . . . . . . . . . . . . . . . . . . . . . . . . $1,205,179 $2,557,390 $587,356 $1,966,510 $ 2,325 $ 1,199Interest expense . . . . . . . . . . . . . . . . . . — $ 238,750 $ 92,500 $ 146,250 $ — $ —Operating leases . . . . . . . . . . . . . . . . . . — $4,977,519 $886,495 $1,498,583 $1,092,652 $1,499,789Purchase obligations(3) . . . . . . . . . . . . . — $ 539,695 $364,719 $ 42,692 $ 24,994 $ 107,290

(1) The above table excludes scheduled interest payments on fixed rate debt obligations that are hedged with derivativeinstruments intended to convert the fixed rate debt agreements into variable interest rate obligations because theamount of future interest payments due on these obligations is not currently determinable (see Notes E and F in theNotes to the Consolidated Financial Statements). As a result, only the interest expense associated with the January2014 Notes and April 2011 Notes is included in the table above.

(2) As of January 29, 2011, we had gross unrecognized tax benefits of $254.2 million, all of which, if recorded, wouldimpact our tax rate and an additional $30.1 million for gross accrued interest and penalties (see Note I in the Notesto the Consolidated Financial Statements). At this time, we are unable to make a reasonably estimate of the timingof payments in connection with these tax liabilities; therefore, such amounts are not included in the contractualobligation table above.

B-11

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

(3) Many of our purchase commitments may be canceled by us without advance notice or payment, and we haveexcluded such commitments, along with intercompany commitments. Contracts that may be terminated by uswithout cause or penalty, but that requires advance notice for termination are, valued on the basis of an estimate ofwhat we would owe under the contract upon providing notice of termination.

April 2011 Notes: On March 27, 2009, we issued $500 million aggregate principal amount of notes (the ‘‘April 2011Notes’’) due April 1, 2011, with a fixed interest rate of 7.75% payable semi-annually on April 1 and October 1 of eachyear commencing on October 1, 2009. From the sale of the April 2011 Notes, we received net proceeds, after theunderwriting discount and estimated fees and expenses, of $497.5 million. Our obligations under the April 2011 Notesare unconditionally guaranteed on an unsecured unsubordinated basis by Staples the Office Superstore, LLC, Staples theOffice Superstore, East Inc., Staples Contract & Commercial, Inc. and Staples the Office Superstore Limited Partnership(collectively, the ‘‘Guarantor Subsidiaries’’).

October 2012 Notes: On September 30, 2002, we issued $325 million principal amount of notes due October 1, 2012(the ‘‘October 2012 Notes’’), with a fixed interest rate of 7.375% payable semi-annually on April 1 and October 1 of eachyear commencing on April 1, 2003. We entered into an interest rate swap agreement to turn the October 2012 Notes intovariable rate obligations (see Note F in the Notes to the Consolidated Financial Statements). Our obligations under theOctober 2012 Notes are unconditionally guaranteed on an unsecured unsubordinated basis by the GuarantorSubsidiaries.

January 2014 Notes: On January 15, 2009, we issued $1.5 billion aggregate principal amount of notes (the ‘‘January2014 Notes’’) due January 15, 2014, with a fixed interest rate of 9.75% payable semi-annually on January 15 and July 15of each year commencing on July 15, 2009. From the sale of the January 2014 Notes, we received net proceeds, after theunderwriting discount and estimated fees and expenses of $1.49 billion. We have entered into an interest rate swapagreement to turn $750 million of the January 2014 Notes into variable rate obligations (see Note F in the Notes to theConsolidated Financial Statements). Our obligations under the January 2014 Notes are unconditionally guaranteed onan unsecured unsubordinated basis by the Guarantor Subsidiaries.

Revolving Credit Facility: On November 4, 2010, we entered into a new credit agreement (the ‘‘November 2014Revolving Credit Facility’’) with Bank of America, N.A, as Administrative Agent and other lending institutions namedtherein. The November 2014 Revolving Credit Facility replaced the Amended and Restated Revolving Credit Agreementdated as of October 13, 2006, as amended, which provided for a maximum borrowing of $750.0 million and was due toexpire in October 2011 (the ‘‘Prior Revolving Credit Facility’’). As of January 29, 2011, no borrowings were outstandingunder the November 2014 Revolving Credit Agreement, resulting in $1.0 billion of availability under this agreement.

The November 2014 Revolving Credit Facility provides for a maximum borrowing of $1.0 billion which, pursuant toan accordion feature, may be increased to $1.5 billion upon the request of the Company and the agreement of thelenders participating in the increase. Borrowings made pursuant to the November 2014 Revolving Credit Facility may besyndicated loans, swing line loans, multicurrency loans, or letters of credit, the combined sum of which may not exceedthe maximum borrowing amount. Borrowings made pursuant to the November 2014 Revolving Credit Facility will bearinterest at various interest rates, depending on the type of borrowing, plus a percentage spread based on our credit ratingand fixed charge coverage ratio. Under the November 2014 Revolving Credit Facility, we agree to pay a facility fee atrates that range from 0.15% to 0.35% per annum depending on our credit rating and fixed charge coverage ratio.Amounts borrowed under the November 2014 Revolving Credit Facility may be borrowed, repaid, and reborrowed fromtime to time until November 4, 2014.

The November 2014 Revolving Credit Facility is unsecured and ranks pari passu with our public notes and otherindebtedness and contains customary affirmative and negative covenants for credit facilities of this type. The November2014 Revolving Credit Facility also contains financial covenants that require us to maintain a minimum fixed chargecoverage ratio and a maximum adjusted funded debt to total capitalization ratio. The borrowings under the November2014 Revolving Credit Facility are unconditionally guaranteed on an unsecured unsubordinated basis by the GuarantorSubsidiaries.

Commercial Paper Program: We have a commercial paper program (‘‘Commercial Paper Program’’) which is notcurrently being used, but allows us to issue up to $1 billion of unsecured commercial paper notes (‘‘Notes’’) from time to

B-12

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

time. The November 2014 Revolving Credit Facility currently serves as a backstop to the Commercial Paper Program.The proceeds of the Notes will be used for general corporate purposes, including working capital, capital expenditures,acquisitions and share repurchases. Maturities of the Notes vary but may not exceed 397 days from the date of issue. TheNotes bear such interest rates, if interest bearing, or will be sold at such discount from their face amounts, as agreedupon from time to time by the dealers under the Commercial Paper Program and Staples. The payments under theCommercial Paper Program are unconditionally guaranteed on an unsecured unsubordinated basis by the GuarantorSubsidiaries. The Commercial Paper Program contains customary events of default with corresponding grace periods. Asof January 29, 2011, no Notes were outstanding under our Commercial Paper Program.

2008 Agreement: On May 26, 2009, we terminated our $3.0 billion credit agreement, which we entered into onApril 1, 2008 (the ‘‘2008 Agreement’’) and provided financing solely (1) for our acquisition of all of the outstandingcapital stock of Corporate Express, including related transaction fees, costs and expenses, and (2) backstopped ourCommercial Paper Program. Amounts borrowed under the 2008 Agreement could be borrowed, repaid and reborrowedfrom time to time. Originally, the aggregate principal amount of the loans outstanding could not exceed the maximumborrowing amount of $3.0 billion.

May 2009 Securitization Program: On December 31, 2010, we terminated our May 2009 $300.0 million accountsreceivable securitization program (the ‘‘May 2009 Securitization Program’’), which we entered into with several of ourwholly owned subsidiaries and certain financial institutions. Under the terms of the May 2009 Securitization Program,the subsidiaries agreed to sell substantially all the customer receivables of our North American Delivery business to awholly owned bankruptcy remote special purpose entity, Staples Receivables LLC. We retained servicing responsibility.The special purpose entity then transferred an interest in the receivables to the financial institutions. Borrowingsoutstanding under the May 2009 Securitization Program were included as a component of current liabilities in theconsolidated balance sheet, while the accounts receivable securing these obligations were included as a component of netreceivables in the consolidated balance sheet.

Australian Credit Facilities: Corporate Express Australia and its subsidiaries are parties to credit facilities underwhich approximately $135.7 million was outstanding at January 29, 2011.

Other Lines of Credit: We had $142.9 million available under other various lines of credit, which had an outstandingbalance of $83.0 million at January 29, 2011, with $0.3 million letters of credit issued under our Canadian facilities.

There were no instances of default during 2010 under any of our debt agreements.

We expect that our cash generated from operations, together with our current cash, funds available under ourexisting credit agreements and other alternative sources of financing, will be sufficient to fund our capital expenditures,including our future store openings, and other operating cash needs for at least the next twelve months.

Uses of Capital

As a result of our financial position, in addition to investing in our existing businesses and pursuing strategicacquisitions, we also expect to continue to return capital to our shareholders through a cash dividend program and ourshare repurchase program. Depending on our credit metrics and our liquidity position, from time to time, we mayrepurchase our public notes through repurchase programs.

We currently plan to spend approximately $500.0 million on capital expenditures during 2011. This projectionrepresents an increase of approximately 22% from our 2010 capital expenditures, reflecting an increase in facility andsystem integration activities, and an increase in the number and magnitude of remodel activities planned in 2011. Weexpect to open approximately 50 new stores in North America, Europe and Asia during 2011. We expect the source offunds for these expenditures to come from operating cash flows.

While we have primarily grown organically, we may use capital to engage in strategic acquisitions or joint ventures inmarkets where we currently have a presence and in new geographic markets that could become significant to ourbusiness in future years. We do not expect to rely on acquisitions to achieve our targeted growth plans. We consider manytypes of acquisitions for their strategic and other benefits, such as our acquisition of Corporate Express. In the past,excluding the Corporate Express acquisition, we have focused on smaller acquisitions, such as our acquisition of Lindell,

B-13

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

designed to align with our existing businesses to drive long-term growth. We expect to continue this strategy and targetsuch acquisitions when opportunities are presented and fit within our financial structure.

In 2009, we changed our dividend policy from an annual dividend to quarterly dividends. We paid quarterlydividends of $0.09 per share on April 15, 2010, July 15, 2010, October 24, 2010 and January 13, 2011, resulting in a totaldividend payment for 2010 of $258.7 million or $0.36 per share on an annualized basis. We paid quarterly dividends of$0.0825 per share on April 10, 2009, July 10, 2009, October 15, 2009 and January 14, 2010, resulting in a total dividendpayment for 2009 of $236.9 million or $0.33 per share on an annualized basis. While it is our intention to continue to payquarterly cash dividends for 2011 and beyond, any decision to pay future cash dividends will be made by our Board ofDirectors and will depend upon our earnings, financial condition and other factors.

Inflation and Seasonality

While neither inflation nor deflation has had, nor do we expect them to have, a material impact upon operatingresults, there can be no assurance that our business will not be affected by inflation or deflation in the future. We believethat our business is somewhat seasonal, with sales and profitability historically higher during the second half of our fiscalyear due to the back to school, holiday and January back to business seasons.

B-14

STAPLES, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis of Financial Condition and

Results of Operations (Continued)

Quantitative and Qualitative Disclosures about Market Risks

We are exposed to market risk from changes in interest rates and foreign exchange rates. We have a riskmanagement control process to monitor our interest rate and foreign exchange risks. The risk management process usesanalytical techniques, including market value, sensitivity analysis and value at risk estimates.

As more fully described in the notes to the consolidated financial statements, we use interest rate swap agreementsto modify fixed rate obligations to variable rate obligations, thereby adjusting the interest rates to current market ratesand ensuring that the debt instruments are always reflected at fair value. While our variable rate debt obligations,approximately $1.3 billion at January 29, 2011, expose us to the risk of rising interest rates, management does not believethat the potential exposure is material to our overall financial position or results of operations. Based on January 29,2011 borrowing levels, a 1.0% increase or decrease in current market interest rates would have the effect of causing a$13.1 million additional pre-tax charge or credit to our statement of operations.

As more fully described in Note F in the Notes to the Consolidated Financial Statements, we are exposed to foreignexchange risks through subsidiaries or investments in Canada, Europe, Australia, South America and Asia. We haveentered into currency swaps in Canadian dollars in order to hedge a portion of our foreign exchange risk related to ournet investment in foreign subsidiaries and to hedge certain intercompany loans. Any increase or decrease in the fair valueof our currency exchange rate sensitive derivative instruments would be offset by a corresponding decrease or increase inthe fair value of the hedged underlying asset.

We account for our interest rate and currency swap agreements using hedge accounting treatment as the derivativeshave been determined to be highly effective in achieving offsetting changes in the fair values of the hedged items. Underthis method of accounting, at January 29, 2011, we have recorded a $44.4 million asset representing gross unrealizedgains on two of our derivatives and a $13.1 million liability representing gross unrealized losses on two of our derivatives.

B-15

Item 8 APPENDIX C

INDEX TO CONSOLIDATED FINANCIAL STATEMENTSPage

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-2

Consolidated Balance Sheets—January 29, 2011 and January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . C-3

Consolidated Statements of Income—Fiscal years ended January 29, 2011, January 30, 2010 andJanuary 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-4

Consolidated Statements of Stockholders’ Equity—Fiscal years ended January 29, 2011, January 30,2010 and January 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-5

Consolidated Statements of Cash Flows—Fiscal years ended January 29, 2011, January 30, 2010 andJanuary 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-6

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-7 to C-40

Schedule II—Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-41

C-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders ofStaples, Inc.

We have audited the accompanying consolidated balance sheets of Staples, Inc. and subsidiaries as of January 29,2011 and January 30, 2010, and the related consolidated statements of income, stockholders’ equity, and cash flows foreach of the three years in the period ended January 29, 2011. Our audits also included the financial statement schedulelisted in the Index at Item 15(a) 2. These financial statements and schedule are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidatedfinancial position of Staples, Inc. and subsidiaries at January 29, 2011 and January 30, 2010, and the consolidated resultsof their operations and their cash flows for each of the three years in the period ended January 29, 2011, in conformitywith U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, whenconsidered in relation to the basic financial statements taken as a whole, presents fairly in all material respects theinformation set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), Staples, Inc.’s internal control over financial reporting as of January 29, 2011, based on criteriaestablished in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission and our report dated March 2, 2011 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Ernst & Young LLP

Boston, MassachusettsMarch 2, 2011

C-2

STAPLES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Dollar Amounts in Thousands, Except Share Data)

January 29, January 30,2011 2010

ASSETSCurrent assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,461,257 $ 1,415,819Receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,954,148 1,811,365Merchandise inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,359,173 2,261,149Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295,232 353,329Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398,357 333,105

Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,468,167 6,174,767Property and equipment:

Land and buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,064,981 1,051,391Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,328,397 1,268,848Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,287,505 2,035,658Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,032,502 966,783

Total property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,713,385 5,322,680Less accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,565,614 3,158,147

Net property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,147,771 2,164,533Intangible assets, net of accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522,722 579,923Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,073,162 4,084,122Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 699,845 713,989

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,911,667 $13,717,334

LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilities:

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,208,386 $ 2,111,696Accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,497,851 1,603,354Debt maturing within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 587,356 67,269

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,293,593 3,782,319Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,014,407 2,500,329Other long-term obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 652,486 579,746

Stockholders’ Equity:Preferred stock, $.01 par value, 5,000,000 shares authorized; no shares issued . . . . . . . — —Common stock, $.0006 par value, 2,100,000,000 shares authorized; issued 908,449,980

shares at January 29, 2011 and 896,655,170 shares at January 30, 2010 . . . . . . . . . . . 545 538Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,334,735 4,379,942Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96,933) (89,337)Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,492,340 5,869,138Less: treasury stock at cost, 187,536,869 shares at January 29, 2011 and 167,990,178

shares at January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,786,977) (3,388,395)

Total Staples, Inc. stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,943,710 6,771,886Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,471 83,054

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,951,181 6,854,940

Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,911,667 $13,717,334

See notes to consolidated financial statements.

C-3

STAPLES, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Share Data)

Fiscal Year Ended

January 29, January 30, January 31,2011 2010 2009

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,545,113 $24,275,451 $23,083,775Cost of goods sold and occupancy costs . . . . . . . . . . . . . . . . . . . . . . . . . . 17,938,958 17,801,548 16,836,839

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,606,155 6,473,903 6,246,936

Operating and other expenses:Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,913,188 4,907,236 4,631,219Integration and restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,765 84,244 173,524Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,689 100,078 70,265

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,032,642 5,091,558 4,875,008

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,573,513 1,382,345 1,371,928

Other (expense) income:Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,722 6,117 28,485Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (214,824) (237,025) (149,774)Other (expense) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,816) 4,457 (7,555)

Consolidated income before income taxes . . . . . . . . . . . . . . . . . . . . . . . 1,356,595 1,155,894 1,243,084Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468,026 398,783 428,863

Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 888,569 757,111 814,221Income attributed to the noncontrolling interests . . . . . . . . . . . . . . . . . . . 6,621 18,440 8,957

Net income attributed to Staples, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . $ 881,948 $ 738,671 $ 805,264

Earnings per common shareBasic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.23 $ 1.04 $ 1.15

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.21 $ 1.02 $ 1.13

Dividends declared per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.36 $ 0.33 $ 0.33

See notes to consolidated financial statements.

C-4

STAPLES, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(Dollar Amounts in Thousands)

For the Fiscal Years Ended January 29, 2011, January 30, 2010, and January 31, 2009

Equity Attributed to Staples, Inc.

