Exhibit 10.4


 


Severance Benefits Agreement


 


[Mr/Ms Name] 

[Address] 

[City, State ZIP]


 


Dear [Name]:


 


You
are or are about to become employed by Staples, Inc. and/or one of its
subsidiaries (“Staples”). Staples agrees to provide you with the severance benefits
set forth in this letter agreement (the “Agreement”) if your employment is
terminated under the circumstances described below:


 


1.                                      Term
of Agreement. The term of this Agreement shall begin on the date it is
signed and shall continue in full force and effect until such time as you or
Staples has delivered to the other 90-days advance written notice of your or
its election to terminate this Agreement. This Agreement is not a contract to
employ you for a definite time period, it being acknowledged that your
employment is “at will” and that either you or Staples may terminate the
employment relationship at any time.


 


2.                                      Notice of Termination and other Matters.
Any termination of your employment, whether by you or Staples, will be
communicated by written notice (“Notice of Termination”) to the other party.
The Notice of Termination will specify the provisions of this Agreement, if
any, upon which termination is based and its effective date, which in no case
will be more than 180 days after the Notice of Termination.  All notices and communications provided for in
this Agreement will be in writing and will be effective when delivered or
mailed by U.S. registered or certified mail, return receipt requested, postage
prepaid, addressed to the Chairman of Staples, 500 Staples Drive, Framingham,
MA 01702, and to you at the address shown above or to such other address as
either Staples or you may have furnished to the other in writing.


 


3.                                      Compensation
Upon Termination. Staples will provide you with the severance benefits
listed below in the event of a Qualified Termination. A “Qualified Termination”
means your employment is terminated for any reason other than because (i) you
die or become Disabled, (ii) Staples terminates you for “Cause,” or (iii) you
resign without “Good Reason.”


 


(a) 
Staples will pay you [6 months = certain executive officers; 12 months = other
executive officers] severance pay, in equal monthly installments. Your monthly
severance payments will equal the sum of (i) your monthly base salary rate
in effect immediately prior to the Qualified Termination (or any higher rate in
effect within the 90 days prior to the Notice of Termination) plus (ii) one-twelfth
of an amount equal to the average annual bonus paid to (or accrued for) you by
Staples during the three full fiscal years preceding such Qualified Termination.
Annual salary rates will be prorated where applicable and annual bonus averages
will be computed on years available if less than three years. Any partial year
bonus you have earned will be annualized.


 


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(b) Staples
will provide you with [6
months = certain executive officers; 12 months = other executive officers]
of life, dental, accident and group health insurance benefits substantially
similar to those available to similarly situated officers (but not disability
insurance); provided, however, that Staples will not provide any such benefit
for any portion of this period that you receive an equivalent benefit from
another party.


 


(c) The
vesting schedule of any outstanding options to purchase shares of Staples’
Common Stock, shares of restricted Staples’ Common Stock and/or any other
equity-based awards will not be accelerated in the event of a Qualified
Termination, unless specifically provided to the contrary in the respective
option, restricted stock or other equity agreements.


 


(d) Staples
will provide you with 6 additional months of the benefits set forth in
paragraphs (a) and (b) above if such Qualified Termination is within
two years after a Change in Control.


 


You will not be entitled
to any of the compensation or benefits set forth in this Section 3 if
Staples determines, within 60 days after your termination, that your conduct
prior to your termination would have warranted a discharge for “Cause,” or if,
after your termination, you have violated the terms of any non-competition or
confidentiality provision contained in any employment, consulting, advisory,
non-disclosure, non-competition or other similar agreement between you and
Staples.


