Exhibit
10.3


STAPLES, INC.


AMENDED AND RESTATED 1990 DIRECTOR STOCK OPTION PLAN


1.      Purpose.


The purpose of this
Amended and Restated 1990 Director Stock Option Plan (the “Plan”) of Staples,
Inc. (the “Company”) is to encourage ownership in the Company by the Company’s
outside directors, whose continued services the Company considers essential to
its future progress, and to provide these individuals with a further incentive
to remain as directors of the Company.


2.     Administration.


The Board of Directors
shall supervise and administer the Plan. Grants of stock options (“Options”)
and awards of restricted stock under the Plan and the amount and nature of the
Options and restricted stock to be granted shall be made by the Board of
Directors in accordance with Section 4. All questions concerning interpretation
of the Plan or any Options or restricted stock issued under it shall be
resolved by the Board of Directors and such resolution shall be final and
binding upon all persons having an interest in the Plan.


3.     Participation in the Plan.


Directors of the Company
who are not employees of the Company or any subsidiary of the Company (“outside
directors”) shall be eligible to receive Options and restricted stock under the
Plan.


4.     Terms, Conditions and Form of
Options and Restricted Stock.


All Options and
restricted stock granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions.


(a)           Stock Subject to
Plan.   Options and restricted stock may
be granted under the Plan with respect to Staples common stock (“Staples Common
Stock”). Subject to adjustment as provided in the Plan, the maximum number of
shares of Staples Common Stock which may be issued under the Plan is 3,350,000
shares. All Options or restricted stock granted under the Plan, as provided
below, shall be granted with respect to 
Staples Common Stock,  If an
Option shall expire or terminate for any reason without having been exercised
in full, the unpurchased shares subject to such Option shall again be available
for subsequent Option grants or restricted stock under the Plan; and if the
shares subject to restricted stock shall be repurchased by the Company, the
repurchased shares shall again be available for subsequent Option grants or
restricted stock under the Plan.


(b)           Grants of Options and
restricted stock.


(i)  Initial
Option Grant. An Option to purchase 15,000 shares of Staples Common
Stock  shall be granted automatically to
outside directors who are initially elected to the Board of Directors
subsequent to the approval of the Plan by the Company’s stockholders at the
close of business on the date of such director’s initial election to the Board
of Directors.













(ii) Annual
Option Grants.


 On the
date of the first regularly scheduled Board of Directors meeting following the
end of each fiscal year of the Company, commencing with the fiscal year ending
January 30, 1999, an Option shall be granted automatically to each outside
director to purchase a number of shares of Staples Common Stock equal to 3,000
multiplied by the number of regularly scheduled meeting days of the Board of
Directors attended by such director in the previous 12 months (up to a maximum
of 15,000 shares).


(iii)                Annual Awards of Restricted Stock. On the date that
performance accelerated restricted stock for any year is awarded to executive
officers,  (x) the Company shall grant to
each outside director 400 shares of restricted stock for each regularly
scheduled meeting day of the Board of Directors attended by such director in
the previous fiscal year (up to a maximum of 2,000  shares of restricted stock) and  (y) in addition, the Company shall grant to
the Lead Director and the Chairman of each of the Audit, Compensation, and
Governance Committees of the Board of Directors 200  shares of restricted stock for each regularly
scheduled meeting day of the Board of Directors attended by such director in
the previous fiscal year (up to a maximum of 1,000  shares of restricted stock).


(c)           Terms of Options.


(i)  Option
Exercise Price.   The option
exercise price per share for each Option granted under the Plan shall be equal
to the last reported sale price per share of Staples Common Stock on the Nasdaq
National Market on the date of grant (or, if no such price is reported on such
date, such price as is reported on the nearest preceding date).


(ii) Nature of
Options.  All Options granted
under the Plan shall be nonstatutory options not entitled to special tax
treatment under Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”).