AccumulatedAdditional Other Total Comprehensive

Common Paid-In Comprehensive Retained Treasury Noncontrolling Stockholders IncomeStock Capital (Loss) Income Earnings Stock Interests Equity (Loss)

Balances at February 2, 2008 . . . . . . . $520 $3,720,319 $ 476,399 $4,793,542 $(3,272,773) $ 10,227 $5,728,234 $1,284,072Issuance of common stock for stock

options exercised . . . . . . . . . . . . . 8 116,182 — — — — 116,190 —Tax benefit on exercise of options . . . . — 5,849 — — — — 5,849 —Stock-based compensation . . . . . . . . . — 180,652 — — — — 180,652 —Sale of common stock under Employee

Stock Purchase Plan and InternationalSavings Plan . . . . . . . . . . . . . . . . 1 32,138 — — — — 32,139 —

Net income for the year . . . . . . . . . . — — — 805,264 — 8,957 814,221 814,221Common stock dividend . . . . . . . . . . — — — (231,465) — — (231,465) —Foreign currency translation adjustments . — — (819,061) — — (30,232) (849,293) (849,293)Changes in the fair value of derivatives

(net of taxes of $23,817) . . . . . . . . . — — 32,891 — — — 32,891 32,891Deferred pension costs (net of taxes of

$58,900) . . . . . . . . . . . . . . . . . . . — — (184,556) — — (184,556) (184,556)Purchase of treasury shares . . . . . . . . — — — — (84,961) — (84,961) —Noncontrolling interest acquired . . . . . — — — — 69,272 69,272Other . . . . . . . . . . . . . . . . . . . . . . — (6,742) — — — — (6,742) —

Balances at January 31, 2009 . . . . . . . $529 $4,048,398 $(494,327) $5,367,341 $(3,357,734) $ 58,224 $5,622,431 $ (186,737)

Issuance of common stock for stockoptions exercised . . . . . . . . . . . . . 8 114,339 — — — — 114,347 —

Tax benefit on exercise of options . . . . — 8,763 — — — — 8,763 —Stock-based compensation . . . . . . . . . — 174,691 — — — — 174,691 —Sale of common stock under Employee

Stock Purchase Plan and InternationalSavings Plan . . . . . . . . . . . . . . . . 1 36,610 — — — — 36,611 —

Net income for the year . . . . . . . . . . — — — 738,671 — 18,440 757,111 757,111Common stock dividend . . . . . . . . . . — — — (236,874) — — (236,874)Foreign currency translation adjustments . — — 373,637 — — 6,390 380,027 380,027Changes in the fair value of derivatives

(net of taxes of $15,807) . . . . . . . . . — — (21,205) — — — (21,205) (21,205)Deferred pension costs (net of taxes of

$17,128) . . . . . . . . . . . . . . . . . . . — — 52,558 — — — 52,558 52,558Purchase of treasury shares . . . . . . . . — — — — (30,661) — (30,661) —Other . . . . . . . . . . . . . . . . . . . . . . — (2,859) — — — — (2,859) —

Balances at January 30, 2010 . . . . . . . $538 $4,379,942 $ (89,337) $5,869,138 $(3,388,395) $ 83,054 $6,854,940 $1,168,491

Issuance of common stock for stockoptions exercised . . . . . . . . . . . . . 3 40,562 — — — — 40,565 —

Tax benefit on exercise of options . . . . — — — — — — — —Stock-based compensation . . . . . . . . . — 146,879 — — — — 146,879 —Sale of common stock under Employee

Stock Purchase Plan and InternationalSavings Plan . . . . . . . . . . . . . . . . 4 44,860 — — — — 44,864 —

Net income for the year . . . . . . . . . . — — — 881,948 — 6,621 888,569 888,569Common stock dividend . . . . . . . . . . — — — (258,746) — — (258,746) —Foreign currency translation adjustments . — — 333 — — 2,050 2,383 2,383Changes in the fair value of derivatives

(net of taxes of $7,471) . . . . . . . . . — — (10,043) — — 574 (9,469) (9,469)Deferred pension and other post

retirement benefit costs (net of taxesof $7,507) . . . . . . . . . . . . . . . . . . — — 2,114 — — — 2,114 2,114

Purchase of treasury shares . . . . . . . . — — — — (398,582) — (398,582) —Purchase of noncontrolling interest . . . — (275,767) — — — (84,828) (360,595) —Other . . . . . . . . . . . . . . . . . . . . . . — (1,741) — — — — (1,741) —

Balances at January 29, 2011 . . . . . . . $545 $4,334,735 $ (96,933) $6,492,340 $(3,786,977) $ 7,471 $6,951,181 $ 883,597

See notes to consolidated financial statements.

C-5

STAPLES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Dollar Amounts in Thousands)

Fiscal Year Ended

January 29, January 30, January 31,2011 2010 2009

Operating activities:Consolidated net income, including income from the noncontrolling interests . . $ 888,569 $ 757,111 $ 814,221Adjustments to reconcile net income to net cash provided by operating

activities:Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498,863 552,441 548,911Non-cash write-down of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 150,081Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,879 174,691 180,652Excess tax benefits from stock-based compensation arrangements . . . . . . . — (8,763) (5,849)Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,630 (89,753) 33,370Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,418 (17,177) 25,239Change in assets and liabilities, net of companies acquired:

(Increase) decrease in receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . (95,656) 129,137 51,716(Increase) decrease in merchandise inventories . . . . . . . . . . . . . . . . . . . (46,450) 244,600 177,199(Increase) decrease in prepaid expenses and other assets . . . . . . . . . . . (70,600) 254,805 (2,679)Increase (decrease) in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 63,305 40,365 (127,051)(Decrease) increase in accrued expenses and other current liabilities . . . (191,917) 71,208 (195,296)Increase (decrease) in other long-term obligations . . . . . . . . . . . . . . . . 75,450 (24,457) 35,316

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . 1,446,491 2,084,208 1,685,830Investing activities:Acquisition of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (408,889) (313,228) (378,329)Acquisition of businesses and investments in joint ventures, net of cash

acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63,066) — (4,381,811)Proceeds from the sale of short-term investments . . . . . . . . . . . . . . . . . . . . — — 27,019Purchase of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (3)

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (471,955) (313,228) (4,733,124)Financing activities:

Proceeds from the exercise of stock options and the sale of stock underemployee stock purchase plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,429 150,958 148,329

(Repayments of) proceeds from the issuance of commercial paper . . . . . . . . — (1,195,557) 1,195,557Proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,566 1,211,424 3,679,045Payments on borrowings, including payment of deferred financing fees . . . . . (207,478) (945,333) (2,206,312)Purchase of noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (360,595) — —Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (258,746) (236,874) (231,465)Excess tax benefits from stock-based compensation arrangements . . . . . . . . . — 8,763 5,849Purchase of treasury stock, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (398,582) (30,661) (84,961)

Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . (938,406) (1,037,280) 2,506,042Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . 9,308 48,345 (70,422)Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . 45,438 782,045 (611,674)Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . 1,415,819 633,774 1,245,448

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . $1,461,257 $ 1,415,819 $ 633,774

See notes to consolidated financial statements.

C-6

STAPLES, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements

NOTE A—Summary of Significant Accounting Policies

Nature of Operations: Staples, Inc. and subsidiaries (‘‘Staples’’ or the ‘‘Company’’) pioneered the office productssuperstore concept and is the world’s leading office products company. Staples has three reportable segments: NorthAmerican Delivery, North American Retail and International Operations. The North American Delivery segmentconsists of the U.S. and Canadian business units that sell and deliver office products and services directly to customersand businesses, and includes Staples Advantage, Staples.com and Quill. The North American Retail segment consists ofthe U.S. and Canadian business units that operate office products stores. The International Operations segment consistsof business units that operate office product stores and that sell and deliver office products and services directly tocustomers in 24 countries in Europe, Australia, South America and Asia.

Basis of Presentation: The consolidated financial statements include the accounts of Staples, Inc. and its wholly andmajority owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. Certainpreviously reported amounts have been reclassified to conform with the current period presentation.

Fiscal Year: Staples’ fiscal year is the 52 or 53 weeks ending on the Saturday closest to January 31. Fiscal year 2010(‘‘2010’’) consisted of the 52 weeks ended January 29, 2011, fiscal year 2009 (‘‘2009’’) consisted of the 52 weeks endedJanuary 30, 2010 and fiscal year 2008 (‘‘2008’’) consisted of the 52 weeks ended January 31, 2009.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generallyaccepted in the United States of America requires management of Staples to make estimates and assumptions that affectthe amounts reported in the financial statements and accompanying notes. Actual results could differ from thoseestimates.

Cash Equivalents: Staples considers all highly liquid investments with an original maturity of three months or lessto be cash equivalents.

Receivables: Receivables include trade receivables financed under regular commercial credit terms and othernon-trade receivables. Gross trade receivables were $1.47 billion at January 29, 2011 and $1.42 billion at January 30,2010. Concentrations of credit risk with respect to trade receivables are limited due to Staples’ large number ofcustomers and their dispersion across many industries and geographic regions.

An allowance for doubtful accounts has been recorded to reduce trade receivables to an amount expected to becollectible from customers based on specific evidence as well as historic trends. The allowance recorded at January 29,2011 and January 30, 2010 was $55.3 million and $63.0 million, respectively.

Other non-trade receivables were $542.8 million at January 29, 2011 and $450.2 million at January 30, 2010 andconsisted primarily of purchase and advertising rebates due from vendors under various incentive and promotionalprograms. Amounts expected to be received from vendors relating to the purchase of merchandise inventories andreimbursement of incremental costs, such as advertising, are recognized as a reduction of inventory cost and realized aspart of cost of goods sold as the merchandise is sold.

Merchandise Inventories: Merchandise inventories are valued at the lower of weighted average cost or marketvalue. The Company reserves for obsolete, overstocked and inactive inventory based on the difference between theweighted-average cost of the inventory and the estimated market value using assumptions of future demand and marketconditions.

Private Label Credit Card: Staples offers a private label credit card which is managed by a financial servicescompany. Under the terms of the agreement, Staples is obligated to pay fees which approximate the financial institution’scost of processing and collecting the receivables, which are non-recourse to Staples.

Property and Equipment: Property and equipment are recorded at cost. Expenditures for normal maintenance andrepairs are charged to expense as incurred. Depreciation and amortization, which includes the amortization of assetsrecorded under capital lease obligations, are provided using the straight-line method over the following useful lives:40 years for buildings; 3-10 years for furniture and fixtures; and 3-10 years for equipment, which includes computerequipment and software with estimated useful lives of 3-7 years. Leasehold improvements are amortized over the shorterof the terms of the underlying leases or the estimated economic lives of the improvements.

C-7

STAPLES, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)

NOTE A—Summary of Significant Accounting Policies (Continued)

Lease Acquisition Costs: Lease acquisition costs, which are included in other assets, are recorded at cost andamortized using the straight-line method over the respective lease terms, including option renewal periods if renewal ofthe lease is reasonably assured, which range from 5 to 40 years. Lease acquisition costs, net of accumulated amortization,at January 29, 2011 and January 30, 2010 were $22.6 million and $25.1 million, respectively.

Goodwill and Intangible Assets: Financing Accounting Standards Board Accounting Standards Codification(‘‘ASC’’) Topic 350 requires that goodwill and intangible assets that have indefinite lives not be amortized but, instead,tested at least annually for impairment. Management uses a discounted cash flow analysis, which requires that certainassumptions and estimates be made regarding industry economic factors and future profitability of acquired businessesto assess the need for an impairment charge. The Company has elected the fourth quarter to complete its annualgoodwill impairment test. As a result of the fourth quarter impairment analyses, management has determined that noimpairment charges are required.

The changes in the carrying amount of goodwill during the year ended January 29, 2011 are as follows (inthousands):

2010 ForeignGoodwill 2010 Net Exchange Goodwill

at January 30, 2010 Additions Fluctuations at January 29, 2011

North American Delivery . . . . . . . . . . . . . . . . . . . . . . . $1,617,147 $ — $(30,750) $1,586,397North American Retail . . . . . . . . . . . . . . . . . . . . . . . . . 286,545 — 2,855 289,400International Operations . . . . . . . . . . . . . . . . . . . . . . . . 2,180,430 20,062 (3,127) 2,197,365

Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,084,122 $20,062 $(31,022) $4,073,162

The Company’s intangible assets are summarized below (in thousands):

January 29, 2011 January 30, 2010WeightedAverage Gross Gross

Amortization Carrying Accumulated Carrying AccumulatedPeriod Amount Amortization Net Amount Amortization Net

Customer relationships . . . . . . . . . . . . . . 12.2 years $689,861 $(209,442) $480,419 $680,328 $(148,613) $531,715Tradenames . . . . . . . . . . . . . . . . . . . . . . 7.0 years 251,765 (209,462) 42,303 253,027 (204,819) 48,208

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 11.8 years $941,626 $(418,904) $522,722 $933,355 $(353,432) $579,923

Estimated future amortization expense associated with the intangible assets at January 29, 2011 is as follows (inthousands):

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 68,5162012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,9092013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,3922014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,8892015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,336Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216,680

$522,722

Fair Value of Financial Instruments: ASC 820 establishes a fair value hierarchy that prioritizes the inputs used tomeasure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets orliabilities (Level 1 measurement), then priority to quoted prices for similar instruments in active markets, quoted pricesfor identical or similar instruments in markets that are not active and model-based valuation techniques for which allsignificant assumptions are observable in the market (Level 2 measurement), then the lowest priority to unobservableinputs (Level 3 measurement).

C-8

STAPLES, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)

NOTE A—Summary of Significant Accounting Policies (Continued)

The fair values of cash, accounts payable, accrued expenses and other current liabilities and short-term debt with theexception of the April 2011 Notes (see Note E), approximate their carrying values because of their short-term nature.The fair values of long-term debt, with the exception of the unhedged portion of the January 2014 Notes (see Note E),approximate their carrying values because of the Company’s use of derivative instruments that qualify for hedgeaccounting (see Note F). The fair values of the April 2011 Notes and the unhedged portion of the January 2014 Noteswere determined based on quoted market prices and are classified as Level 1 liabilities. The following table reflects thedifference between the carrying value and fair value of these notes as of January 29, 2011 and January 30, 2010 (inthousands):

January 29, 2011 January 30, 2010

Carrying Value Fair Value Carrying Value Fair Value

April 2011 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500,000 $506,200 $ 500,000 $ 537,500Unhedged portion of the January 2014 Notes ($750 million at

January 29, 2011 and $1.5 billion at January 30, 2010) . . . . . . 750,000 915,450 1,500,000 1,826,250

The following table shows the Company’s other assets and liabilities as of January 29, 2011 that are measured at fairvalue on a recurring basis (in thousands):

Quoted Prices in ActiveMarkets for Identical Assets Significant Other Observable Unobservable

or Liabilities Inputs InputsLevel 1 Level 2 Level 3

AssetsMoney market funds . . . . . . . . . . . . . . . . $260,670 — —Derivative assets . . . . . . . . . . . . . . . . . . . — $ 44,373 —LiabilitiesDerivative liabilities . . . . . . . . . . . . . . . . . — $(13,532) —

The fair value of the Company’s money market funds are based on quotes received from third party banks. TheCompany’s derivative assets and liabilities are based on quotes received from third party banks and represent theestimated amount the Company would receive or pay to terminate the agreements taking into consideration currentinterest and forward exchange rates as well as the creditworthiness of the counterparty.

The fair values of the assets in the Company’s pension plans are described in detail in Note K.

Impairment of Long-Lived Assets: ASC Topic 360 requires a Company to record an impairment loss on long-livedassets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to begenerated by those assets are less than the assets’ carrying amount. Staples’ policy is to evaluate long-lived assets forimpairment at a store level for retail operations and an operating unit level for Staples’ other operations.

Revenue Recognition: Revenue is recognized at the point of sale for the Company’s retail operations and at thetime of shipment for its delivery sales. The Company offers its customers various coupons, discounts and rebates, whichare treated as a reduction of revenue. Staples sells certain machines to customers which are financed by externalfinancing companies and for which they have given repurchase guarantees. The Company recognizes revenue from thesale of these machines only when the right of recourse has ended and the Company is legally released from itsrepurchase obligation.

Sales of extended service plans are either administered by an unrelated third party or by the Company. Theunrelated third party is the legal obligor in most of the areas they administer and accordingly bears all performanceobligations and risk of loss related to the service plans sold in such areas. In these areas, Staples recognizes a netcommission revenue at the time of sale for the service plans. In certain areas where Staples is the legal obligor, therevenues associated with the sale are deferred and recognized over the life of the service contract, which is typically oneto five years.

C-9

STAPLES, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)

NOTE A—Summary of Significant Accounting Policies (Continued)

Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities, with thecollected taxes recorded as current liabilities until remitted to the relevant government authority.

Cost of Goods Sold and Occupancy Costs: Cost of goods sold and occupancy costs includes the costs ofmerchandise sold, inbound and outbound freight, receiving and distribution, and store and distribution center occupancy(including real estate taxes and common area maintenance).

Shipping and Handling Costs: All shipping and handling costs are included as a component of cost of goods soldand occupancy costs.

Selling, General and Administrative Expenses: Selling, general and administrative expenses include payroll,advertising and other operating expenses for the Company’s stores and delivery operations not included in cost of goodssold and occupancy costs.

Advertising: Staples expenses the production costs of advertising the first time the advertising takes place, exceptfor the cost of direct response advertising, primarily catalog production costs, which are capitalized and amortized overtheir expected period of future benefits (i.e., the life of the catalog). Direct catalog production costs included in prepaidand other assets totaled $18.7 million at January 29, 2011 and $21.6 million at January 30, 2010. Total advertising andmarketing expense was $560.5 million, $553.5 million, and $667.7 million for 2010, 2009, and 2008, respectively.

Integration and Restructuring Costs: Integration and restructuring costs represent the costs associated with theintegration of Corporate Express including Corporate Express Australia Limited, with the Company’s pre-existingbusiness and the consolidation of certain operations of the combined Company.

