Exhibit 10.26


 


Non-Management Director Compensation Summary


 


Our non-management directors
(“Outside Directors”) will be compensated as follows through a combination of
cash payments and equity grants:


 


1.     Cash Retainer.


 


Each
director will receive $18,750 after each regularly scheduled quarterly Board
meeting, and the Chair of the Audit Committee will receive an additional $3,750
at such time.  The quarterly cash
retainer paid to a director leaving the Board will be pro-rated based on the
number of days such director served on the Board between regularly scheduled
meetings.


 


2.     Equity Grants for All
Outside Directors.


 


Initial Grant


 


In connection with his or
her initial election to the Board, each director will be granted shares of
restricted Staples common stock/restricted stock units with an aggregate value
of $150,000(1) on the grant date.  Such
shares will be granted on the second business day following a director’s
initial election to the Board, will vest in full on the third anniversary of
the grant date, and may be sold after vesting.


 


Annual Grant


 


Each
director will receive the following annual equity grants on the second day
following the first regularly scheduled Board meeting of each fiscal year:


 


(a)   an option to
purchase shares of Staples common stock with an aggregate present value of
$112,500(2) on the grant date (such option will vest in full one year after the
grant date and any exercised shares may be sold after vesting); and


 


(b)   shares of
restricted Staples common stock with an aggregate value of $112,500(3) on the
grant date (such shares will vest in full one year after the grant date and may
not be sold while the director is serving on the Board);


 


provided,
that if a director is elected to the Board after the second day following the
first regularly scheduled Board meeting of a fiscal year, such equity grants
will be granted on the second business day following the first regularly
scheduled Board meeting that occurs after his or her election and such grants
will be pro-rated based 


 


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on
the number of regularly scheduled meetings occurring on or after his or her
election.


 


3.     Equity Grants for the Lead
Director/Committee Chairpersons.


 


The
Lead Director will be granted Staples restricted stock units with an aggregate
value of $40,000(3) on the second business day following the first
regularly scheduled Board meeting of each fiscal year, which grant will vest
pro rata on the date of each regularly scheduled Board meeting occurring in the
fiscal year that the grant was made at which the director is the Lead
Director.  Each of the Chairpersons of
the Audit, Compensation, and Nominating and Corporate Governance Committees
will be granted Staples restricted stock units with an aggregate value of $32,000(3) on
the second business day following the first regularly scheduled Board meeting
of each fiscal year, which grant will vest pro rata on the date of each
regularly scheduled Board meeting occurring in the fiscal year that the grant
was made at which each director is chair of one of these three committees.  The chair of the Finance Committee will be
granted Staples restricted stock units with an aggregate value of $8,000(3) on
the second business day following the first regularly scheduled Board meeting
of each fiscal year, which grant will vest pro rata on the date of each
regularly scheduled Board meeting occurring in the fiscal year that the grant
was made at which the director is the Finance Committee chair.  In the event a director becomes the Lead
Director and/or chair of any of the above mentioned committees after the first
regularly scheduled Board meeting of the fiscal year, such director will be
granted such restricted stock units two business days after the next regularly
scheduled Board meeting.  All of the
above restricted stock units will be paid in shares of Staples common stock on
the first anniversary of the grant date and the shares paid may not be sold
while a director is serving on the Board.


 


4.     Unvested Awards.


 


Unvested options and shares of restricted
stock/restricted stock units are subject to accelerated vesting (and, in the
case of restricted stock units, accelerated payment) upon a director’s death,
disability, retirement from the Board after reaching the Board’s mandatory retirement
age of 72, or the occurrence of a change in control of Staples.  In such instances, the unvested award(s) will
vest in full.  All unvested awards are
otherwise forfeited upon termination of the director’s service on the Board.


 


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Summary
Table for Director Compensation


 


	
  Event

  	
   

  	
  Payment/Award

  	
   

  	
  Vesting/Holding Requirement

  
	
  Quarterly
  Cash Retainer

  	
   

  	
  $18,750

  	
   

  	
  N/A

  
	
   

  	
   

  	
  ($3,750
  additional for Audit Committee Chair)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  One-Time
  Initial Election Equity Award

  	
   

  	
  $150,000(1) of
  restricted stock/units

  	
   

  	
  Cliff
  vest 3 years after grant; may be sold upon vesting.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual
  Equity Retainer

  	
   

  	
  $112,500(2) of
  options

   

  $112,500(3) of
  restricted stock

  	
   

  	
  Vest
  after 1 year; may be sold upon vesting.

   

  Vest
  after 1 year; may be sold only after leaving board.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lead
  Director

  	
   

  	
  $40,000(3)
  of restricted stock units annually

  	
   

  	
  Vest
  on a pro-rated basis; paid on the one year anniversary of grant; shares may
  be sold only after leaving board.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Committee
  Chairperson 

  	
   

  	
  $32,000(3) of
  restricted stock units annually

  ($8,000 Finance Committee Chair) 

  	
   

  	
  Vest
  on a pro-rated basis; paid on the one year anniversary of grant; shares may
  be sold only after leaving board. 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Retirement
  after age 72

  	
   

  	
  All
  unvested options and restricted stock/units vest in full.

  	
   

  	
  N/A

  



 






(1)   The number of restricted shares/units will be
equal to the number arrived at by dividing $150,000 by the closing stock price
on the grant date.


 


(2)   The option will be for a number of shares
equal to the number arrived at by dividing the present dollar value of the
award by the binomial value and then taking such quotient and dividing it by
the closing stock price on the grant date. 
The exercise price of the option will be the closing stock price on the
grant date.


 


(3)   The number of restricted shares/units will be
equal to the number arrived at by dividing the dollar value of the award by the
closing stock price on the grant date.


 


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