(iii)                Vesting.  Except as
otherwise provided in the Plan, (A) each Option to purchase shares of Staples
Common Stock shall become exercisable, on a cumulative basis, in four equal
annual installments on each of the first, second, third and fourth anniversary
dates of its date of grant, provided the optionee continues to serve as a
director of the Company on such dates. (Notwithstanding the foregoing, each
outstanding Option shall immediately become exercisable in full in the event
(A) a Change in Control (as defined in Section 8) of the Company occurs or (B)
the optionee ceases to serve as a director of the Company due to his or her
death, disability (within the meaning of Section 22(e)(3) of the Code or any
successor provision) or retires pursuant to a retirement policy adopted by the
Company.


(iv)                Option Exercise Procedure.   An
Option may be exercised only by written notice to the Company at its principal
office accompanied by payment in cash of the exercise price with respect to the
Option being exercised or by the tender (actual or constructive) of shares of
Staples Common Stock owned by the director having a value as of the date of
exercise equal to the exercise price. In the case of a constructive tender of
shares of Staples Common Stock, the optionee and the Company may enter into an
agreement to defer until an agreed-upon date the issuance, transfer and
delivery of shares of Staples Common Stock with a value equal to the difference
between the fair market value of the Staples Common Stock on the date of
exercise and the exercise price of the Option being exercised. The Board of
Directors may impose such restrictions on the tender of shares as it deems
appropriate.


(v) Termination.   Each Option shall terminate, and
may no longer be exercised, on the date six months after the optionee ceases to
serve as a director of the Company; provided that, in the event (A) an optionee
ceases to serve as a director due to his or her death or disability (within the
meaning of Section 22(e)(3) of the Code or any successor provision), or (B) an
optionee dies within six months after he or she ceases to serve as a director
of the Company, then the exercisable portion of the Option may be exercised,
within the period of one year following the date the optionee ceases to serve
as a director, by the optionee or by the person to whom the Option is
transferred by will, by the laws of descent and distribution, or by written notice




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pursuant to Section 4(c)(vii).
Notwithstanding the foregoing, each Option shall terminate, and may no longer
be exercised, on the date 10 years after the date of grant.


(vi)                Options Nontransferable.   Except
as otherwise provided by the Board of Directors, each Option granted under the
Plan by its terms shall not be transferable by the optionee otherwise than by
will or the laws of descent and distribution, and shall be exercised during the
lifetime of the optionee only by the optionee or his or her legal
representative. No Option or interest therein may be transferred, assigned,
pledged or hypothecated by the optionee during his or her lifetime, whether by
operation of law or otherwise, or be made subject to execution, attachment or
similar process.


(vii)               Option Exercise by Representative Following Death of Director.   An optionee, by written notice to
the Company, may designate one or more persons (and from time to time change
such designation), including his or her legal representative, who, by reason of
the optionee’s death, shall acquire the right to exercise all or a portion of
the Option. If the person or persons so designated wish to exercise any portion
of the Option, they must do so within the term of the Option as provided
herein. Any exercise by a representative shall be subject to the provisions of
the Plan.


(d)           Terms of Restricted Stock.


(i)  Nature of
Restricted Stock.   All
restricted stock hereunder shall consist of the issuance by the Company of
shares of Staples Common Stock or an agreement for the future delivery of
shares of Staples Common Stock at an agreed-upon date (“Restricted Stock  Deferred Units”) and the purchase by the
recipient thereof of such shares, subject to the terms, conditions and
restrictions described in the document evidencing the restricted stock and in
this Plan.


(ii) Execution of
Restricted Stock Agreement.   In
the case of the actual issuance of Staples Common Stock, the Company shall,
upon the date of the restricted stock grant, issue the shares of Staples Common
Stock subject to the restricted stock by registering such shares in book entry
form with the Company’s transfer agent in the name of the recipient. No
certificate(s) representing all or a part of such shares shall be issued until
the conclusion of the vesting period described in paragraph (iv) below.


(iii)                Price.   Except as
otherwise determined by the Board of Directors, all restricted stock issued
hereunder shall be issued without the payment of any cash purchase price by the
recipients (in which case the “price per share originally paid” for purposes of
clause (2) of paragraph (v) below shall be zero).