Stock-Based Compensation: The Company accounts for stock-based compensation in accordance with ASC Topics505 and 718. Stock-based compensation for stock options is measured based on the estimated fair value of each award onthe date of grant using a binomial valuation model. Stock-based compensation for restricted shares is measured based onthe closing fair market value of the Company’s common stock price on the date of grant. The Company recognizes stock-based compensation costs as expense ratably on a straight-line basis over the requisite service period.

Pension and Post Retirement Benefits: The Company maintains pension and post retirement life insurance plans forcertain employees globally. These plans include significant obligations, which are calculated based on actuarialvaluations. Key assumptions used in determining these obligations and related expenses include expected long-term ratesof return on plan assets, discount rates and inflation. The Company also makes assumptions regarding employeedemographic factors such as retirement patterns, mortality, turnover and the rate of compensation increases. Theseassumptions are evaluated annually.

Foreign Currency: The assets and liabilities of Staples’ foreign subsidiaries are translated into U.S. dollars atcurrent exchange rates as of the balance sheet date, and revenues and expenses are translated at average monthlyexchange rates. The resulting translation adjustments, and the net exchange gains and losses resulting from thetranslation of investments in Staples’ foreign subsidiaries, are recorded as a separate component of stockholders’ equity.Foreign currency transaction gains and losses relate to the settlement of assets or liabilities in another currency. Foreigncurrency transaction gains (losses) were $(7.6) million, $5.7 million and $(6.3) million for 2010, 2009 and 2008,respectively. These amounts are included in other income (expense).

Derivative Instruments and Hedging Activities: The Company recognizes all derivative financial instruments in theconsolidated financial statements at fair value. Changes in the fair value of derivative financial instruments that qualifyfor hedge accounting are recorded in stockholders’ equity as a component of accumulated other comprehensive incomeor as an adjustment to the carrying value of the hedged item. Changes in fair values of derivatives not qualifying forhedge accounting are reported in earnings.

Accounting for Income Taxes: Deferred income tax assets and liabilities are determined based on the differencesbetween financial reporting and tax bases of assets and liabilities and are measured using the enacted income tax ratesand laws that are expected to be in effect when the temporary differences are expected to reverse. Additionally, deferred

C-10

STAPLES, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)

NOTE A—Summary of Significant Accounting Policies (Continued)

income tax assets and liabilities are separated into current and non-current amounts based on the classification of therelated assets and liabilities for financial reporting purposes.

The Company accounts for uncertain tax provisions in accordance ASC Topic 740 (Income Taxes). These provisionsrequire companies to determine whether it is ‘‘more likely than not’’ that a tax position will be sustained uponexamination by the appropriate taxing authorities before any benefit can be recorded in the financial statements. Anuncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

New Accounting Pronouncements: In June 2009, a pronouncement was issued relating to information a companyneeds to provide regarding the sales of securitized financial assets and similar transactions, particularly if the companyhas continuing exposure to the risks related to transferred financial assets (ASC Topic 860). This pronouncementeliminates the concept of a ‘‘qualifying special-purpose entity,’’ changes the requirements for derecognizing financialassets and requires additional disclosures. This pronouncement is effective for fiscal years beginning after November 15,2009. The Company adopted this pronouncement as of January 31, 2010. This pronouncement did not have any impacton the Company’s consolidated financial condition, results of operations or cash flows.

In June 2009, a pronouncement was issued that clarified how a company determines whether an entity, that isinsufficiently capitalized or not controlled through voting (or similar rights), should be capitalized (ASC Topic 810). Thisdetermination of whether a company is required to consolidate an entity is based on, among other things, an entity’spurpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’seconomic performance. This pronouncement requires an ongoing reassessment of whether a company is the primarybeneficiary of a variable interest entity. This pronouncement also requires additional disclosures about a company’sinvolvement in variable interest entities and any significant changes in risk exposure due to that involvement. Thispronouncement is effective for fiscal years beginning after November 15, 2009. The Company adopted thispronouncement as of January 31, 2010. This pronouncement did not have any impact on the Company’s consolidatedfinancial condition, results of operations or cash flows.

In October 2009, a pronouncement was issued that amended the rules on revenue recognition for multiple-deliverable revenue arrangements. This amendment eliminated the residual method of allocation for multiple-deliverable revenue arrangements, and requires that arrangement consideration be allocated at the inception of anarrangement to all deliverables using the relative selling price method (ASC Topic 605). This pronouncement establishesa selling price hierarchy for determining the selling price of a deliverable, which includes: (1) vendor-specific objectiveevidence if available, (2) third-party evidence if vendor-specific objective evidence is not available, and (3) estimatedselling price if neither vendor-specific nor third-party evidence is available. In addition, this pronouncement expands thedisclosure requirements related to a vendor’s multiple-deliverable revenue arrangements. This pronouncement iseffective for revenue arrangements entered into or materially modified in fiscal years beginning after June 15, 2010. TheCompany will adopt this pronouncement as of January 30, 2011. The Company does not expect this pronouncement willhave a material impact on its consolidated financial condition, results of operations or cash flows.

In January 2010, a pronouncement was issued to improve the disclosures about fair value measurements as requiredunder ASC Topic 820 (Accounting Standards Updated (‘‘ASU’’) No. 2010-06). This amendment requires an entity to:(i) disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements anddescribe the reasons for the transfers, (ii) disclose separately the reasons for any transfers in and out of Level 3, and(iii) present separate information for Level 3 activity pertaining to gross purchases, sales, issuances, and settlements. Thisamendment is effective for interim and annual reporting periods beginning after December 15, 2009, with one newdisclosure effective after December 15, 2010. The Company adopted this pronouncement as of May 1, 2010. As thispronouncement relates to disclosure only, the adoption did not impact its consolidated financial condition, results ofoperations or cash flows.

In December 2010, a pronouncement was issued that modified the process used to test goodwill for impairment. Thepronouncement impacted reporting units with zero or negative carrying amounts and required an additional test to beperformed to determine whether goodwill has been impaired and to calculate the amount of that impairment. Thisamendment is effective for fiscal years beginning after December 15, 2010. The Company will adopt this pronouncement

C-11

STAPLES, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)

NOTE A—Summary of Significant Accounting Policies (Continued)

as of January 30, 2011. The Company is currently evaluating the potential impact, if any, the adoption of thispronouncement will have on its consolidated financial condition, results of operations or cash flows.

NOTE B—Business Combinations and Acquisition of Noncontrolling Interest

ASC Topic 805 (‘‘Business Combinations’’) requires that companies record acquisitions under the purchase methodof accounting. Accordingly, the purchase price is allocated to the tangible assets and liabilities and intangible assetsacquired, based on their estimated fair values. The excess purchase price over the fair value is recorded as goodwill.Purchased intangibles with definite lives are amortized over their respective useful lives.

In July 2008, Staples acquired Corporate Express N.V. (‘‘Corporate Express’’), a Dutch office products distributorwith operations in North America, Europe and Australia, through a tender offer for all of its outstanding capital stock.With the acquisition of Corporate Express, the Company became approximately a 59% shareholder of CorporateExpress Australia Limited (‘‘Corporate Express Australia’’), a public company traded on the Australian SecuritiesExchange.

The operating results of Corporate Express have been included in the consolidated financial statements since July 2,2008, the date Staples declared the terms of the tender offer unconditional. The Corporate Express results are reportedin Staples’ North American Delivery and International Operations for segment reporting.

On March 16, 2010, the Company announced that it had made an offer to acquire all of the noncontrolling interestin Corporate Express Australia for cash consideration of AUD $5.60 per share (the ‘‘Offer’’). On July 9, 2010, theCompany declared the Offer unconditional, and on September 6, 2010, through a compulsory acquisition process, theCompany acquired the final outstanding shares, bringing the Company’s ownership of this business to 100% for anaggregate purchase price of approximately AUD $407 million (approximately $361 million). The purchase of theadditional shares in 2010 was accounted for in accordance with ASC Topic 810, ‘‘Noncontrolling Interest in ConsolidatedFinancial Statements,’’ as an equity transaction, by adjusting the carrying amount of the noncontrolling interest to reflectthe change in the Company’s ownership interest in Corporate Express Australia. The purchase of the noncontrollinginterest is reflected as a financing cash outflow in the consolidated statement of cash flows.

On July 2, 2010, the Company entered the Finnish market, acquiring Oy Lindell AB (‘‘Lindell’’), a Finnish officeproducts distributor. The aggregate cash purchase price was 31 million Euros (approximately $39 million based onforeign exchange rates on the acquisition date), net of cash acquired. As a result of this acquisition, the Companyrecorded goodwill of $16.4 million and $4.3 million of intangible assets, which are being amortized on a straight line basisover their weighted average estimated lives of 5 years. The goodwill and intangible assets were allocated to theInternational Operations segment. None of the goodwill is deductible for tax purposes.

NOTE C—Integration and Restructuring Costs

Integration and restructuring costs represent the costs associated with the integration of Corporate Express,including Corporate Express Australia, with the Company’s pre-existing business and the consolidation of certainoperations of the combined Company.

Integration and restructuring costs are comprised of the following (in thousands):

2010 2009 2008

Consulting and other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37,529 $46,135 $ 21,758Severance and retention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,999 30,465 1,685Facility closure costs and other asset write-downs . . . . . . . . . . . . . . . . . . . . 10,237 7,644 150,081

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $57,765 $84,244 $173,524

Facility closure costs and other asset write-downs for 2008 included a $123.8 million charge related to thewrite-down of indefinite lived intangible tradenames associated with the European catalog business. The tradename

C-12

STAPLES, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)

NOTE C—Integration and Restructuring Costs (Continued)

write-down was the result of the Company’s decision to move toward one global brand with the acquisition of CorporateExpress, eliminating, over time, certain legacy Staples brands used in the European catalog business. Facility closurecosts and other asset write-downs for 2008 also included a $26.3 million charge related to the write-down of software andfacilities whose use was expected to be limited as a result of the acquisition.

In connection with the Company’s acquisition of Corporate Express, acquisition reserves of $181.0 million wereestablished. The activity related to this reserve (in thousands) for fiscal 2010 is as follows:

Balance as of Foreign Exchange Balance as ofJanuary 30, 2010 Utilization Fluctuations January 29, 2011

Transaction costs . . . . . . . . . . . . . . . . . . . . . . $ 807 $ (264) $ — $ 543Severance . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,843 (16,206) (844) 11,793Facility closures . . . . . . . . . . . . . . . . . . . . . . . 28,390 (7,973) (130) 20,287Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,759 (1,172) (243) 9,344

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $68,799 $(25,615) $(1,217) $41,967

The Company believes that the reserves above should be substantially utilized by the end of fiscal year 2011;however, certain payments related to facility closures may be made over the remaining lease terms.

NOTE D—Accrued Expenses and Other Current Liabilities

The major components of accrued liabilities are as follows (in thousands):

January 29, January 30,2011 2010

Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 258,518 $ 281,464Employee related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,598 405,005Acquisition and restructuring reserves . . . . . . . . . . . . . . . . . . . . . . . . . . 82,144 106,476Advertising and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,383 123,044Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627,208 687,365

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,497,851 $1,603,354

NOTE E—Debt and Credit Agreements

The major components of the Company’s outstanding debt are as follows (in thousands):

January 29, January 30,2011 2010

April 2011 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500,000 $ 500,000October 2012 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,000 325,000January 2014 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000November 2014 Revolving Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —May 2009 Securitization Program (terminated December 31, 2010) . . . . . . . . . . . . . . . . . . — —Lines of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218,689 134,859Capital lease obligations and other notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,701 81,679

2,557,390 2,541,538Fair value adjustments on hedged debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,373 26,060Less: Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (587,356) (67,269)

Net long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,014,407 $2,500,329

C-13

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE E—Debt and Credit Agreements (Continued)

Aggregate annual maturities of long-term debt and capital lease obligations are as follows (in thousands):

Fiscal Year: Total

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 587,3562012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465,1372013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,501,3732014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,1492015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,176Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,199

$2,557,390

Future minimum lease payments under capital leases of $6.5 million, excluding $2.1 million of interest, are includedin aggregate annual maturities shown above. Staples entered into no new capital lease obligations in 2010. Staplesentered into capital lease obligations totaling $2.2 million in 2009.

Interest paid by Staples totaled $210.9 million, $217.5 million, and $113.5 million for 2010, 2009, and 2008,respectively. There was no interest capitalized in 2010, 2009, or 2008.

April 2011 Notes: On March 27, 2009, the Company issued $500 million aggregate principal amount of notes (the‘‘April 2011 Notes’’) due April 1, 2011, with a fixed interest rate of 7.75% payable semi-annually on April 1 and October 1of each year commencing on October 1, 2009. From the sale of the April 2011 Notes, the Company received netproceeds, after the underwriting discount and estimated fees and expenses, of $497.5 million. The Company’s obligationsunder the April 2011 Notes are unconditionally guaranteed on an unsecured unsubordinated basis by Staples the OfficeSuperstore, LLC, Staples the Office Superstore, East Inc., Staples Contract & Commercial, Inc. and Staples the OfficeSuperstore Limited Partnership (collectively, the ‘‘Guarantor Subsidiaries’’).

October 2012 Notes: On September 30, 2002, Staples issued $325 million principal amount of notes due October 1,2012 (the ‘‘October 2012 Notes’’), with a fixed interest rate of 7.375% payable semi-annually on April 1 and October 1 ofeach year commencing on April 1, 2003. Staples has entered into an interest rate swap agreement to turn the October2012 Notes into variable rate obligations (see Note F). The Company’s obligations under the October 2012 Notes areunconditionally guaranteed on an unsecured unsubordinated basis by the Guarantor Subsidiaries.

January 2014 Notes: On January 15, 2009, Staples issued $1.5 billion aggregate principal amount of notes (the‘‘January 2014 Notes’’) due January 15, 2014, with a fixed interest rate of 9.75% payable semi-annually on January 15 andJuly 15 of each year commencing on July 15, 2009. From the sale of the January 2014 Notes, the Company received netproceeds, after the underwriting discount and estimated fees and expenses of $1.49 billion. Staples has entered into aninterest rate swap agreement to turn $750 million of the January 2014 Notes into variable rate obligations (see Note F).The Company’s obligations under the January 2014 Notes are unconditionally guaranteed on an unsecuredunsubordinated basis by the Guarantor Subsidiaries.

Revolving Credit Facility: On November 4, 2010, Staples entered into a new credit agreement (the ‘‘November 2014Revolving Credit Facility’’) with Bank of America, N.A, as Administrative Agent and other lending institutions namedtherein. The November 2014 Revolving Credit Facility replaced the Amended and Restated Revolving Credit Agreementdated as of October 13, 2006, as amended, which provided for a maximum borrowing of $750.0 million and was due toexpire in October 2011 (the ‘‘Prior Revolving Credit Facility’’). As of January 29, 2011, no borrowings were outstandingunder the November 2014 Revolving Credit Agreement, resulting in $1.0 billion of availability under this agreement.

The November 2014 Revolving Credit Facility provides for a maximum borrowing of $1.0 billion which, pursuant toan accordion feature, may be increased to $1.5 billion upon the request of the Company and the agreement of thelenders participating in the increase. Borrowings made pursuant to the November 2014 Revolving Credit Facility may besyndicated loans, swing line loans, multicurrency loans, or letters of credit, the combined sum of which may not exceedthe maximum borrowing amount. Borrowings made pursuant to the November 2014 Revolving Credit Facility will bear

C-14

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE E—Debt and Credit Agreements (Continued)

interest at various interest rates, depending on the type of borrowing, plus a percentage spread based on Staples’ creditrating and fixed charge coverage ratio. Under the November 2014 Revolving Credit Facility, Staples agrees to pay afacility fee at rates that range from 0.15% to 0.35% per annum depending on its credit rating and fixed charge coverageratio. Amounts borrowed under the November 2014 Revolving Credit Facility may be borrowed, repaid, and reborrowedfrom time to time until November 4, 2014.

The November 2014 Revolving Credit Facility is unsecured and ranks pari passu with Staples’ public notes and otherindebtedness and contains customary affirmative and negative covenants for credit facilities of this type. The November2014 Revolving Credit Facility also contains financial covenants that require Staples to maintain a minimum fixed chargecoverage ratio and a maximum adjusted funded debt to total capitalization ratio. The borrowings under the November2014 Revolving Credit Facility are unconditionally guaranteed on an unsecured unsubordinated basis by the GuarantorSubsidiaries.

Commercial Paper Program: The Company has a commercial paper program (‘‘Commercial Paper Program’’)which is not currently being used but allows the Company to issue up to $1 billion of unsecured commercial paper notes(‘‘Notes’’) from time to time. The November 2014 Revolving Credit Facility currently serves as a backstop to theCommercial Paper Program. The proceeds of the Notes will be used for general corporate purposes, including workingcapital, capital expenditures, acquisitions and share repurchases. Maturities of the Notes vary but may not exceed397 days from the date of issue. The Notes bear such interest rates, if interest bearing, or will be sold at such discountfrom their face amounts, as agreed upon from time to time by the dealers under the Commercial Paper Program andStaples. The payments under the Commercial Paper Program are unconditionally guaranteed on an unsecuredunsubordinated basis by the Guarantor Subsidiaries. The Commercial Paper Program contains customary events ofdefault with corresponding grace periods. As of January 29, 2011, no Notes were outstanding under the Company’sCommercial Paper Program.

2008 Agreement: On May 26, 2009, Staples terminated the $3.0 billion credit agreement (the ‘‘2008 Agreement’’),which the Company entered into on April 1, 2008 (the ‘‘2008 Agreement’’) and provided financing solely (1) for theCompany’s acquisition of all of the outstanding capital stock of Corporate Express, including related transaction fees,costs and expenses, and (2) backstopped the Company’s Commercial Paper Program. Amounts borrowed under the 2008Agreement could be borrowed, repaid and reborrowed from time to time. Originally, the aggregate principal amount ofthe loans outstanding could not exceed the maximum borrowing amount of $3.0 billion.

