The Overlay dialog box appears if you click the Overlay button in the PDF Create Propertiesdialog box when Overlay with existing file is selected in the If File Exists selection box under Destination.

The Overlay dialog box also appears if Show warning dialog is selected in the If File Exists selection box and you intend to save the resulting PDF under an existing file name. In the warning dialog box, select Overlay with existing file and then click the Overlay Options button.

Merge Rules
Select a location from both selection boxes to adjust the overlay between a newly created page and an existing page.
Place newly created pages as Foreground
Place the original page in the background, and the newly created page in the foreground to place it on top of the original page content. This option may be useful if you want to place a logo on a document.
Repeat last page of the shorter document for page overlay
Insert a header / footer or logo on each page of a longer document. The last page of the shorter document must contain the header / footer or logo to be repeated.
Use existing file's Document Settings for newly created file
When selected, a newly created PDF file inherits the Document Settings of the existing PDF file. Otherwise, the default values are used. This option is useful if you want to add a set of document settings (common properties) to several PDF files. For example, you might place common keywords or a subject into an overlay PDF file, and apply the overlay to all files with these properties in common. These document settings are automatically inherited in all PDF files created with the overlay, so you do not have to add them multiple times.