(iv)                Vesting.   Except as
otherwise provided in the Plan, the restrictions on transfer and the forfeiture
provisions of each  share of restricted
stock shall lapse five years from the first day of the fiscal year during which
the restricted stock is granted. 
Notwithstanding the foregoing, the restrictions on transfer and the
forfeiture provisions of all restricted stock granted under this Plan shall
immediately lapse in the event (A) a Change in Control of the Company occurs,
or (B) the recipient ceases to serve as a director of the Company due to his or
her death, disability (within the meaning of Section 22(e)(3) of the Code or
any successor provision) or retires pursuant to a retirement policy adopted by
the Company.


(v) Restrictions
on Transfer.   In addition to
such other terms, conditions and restrictions on restricted stock contained in
the Plan or the applicable restricted stock Agreement, all restricted stock
shall be subject to the following restrictions:



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(1)         No  shares of restricted stock shall be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of until
they become vested pursuant to paragraph (iv) above. The period during which
such restrictions are applicable is referred to as the “Restricted Period.”


(2)         Except as set forth in
the last sentence of paragraph (iv) above, if a recipient ceases to be a
director of the Company within the Restricted Period for any reason, the
Company shall have the right and option for a period of three months following
the date of such cessation to buy for cash that number of  shares of restricted stock as to which the
restrictions on transfer and the forfeiture provisions contained in the  shares of restricted stock have not then
lapsed, at a price equal to the price per share originally paid by the
recipient. If such cessation occurs within the last three months of the
applicable Restricted Period, the restrictions and repurchase rights of the
Company shall continue to apply until the expiration of the Company’s three
month option period.


(3)         Notwithstanding
subparagraphs (1) and (2) above, the Board of Directors may, in its discretion,
either at the time that  shares of
restricted stock are awarded or at any time thereafter, waive the Company’s
right to repurchase shares of Staples Common Stock or Restricted Stock Deferred
Units upon the occurrence of any of the events described in this paragraph (v)
or remove or modify any part or all of the restrictions. In addition, the Board
of Directors may, in its discretion, impose upon the recipient of restricted
stock at the time that such  shares of
restricted stock are granted such other restrictions on any restricted stock as
the Board of Directors may deem advisable.


(vi)                Additional Shares.   Any
shares received by a recipient of restricted stock as a stock dividend or any
Restricted Stock Deferred Units received in respect of a stock dividend, or as
a result of stock splits, combinations, exchanges of shares, reorganizations,
mergers, consolidations or otherwise with respect to such restricted stock
shall have the same status and shall bear the same restrictions, all on a
proportionate basis, as the shares or Restricted Stock Deferred Units initially
subject to such.


(vii)               Transfers in Breach of Restricted Stock.   If any transfer of restricted
stock is made or attempted contrary to the terms of the Plan and of such
restricted stock, the Board of Directors shall have the right to purchase for
the account of the Company those shares from the owner thereof or his or her
transferee at any time before or after the transfer at the price paid for such
shares by the person to whom they were awarded under the Plan. In addition to
any other legal or equitable remedies which it may have, the Company may
enforce its rights by specific performance to the extent permitted by law. The
Company may refuse for any purpose to recognize as a shareholder of the Company
any transferee who receives any shares contrary to the provisions of the Plan
and the applicable restricted stock or any recipient of restricted stock who
breaches his or her obligation to resell shares as required by the provisions
of the Plan and the applicable restricted stock, and the Company may retain
and/or recover all dividends on such shares which were paid or payable
subsequent to the date on which the prohibited transfer or breach was made or
attempted.


(viii)               Additional
Restricted Stock Provisions.   The
Board of Directors may, in its sole discretion, include additional provisions
in any restricted stock granted under the Plan.



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5.     Limitation of Rights.


(a)           No Right to Continue as a Director.   Neither the Plan, nor the
granting of an Option or restricted stock nor any other action taken pursuant
to the Plan, shall constitute or be evidence of any agreement or understanding,
express or implied, that the Company will retain the optionee or recipient of
restricted stock as a director for any period of time.


(b)           Rights as a Stockholder.


(i)  Options.   An optionee shall have no rights
as a stockholder with respect to the shares covered by his or her Option until
the date of the issuance to him or her of a stock certificate therefor, and no
adjustment will be made for dividends or other rights (except as provided in
Section 6) for which the record date is prior to the date such certificate is
issued.