May 2009 Securitization Program: On December 31, 2010, Staples terminated the May 2009 $300.0 million accountsreceivable securitization program (the ‘‘May 2009 Securitization Program’’), which the Company entered into withseveral of its wholly owned subsidiaries and certain financial institutions. Under the terms of the May 2009 SecuritizationProgram, the subsidiaries agreed to sell substantially all the customer receivables of the Company’s North AmericanDelivery business to a wholly owned bankruptcy remote special purpose entity, Staples Receivables LLC. The Companyretained servicing responsibility. The special purpose entity then transferred an interest in the receivables to the financialinstitutions. Borrowings outstanding under the May 2009 Securitization Program were included as a component ofcurrent liabilities in the consolidated balance sheet, while the accounts receivable securing these obligations wereincluded as a component of net receivables in the consolidated balance sheet.

Australian Credit Facilities: Corporate Express Australia Limited and its subsidiaries are parties to credit facilitiesunder which approximately $135.7 million was outstanding at January 29, 2011.

Other Lines of Credit: Staples had $142.9 million available under other various lines of credit, which had anoutstanding balance of $83.0 million at January 29, 2011, with $0.3 million letters of credit issued under the Company’sCanadian facilities.

There were no instances of default during 2010 under any of the Company’s debt agreements.

C-15

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE E—Debt and Credit Agreements (Continued)

Deferred Financing Fees

In connection with the issuance of certain debt instruments, the Company incurred financing fees which are beingamortized over the terms of the related debt instruments. Amortization of the financing fees is classified as interestexpense. Deferred financing fees amortized to interest expense were $6.3 million, $7.9 million and $13.5 million for 2010,2009 and 2008, respectively. At January 29, 2011, unamortized financing fees of $0.2 million were included in prepaidexpenses and other current assets and unamortized fees of $11.9 million were included in other assets. At January 30,2010, unamortized financing fees of $1.2 million were included in prepaid expenses and other current assets andunamortized financing fees of $12.4 million were included in other assets.

NOTE F—Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities: Staples uses interest rate swap agreements and foreign currency swapagreements to offset certain operational and balance sheet exposures related to changes in interest or foreign exchangerates. These agreements are entered into to support transactions made in the normal course of business, and accordingly,are not speculative in nature. These derivatives qualify for hedge accounting treatment as the derivatives have beenhighly effective in offsetting changes in fair value of the hedged items.

All derivatives are recorded at fair value and the changes in fair value are immediately included in earnings if thederivatives do not qualify as effective hedges. If a derivative is designated as a fair value hedge, then changes in the fairvalue of the derivative are offset against the changes in the fair value of the underlying hedged item in earnings. If aderivative is designated as a cash flow hedge, then the effective portion of the changes in the fair value of the derivative isrecognized as a component of accumulated other comprehensive loss until the underlying hedged item is recognized inearnings when the underlying contract matures or the forecasted transaction is no longer probable of occurring. If aderivative or a nonderivative financial instrument is designated as a hedge of the Company’s net investment in a foreignsubsidiary, then changes in the fair value of the financial instrument are recognized as a component of accumulated othercomprehensive loss to offset a portion of the change in the translated value of the net investment being hedged, until theinvestment is sold or liquidated. The Company formally documents all hedging relationships for all derivative andnonderivative hedges and the underlying hedged items, as well as its risk management objectives and strategies forundertaking the hedge transactions. There are no amounts excluded from the assessment of hedge effectiveness.

The Company classifies the fair value of all its derivative contracts and the fair value of its hedged firmcommitments as either current or long-term, depending on whether the maturity date of the derivative contract is withinor beyond one year from the balance sheet date. The cash flows from derivatives treated as hedges are classified in theCompany’s consolidated statement of cash flows in the same category as the item being hedged.

Interest Rate Swaps: On January 8, 2003, Staples entered into an interest rate swap, for an aggregate notionalamount of $325 million, designed to convert Staples’ October 2012 Notes into a variable rate obligation. The swapagreement, scheduled to terminate on October 1, 2012, is designated as a fair value hedge of the October 2012 Notes.Under the interest rate swap agreement, Staples is entitled to receive semi-annual interest payments at a fixed rate of7.375% and is required to make semi-annual interest payments at a floating rate equal to the 6 month LIBOR plus3.088%. The interest rate swap agreement is being accounted for as a fair value hedge and the differential to be paid orreceived on the interest rate swap agreement is accrued and recognized as an adjustment to interest expense over the lifeof the agreement and the October 2012 Notes. At January 29, 2011 and January 30, 2010, the interest rate swapagreement had fair value gains of $23.0 million and $26.1 million, respectively, which were included in other assets. Noamounts were included in the consolidated statement of income for 2010, 2009 or 2008 related to ineffectivenessassociated with this fair value hedge.

In connection with Staples’ acquisition of Corporate Express, the Company assumed interest rate swaps, for anotional amount of AUD $103 million, designed to convert Corporate Express’ variable rate credit facilities into fixedrate obligations. AUD $30 million of these swaps matured in July 2009, AUD $8 million of these swaps matured inJanuary 2010 and AUD $40 million of these swaps matured in July 2010, as scheduled. The Company also entered intointerest rate swap agreements in August 2009, for a notional amount of AUD $35 million, designed to convert local

C-16

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE F—Derivative Instruments and Hedging Activities (Continued)

variable rate credit facilities into fixed rate obligations. As of January 29, 2011, the total notional amount of alloutstanding interest rate swap agreements was AUD $60 million (approximately $59.4 million, based on foreignexchange rates at January 29, 2011). The remaining swap agreements are scheduled to terminate in three stages: AUD$25 million in July 2011, AUD $10 million in August 2011 and the remaining AUD $25 million in August 2012. Under theterms of the agreements, the Company is required to make monthly interest payments at a weighted average interest rateof 6.0% and is entitled to receive monthly interest payments at a floating rate equal to the average bid rate forborrowings having a term closest to the relevant period displayed on the appropriate page of the Reuters screen (BBSY).The interest rate swaps are being accounted for as a cash flow hedge and the differential to be paid or received on theinterest rate swap agreements is accrued and recognized as an adjustment to interest expense over the life of theagreements. At January 29, 2011 and January 30, 2010, the interest rate swap agreements had fair value losses of$0.4 million and $1.4 million, respectively, which were included in stockholders’ equity as a component of accumulatedother comprehensive loss. No amounts were included in the consolidated statement of income for 2010, 2009 or 2008related to ineffectiveness associated with this cash flow hedge. The amount of estimated cash flow hedges’ unrealized netgains or losses expected to be reclassified to earnings in the next twelve months is not significant.

On March 16, 2010, Staples entered into an interest rate swap, for an aggregate notional amount of $750 million,designed to convert half of the aggregate principal amount of the January 2014 Notes into a variable rate obligation. Theswap agreement, scheduled to terminate on January 15, 2014, is designated as a fair value hedge of half of the aggregateprincipal amount of the January 2014 Notes. Under the interest rate swap agreement, Staples is entitled to receivesemi-annual interest payments at a fixed rate of 9.75% and is required to make semi-annual interest payments at afloating rate equal to the 3 month LIBOR plus 7.262%. The interest rate swap agreement is being accounted for as a fairvalue hedge and the differential to be paid or received on the interest rate swap agreement is accrued and recognized asan adjustment to interest expense over the life of the agreement and the January 2014 Notes. At January 29, 2011, theinterest rate swap agreement had a fair value gain of $21.4 million, which was included in other assets. No amounts wereincluded in the consolidated statement of income for 2010 related to ineffectiveness associated with this fair value hedge.

Foreign Currency Swaps: On August 15, 2007, the Company entered into a $300 million foreign currency swap thathas been designated as a foreign currency hedge on Staples’ net investment in Canadian dollar denominated subsidiaries.Staples, upon maturity of the agreement in October 2012, will be entitled to receive $300 million and will be obligated topay 316.2 million in Canadian dollars. Staples will also be entitled to receive quarterly interest payments on $300 millionat a fixed rate of 5.28% and will be obligated to make quarterly interest payments on 316.2 million Canadian dollars at afixed rate of 5.17%. At January 29, 2011, the currency swap had an aggregate fair value loss of $11.0 million, which wasincluded in other long-term liabilities and at January 30, 2010, the currency swap had a fair value gain of $7.4 million,which was included in other assets. No amounts were included in the consolidated statement of income for 2010, 2009 or2008 related to ineffectiveness associated with this net investment hedge.

On June 30, 2010, Staples entered into a currency swap, for an aggregate notional amount of 40 million Canadiandollars. Upon maturity of the agreement in July 2011, Staples will be entitled to receive $37.8 million and will beobligated to pay 40 million Canadian dollars. This swap was designated as a foreign currency hedge of a short-termintercompany loan with a Canadian dollar denominated subsidiary. Gains and losses on this foreign currency hedge willbe recorded to other income (expense) over the life of the agreement, which will offset the gains and losses of theunderlying hedged item. At January 29, 2011, the currency swap had a fair value loss of $2.1 million, which was includedin accrued expenses and other current liabilities. No amounts were included in the consolidated statement of income for2010 related to ineffectiveness associated with this net investment hedge.

C-17

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE G—Accumulated Other Comprehensive Loss

Amounts included in accumulated other comprehensive loss for the Company’s derivative instruments andminimum pension and other postretirement liabilities are recorded net of the related income tax effects. The followingtable details the composition of accumulated other comprehensive loss for 2010, 2009, and 2008 (in thousands):

2010 2009 2008

Foreign currency translation adjustments . . . . . . . . . . . . . . . . $ 37,158 $ 36,825 $(336,812)Derivative instruments (net of taxes) . . . . . . . . . . . . . . . . . . . (4,207) 5,836 27,041Deferred benefit costs (net of taxes) . . . . . . . . . . . . . . . . . . . (129,884) (131,998) (184,556)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (96,933) $ (89,337) $(494,327)

NOTE H—Commitments and Contingencies

Staples leases certain retail and support facilities under long-term non-cancelable lease agreements. Most leaseagreements contain renewal options and rent escalation clauses and, in some cases, allow termination within a certainnumber of years with notice and a fixed payment. Certain agreements provide for contingent rental payments based onsales.

Other long-term obligations at January 29, 2011 include $132.0 million relating to future rent escalation clauses andlease incentives under certain existing store operating lease arrangements. These rent obligations are recognized on astraight-line basis over the respective terms of the leases. Future minimum lease commitments due for retail and supportfacilities (including lease commitments for 76 retail stores not yet opened at January 29, 2011) and equipment leasesunder non-cancelable operating leases are as follows (in thousands):

Fiscal Year: Total

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 886,4952012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798,9582013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 699,6252014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 594,8192015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497,833Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,499,789

$4,977,519

Future minimum lease commitments do not include $32.4 million of minimum rentals due under non-cancelablesubleases.

Rent expense was $795.5 million, $797.0 million, and $744.6 million for 2010, 2009, and 2008, respectively.

As of January 29, 2011, Staples had purchase obligations of $539.7 million. Many of the Company’s purchasecommitments may be canceled by the Company without advance notice or payment, and the Company has excluded suchcommitments, along with intercompany commitments from the following schedule. Contracts that may be terminated bythe Company without cause or penalty, but that require advance notice for termination, are valued on the basis of anestimate of what the Company would owe under the contract upon providing notice of termination. Such purchaseobligations will arise as follows (in thousands):

Fiscal Year: Total

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $364,7192012 through 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,6922014 through 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,994Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,290

$539,695

C-18

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE H—Commitments and Contingencies (Continued)

Letters of credit are issued by Staples during the ordinary course of business through major financial institutions asrequired by certain vendor contracts. As of January 29, 2011, Staples had open standby letters of credit totaling$161.0 million.

The Company has become the subject of several class action lawsuits filed in various states, where the plaintiffsalleged the Company failed to comply with federal and state overtime laws and that it failed to pay them overtimebecause assistant store managers were misclassified as exempt from overtime pay. In January 2010, the Company and theattorneys for the plaintiffs jointly announced a settlement of these suits recording a charge of $42.0 million, includinginterest, class counsel’s attorney’s fees and a previous jury verdict obtained in February 2009 for one of these class actionlawsuits. Under the terms of the settlement, the Company does not admit to any wrongdoing in connection withmisclassification and resolves claims for damages as far back as 2002 that cover approximately 5,500 current and formerassociates.

In connection with the 1991 acquisition of Agena S.A., Corporate Express initiated legal proceedings against Befec(a predecessor of PricewaterhouseCoopers, France), the accountants who certified the acquisition balance sheet.Corporate Express claimed damages totaling EUR 134 million plus interest and fees. In October 2010, the CommercialCourt in France issued its judgment in this case and did not award any of the claimed damages to Corporate Express.The Company has begun the process for appealing the judgment.

At the time the Corporate Express tender offer was fully settled on July 23, 2008, Staples had acquired more than99% of the outstanding capital stock of Corporate Express. Staples has worked diligently to acquire the remaining capitalstock of Corporate Express by means of a compulsory judicial ‘‘squeeze out’’ procedure in accordance with the DutchCivil Code. Staples and the other parties to the ‘‘squeeze out’’ procedure have submitted their arguments to theEnterprise Division of the Court of Appeal in Amsterdam (the ‘‘Court’’) and are awaiting final judgment. Staplesrecently received an interim judgment from the Court. The Court decided to appoint a team of independent experts todetermine the correct valuation for the outstanding shares of Corporate Express, and the Company expects the valuationreport to be completed by June 2011. Staples anticipates the Court will issue a final judgment as soon as possible afterthe valuation report is completed. Any additional payments will be recorded in equity pursuant to ASC Topic 810.

In addition, from time to time, the Company is involved in litigation arising from the operation of its business that isconsidered routine and incidental to its business. The Company does not expect the results of any of these actions tohave a material adverse effect on its business, results of operations, or financial condition.

C-19

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE I—Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets andliabilities for financial reporting purposes and the amounts used for income tax purposes. The approximate tax effect ofthe significant components of Staples’ deferred tax assets and liabilities are as follows (in thousands):

January 29, January 30,2011 2010

Deferred income tax assets:Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,256 $ 50,825Foreign tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,913 184,050Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402,136 439,104Capital loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,110 24,307Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,466 124,701Merger related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,044 70,532Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,604 54,317Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,891 35,456Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,672 30,802Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,362 73,327Unrealized loss on hedge instruments . . . . . . . . . . . . . . . . . . . . . . . . . 4,629 —Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,786 69,226

Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 970,869 1,156,647Total valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (331,567) (398,697)

Net deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 639,302 $ 757,950

Deferred income tax liabilities:Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(200,901) $ (216,009)Unrealized gain on hedge instruments . . . . . . . . . . . . . . . . . . . . . . . . . — (3,128)Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,308) (2,480)

Total deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (204,209) (221,617)

Net deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 435,093 $ 536,333

The deferred tax asset from tax loss carryforwards of $402.1 million represents approximately $1.7 billion of netoperating loss carryforwards, $1.2 billion of which are subject to expiration beginning in 2011. The remainder has anindefinite carryforward period. The deferred tax asset from foreign tax credit carryforwards of $109.9 million is subject toexpiration beginning in 2012. The valuation allowance decreased by $67.1 million during 2010, primarily due toutilization of certain foreign net operating losses.

For financial reporting purposes, consolidated income before income taxes includes the following components (inthousands):

2010 2009 2008

Pretax income:United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 877,936 $ 728,765 $ 923,398Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 478,659 427,129 319,686

$1,356,595 $1,155,894 $1,243,084

C-20

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE I—Income Taxes (Continued)

The provision for income taxes consists of the following (in thousands):

2010 2009 2008

Current tax expense:Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $142,282 $329,809 $307,034State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,797 42,547 28,226Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,317 116,180 60,233

Deferred tax expense (benefit):Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,103 (63,494) 15,181State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,329 (8,191) 2,002Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,198 (18,068) 16,187

Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $468,026 $398,783 $428,863

A reconciliation of the federal statutory tax rate to Staples’ effective tax rate on historical net income is as follows:

2010 2009 2008

Federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0% 35.0%State effective rate, net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 2.9 2.5Effect of foreign taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.5) (3.4) (2.9)Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.4) (0.7) (0.4)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 0.7 0.3

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.5% 34.5% 34.5%

The effective tax rate in any year is impacted by the geographic mix of earnings.

The tax impact of the unrealized gain or loss on instruments designated as hedges of net investments in foreignsubsidiaries is reported in accumulated other comprehensive loss in stockholders’ equity.

The Company operates in multiple jurisdictions and could be subject to audit in these jurisdictions. These audits caninvolve complex issues that may require an extended period of time to resolve and may cover multiple years. In theCompany’s opinion, an adequate provision for income taxes has been made for all years subject to audit.

Income tax payments were $404.9 million, $236.1 million and $470.4 million during 2010, 2009 and 2008,respectively.

Income taxes have not been provided on certain undistributed earnings of foreign subsidiaries of approximately$761.3 million, net of the noncontrolling interest, because such earnings are considered to be indefinitely reinvested inthe business. The determination of the amount of the unrecognized deferred tax liability related to the undistributedearnings is not practicable because of the complexities associated with its hypothetical calculation.

Uncertain Tax Positions

At January 29, 2011, the Company had $254.2 million of gross unrecognized tax benefits, all of which, if recognized,would affect the Company’s tax rate. At January 30, 2010, the Company had $264.3 million of gross unrecognized taxbenefits, all of which, if recognized, would affect the Company’s tax rate. The Company does not reasonably expect anymaterial changes to the estimated amount of liability associated with its uncertain tax positions through fiscal 2011.

