THREATENED ELECTION CONTEST RELATING TO THE ELECTION OF THE
DIRECTORS OF STAPLES, 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.
6
(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 BOARD OF
DIRECTORS OF STAPLES, OR
(V)
YOU ENGAGE IN BUSINESS OTHER THAN THE
BUSINESS OF STAPLES EXCEPT AS MAY BE AUTHORIZED IN WRITING BY THE BOARD OF
DIRECTORS OF STAPLES, OR
(VI)
YOU ENGAGE IN MISCONDUCT WHICH IS DEMONSTRABLY
AND MATERIALLY INJURIOUS TO STAPLES;
provided that in each case Staples has given you written