(ii) Restricted
Stock.   Subject to the
limitations set forth in Section 4(d) and except as otherwise provided herein,
a recipient of restricted stock, other than Restricted Stock Deferred Units,
shall have all rights as a shareholder with respect to the shares subject to
such restricted stock including, without limitation, any rights to receive
dividends or non-cash distributions with respect to such shares and to vote
such shares and act in respect of such shares at any meeting of shareholders. A
recipient of Restricted Stock Deferred Units shall have no rights as a
shareholder with respect to the Staples Common Stock until the date of issuance
to him or her of a stock certificate therefor, but the agreement evidencing the
Restricted Stock Deferred Units may include the crediting of additional
Restricted Stock Deferred Units equal in value to the cash amount of dividends
paid with respect to same number of shares of Staples Common Stock as the
Restricted Stock Deferred Units.


6.     Adjustment Provisions for
Recapitalizations and Related Transactions.


(a)           If, through or as a
result of any merger, consolidation, sale of all or substantially all of the
assets of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other similar transaction,
(i) the outstanding shares of Staples Common Stock are increased or decreased
or are exchanged for a different number or kind of shares or other securities
of the Company, or (ii) additional shares or new or different shares or other
securities of the Company or other non-cash assets are distributed with respect
to Staples Common Stock or other securities, a proportionate adjustment shall
be made in (x) the number and kind of shares of Staples Common Stock subject to
Options or the number and kind of shares of Staples Common Stock or Restricted
Stock Deferred Units subject to restricted stock to be granted to outside directors
after such event pursuant to Section 4(b), (y) the number and kind of shares of
Staples Common Stock subject to then outstanding Options or the number and kind
of shares of Staples Common Stock or Restricted Stock Deferred Units subject to
any then outstanding restricted stock under the Plan, and (z) the exercise
price for each share of Staples Common Stock subject to any then outstanding
Options or repurchase rights of the Company under the Plan, without changing
the aggregate purchase price as to which such Options or repurchase rights of
the Company remain exercisable. No fractional shares or Restricted Stock
Deferred Units will be issued under the Plan on account of any such
adjustments.


(b)           All share numbers
herein have been adjusted to reflect all stock splits through April 5, 2000.


7.     Mergers, Consolidations,
Asset Sales, Liquidations, etc.


Subject to the provisions
of Section 4(c)(iii) and 4(d)(iv), in the event of a merger or consolidation or
sale of all or substantially all of the assets of the Company in which
outstanding shares of Staples Common Stock are exchanged for securities, cash
or other property of any other corporation or business entity or in 



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the event of a
liquidation of the Company, the Board of Directors of the Company, or the board
of directors of any corporation assuming the obligations of the Company, shall
take one or more of the following actions, as to outstanding Options of Staples
Common Stock: (i) provide that such Options shall be assumed, or equivalent
Options shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof); (ii) upon written notice to the optionees, provide that all
unexercised Options shall (A) immediately become exercisable in full and (B)
terminate immediately prior to the consummation of such transaction unless
exercised by the optionee within a specified period following the date of such
notice; or (iii) in the event of a merger under the terms of which holders of
Staples Common Stock of the Company will receive upon consummation thereof a
cash payment for each share surrendered in the merger (the “Merger Price”),
make or provide for a cash payment to such optionees equal to the difference
between (A) the Merger Price times the number of shares of Staples Common Stock
subject to such outstanding Options (to the extent then exercisable) with
exercise prices not in excess of the Merger Price and (B) the aggregate
exercise price of all such Options, in exchange for the termination of such
Options.