C-21

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE I—Income Taxes (Continued)

The following summarizes the activity related to our unrecognized tax benefits (in thousands):

2010 2009 2008

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . $264,277 $222,892 $ 87,688Additions for tax positions related to current year . . . . . . . . . . . 25,876 47,354 24,859(Reductions) additions for tax positions of prior years . . . . . . . . (9,983) 15,422 119,973Reduction for Statute of Limitations Expiration . . . . . . . . . . . . . (19,840) (20,802) (7,597)Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,163) (589) (2,031)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . $254,167 $264,277 $222,892

Staples is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. TheCompany has substantially concluded all U.S. federal income tax matters for years through 2006 and all material state,local and foreign income tax matters for years through 2002.

Staples’ continuing practice is to recognize interest and penalties related to income tax matters in income taxexpense. The Company had $30.1 million and $18.7 million accrued for gross interest and penalties as of January 29,2011 and January 30, 2010, respectively.

NOTE J—Equity Based Employee Benefit Plans

Staples offers its associates share ownership through certain equity based employee benefit plans, including theAmended and Restated 1998 Employee Stock Purchase Plan and the Amended and Restated International EmployeeStock Purchase Plan (collectively the ‘‘Employee Stock Purchase Plans’’) and the Amended and Restated 2004 StockIncentive Plan (the ‘‘2004 Plan’’).

In connection with certain equity based employee benefit plans, Staples included approximately $146.9 million,$174.7 million and $180.7 million in compensation expense for 2010, 2009 and 2008, respectively. There was no excessincome tax benefit related to stock-based compensation for 2010. The excess income tax benefit related to stock-basedcompensation was $8.8 million and $5.8 million for 2009 and 2008, respectively. As of January 29, 2011, Staples had$227.6 million of nonqualified stock options, restricted stock and restricted stock units to be expensed over the periodthrough December, 2014.

Employee Stock Purchase Plans

The Amended and Restated 1998 Employee Stock Purchase Plan authorizes a total of up to approximately22.8 million shares of common stock to be sold to participating employees and the Amended and Restated InternationalEmployee Stock Purchase Plan authorizes a total of up to approximately 2.8 million shares of common stock to be sold toparticipating employees of non-U.S. subsidiaries of the Company. Under both plans, participating employees maypurchase shares of common stock at 85% of its fair market value at the beginning or end of an offering period, whicheveris lower, through payroll deductions in an amount not to exceed 10% of an employee’s annual base compensation.

Stock Award Plans

The 2004 Plan was implemented in July 2004 and replaced the amended and restated 1992 Equity Incentive Plan(the ‘‘1992 Plan’’) and the amended and restated 1990 Director Stock Option Plan (the ‘‘1990 Plan’’). Unexercisedoptions under both the 1992 Plan and the 1990 Plan remain outstanding. Under the 2004 Plan, Staples may issue up to97.4 million shares of common stock to management and employees using various forms of awards, including, restrictedstock and restricted stock units (collectively, ‘‘Restricted Shares’’), nonqualified stock options and performance shares.The Restricted Shares are restricted in that they are non transferable (i.e. may not be sold until they vest). Thenonqualified stock options cannot be exercised until they vest. Vesting of Restricted Shares and nonqualified stockoptions occurs over different periods depending on the terms of the individual award. Options outstanding under theCompany’s plans have an exercise price equal to the fair market value of the common stock on the date of grant. Options

C-22

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE J—Equity Based Employee Benefit Plans (Continued)

outstanding are exercisable at various percentages of the total shares subject to the option starting one year after thegrant. All options expire ten years after the grant date, subject to earlier termination in the event of employmenttermination.

Stock Options

Information with respect to stock options granted under the above plans is as follows:

Weighted AverageWeighted Average Remaining Aggregate

Number of Exercise Price Contractual Intrinsic ValueShares Per Share Term in Years (in thousands)(1)

Outstanding at January 30, 2010 . . . . . . . . . . . . . . . . 43,834,405 $19.57Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,721,048 19.45Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,948,077) 14.40Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (794,119) 21.77

Outstanding at January 29, 2011 . . . . . . . . . . . . . . . . 44,813,257 $19.86 5.43 $136,353

Exercisable at January 29, 2011 . . . . . . . . . . . . . . . . . 32,145,797 $19.41 4.27 $113,178

Vested or expected to vest at January 29, 2011 . . . . . . 42,864,601 $19.82 5.30 $132,713

(1) The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds theexercise price of an option.

The total intrinsic value of options exercised during 2010, 2009 and 2008 were $24.0 million, $60.8 million and$67.8 million, respectively.

The weighted-average fair values of options and employee stock purchase plan shares granted during 2010, 2009 and2008 and were $4.75, $5.57 and $6.16, respectively.

For options granted prior to May 1, 2005, the fair value for these options was estimated at the date of grant using aBlack-Scholes option-pricing model. For stock options granted on or after May 1, 2005, the fair value of each award isestimated on the date of grant using a binomial valuation model. The binomial model considers characteristics of fairvalue option pricing that are not available under the Black-Scholes model. Similar to the Black-Scholes model, thebinomial model takes into account variables such as volatility, dividend yield rate, and risk free interest rate. However, inaddition, the binomial model considers the contractual term of the option, the probability that the option will beexercised prior to the end of its contractual life, and the probability of termination or retirement of the option holder incomputing the value of the option. For these reasons, the Company believes that the binomial model provides a fairvalue that is more representative of actual experience and future expected experience than that value calculated usingthe Black-Scholes model.

The fair value of options granted in each year was estimated at the date of grant using the following weightedaverage assumptions:

2010 2009 2008

Risk free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3% 2.1% 3.2%Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3% 1.1% 1.0%Expected stock volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31% 35% 30%Expected life of options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 years 5.3 years 5.3 years

The expected stock volatility factor was calculated using an average of historical and implied volatility measures toreflect the different periods in the Company’s history that would impact the value of the stock options granted toemployees. The fair value of stock options is expensed over the applicable vesting period using the straight line method.

C-23

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE J—Equity Based Employee Benefit Plans (Continued)

Restricted Shares

In 2003, the Company began granting Restricted Shares in lieu of special grants of stock options. Beginning in fiscal2006, the Company began issuing Restricted Shares to employees and directors as part of its regular equity compensationprogram. All shares underlying awards of Restricted Shares are restricted in that they are not transferable (i.e., they maynot be sold) until they vest. Subject to limited exceptions, if the employees who received the Restricted Shares leaveStaples prior to the vesting date for any reason; the Restricted Shares will be forfeited and returned to Staples. The fairvalue of restricted shares is expensed over the applicable vesting period using the straight line method. The followingtable summarizes the Company’s grants of Restricted Shares in 2010:

Weighted AverageNumber of Grant Date Fair

Shares Value Per Share

Nonvested at January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,973,840 $22.52Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,190,125 19.40Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,886,835) 23.75Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,005,972) 21.26

Nonvested at January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,271,158 $20.62

Performance Shares

In fiscal 2006, the Company began granting performance shares which are restricted stock awards whose underlyingshares are paid out and issued to the recipient only if the Company meets minimum performance targets. Some of theseawards are subject to additional vesting requirements. For the 2009 performance share awards, payouts were based on2009 earnings per share performance. The Company met the performance target that was established in 2009 and0.5 million shares were awarded in March 2010, subject to vesting over a three year period. For the 2008 performanceshare awards, the performance target was established based on a cumulative three year earnings per share goal. The 2008performance awards are not expected to vest as the minimum performance targets were not met.

In 2010, the Company switched from granting annual performance share awards and introduced a performancebased long term cash incentive plan based on meeting minimum performance targets. The expense associated with these2010 awards is reflected as part of selling, general and administrative expense.

Although not a part of the annual grant cycle, in July 2010 the Company granted special performance shares totaling0.8 million at target at $19.27 per share. These awards will payout only if the Company meets minimum performanceobjectives, which will be established in each year of a three year performance cycle. One-third of the target award will beapplied as a target amount for each of the fiscal years within the performance cycle. No payout will occur until thecompletion of the three year performance cycle. Any shares that are paid out will also be subject to additional vestingrequirements. For fiscal year 2010, 93% of the target shares were earned based on the extent to which the 2010 objectivewas achieved.

Employees’ 401(k) Savings Plan

Staples’ Employees’ 401(k) Savings Plan (the ‘‘401(k) Plan’’) is available to all United States based employees ofStaples who meet minimum age and length of service requirements. Beginning in 2009, contributions to the 401(k) Planare made in cash and vest ratably over a five year period. Previously, contributions were made based upon a matchingformula applied to employee contributions in the form of Company common stock and vested ratably over a five yearperiod. The Supplemental Executive Retirement Plan (the ‘‘SERP Plan’’), which is similar in many respects to the 401(k)Plan, is available to certain Company executives and other highly compensated employees, whose contributions to the401(k) Plan are limited, and allows such individuals to supplement their contributions to the 401(k) Plan by makingpre-tax contributions to the SERP Plan. Company contributions to the SERP Plan are based on a similar matching

C-24

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE J—Equity Based Employee Benefit Plans (Continued)

formula and vesting period; however, beginning in October 2004, such contributions were made in cash rather than inCompany common stock.

The expense associated with the Company’s match for the Staples 401(k) Savings Plan for 2010, 2009 and 2008 was$24.9 million, $27.3 million and $26.0 million, respectively.

At January 29, 2011, 66.2 million shares of common stock were reserved for issuance under Staples’ 2004 Plan,401(k) Plan and employee stock purchase plans.

NOTE K—Pension and other Post-Retirement Benefit Plans

In connection with the acquisition of Corporate Express, Staples assumed the obligations under the pension plansCorporate Express sponsored. The pension plans cover certain employees in Europe and the United States. The benefitsdue to U.S. plan participants are frozen. A number of the defined benefit plans outside the U.S. are funded with planassets that have been segregated in trusts. Contributions are made to these trusts, as necessary, to meet legal and otherrequirements.

In August 2010, the Company began sponsoring an unfunded postretirement life insurance benefit plan, whichprovides benefits to eligible U.S. executives based on earnings, years of service and age at termination of employment.

The following table presents a summary of the total projected benefit obligation for the pension plans, the fair valueof plan assets and the associated funded status recorded in the consolidated balance sheet at January 29, 2011 andJanuary 30, 2010 (in thousands):

January 29, 2011 January 30, 2010

Projected Fair Value Projected Fair ValueBenefit of Plan Funded Benefit of Plan Funded

Obligations Assets Status Obligations Assets Status

Overfunded Plans:International Plans . . . . . . . . . . . . . . . . . . . . $(780,928) $963,404 $182,476 $(767,894) $906,713 $138,819

Total Overfunded Plans . . . . . . . . . . . . . . (780,928) 963,404 182,476 (767,894) 906,713 138,819

Underfunded Plans:U.S. Plans . . . . . . . . . . . . . . . . . . . . . . . . . . (33,431) 28,451 (4,980) (32,178) 24,836 (7,342)International Plans . . . . . . . . . . . . . . . . . . . . (130,314) 99,415 (30,899) (135,913) 89,244 (46,669)

Total Underfunded Plans . . . . . . . . . . . . . $(163,745) $127,866 $(35,879) $(168,091) $114,080 $(54,011)

The following tables present a summary of the total net cost recorded in the consolidated statement of income (inthousands) for the pension and postretirement life insurance benefit plans for 2010, 2009 and the period subsequent tothe acquisition in 2008:

2010

PostretirementPension Plans Benefit Plan

InternationalU.S. Plans Plans Total Total

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 10,717 $ 10,717 $ 895Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,841 37,718 39,559 695Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,735) (61,361) (63,096) —Amortization of actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3,991 3,993 —

Net periodic pension expense (income) . . . . . . . . . . . . . . . . . . . . . $ 108 $ (8,935) $ (8,827) $1,590

C-25

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE K—Pension and other Post-Retirement Benefit Plans (Continued)

2009

InternationalU.S. Plans Plans Total

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 9,641 $ 9,641Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,868 47,962 49,830Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,507) (57,531) (59,038)Amortization of actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9,328 9,328

Net periodic pension expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 361 $ 9,400 $ 9,761

2008

InternationalU.S. Plans Plans Total

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 6,259 $ 6,259Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849 27,063 27,912Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,029) (44,083) (45,112)Amortization of actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —

Net periodic pension (income) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (180) $(10,761) $(10,941)

The following table presents the changes in benefit obligations during 2009 and 2010 (in thousands):

PostretirementPension Plans Benefit Plans

InternationalU.S. Plans Plans Total Total

Projected benefit obligation at January 31, 2009 . . . . . . . . . . . . . . $27,895 $777,196 $805,091 $ —Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9,641 9,641 —Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,868 47,962 49,830 —Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . — 705 705 —Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,645 48,546 52,191 —Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,230) (53,106) (54,336) —Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 17,781 17,781 —Currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . — 55,082 55,082 —

Projected benefit obligation at January 30, 2010 . . . . . . . . . . . . . . $32,178 $903,807 $935,985 $ —

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 10,717 10,717 895Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,841 37,718 39,559 695Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,427 1,427 —Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 761 22,049 22,810 —Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,349) (47,551) (48,900) —Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 23,691Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (3,202) (3,202) —Currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . — (13,723) (13,723) —

Projected benefit obligation at January 29, 2011 . . . . . . . . . . . . . . $33,431 $911,242 $944,673 $25,281

The accumulated benefit obligation for the U.S. Plans and International Plans at January 29, 2011 was $33.4 millionand $885.8 million, respectively. The accumulated benefit obligation for the U.S. Plans and International Plans atJanuary 30, 2010 was $32.2 million and $880.3 million, respectively. The accumulated benefit obligation for thepostretirement benefit obligation at January 29, 2011 was $25.3 million.

C-26

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE K—Pension and other Post-Retirement Benefit Plans (Continued)

The following table presents the changes in pension plan assets for each of the defined benefit pension plans during2009 and 2010 (in thousands):

InternationalU.S. Plans Plans Total

Fair value of plan assets at January 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . $21,532 $ 800,730 $ 822,262Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,872 164,394 168,266Employer’s contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 662 12,806 13,468Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 705 705Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,230) (53,106) (54,336)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 23,445 23,445Amortization of unrecognized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (9,328) (9,328)Currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 56,311 56,311

Fair value of plan assets at January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . $24,836 $ 995,957 $1,020,793

Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,760 116,697 120,457Employer’s contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,206 13,504 14,710Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,427 1,427Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,349) (47,551) (48,900)Amortization of unrecognized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (3,991) (3,993)Currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (13,224) (13,224)

Fair value of plan assets at January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . $28,451 $1,062,819 $1,091,270

The funded status for the U.S. Plans and International Pension Plans at January 29, 2011 was $5.0 millionunderfunded and $151.6 million overfunded, respectively. The funded status for the U.S. Plans and International PensionPlans at January 30, 2010 was $7.3 million underfunded and $92.2 million overfunded, respectively.

Amounts recognized in the consolidated balance sheet consist of the following (in thousands):

January 29, 2011 January 30, 2010

Pension Plans Postretirement Pension PlansBenefit PlansInternational International

U.S. Plans Plans Total Total U.S. Plans Plans Total

Prepaid benefit cost (included in otherassets) . . . . . . . . . . . . . . . . . . . . . . . . $ — $182,476 $182,476 $ — $ — $138,819 $138,819

Accrued benefit liability (included inother long-term obligations) . . . . . . . . (4,980) (30,899) (35,879) (25,281) (7,342) (46,669) (54,011)

Accumulated other comprehensive loss . . 2,655 105,613 108,268 21,616 3,917 128,081 131,998

Net amount recognized . . . . . . . . . . . . . $(2,325) $257,190 $254,865 $ (3,665) $(3,425) $220,231 $216,806

Amounts recognized in accumulated other comprehensive loss that have not yet been recognized as components ofnet periodic pension and postretirement costs at January 29, 2011 and January 30, 2010 are comprised of actuarial lossesand prior service costs.

The amount of accumulated other comprehensive loss expected to be recognized as components of net periodicpension and postretirement benefit costs during 2011 is approximately $1.5 million and $1.7 million, respectively.

There were no significant amendments to any of the Company’s defined benefit pension plans in 2009 or 2010 thatwould have had a material effect on the consolidated statement of income in these periods.

C-27

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE K—Pension and other Post-Retirement Benefit Plans (Continued)

Assumptions Used to Determine Plan Financial Information

The valuation of benefit obligations and net periodic pension and postretirement benefit cost uses participant-specific information such as salary, age and years of service, as well as certain assumptions, the most significant of whichinclude estimates of discount rates, expected return on plan assets, rate of compensation increases, interest rates andmortality rates.

The following table presents the assumptions used to measure the net periodic cost and the year-end benefitobligations for the defined benefit pension and postretirement benefit plans for the post acquisition period in 2008, 2009and 2010:

2010 2009 2008

Pension Plans Postretirement Pension Plans Pension PlansBenefit PlanU.S. International U.S. International U.S. International

Plans Plans Total Plans Plans Plans Plans

Weighted-average assumptions used to measure netperiodic pension cost:Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9% 4.6% 5.9% 6.8% 5.8% 6.1% 5.4%Expected return on plan assets . . . . . . . . . . . . . 7.0% 6.4% — 7.0% 6.4% 7.0% 6.5%Rate of compensation increase . . . . . . . . . . . . . — 2.2% 3.0% — 3.0% — 3.2%

Weighted-average assumptions used to measurebenefit obligations at year-end:Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7% 4.8% 5.9% 5.9% 4.5% 6.8% 5.8%Rate of compensation increase . . . . . . . . . . . . . — 2.1% 3.0% — 2.1% — 3.0%Rate of pension increase . . . . . . . . . . . . . . . . . . — 1.1% — — 1.1% — 2.0%

The following table shows the effect on pension obligations at January 29, 2011 of a change in discount rate andother assumptions (in thousands):

Change in Discount Rate

(.25%) No change .25%

Change in rate of compensation increase:(.25%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $31,403 $ (2,539) $(33,896)No change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,186 — (32,002).25% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,121 1,948 (30,156)

Change in rate of pension increase:(.25%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,233 $(26,482) $(57,334)No change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,186 — (24,685).25% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,697 27,134 (5,572)

The discount rate used is the interest rate on high quality (AA rated) corporate bonds that have a maturityapproximating the term of the related obligations. In estimating the expected return on plan assets, appropriateconsideration is taken into account of the historical performance for the major asset classes held, or anticipated to beheld, by the applicable pension funds and of current forecasts of future rates of return for those asset classes.