 


4.                                      Definitions.
For the purposes of this Agreement, the terms listed below are defined as
follows:


 


(a) Change in Control. A “Change in Control” will be deemed to
have occurred only if any of the following events occur:


 


(i) any
“person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), (other than
Staples, any trustee or other fiduciary holding securities under an employee
benefit plan of Staples, or any corporation owned directly or indirectly by the
stockholders of Staples in substantially the same proportion as their ownership
of stock of Staples) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of Staples
representing 30% or more of the combined voting power of Staples’ then
outstanding securities;


 


(ii) individuals
who constitute the Board (as of the date hereof, the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board, provided that
any person becoming a director subsequent to the date hereof whose election, or
nomination for election by Staples’ stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of Staples,


 


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as such terms are used in
Rule 14a-11 of Regulation 14A under the Exchange Act) will be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or


 


(iii) the
stockholders of Staples approve a merger or consolidation of Staples with any
other corporation, other than (A) a merger or consolidation which would
result in the voting securities of Staples outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 75% of the
combined voting power of the voting securities of Staples or such surviving
entity outstanding immediately after such merger or consolidation or (B) a
merger or consolidation effected to implement a recapitalization of Staples (or
similar transaction) in which no “person” (as hereinabove defined) acquires
more than 50% of the combined voting power of Staples’ then outstanding
securities; or


 


(iv) the
stockholders of Staples approve a plan of complete liquidation of Staples or an
agreement for the sale or disposition by Staples of all or substantially all of
Staples’ assets.


 


(b) Disabled. You are “disabled” for the purposes of this
Agreement, if you have been absent from the full-time performance of your
duties with Staples for six (6) consecutive months because of incapacity
due to physical or mental illness, and, within thirty (30) days after being
sent a written Notice of Termination, you fail to resume performance of your
essential job duties, with or without reasonable accommodation.


 


(c) Cause. A termination for “Cause” by Staples will occur
whenever:


 


(i) you
willfully fail to substantially perform your duties with Staples (other
than any failure resulting from incapacity due to physical or mental illness);
provided, however, that Staples has given you a written demand for substantial
performance, which specifically identifies the areas in which your performance
is substandard, and you have not cured such failure within 30 days after delivery
of the demand. No act or failure to act on your part will be deemed “willful”
unless you acted or failed to act without a good faith or reasonable belief
that your conduct was in Staples’ best interest.


 


(ii) you
breach any of the terms of the Proprietary and Confidential Information
Agreement or Non-Competition Agreement (or other similar agreement) between you
and Staples, or


 


(iii) you
violate the Code of Ethics or attempt to secure any improper personal profit in
connection with the business of Staples, or


 


(iv) you
fail to devote your full
working time to the affairs of Staples except as may be authorized in
writing by the CEO or other authorized Company official, or


 


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(v) you
engage in business other
than the business of Staples except as may be authorized in writing by the
CEO or other authorized Company official, or


 


(vi) you
engage in misconduct which is demonstrably and materially injurious to Staples;


 


provided that in each
case Staples has given you written notice of its intent to terminate your
employment under this Section 5(c) and an opportunity to present, in
person, to the Executive Vice President of Human Resources or any other
authorized Company official, any objections you may have to such termination.


 


(d) Good Reason. A termination by you for “Good Reason” will
occur whenever any of the following circumstances have taken place, without
your written consent within 90 days prior to your Notice of Termination:


 


(i) your
position, duties, responsibilities, power, title or office was significantly
diminished (a change in your reporting relationship, standing alone, shall not
be deemed significant);


 


(ii) your
annual base salary was reduced;


 


(iii) you
were not allowed to participate in a cash bonus program in a manner
substantially consistent with past practice in light of Staples’ financial
performance and attainment of your specified goals, your participation in any
other material compensation plan (other than any stock option or stock award program
which programs are within the full discretion of the Compensation Committee)
was substantially reduced, both in terms of the amount of benefits provided and
the level of participation relative to other participants; unless such
circumstances are fully corrected prior to the Date of Termination specified in
your Notice of Termination;


 


(iv) you
were not provided with paid vacation or other benefits substantially similar to
those enjoyed by you under any of Staples’ life insurance, medical, health and
accident, or disability plans in which you were participating, or Staples took
any action which would directly or indirectly materially reduce any of such
benefits or the number of your paid vacation days; unless such circumstances
are fully corrected prior to the Date of Termination specified in your Notice
of Termination;


 


(v) in
the event of a Change in Control, Staples or any person in control of Staples
requires you to perform your principal duties in a new location outside a
radius of 50 miles from your business location at the time of the Change in
Control; or


 


(vi) Staples
fails to obtain a satisfactory agreement from any successor to assume and agree
to perform this Agreement, as contemplated in Section 5.