8.     Change in Control.


For purposes of the Plan,
a “Change in Control” shall be deemed to have occurred if (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 the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportion as their ownership of stock of
the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company’s then
outstanding securities (other than pursuant to a merger or consolidation
described in clause (A) or (B) of subsection (iii) below); (ii) during any
period of two consecutive years ending during the term of the Plan (not
including any period prior to the adoption of the Plan), individuals who at the
beginning of such period constitute the Board of Directors of the Company, and
any new director (other than a director designated by a person who has entered
into an agreement with the Company to effect any transaction described in
clause (i), (iii) or (iv) of this Section 8) whose election by the Board of
Directors or nomination for election by the Company’s stockholders was approved
by a vote of at least two-thirds of the directors then still in office who were
either directors at the beginning of the period or whose election or nomination
for election was previously so approved (collectively, the “Disinterested
Directors”), cease for any reason to constitute a majority of the Board of
Directors; (iii) the closing of a merger or consolidation of the Company or any
subsidiary of the Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which
no “person” (as defined above) acquires more than 30% of the combined voting
power of the Company’s then outstanding securities; or (iv) a complete liquidation
of the Company or a sale by the Company of all or substantially all of the
Company’s assets.


9.     Modification, Extension and
Renewal of Options and Restricted Stock.


The Board of Directors
shall have the power to modify or amend outstanding Options and restricted
stock; provided, however, that no modification or amendment may (i) have the
effect of altering or impairing any rights or obligations of any Option or
restricted stock previously granted without the consent of the optionee or
holder thereof, as the case may be, (ii) modify the number of shares of Staples
Common Stock subject to the Option or number of shares of Staples Common Stock
or Restricted Stock Deferred Units subject to the restricted stock (except as
provided in Section 6) or (iii) reprice, replace or regrant options issued
through cancellation or by lowering the option exercise price of a previously
granted award unless approved by the stockholders of the Company .



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10.  Amendment of the Plan.


The Board of Directors
may suspend or discontinue the Plan or amend it in any respect whatsoever;
provided, however, that without approval of the stockholders of the Company, no
amendment may (i) materially modify the requirements as to eligibility to
receive Options or restricted stock under the Plan, or (ii) materially increase
the benefits accruing to participants in the Plan.


11.  Withholding.


(a)           The Company shall have
the right to deduct from payments of any kind otherwise due to the optionee or
recipient of restricted stock any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of Options under the Plan or upon the expiration or termination of the
Restricted Period relating to the restricted stock. Subject to the prior approval
of the Company, the optionee or recipient of restricted stock may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Staples Common Stock otherwise issuable pursuant to the
exercise of an Option or upon the expiration or termination of the Restricted
Period relating to the restricted stock or (ii) by delivering to the Company
shares of Staples Common Stock already owned by the optionee or restricted
stock recipient. The shares so delivered or withheld shall have a fair market
value equal to such withholding obligation. The fair market value of the shares
used to satisfy such withholding obligation shall be determined by the Company
as of the date that the amount of tax to be withheld is to be determined. An
optionee or restricted stock recipient who has made an election pursuant to
this Section 11(a) may only satisfy his or her withholding obligation with
shares of Staples Common Stock which are not subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements.


(b)           If the recipient of
restricted stock under the Plan elects, in accordance with Section 83(b) of the
Code, to recognize ordinary income in the year of acquisition of any shares
awarded under the Plan, the Company will require at the time of such election
an additional payment for withholding tax purposes based on the difference, if
any, between the purchase price of such shares and the fair market value of
such shares as of the date immediately preceding the date on which the
restricted stock is awarded.


12.  Notice.


Any written notice to the
Company required by any of the provisions of the Plan shall be addressed to the
Treasurer of the Company and shall become effective when it is received.


13.  Governing Law.


The Plan and all
determinations made and actions taken pursuant hereto shall be governed by the
laws of the State of Delaware.


14.  Stockholder Approval.


The Plan is conditional
upon stockholder approval of the Plan, and the Plan shall be null and void if
the Plan is not so approved by the Company’s stockholders.



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  Amended and restated by the Board of Directors on
  September 10, 1998 and approved by stockholders on January 21, 1999; amended
  by the Board of Directors on September 14, 1999 and approved by
  stockholders on  November 9, 1999;
  amended by the Board of Directors on March 7, 2000 and approved by
  stockholders on  July 10, 2000; amended
  by the Board of Directors on August 27, 2001, and amended by the Board of
  Directors on March 4, 2003 and March 6, 2007.

  



 



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