Staples’ investment strategy for worldwide pension plan assets is to seek a competitive rate of return relative to anappropriate level of risk depending on the funded status of each plan. The majority of the plans’ investment managersemploy active investment management strategies with the goal of outperforming the broad markets in which they invest.Risk management practices include diversification across asset classes and investment styles and periodic rebalancingtoward asset allocation targets. A portion of the currency risk related to investments in equity securities, real estate anddebt securities are hedged.

C-28

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE K—Pension and other Post-Retirement Benefit Plans (Continued)

The target allocation reflects a risk/return profile Staples feels is appropriate relative to each plan’s liabilitystructure and return goals. Staples conducts periodic asset-liability studies for the plan assets in order to model variouspotential asset allocations in comparison to each plan’s forecasted liabilities and liquidity needs.

Outside the United States, asset allocation decisions are typically made by an independent board of trustees. As inthe U.S., investment objectives are designed to generate returns that will enable the plan to meet its future obligations.In some countries local regulations require adjustments in asset allocation, typically leading to a higher percentage infixed income than would otherwise be deployed. Staples acts in a consulting and governance role via its boardrepresentatives in reviewing investment strategy, with final decisions on asset allocation and investment managers madeby local trustees.

The Company’s pension plans’ actual and target asset allocations at January 29, 2011 and January 30, 2010 are asfollows:

January 29, 2011

Actual Target

U.S. International U.S. InternationalPlans Plans Total Plans Plans Total

Asset allocation:Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41% 33% 33% 36% 39% 39%Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59% 49% 49% 64% 48% 48%Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9% 9% — 7% 7%Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3% 3% — — —Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6% 6% — 6% 6%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 100% 100% 100%

January 30, 2010

Actual Target

U.S. International U.S. InternationalPlans Plans Total Plans Plans Total

Asset allocation:Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36% 30% 30% 35% 39% 39%Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64% 52% 53% 65% 48% 48%Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9% 9% — 7% 7%Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4% 3% — — —Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5% 5% — 6% 6%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 100% 100% 100%

No pension plan assets are expected to be returned to the Company during 2011.

C-29

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE K—Pension and other Post-Retirement Benefit Plans (Continued)

Information on Fair Value of Plan Assets

The fair values of the Company’s pension plan assets at January 29, 2011 by asset category are as follows (inthousands):

U.S. Pension Plans

Quoted Pricesin Active Significant Other

Markets for Observable UnobservableFair Market Identical Assets Inputs Inputs

Asset Category: Value Level 1 Level 2 Level 3

Equity securities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,549 $11,549 $— $ —Debt securities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,902 6,773 — 10,129

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $28,451 $18,322 $— $10,129

International Pension Plans

Quoted Pricesin Active Significant Other

Markets for Observable UnobservableFair Market Identical Assets Inputs Inputs

Asset Category: Value Level 1 Level 2 Level 3

Equity securities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 355,282 $ 331,469 $23,813 $—Debt securities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517,473 510,040 7,433 —Real estate(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,008 85,218 10,790 —Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,493 30,493 — —Other(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,563 63,563 — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,062,819 $1,020,783 $42,036 $—

(1) This category includes investments in equity securities of large, small and medium sized companies in the U.S. andin foreign companies, including those in developing countries. The funds are valued using the net asset valuemethod in which an average of the market prices for the underlying investments is used to value the fund.

(2) This category includes investments in investment grade fixed income instruments, U.S. dollar denominated debtsecurities of emerging market issuers and high yield fixed-income securities that are rated below investment grade.The funds are valued using the net asset value method in which an average of the market prices for the underlyinginvestments is issued to value the fund.

(3) This category includes investments in mortgage-backed and asset-backed securities. The funds are valued using thenet asset value method in which an average of the market prices for the underlying investments is used to value thefund.

(4) This category includes commodities of approximately $48 million and non-separated investments with insurancecompanies of approximately $15 million.

C-30

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE K—Pension and other Post-Retirement Benefit Plans (Continued)

The change in the fair value for the pension assets valued using significant unobservable inputs (Level 3) was due tothe following:

U.S. Plans

Balance at January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,203Actual Return on Plan Assets:

Relating to assets still held at the reporting date . . . . . . . . . . . . . . . . . . . . . . . . . . . 496Relating to assets sold during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (318)

Purchases, sales and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (252)

Balance at January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,129

Expected Benefit Payments and Contributions

The following table presents the expected benefit payments to pension plan participants for the next five years, andthe aggregate for the following five years (in thousands):

Pension Plans

InternationalU.S. Plans Plans Total

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,394 $ 54,245 $ 55,6392012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,561 54,101 55,6622013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,625 52,952 54,5772014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,758 51,804 53,5622015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,873 54,378 56,2512016-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,096 256,458 267,554

These payments have been estimated based on the same assumptions used to measure the plans’ projected benefitobligation at January 29, 2011 and include benefits attributable to estimated future compensation increases for thepension plans.

The 2011 expected benefit payments to plan participants not covered by the respective plan assets (that is,underfunded plans) represent a component of other long-term obligations in the consolidated balance sheet.

The following table presents, based on current assumptions, the Company’s expected contributions for the next fiveyears and the aggregate for the following five years (in thousands):

Pension Plans

InternationalU.S. Plans Plans Total

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 777 $11,002 $11,7792012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801 12,641 13,4422013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 12,821 13,6212014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 12,936 13,7362015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 13,114 13,9142016-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,997 68,700 72,697

There are no expected benefit payments and contributions associated with the other post retirement benefit plans.

NOTE L—Stockholders’ Equity

The current share repurchase program which went into effect in the second quarter of 2007, allows for therepurchase of $1.5 billion of Staples common stock and has no expiration date. In 2008, prior to the acquisition of

C-31

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE L—Stockholders’ Equity (Continued)

Corporate Express, the Company repurchased 2.8 million shares of the Company’s common stock for a total purchaseprice (including commissions) of $65.0 million under the Company’s share repurchase programs. The repurchaseprogram was temporarily suspended as a result of the acquisition of Corporate Express. On June 7, 2010, the Companyresumed the share repurchase program. Subsequent to this date, the Company repurchased 18.0 million shares for a totalprice of $367.4 million. The Company has the authority to repurchase up to $640.4 million under the share repurchaseprogram.

NOTE M—Computation of Earnings per Common Share

The computation of basic and diluted earnings per share for 2010, 2009, and 2008 is as follows (in thousands, exceptper share data):

2010 2009 2008

Numerator:Net income attributed to Staples, Inc. . . . . . . . . . . . . . . . . . . $881,948 $738,671 $805,264

Denominator:Weighted-average common shares outstanding . . . . . . . . . . . . 715,596 709,744 698,410

Effect of dilutive securities:Employee stock options, Restricted Shares and Performance

Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,624 12,094 13,117

Weighted-average common shares outstanding assuming dilution . 726,220 721,838 711,527

Basic earnings per common share . . . . . . . . . . . . . . . . . . . . . . . $ 1.23 $ 1.04 $ 1.15

Diluted earnings per common share . . . . . . . . . . . . . . . . . . . . . . $ 1.21 $ 1.02 $ 1.13

Options to purchase shares of common stock are excluded from the calculation of diluted earnings per share whentheir inclusion would have an anti-dilutive effect on the calculation. Options to purchase 13.3 million shares, 12.7 millionshares, and 33.2 million shares of Staples common stock were excluded from the calculation of diluted earnings per sharefor 2010, 2009, and 2008, respectively.

NOTE N—Segment Reporting

Staples has three reportable segments: North American Delivery, North American Retail and InternationalOperations. The North American Delivery segment consists of the U.S. and Canadian business units that sell and deliveroffice products and services directly to customers and businesses, and includes Staples Advantage, Staples.com andQuill.com. The North American Retail segment consists of the U.S. and Canadian business units that operate officeproducts stores. The International Operations segment consists of business units that operate office products stores andthat sell and deliver office products and services directly to customers and businesses in 24 countries in Europe,Australia, South America and Asia.

Staples evaluates performance and allocates resources based on profit or loss from operations before integrationand restructuring costs, stock-based compensation, interest and other expense, non-recurring items and the impact ofchanges in accounting principles (‘‘business unit income’’). The accounting policies of the reportable segments are thesame as those described in the summary of significant accounting policies in Note A. Intersegment sales and transfers arerecorded at Staples’ cost; therefore, there is no intercompany profit or loss recognized on these transactions.

Staples’ North American Delivery and North American Retail segments are managed separately because the waythey market products is different, the classes of customers they service may be different, and the distribution methodsused to deliver products to customers is different. The International Operations are considered a separate reportablesegment because of the significant differences in the operating environment from the North American operations.

C-32

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE N—Segment Reporting (Continued)

The following is a summary of sales, business unit income, and significant accounts and balances by reportablesegment for 2010, 2009, and 2008 (in thousands):

2010 2009 2008

Sales:North American Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,849,218 $ 9,640,390 $ 8,929,924North American Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,529,757 9,364,190 9,489,510International Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,166,138 5,270,871 4,664,341

Total segment sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,545,113 $24,275,451 $23,083,775

Business Unit Income:North American Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 841,429 $ 786,723 $ 802,523North American Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 770,122 774,529 769,695International Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166,606 122,028 153,886

Business unit income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,778,157 1,683,280 1,726,104Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (146,879) (174,691) (180,652)

Total segment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,631,278 $ 1,508,589 $ 1,545,452

Depreciation & Amortization:North American Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 157,960 $ 175,058 $ 155,496North American Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,177 229,362 259,328International Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,726 148,021 134,087

Total depreciation & amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 498,863 $ 552,441 $ 548,911

Capital Expenditures:North American Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 140,247 $ 93,309 $ 90,694North American Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183,828 133,161 183,275International Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,814 86,758 104,360

Total capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 408,889 $ 313,228 $ 378,329

The following is a reconciliation of total segment income to consolidated income before income taxes for 2010, 2009and 2008 (in thousands):

2010 2009 2008

Total segment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,631,278 $1,508,589 $1,545,452Integration and restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57,765) (84,244) (173,524)Impact of wage and hour settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (42,000) —Interest and other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (216,918) (226,451) (128,844)

Consolidated income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . $1,356,595 $1,155,894 $1,243,084

January 29, 2011 January 30, 2010 January 31, 2009

Assets:North American Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,999,421 $ 4,998,220 $ 5,124,770North American Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,165,648 3,145,853 2,876,989International Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,746,598 5,573,261 5,087,511

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,911,667 13,717,334 13,089,270Elimination of net intercompany receivable . . . . . . . . . . . . . . . . . — — (16,215)

Total consolidated assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,911,667 $13,717,334 $13,073,055

C-33

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE N—Segment Reporting (Continued)

Geographic Information:

2010 2009 2008

Sales:United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,462,822 $16,343,340 $15,787,335Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,916,153 2,661,238 2,632,099International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,166,138 5,270,873 4,664,341

Total consolidated sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,545,113 $24,275,451 $23,083,775

January 29, 2011 January 30, 2010 January 31, 2009

Long-lived Assets:United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,461,083 $3,561,702 $3,633,345Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281,555 263,761 256,640International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,023,609 3,028,198 2,909,659

Total consolidated long-lived assets . . . . . . . . . . . . . . . . . . . . . $6,766,247 $6,853,661 $6,799,644

NOTE O—Guarantor Subsidiaries

Under the terms of the Company’s April 2011 Notes, the November 2014 Revolving Credit Facility, the October2012 Notes and the January 2014 Notes, the Guarantor Subsidiaries (as defined in Note E) guarantee repayment of thedebt. The debt is fully and unconditionally guaranteed on an unsecured, joint and several basis by the GuarantorSubsidiaries. The term of guarantees is equivalent to the term of the related debt. The following condensed consolidatingfinancial data is presented for the holders of the April 2011 Notes, the October 2012 Notes, and the January 2014 Notesand illustrates the composition of Staples, Inc. (the ‘‘Parent Company’’), Guarantor Subsidiaries, and non-guarantorsubsidiaries as of January 29, 2011 and January 30, 2010 and for the years ended January 29, 2011, January 30, 2010, andJanuary 31, 2009. The Guarantor Subsidiaries are wholly owned by Staples, Inc. The non-guarantor subsidiariesrepresent more than an inconsequential portion of the consolidated assets and revenues of Staples.

Investments in subsidiaries are accounted for by the Parent Company on the equity method for purposes of thesupplemental consolidating presentation. Earnings of subsidiaries are, therefore, reflected in the Parent Company’sinvestment accounts and earnings. The principal elimination entries eliminate the Parent Company’s investment insubsidiaries and intercompany balances and transactions.

C-34

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE O—Guarantor Subsidiaries (Continued)

Condensed Consolidating Balance SheetAs of January 29, 2011

(in thousands)

Staples, Inc. Guarantor Non-Guarantor(Parent Co.) Subsidiaries Subsidiaries Eliminations Consolidated

Cash and cash equivalents . . . . . . . . . . . . . . . $ 406,821 $ 38,298 $ 1,016,138 $ — $ 1,461,257Merchandise inventories, net . . . . . . . . . . . . . . — 1,396,667 962,506 — 2,359,173Other current assets . . . . . . . . . . . . . . . . . . . . 64,699 1,147,433 1,435,605 — 2,647,737

Total current assets . . . . . . . . . . . . . . . . . . . 471,520 2,582,398 3,414,249 — 6,468,167Net property, equipment and other assets . . . . 742,833 1,246,194 1,381,311 — 3,370,338Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,617,937 154,527 2,300,698 — 4,073,162Investment in affiliates and intercompany, net . 6,691,832 4,783,397 7,001,204 (18,476,433) —

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . $9,524,122 $8,766,516 $14,097,462 $(18,476,433) $13,911,667

Total current liabilities . . . . . . . . . . . . . . . . . . $ 875,100 $1,454,741 $ 1,963,752 $ — $ 4,293,593Total long-term liabilities . . . . . . . . . . . . . . . . 1,697,841 562,027 407,025 — 2,666,893Total stockholders’ equity . . . . . . . . . . . . . . . . 6,951,181 6,749,748 11,726,685 (18,476,433) 6,951,181

Total liabilities and stockholders’ equity . . . . $9,524,122 $8,766,516 $14,097,462 $(18,476,433) $13,911,667

Condensed Consolidating Balance SheetAs of January 30, 2010

(in thousands)

Staples, Inc. Guarantor Non-Guarantor(Parent Co.) Subsidiaries Subsidiaries Eliminations Consolidated

Cash and cash equivalents . . . . . . . . . . . . . . . $ 581,095 $ 54,324 $ 780,400 $ — $ 1,415,819Merchandise inventories, net . . . . . . . . . . . . . . — 1,312,523 948,626 — 2,261,149Other current assets . . . . . . . . . . . . . . . . . . . . 171,292 640,587 1,685,920 — 2,497,799

Total current assets . . . . . . . . . . . . . . . . . . . 752,387 2,007,434 3,414,946 — 6,174,767Net property, equipment and other assets . . . . 751,876 1,351,770 1,354,799 — 3,458,445Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,648,686 154,527 2,280,909 — 4,084,122Investment in affiliates and intercompany, net . 6,243,472 5,026,554 3,495,550 (14,765,576) —

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . $9,396,421 $8,540,285 $10,546,204 $(14,765,576) $13,717,334

Total current liabilities . . . . . . . . . . . . . . . . . . $ 347,969 $1,733,223 $ 1,701,127 $ — $ 3,782,319Total long-term liabilities . . . . . . . . . . . . . . . . 2,193,512 611,675 274,888 — 3,080,075Total stockholders’ equity . . . . . . . . . . . . . . . . 6,854,940 6,195,387 8,570,189 (14,765,576) 6,854,940

Total liabilities and stockholders’ equity . . . . $9,396,421 $8,540,285 $10,546,204 $(14,765,576) $13,717,334

C-35

STAPLES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

NOTE O—Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of IncomeFor the year ended January 29, 2011

(in thousands)

Staples, Inc. Guarantor Non-Guarantor(Parent Co.) Subsidiaries Subsidiaries Eliminations Consolidated

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $14,900,355 $9,644,758 $ — $24,545,113Cost of goods sold and occupancy costs . . . . . . . 11,277 11,126,849 6,800,832 — 17,938,958

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,277) 3,773,506 2,843,926 — 6,606,155Operating and other expenses . . . . . . . . . . . . . . (893,225) 3,072,351 2,154,558 915,876 5,249,560

Consolidated income (loss) before income taxes . 881,948 701,155 689,368 (915,876) 1,356,595Income tax expense . . . . . . . . . . . . . . . . . . . . . — 318,705 149,321 — 468,026

Consolidated net income (loss) . . . . . . . . . . . . . 881,948 382,450 540,047 (915,876) 888,569Income attributed to the noncontrolling interests . — — 6,621 — 6,621

Net income attributed to Staples, Inc. . . . . . . . . $ 881,948 $ 382,450 $ 533,426 $(915,876) $ 881,948

Condensed Consolidating Statement of IncomeFor the year ended January 30, 2010

(in thousands)

Staples, Inc. Guarantor Non-Guarantor(Parent Co.) Subsidiaries Subsidiaries Eliminations Consolidated

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $13,577,862 $10,697,589 $ — $24,275,451Cost of goods sold and occupancy costs . . . . . . . 11,324 10,043,973 7,746,251 — 17,801,548