 


Notwithstanding the
foregoing, any general reduction of salary or reduction (or elimination) of
other compensation, bonus and/or benefits for its officers which are


 


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substantially comparable
for all such officers (but not occurring within
24 months after a Change of Control) will not be considered “Good
Reason.”


 


5.                                      Successors;
Binding Agreement. Staples will require any successor (whether direct,
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of its business or assets expressly to assume and agree to
perform this Agreement to the same extent that Staples would be required
to perform it if no such succession had taken place. Any failure to obtain
an assumption of this Agreement prior to the effectiveness of any succession
will be a breach of this Agreement and will entitle you to compensation in the
same amount and on the same terms as you would be entitled hereunder. As used
in this Agreement, “Staples” means Staples as defined above and any successor
to its business or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise. This Agreement will inure to the
benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, will be paid in accordance with the terms of this Agreement to
your devisee, legatee or other designee or if there is no such designee, to
your estate.


 


6.                                      Arbitration.
The parties agree that any legal disputes (including but not limited to
claims arising under federal or state statute, contract, tort, or public
policy) that may occur between you and Staples, and that arise out of, or
are related in any way to, your employment with or termination of employment
from Staples or the termination of this Agreement, and which disputes cannot be
resolved informally, will be resolved exclusively though final and binding
arbitration. The parties will be precluded from raising in any other forum,
including, but not limited to, any federal or state court of law, or equity,
any claim which could be raised in arbitration; provided, however that nothing
in this Agreement precludes you from filing a charge or from participating in
an administrative investigation of a charge before an appropriate government
agency or Staples from initiating an arbitration over a matter covered by this
Agreement.


 


Each party may demand
arbitration, no later than three hundred (300) days after the date on which the
claim arose, by submitting to the other party a written demand which states: (i) the
claim asserted, (ii) the facts alleged, (iii) the applicable statute
or principal of law (e.g., breach of contract) upon which the demand is based,
and (iv) the remedy sought. Any response to such demand must be made, in
writing, within twenty (20) days after receiving the demand, and will
specifically admit or deny each factual allegation.


 


The arbitration will be
conducted in accordance with the Rules for Employment Arbitration of the
American Arbitration Association (AAA) and any arbitration will take place in Framingham,
Massachusetts. Each party will bear its own costs and attorney’s fees. The
arbitrator will have the power to award any types of legal or equitable relief
that would be available in a court of competent jurisdiction, including, but
not limited to, the costs of arbitration, attorney’s fees, emotional distress
damages, and punitive


 


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damages for causes of
action when such damages are available under law. Any relief or recovery to
which you are entitled from any claims arising out of your employment,
termination, or any claim of unlawful discrimination will be limited to that
awarded by the arbitrator.


 


7.                                      Waiver
of Jury Trial. If any claim arising out of your employment or
termination is found not to be subject to final and binding arbitration, the
parties agree to waive any right to a jury trial if such claim is filed in
court.


 


8.                                      Miscellaneous.


 


(a)                                  The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
which will remain in full force and effect.


 


(b)                                 The
validity, interpretation, construction and performance of this Agreement will
be governed by the laws of the Commonwealth of Massachusetts.


 


(c)                                  No
waiver by you or Staples at any time of any breach of, or compliance with, any
provision of this Agreement to be performed by Staples or you, respectively, will
be deemed a waiver of that or any other provision at any subsequent time.


 


(d)                                 You
must execute a legally enforceable separation agreement and general release in
a form acceptable to Staples prior to the receipt of any payments or
benefits set forth above. Any payments made to you will be paid net of any
applicable withholding required under federal, state or local law.


 


(e)                                  This
Agreement is the exclusive agreement with respect to the severance benefits
payable to you in the event of a termination of your employment. All prior
negotiations and agreements are hereby merged into this Agreement.


 


If
this Agreement sets forth our agreement, kindly sign and return to Staples the
enclosed copy of this Agreement.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
  STAPLES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Executive Vice
  President,

  
	
   

  	
   

  	
  Human Resources

  



 


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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         
day of                                 ,
2006


 


 


	
   

  	
   

  
	
  (Associate Signature)

  	
   

  



 


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