Exhibit 10.37

 

Amendment to Severance Benefits Agreement (Amendment A)

 

Ronald L. Sargent

c/o Staples, Inc.

500 Staples Drive

Framingham, MA 01702

 

Dear Mr. Sargent,

 

You are a party to a Severance Benefits Agreement (“Agreement”) with
Staples, Inc. and/or one of its subsidiaries (“Staples”). Under the Agreement,
Staples agrees to provide you with the severance benefits set forth in the
Agreement if your employment is terminated under the circumstances described in
the Agreement.

 

To avoid certain tax penalties under the new federal tax law governing deferred
compensation (commonly referred to as Section 409A), you have elected to keep
the definition of “Good Reason” as set forth in your Agreement, and wait six
months following your termination before receiving any severance payments
otherwise payable under the Agreement should you be among the 50 highest
compensated associates of Staples at the time of your severance.

 

Specifically, you agree to the addition of the following language to your
Agreement effective January 1, 2009, which shall otherwise remain in full force
and effect in accordance with its terms:

 

You expressly waive your right to receive any Gross-up Payment for any 409A
Liability under Section 3(e)(ii) of this Agreement.

 

To the extent required by Section 409A of the Internal Revenue Code
(“Section 409A”), reimbursement by Staples of expenses incurred due to a tax
audit or litigation relating to any Gross-up Payment shall be made as soon as
reasonably practical following satisfaction of Section 3(e)(v) of this
Agreement, but in no event later than the end of the calendar year following the
calendar year in which the taxes that are the subject of the audit or litigation
are remitted to the taxing authority, or where as a result of such audit or
litigation no taxes are remitted, the end of the calendar year following the
calendar year in which the audit is completed or there is a final nonappealable
settlement or other resolution of the litigation.

 

You and Staples intend that this Agreement comply with the requirements of
Section 409A so that any payments and benefits provided by the Agreement do not
subject you to penalty taxes and interest imposed for noncompliance with
Section 409A. Accordingly, you and Staples agree to delete the language of
Section 3(f) of this Agreement and replace it with the following rules shall
that apply with respect to the payments and

 

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benefits to be provided to you under this Agreement:

 

(i)                      Each installment of the payments and benefits provided
under this Agreement shall be treated as a “separate payment” for purposes of
Section 409A. Neither Staples nor you shall have the right to accelerate or
defer the delivery of any such payments or benefits except to the extent
specifically permitted or required by Section 409;

 

(ii)                  The life, dental, accident and group health insurance
benefits to be provided to you during your severance period under this Agreement
as described above shall be treated as exempt “reimbursements and certain other
separation payments” within the meaning of Treasury Regulation
Section 1.409A-1(b)(9)(v), and any reimbursement or payment with respect to such
benefits shall be made not later than December 31 of the second calendar year
following the year in which you are terminated;

 

(iii)              If, as of the date of your “separation from service” from
Staples, you are not a “specified employee” (each within the meaning of
Section 409A which generally defines a “specified employee” as an employee who
is among Staples’ 50 most highly compensated officers), then each installment of
the payments and benefits shall be made on the dates and terms set forth in this
Agreement;

 

(iv)                If, as of the date of your “separation from service” from
Staples, you are a “specified employee”, then each installment of the payments
and benefits due under this Agreement that would, absent this subsection, be
paid within the six-month period following your “separation from service” from
Staples shall not be paid until the date that is six months and one day
following your separation from service and any subsequent installments, if any,
being paid in accordance with the dates and terms set forth herein.  Any such
delayed payments shall bear interest from the date of your separation from
service to the date of payment at an annual rate equal to the prime rate as set
forth in the Eastern edition of the The Wall Street Journal on the date of your
separation from service;

 

(v)                    Staples shall have no liability for any tax or penalty
imposed on you by Section 409A.

 

 

If this letter sets forth our agreement, kindly sign and return to Staples the
enclosed copy of this letter no later than December 31, 2008.

 

 

Sincerely,

 

 

 

STAPLES, INC.

 

 

 

 

 

 

 

By:

  /s/ Martin Trust

 

 

  Chairman of the Compensation Committee Of the Board of Directors

 

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I have been advised of my right to consult with counsel regarding this Agreement
and have decided to sign below knowingly, voluntarily, and free from duress or
coercion.

 

Agreed to this 22nd day of December 2008.

 

  /s/ Ronald L. Sargent

 

(Associate Signature)

 

 

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