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,324) 3,533,889 2,951,338 — 6,473,903Operating and other expenses . . . . . . . . . . . . . . (749,995) 2,956,530 2,261,707 849,767 5,318,009

Consolidated income (loss) before income taxes . 738,671 577,359 689,631 (849,767) 1,155,894Income tax expense . . . . . . . . . . . . . . . . . . . . . — 174,152 224,631 — 398,783

Consolidated net income (loss) . . . . . . . . . . . . . 738,671 403,207 465,000 (849,767) 757,111Income attributed to the noncontrolling interests . — — 18,440 — 18,440

Net income attributed to Staples, Inc. . . . . . . . . $ 738,671 $ 403,207 $ 446,560 $(849,767) $ 738,671

C-36

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE O—Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of IncomeFor the year ended January 31, 2009

(in thousands)

Staples, Inc. Guarantor Non-Guarantor(Parent Co.) Subsidiaries Subsidiaries Eliminations Consolidated

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $12,273,563 $10,810,212 $ — $23,083,775Cost of goods sold and occupancy costs . . . . . . . 14,126 8,981,573 7,841,140 — 16,836,839

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,126) 3,291,990 2,969,072 — 6,246,936Operating and other expenses . . . . . . . . . . . . . . (819,390) 2,595,654 2,333,876 893,712 5,003,852

Consolidated income (loss) before income taxes . 805,264 696,336 635,196 (893,712) 1,243,084Income tax expense . . . . . . . . . . . . . . . . . . . . . — 309,465 119,398 — 428,863

Consolidated net income (loss) . . . . . . . . . . . . . 805,264 386,871 515,798 (893,712) 814,221Income attributed to the noncontrolling interests . — — 8,957 — 8,957

Net income attributed to Staples, Inc. . . . . . . . . $ 805,264 $ 386,871 $ 506,841 $(893,712) $ 805,264

Condensed Consolidating Statement of Cash FlowsFor the year ended January 29, 2011

(in thousands)

Non-Staples, Inc. Guarantor Guarantor(Parent Co.) Subsidiaries Subsidiaries Consolidated

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . $ 479,783 $ 198,293 $ 768,415 $1,446,491Investing activities:

Acquisition of property and equipment . . . . . . . . . . . . . . . . . . (56,984) (214,319) (137,586) (408,889)Acquisition of businesses, net of cash acquired . . . . . . . . . . . . . — — (63,066) (63,066)

Cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . (56,984) (214,319) (200,652) (471,955)Financing activities:

Proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,033 — 130,533 201,566Payments on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96,207) — (111,271) (207,478)Purchase of treasury stock, net . . . . . . . . . . . . . . . . . . . . . . . . (398,582) — — (398,582)Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (258,746) — — (258,746)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,429 — (360,595) (275,166)

Cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . (597,073) — (341,333) (938,406)Effect of exchange rate changes on cash and cash equivalents . . . — — 9,308 9,308

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . (174,274) (16,026) 235,738 45,438Cash and cash equivalents at beginning of period . . . . . . . . . . . . 581,095 54,324 780,400 1,415,819

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . $ 406,821 $ 38,298 $1,016,138 $1,461,257

C-37

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE O—Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Cash FlowsFor the year ended January 30, 2010

(in thousands)

Non-Staples, Inc. Guarantor Guarantor(Parent Co.) Subsidiaries Subsidiaries Consolidated

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . $ 1,709,923 $ 159,872 $ 214,413 $ 2,084,208Investing activities:

Acquisition of property and equipment . . . . . . . . . . . . . . . . . (42,737) (155,684) (114,807) (313,228)

Cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . (42,737) (155,684) (114,807) (313,228)Financing activities:

Payments on issuance of commercial paper . . . . . . . . . . . . . . (1,195,557) — — (1,195,557)Proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . 869,380 — 342,044 1,211,424Payments on borrowings, including payment of deferred

financing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (721,044) — (224,289) (945,333)Purchase of treasury stock, net . . . . . . . . . . . . . . . . . . . . . . . (30,661) — — (30,661)Excess tax benefits from stock-based compensation

arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,452 5,053 258 8,763Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (236,874) — — (236,874)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,958 — — 150,958

Cash (used in) provided by financing activities . . . . . . . . . . . . . . (1,160,346) 5,053 118,013 (1,037,280)Effect of exchange rate changes on cash and cash equivalents . . — — 48,345 48,345

Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . 506,840 9,241 265,964 782,045Cash and cash equivalents at beginning of period . . . . . . . . . . . 74,255 45,083 514,436 633,774

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . $ 581,095 $ 54,324 $ 780,400 $ 1,415,819

C-38

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE O—Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Cash FlowsFor the year ended January 31, 2009

(in thousands)

Non-Staples, Inc. Guarantor Guarantor(Parent Co.) Subsidiaries Subsidiaries Consolidated

Net cash provided by operating activities . . . . . . . . . . . . . . . . . $(3,048,263) $ 175,045 $ 4,559,048 $ 1,685,830Investing activities:

Acquisition of property and equipment . . . . . . . . . . . . . . . . (47,017) (174,542) (156,770) (378,329)Acquisition of businesses and investments in joint ventures,

net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (4,381,811) (4,381,811)Proceeds from the sale of short-term investments . . . . . . . . . 27,019 — — 27,019

Purchase of short-term investments . . . . . . . . . . . . . . . . . . . . . (3) — — (3)

Cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . (20,001) (174,542) (4,538,581) (4,733,124)Financing activities:

Proceeds from issuance of commercial paper . . . . . . . . . . . . 1,195,557 — — 1,195,557Proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . 3,679,045 3,679,045Payments on borrowings, including payment of deferred

financing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,206,312) — — (2,206,312)Purchase of treasury stock, net . . . . . . . . . . . . . . . . . . . . . . (84,961) — — (84,961)Excess tax benefits from stock-based compensation

arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,783 1,968 98 5,849Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (231,465) — — (231,465)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,329 — — 148,329

Cash provided by financing activities . . . . . . . . . . . . . . . . . . . . 2,503,976 1,968 98 2,506,042Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . — — (70,422) (70,422)

Net (decrease) increase in cash and cash equivalents . . . . . . . . (564,288) 2,471 (49,857) (611,674)Cash and cash equivalents at beginning of period . . . . . . . . . . 638,543 42,612 564,293 1,245,448

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . $ 74,255 $ 45,083 $ 514,436 $ 633,774

NOTE P—Subsequent Events

Subsequent events have been evaluated through the date the financial statements were issued and no events ortransactions have occurred that require disclosure or adjustment to these consolidated financial statements.

C-39

STAPLES, INC. AND SUBSIDIARIESNotes To Consolidated Financial Statements (Continued)

NOTE Q—Quarterly Summary (Unaudited)

(In thousands, except per share amounts)

First Second Third FourthQuarter(1) Quarter(2) Quarter(3) Quarter(4)

Fiscal Year Ended January 29, 2011Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,057,795 $5,534,240 $6,537,676 $6,415,402Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,619,055 1,462,708 1,803,748 1,720,644Net income attributed to Staples, Inc . . . . . . . . . . . . . . . . . . . 188,770 129,756 288,680 274,742

Basic earnings per common share . . . . . . . . . . . . . . . . . . . . . . . $ 0.26 $ 0.18 $ 0.40 $ 0.39Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.26 $ 0.18 $ 0.40 $ 0.38

First Second Third FourthQuarter(5) Quarter(6) Quarter(7) Quarter(8)

Fiscal Year Ended January 30, 2010Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,817,559 $5,533,779 $6,518,039 $6,406,074Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,525,902 1,424,257 1,766,203 1,757,541Net income attributed to Staples, Inc . . . . . . . . . . . . . . . . . . . 142,964 92,411 269,381 233,914

Basic earnings per common share . . . . . . . . . . . . . . . . . . . . . . . $ 0.20 $ 0.13 $ 0.38 $ 0.33Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.20 $ 0.13 $ 0.37 $ 0.32

(1) Results of operation for this period include a $13.1 million charge, net of taxes ($0.02 per diluted share) related tointegration and restructuring costs.

(2) Results of operation for this period include a $13.5 million charge, net of taxes ($0.02 per diluted share) related tointegration and restructuring costs.

(3) Results of operation for this period include a $5.6 million charge, net of taxes ($0.01 per diluted share) related tointegration and restructuring costs.

(4) Results of operation for this period include a $4.6 million charge, net of taxes ($0.01 per diluted share) related tointegration and restructuring costs.

(5) Results of operations for this period include a $12.4 million charge, net of taxes ($0.02 per diluted share) related tointegration and restructuring costs.

(6) Results of operations for this period include a $19.4 million charge, net of taxes ($0.03 per diluted share) related tointegration and restructuring costs.

(7) Results of operations for this period include a $10.4 million charge, net of taxes ($0.01 per diluted share) related tointegration and restructuring costs.

(8) Results of operations for this period include a $12.9 million charge, net of taxes ($0.02 per diluted share) related tointegration and restructuring costs and a $27.5 million charge, net of taxes ($0.04 per diluted share) related to thesettlement of retail wage and hour class action litigation.

C-40

(9) Item 15(a)2Staples, Inc.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Accounts Receivable Allowance for Doubtful Accounts

Valuation and qualifying account information related to operations is as follows (in thousands):

Balance at Deductions—Beginning of Additions Charged Additions from Write-offs, Payments Balance at End

Period to Expense Acquisition and Other Adjustments of Period

Fiscal year ended:January 31, 2009 . . . . . . . . . . . . . . $22,503 $28,810 $33,381 $27,401 $57,293January 30, 2010 . . . . . . . . . . . . . . 57,293 45,754 — 40,023 63,024January 29, 2011 . . . . . . . . . . . . . . 63,024 20,679 — 28,355 55,348

C-41

EXHIBIT INDEX

Exhibit No. Description

3.1^ Restated Certificate of Incorporation, dated as of September 29, 2008. Filed as Exhibit 3.1 to theCompany’s Form 10-Q for the quarter ended November 1, 2008.

3.2^ Amended and Restated By-laws of the Company, as amended, dated March 10, 2009.4.1^ Indenture, dated September 30, 2002, for the 7.375% Senior Notes due 2012, by and among the

Company, the Guarantor Subsidiaries and HSBC Bank USA. Filed as Exhibit 4.1 to theCompany’s Form 8-K filed on October 8, 2002.

4.2^ First Supplemental Indenture (7.375% Senior Notes), entered into as of February 1, 2004, toIndenture, dated as of September 30, 2002, by and among the Company, the SubsidiaryGuarantors, the Initial Subsidiary Guarantors and HSBC Bank. Filed as Exhibit 4.1 to theCompany’s Form 10-Q for the quarter ended May 1, 2004.

4.3^ Indenture, dated January 15, 2009, for the 9.75% Senior Notes due 2014, by and among theCompany, the Guarantor Subsidiaries and HSBC Bank (USA) Inc. Filed as Exhibit 4.1 to theCompany’s Form 8-K filed on January 21, 2009.

4.4^ Form of 9.75% Senior Note due 2014. Filed as Exhibit 4.2 to the Company’s Form 8-K filed onJanuary 21, 2009.

4.5^ Form of 7.75% Senior Note due 2011. Filed as Exhibit 4.1 to the Company’s Form 8-K filed onMarch 31, 2009.

10.1^ Credit Agreement, dated November 4, 2010, by and among Staples, Inc., the lenders namedtherein, Bank of America, N.A., as Administrative Agent, Barclays Capital and HSBC Bank USA,National Association, as Co-Syndication Agents, and Wells Fargo Bank, National Association andJPMorgan Chase Bank, N.A., as Co-Documentation Agents, with Merrill Lynch, Pierce Fenner &Smith Incorporated, Barclays Capital and HSBC Securities (USA) Inc. having acted as joint leadarrangers and joint bookrunners (including schedules and exhibits). Filed as Exhibit 10.1 to theCompany’s Form 8-K filed on November 4, 2010

10.2^ Amended and Restated Commercial Paper Dealer Agreement, dated as of August 6, 2008, amongthe Company, Banc of America Securities LLC and the other parties thereto. Filed as Exhibit 10.4to the Company’s Form 10-Q for the quarter ended on August 2, 2008.

10.3^ Amended and Restated Commercial Paper Dealer Agreement, dated as of August 6, 2008, amongthe Company, Lehman Brothers Inc. and the other parties thereto. Filed as Exhibit 10.5 to theCompany’s Form 10-Q for the quarter ended on August 2, 2008.

10.4^ Letter, dated as of September 29, 2008, assigning Lehman Brothers Inc. interests to BarclaysCapital Inc., for the Amended and Commercial Paper Dealer Agreement, dated as of August 6,2008, among the Company, Lehman Brothers Inc. and the other parties thereto. Filed asExhibit 10.5 to the Company’s Form 10-Q for the quarter ended on November 1, 2008.

10.5^ Commercial Paper Dealer Agreement, dated as of September 19, 2008, among the Company, JPMorgan Securities Inc. and the other parties thereto. Filed as Exhibit 10.6 to the Company’sForm 10-Q for the quarter ended on November 1, 2008.

10.6*^ Amended and Restated 2004 Stock Incentive Plan, as amended. Filed as Exhibit 10.2 to theCompany’s Form 10-Q for the quarter ended on October 30, 2010.

10.7*^ Form of Non-Employee Director Restricted Stock Award Agreement (Initial Grant) under theAmended and Restated 2004 Stock Incentive Plan. Filed as Exhibit 10.15 to the Company’sForm 10-K for the fiscal year ended on January 31, 2009.

10.8*^ Form of Non-Employee Director Restricted Stock Award Agreement under the Amended andRestated 2004 Stock Incentive Plan. Filed as Exhibit 10.16 to the Company’s Form 10-K for thefiscal year ended on January 31, 2009.

10.9*^ Form of Non-Employee Director Stock Option Agreement under the Amended and Restated 2004Stock Incentive Plan. Filed as Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended onMay 3, 2008.

10.10*^ Form of Non-Employee Director Restricted Stock Unit Award Agreement under the Amendedand Restated 2004 Stock Incentive Plan. Filed as Exhibit 10.12 to the Company’s Form 10-K forthe fiscal year ended January 30, 2010.

D-1

Exhibit No. Description

10.11*^ Form of Restricted Stock Award Agreement under the Amended and Restated 2004 StockIncentive Plan. Filed as Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended onMay 1, 2010.

10.12*^ Form of Non-Qualified Stock Option Agreement under the Amended and Restated 2004 StockIncentive Plan. Filed as Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended onMay 1, 2010.

10.13*^ Form of Performance Share Award Agreement under the Amended and Restated 2004 StockIncentive Plan. Filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended onJuly 31, 2010.

10.14*^ Form of Performance Share Award Agreement under the Amended and Restated 2004 StockIncentive Plan. Filed as Exhibit 10.3 to the Company’s Form 8-K filed on June 10, 2009.

10.15*^ Form of Performance Share Award Agreement under the Amended and Restated 2004 StockIncentive Plan. Filed as Exhibit 10.16 to the Company’s Form 10-K for fiscal year ended onFebruary 2, 2008.

10.16*^** Performance Share Award Agreement, dated as of March 8, 2007, by and between the Companyand Ronald L. Sargent. Filed as Exhibit 10.6 to the Company’s Form 10-Q for the quarter endedMay 5, 2007.

10.17*^ Restricted Stock Award Agreement, dated as of March 8, 2007, by and between the Company andRonald L. Sargent. Filed as Exhibit 10.7 to the Company’s Form 10-Q for the quarter endedMay 5, 2007.

10.18*^ Amended and Restated 1992 Equity Incentive Plan, as amended. Filed as Exhibit 10.21 to theCompany’s Form 10-K for the fiscal year ended February 2, 2008.

10.19*^ Amended and Restated 1990 Director Stock Option Plan, as amended. Filed as Exhibit 10.22 tothe Company’s Form 10-K for the fiscal year ended February 2, 2008.

10.20*^ 1997 United Kingdom Company Share Option Scheme. Filed as Exhibit 10.3 to the Company’sForm 10-K for the fiscal year ended on January 31, 1998.

10.21*^ 1997 UK Savings Related Share Option Scheme. Filed as Exhibit 10.5 to the Company’sForm 10-K for the fiscal year ended on February 1, 2003.

10.22*^ Amended and Restated 1998 Employee Stock Purchase Plan, as amended. Filed as Exhibit 10.1 tothe Company’s Form 8-K filed on June 10, 2009.

10.23*^ Amended and Restated International Employee Stock Purchase Plan, as amended. Filed asExhibit 10.2 to the Company’s Form 8-K filed on June 10, 2009.

10.24*+ Non-Management Director Compensation Summary.10.25*^ Executive Officer Incentive Plan for fiscal years 2008 through 2012. Filed as Exhibit 10.3 to the

Company’s Form 8-K filed on June 13, 2008.10.26*^ Amendment to Executive Officer Incentive Plan. Filed as Exhibit 10.4 to the Company’s

Form 10-Q for the quarter ended on May 1, 2010.10.27*^ Staples, Inc. Long Term Cash Incentive Plan. Filed as Exhibit 10.1 to the Company’s Form 8-K

filed on June 11, 2010.10.28*^ Form of Severance Benefits Agreement signed by executive officers of the Company. Filed as

Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended on April 29, 2006.10.29*^ Form of Non-Compete and Non-Solicitation Agreement signed by executive officers of the

Company. Filed as Exhibit 10.6 to the Company’s Form 10-K for the fiscal year ended January 29,2000.

10.30*^ Form of Proprietary and Confidential Information Agreement signed by executive officers of theCompany. Filed as Exhibit 10.30 to the Company’s Form 10-K for the fiscal year ended onFebruary 1, 2003.

10.31*^ Form of Indemnification Agreement signed by executive officers and directors of the Company.Filed as Exhibit 10.34 to the Company’s Form 10-K for the fiscal year ended on January 31, 2009.

10.32*^ Offer Letter, dated as of July 30, 2003, by and between the Company and Michael A. Miles. Filedas Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended on November 1, 2003.

10.33*^ Second Amended and Restated Severance Benefits Agreement, dated March 13, 2006, by andbetween the Company and Ronald L. Sargent. Filed as Exhibit 10.1 to the Company’s Form 10-Qfor the quarter ended on April 29, 2006.

D-2

Exhibit No. Description

10.34*^ Amendment, dated December 22, 2008, to Second Amended and Restated Severance BenefitsAgreement, dated March 13, 2006, by and between the Company and Ronald L. Sargent. Filed asExhibit 10.37 to the Company’s Form 10-K for the fiscal year ended on January 31, 2009.

10.35*^ Amended and Restated Severance Benefits Agreement, dated March 13, 2006, by and betweenthe Company and John J. Mahoney. Filed as Exhibit 10.2 to the Company’s Form 10-Q for thequarter ended on April 29, 2006.

10.36*^ Amendment, dated December 23, 2008, to Amended and Restated Severance Benefits Agreement,dated March 13, 2006, by and between the Company and John J. Mahoney. Filed as Exhibit 10.39to the Company’s Form 10-K for the fiscal year ended on January 31, 2009.

10.37*^ Amended and Restated Severance Benefits Agreement, dated March 13, 2006, by and betweenthe Company and Michael A. Miles. Filed as Exhibit 10.3 to the Company’s Form 10-Q for thequarter ended on April 29, 2006.

10.38*^ Amendment, dated December 31, 2008, to Amended and Restated Severance Benefits Agreement,dated March 13, 2006, by and between the Company and Michael A. Miles. Filed as Exhibit 10.41to the Company’s Form 10-K for the fiscal year ended on January 31, 2009.

10.39*+ Long Term Care Insurance Plan Summary.10.40*^ Survivor Benefit Plan. Filed as Exhibit 10.24 to the Company’s Form 10-K for the fiscal year

ended on January 29, 2005.10.41*+ Executive Life Insurance Plans Summary of Provisions.10.42*^ Amended and Restated Supplemental Executive Retirement Plan. Filed as Exhibit 10.2 to the

Company’s Form 8-K filed on June 11, 2010.10.43*^ Policy on Personal Use of Corporate Aircraft. Filed as Exhibit 10.28 to the Company’s Form 10-K

for the fiscal year ended on January 29, 2005.10.44*+ Senior Executive Long Term Disability Supplemental Coverage Reimbursement Policy.10.45*+ Tax Services Reimbursement.14.1+ Code of Ethics.21.1+ Subsidiaries of the Company.23.1+ Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.31.1+ Principal Executive Officer—Certification pursuant to Section 302 of the Sarbanes-Oxley Act of

2002.31.2+ Principal Financial Officer—Certification pursuant to Section 302 of the Sarbanes-Oxley Act of

2002.32.1++ Principal Executive Officer—Certification pursuant to Section 906 of the Sarbanes-Oxley Act of

2002.32.2++ Principal Financial Officer—Certification pursuant to Section 906 of the Sarbanes-Oxley Act of

2002.101.INS++ XBRL Instance Document.101.SCH++ XBRL Taxonomy Extension Schema Document.101.CAL++ XBRL Taxonomy Calculation Linkbase Document101.DEF++ XBRL Taxonomy Definition Linkbase Document.101.LAB++ XBRL Taxonomy Label Linkbase Document.101.PRE++ XBRL Taxonomy Presentation Linkbase Document.

* A management contract or compensatory plan or arrangement required to be filed as an exhibit to this annualreport pursuant to Item 15(b) of Form 10-K.

** Portions of the exhibit have been omitted pursuant to a grant of confidential treatment.

^ An exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference.Unless otherwise indicated, such exhibit was filed under Commission File Number 0-17586.

+ Filed herewith.

++ Furnished herewith.

D-3

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

1) Registration Statements on Form S-3 (Nos. 333-58743, 333-81503, 333-124024, and 333-155855) of Staples, Inc.and

2) Registration Statements on Form S-8 (Nos. 333-36713, 333-36715, 333-39991, 333-39993, 333-64545, 333-73383,333-87971, 333-68428, 333-68430, 333-68432, 333-116644, 333-128449, 333-153405, 333-159875, and333-167378) of Staples, Inc.;

of our reports dated March 2, 2011, with respect to the consolidated financial statements and schedules ofStaples, Inc. and the effectiveness of internal control over financial reporting of Staples, Inc., included in thisAnnual Report (Form 10-K) for the year ended January 29, 2011.

/s/ ERNST & YOUNG LLP

Ernst & Young LLP

Boston, MassachusettsMarch 2, 2011

Exhibit 31.1

Principal Executive Officer Certification

I, Ronald L. Sargent, certify that:

1. I have reviewed this Annual Report on Form 10-K of Staples, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statementswere made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financialreporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reportingto be designed under our supervision, to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this reportour conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the periodcovered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controlover financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controlover financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors(or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarizeand report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant rolein the registrant’s internal control over financial reporting.

Date: March 1, 2011 /s/ RONALD L. SARGENT

Ronald L. SargentChairman and Chief Executive Officer(Principal Executive Officer)

Exhibit 31.2

Principal Financial Officer Certification

I, John J. Mahoney, certify that:

1. I have reviewed this Annual Report on Form 10-K of Staples, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statementswere made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financialreporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reportingto be designed under our supervision, to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this reportour conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the periodcovered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controlover financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controlover financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors(or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarizeand report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant rolein the registrant’s internal control over financial reporting.

Date: March 1, 2011 /s/ JOHN J. MAHONEY

John J. MahoneyVice Chairman and Chief Financial Officer(Principal Financial Officer)

Exhibit 32.1

Principal Executive Officer Certification

In connection with the annual report on Form 10-K of Staples, Inc. (the ‘‘Company’’) for the period endedJanuary 29, 2011 as filed with the Securities and Exchange Commission on or about the date hereof (the ‘‘Report’’), theundersigned, Ronald L. Sargent, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C.Section 1350, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company.

Dated: March 1, 2011 /s/ RONALD L. SARGENT

Ronald L. SargentChairman and Chief Executive Officer(Principal Executive Officer)

Exhibit 32.2

Principal Financial Officer Certification

In connection with the annual report on Form 10-K of Staples, Inc. (the ‘‘Company’’) for the period endedJanuary 29, 2011 as filed with the Securities and Exchange Commission on or about the date hereof (the ‘‘Report’’), theundersigned, John J. Mahoney, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C.Section 1350, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company.

Dated: March 1, 2011 /s/ JOHN J. MAHONEY

John J. MahoneyVice Chairman and Chief Financial Officer(Principal Financial Officer)

Jay G. Baitler Executive Vice President, North America Contract

John K. Barton Executive Vice President, International Development

Elaine F. Bruzios Senior Vice President, North American Delivery Finance

John F. Burke Senior Vice President, Business Services, U.S. Retail

Steve D. Bussberg Senior Vice President, Staples Business Delivery

Kristin A. Campbell Senior Vice President, General Counsel and Corporate Secretary

Amee Chande Senior Vice President, Strategy

David G. D’Angelo Senior Vice President, Staples Brands Group

Michael DeSanto, Jr. Senior Vice President, Sales and Operations, U.S. Retail

Joseph G. Doody President, North American Delivery

Jevin S. Eagle Executive Vice President, Merchandising and Marketing

Steven Fund Senior Vice President, Global Marketing

Gordon Glover Senior Vice President, Finance International

Shira D. Goodman Executive Vice President, Human Resources

Thomas W. Heisroth Senior Vice President, Enterprise Accounts

Paul W. Hitchcock President, Australia and New Zealand

Nicholas P. Hotchkin Senior Vice President, U.S. Retail Finance

Peter J. Howard Senior Vice President, Staples Business Delivery and Marketing, Europe

Petter M. Knutrud Senior Vice President, General Merchandising Manager, Supplies

Christine T. Komola Senior Vice President, Corporate Controller

Anders Kristiansen President, China

Andrew B. Lewis Senior Vice President, Midwest Sales and Operations, U.S. Retail

Brian T. Light Executive Vice President, Chief Information Officer

Steven A. Liotta Senior Vice President, Northeast Sales and Operations, U.S. Retail

John M. Lynch Senior Vice President, Engineering, Construction, Facilities and Support Services

John J. Mahoney Vice Chairman and Chief Financial Officer

Steven F. Mastrogiacomo Senior Vice President, Merchandise Planning and Inventory Management

Steven E. Matyas President, Staples Business Depot — Canada

Mark Mettler Senior Vice President, General Merchandising Manager, Consumer Technology and Seasonal Supplies

Michael A. Miles President and Chief Operating Officer

Kevin S. Milliken Senior Vice President, Information Technology, Europe

Jay L. Mutschler Senior Vice President, North America Contract

Richard A. Neff Senior Vice President, West Sales and Operations, U.S. Retail

Otis C. Pannell Senior Vice President, Mid-Atlantic and Southeast Sales and Operations, U.S. Retail

Demos Parneros President, U.S. Retail

Michael Patriarca Senior Vice President, Quill

Christine C. Putur Senior Vice President, North American Delivery and Supply Chain Systems

Donald F. Ralph Senior Vice President, Logistics

Neil E. Ringel Senior Vice President, Staples Advantage

Donna S. Rosenberg Senior Vice President, Corporate Pricing

Ronald L. Sargent Chairman and Chief Executive Officer

Peter J. Scala Senior Vice President, General Merchandising Manager, Technology

Bernard I. Schachter Senior Vice President, Real Estate

Rob Vale President, Staples Europe

BOARD OF DIRECTORS

MANAGEMENT TEAM

Basil L. Anderson* Retired Vice Chairman, Staples, Inc.

Arthur M. Blank o Owner and Chief Executive Officer, Atlanta Falcons and Lead Director, Staples, Inc.

Mary Elizabeth Burton^ Former Chief Executive Officer, Zale Corporation

Justin King Chief Executive Officer and Chairman of the Operating Board, J Sainsbury plc

Carol Meyrowitz^ Chief Executive Officer, The TJX Companies, Inc.

Rowland T. Moriarty *o Chairman of the Board, CRA International, Inc.

Robert C. Nakasone^ Chief Executive Officer, NAK Enterprises, L.L.C.

Ronald L. Sargent Chairman and Chief Executive Officer, Staples, Inc.

Elizabeth A. Smith Chief Executive Officer, OSI Restaurant Partners, LLC

Robert E. Sulentic President, CB Richard Ellis Group, Inc.

Vijay Vishwanatho Partner, Bain & Company

Paul F. Walsh^* Former Chairman and Chief Executive Officer, eFunds Corporation

*o

Board CommitteeLegend

This report was printed on paper made from recycled post-consumer content. The carbon emissions associated with its production have been offset through the purchase of renewable energy certificates. Please help us to further reduce paper use and associated carbon emissions by choosing to receive shareholder materials electronically. For more information on Staples’ commitment to corporate responsibility, visit staples.com/soul.

Corporate Information

Corporate Headquarters Staples, Inc. 500 Staples DriveFramingham, MA 01702Telephone: 1-508-253-5000Internet address: www.staples.com

Transfer Agent and Registrar

BNY Mellon Shareowner Services is the Transfer Agent and Registrar for the Staples, Inc. common stock and maintains stockholder accounting records. Please contact the Transfer Agent directly concerning changes in address, name or ownership, lost certificates, and consolidation of multiple accounts. When corresponding with the Transfer Agent, stock-holders should reference the exact name(s) in which the Staples stock is registered as well as the certificate number.

BNY Mellon Shareowner Services

480 Washington Boulevard, Jersey City, NJ 07310Telephone: 1-888-875-9002 or 1-201-680-6578For Hearing Impaired: 1-800-231-5469 or 1-201-680-6610Internet address: www.bnymellon.com/shareowner/isd

Financial Information

To request financial documents such as this Annual Report, which contains Staples’ Form 10-K for the fiscal year ended January 29, 2011, as filed with the Securities and Exchange Commission, please visit Staples’ Web site, www.staples.com, call our toll-free investor hotline at 1-800-INV-SPL1 (1-800-468-7751), or send a written request to the attention of Investor Relations at Staples’ corporate address.

Investor Relations

Investor inquiries may be directed to: Laurel Lefebvre, Vice President, Investor RelationsTelephone: 1-800-468-7751Email: investor@staples.com

General Information

Members of the media or others seeking general information about Staples should contact the Corporate Communications Department. Telephone: 1-508-253-8530

Independent Registered Public Accounting Firm

Ernst & Young LLP200 Clarendon StreetBoston, MA 02116

Annual Meeting

The Annual Meeting of Stockholders of Staples, Inc. will be held on June 7, 2011, at 8:00 am, local time, at the Four Seasons Hotel, 57 East 57th Street, New York, New York.

Price Range of Common Stock

Staples, Inc. common stock is traded on the NASDAQ Global Select Market under the symbol “SPLS.”As of January 29, 2011, the number of holders of record of the Staples, Inc. common stock was 5,462.The following table sets forth, for the periods indicated, the high and low sale prices per share of Staples, Inc. common stock on the NASDAQ Global Select Market, as reported by NASDAQ.

Fiscal Year Ended January 29, 2011

First Quarter: High: $26.00 Low: $22.00Second Quarter: High: $23.97 Low: $18.82Third Quarter: High: $21.25 Low: $17.45Fourth Quarter: High: $23.75 Low: $19.96

Fiscal Year Ended January 30, 2010

First Quarter: High: $22.20 Low: $14.35Second Quarter: High: $21.95 Low: $18.72Third Quarter: High: $23.55 Low: $20.88Fourth Quarter: High: $26.00 Low: $21.43

Dividend

On March 8, 2011, Staples, Inc. announced that its Board of Directors had declared a quarterly cash dividend on Staples, Inc. common stock of $0.10 per share, an increase of 11% percent over the previous quarterly cash dividend of $0.09 per share. On an annualized basis, the quarterly dividend is equal to $0.40 per share compared to the $0.36 per share that the Company paid in 2010. The first quarter 2011 cash dividend was paid on April 14, 2011, to shareholders of record on March 25, 2011.

Direct Stock Purchase Plan and Dividend Reinvestment

Purchase of Staples, Inc. common stock can be made through a Direct Stock Purchase Plan administered by BNY Mellon Shareowner Services. Dividends on Staples, Inc. common stock may be automatically invested in additional shares. Contact BNY Mellon Shareowner Services at 1-888-875-9002 for more information.

Stock Splits

Record Date Effective Date Split 06/26/91 07/10/91 3 for 2 11/29/93 12/13/93 3 for 2 10/14/94 10/28/94 3 for 2 07/14/95 07/24/95 3 for 2 03/15/96 03/25/96 3 for 201/20/98 01/30/98 3 for 2 01/18/99 01/28/99 3 for 203/29/05 04/15/05 3 for 2

Debt Ratings

Staples, Inc. long-term corporate debt ratings as of March 1, 2011: Fitch BBBMoody’s Baa2Standard & Poors BBB

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

$18.2 $19.4

$23.1$24.3 $24.5

$0.22

$0.29

$0.33 $0.33

$0.36

$1,151

$1,361

$1,686

$2,084

$1,446

$1.28

$1.42$1.29

$1.14$1.27

1,884

2,038

2,218 2,243 2,281

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

$528

13% 14% 20% 22% 21%

33% 34%

39% 40% 40%

54% 52%41% 39% 39%

$470

$378

$313

$409

$623

$891

$1,308

$1,771

$1,037

Staples, the world’s largest office products company, is committed to making it easy for customers to buy a wide range of office products and services. Our broad selection of office supplies, electronics, technology and office furniture, as well as business services, including computer repair and copying and printing, helps our customers run their offices efficiently. With 2010 sales of $25 billion and 89,000 associates worldwide, Staples operates in 26 countries throughout North America, Europe, Australia, South America and Asia, serving businesses of all sizes and consumers. Staples invented the office superstore concept in 1986 and today ranks second worldwide in eCommerce sales. The company is headquartered outside Boston. More information about Staples (Nasdaq: SPLS) is available at www.staples.com/media.

In 2006, Staples benefited from a 53rd week in the fiscal year.

1 - 2008 revenues include $4.2 billion of revenues from Corporate Express for the period July 2008–January 2009.

2 - 2008 revenue mix includes $2.3 billion of North American Delivery revenues and $1.9 billion of International revenues from Corporate Express for the period July 2008–January 2009.

3 - 2006 excludes a $10.8 million ($0.01 per share) charge related to the correction of prior years’ stock-based compensation, and a $33.3 million ($0.05 per share) benefit related to favorable tax events. 2007 excludes a $38.0 million ($0.04 per share) charge related to the settlement of California wage and hour class action litigation. 2008 excludes $173.5 million ($0.16 per share) of charges related to integration and restructuring associated with Corporate Express. 2009 excludes $84.2 million ($0.08 per share) of charges related to integration and restructuring associated with Corporate Express, and a $42.0 million ($0.04 per share) charge related to the settlement of wage and hour class action litigation. 2010 excludes $57.8 million ($0.06 per share) of charges related to integration and restructuring associated with Corporate Express. Staples adjusts its operating results for such matters to provide a more meaningful measure of our normalized operating performance and to assist with comparing prior periods and recognizing trends.

Please see the “Financial Measures & Other Data” section of the Investor Information portion of www.staples.com for further information, including a reconciliation.

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North American Retail North American Delivery International

Free Cash Flow Capital Expenditures

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Notice of Annual Meeting and Proxy Statement

®

Staples, Inc., 500 Staples Drive, Framingham, MA 01702 | 1-508-253-5000 | staples.com®

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2010 Annual Report

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