Document:

Exhibit 10.1

 

Non-Management Director Compensation Summary

 

Effective as of March 11,
2008, as described in detail below, 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.

 

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.

 

In
addition, each director will receive the following equity grants on the second
business 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/restricted stock units 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 business 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 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 shares of restricted Staples common stock/
restricted stock units with an aggregate value of $40,000(3) on the second
business day following the earlier of the last regularly scheduled Board
meeting of the year or the Lead Director’s resignation or retirement from the
Board, which grant will be pro-rated based on the number of regularly scheduled
Board meetings at which the Lead Director served in such capacity. Each of the
Chairpersons of the Audit, Compensation, and Nominating and Corporate Governance

 

 

Committees
will be granted shares of restricted Staples common stock/ restricted stock
units with an aggregate value of $32,000(3) on the second business day
following the earlier of the last regularly scheduled Board meeting of the year
or the Chairperson’s resignation or retirement from the Board, which grant will
be pro-rated based on the number of regularly scheduled committee meetings at
which such chair served in such capacity. 
The chair of the Finance Committee will be granted shares of restricted
Staples common stock/ restricted stock units with an aggregate value of $8,000(3) on
the second business day following the earlier of the last regularly scheduled
Board meeting of the year or the Chairperson’s resignation or retirement from
the Board, which grant will be pro-rated based on the number of regularly
scheduled committee meetings at which such chair served in such capacity.  Such shares will vest in full on the first
anniversary of the grant date and 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 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.

 

Summary Table for Director Compensation

 

	
  Event

  	
   

  	
  Payment/Award

  	
   

  	
  Vesting/Holding Requirement

  
	
  One-Time Initial
  Election Award

  	
   

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

  	
   

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

  
	
  Quarterly Cash 

  Retainer

  	
   

  	
  $18,750 

  ($3,750 additional for Audit Committee Chair)

  	
   

  	
  N/A

  
	
  Annual Equity 

  Retainer

  	
   

  	
  $112,500(2) of
  options 

  $112,500(3) of restricted stock/units

  	
   

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

  
	
  Committee 

  Chairperson

  	
   

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

  ($8,000 Finance Committee Chair)

  	
   

  	
  Vest after 1 year; 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.

 

2Exhibit 10.2

 

Stock Option Grant

 

Staples, Inc.

Employer
ID: 04-2896127

500
Staples Drive

Framingham,
MA 01702

 

	
   

  	
  ACCOUNT
  ID:

  	
   

  
	
  «FirstName» «MiddleName» «LastName»

  	
  LOCATION:

  	
   

  
	
  «Address1»

  	
   

  	
   

  
	
  «Address2»

  	
   

  	
   

  
	
  «Address3»

  	
   

  	
   

  
	
  «City», «State» «Zip»

  	
   

  	
   

  
	
  «Country»

  	
   

  	
   

  

 

You have
been granted an option to purchase Staples, Inc. Common Stock as follows:

 

	
  Type
  of Option:

  	
   

  	
  Non-Qualified Stock Option

  
	
  Grant
  No.:

  	
   

  	
   

  
	
  Stock
  Option Plan:

  	
   

  	
  2004

  
	
  Date
  of Grant:

  	
   

  	
   

  
	
  Total
  Number of Option Shares:

  	
   

  	
   

  
	
  Option
  Price per Share:

  	
   

  	
  US$

  
	
  Total
  Exercise Price of Option Shares:

  	
   

  	
  US$

  

 

	
  Vesting Date

  	
   

  	
  Number of Shares 

  Vesting on Vesting Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

By your
acceptance of this Stock Option Grant, you agree that this option is granted
under and governed by the terms and conditions of Staples, Inc.’s Amended
and Restated 2004 Stock Incentive Plan
(as further amended or restated from time to time) and by the terms and
conditions of Staples, Inc.’s Non-Qualified
Stock Option Agreement, which is attached hereto.

 

Staples, Inc.

 

 

Ronald L. Sargent

Chairman and Chief Executive Officer

 

Attachment: Staples, Inc. Director Stock Option
Agreement

 

 

STAPLES, INC. DIRECTOR STOCK OPTION AGREEMENT

 

1. Grant of Option. 
Staples, Inc., a Delaware corporation (“Staples”), hereby grants to
the Optionee named on the reverse hereof an option, pursuant to Staples’ Amended
and Restated 2004 Stock Incentive Plan (the “Plan”), to purchase an aggregate
of the Total Number of Option Shares of Common Stock of Staples stated on the
reverse hereof at a price per share equal to the Option Price per Share stated
on the reverse hereof, purchasable as set forth in, and subject to the terms
and conditions of, this Option Agreement and the Plan.

 

2. Non-Statutory Stock Option. 
This option is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

3. Exercise of Option and Provisions for Termination.

 

(a) Vesting Schedule. 
Except as otherwise provided in this Agreement, this option may be
exercised up to and including the tenth anniversary of the Date of Grant set
forth on the reverse hereof (hereinafter the “Expiration Date”) in installments
as to not more than the number of shares commencing on the respective vesting
dates set forth in the table on the reverse hereof.  Notwithstanding the foregoing: (1) if
the Optionee ceases to serve as a director of Staples before the vesting date
set forth in the table on the reverse hereof, no shares of Common Stock shall
become exercisable on such vesting date following the cessation of his or her
service as director; and (2) this option shall immediately become exercisable
in full in the event (i) a Change in Control (as defined below) of Staples
occurs,  (ii) the Optionee ceases to
serve as a director of Staples due to his or her death or disability (within
the meaning of Section 22(e)(3) of the Code or any successor
provision) or (iii) the Optionee ceases to serve as a director of Staples
after attaining age 72.

 

(b) 
Definitions. 
For purposes of this Agreement, the following terms shall
have the following meanings:

 

(i) 
A “Change in Control” shall be deemed to have occurred if (A) any “person”,
as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (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 (other than pursuant to a merger or consolidation described in
clause (1) or (2) of subsection (C) below); (B) individuals
who, as of the date hereof, constitute the Board of Directors of Staples (as of
the date hereof, the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board of Directors, 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, as such terms are used in Regulation 14A
under the Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; (C) the
stockholders of Staples approve a merger or consolidation of Staples with any other
corporation, and such merger or consolidation is consummated, other than (1) 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 (2) a merger or consolidation effected to implement a
recapitalization of Staples (or similar transaction) in which no “person” (as
defined above) acquires more than 30% of the combined voting power of Staples’
then outstanding securities; or (D) the stockholders of Staples approve an
agreement for the sale or disposition by Staples of all or substantially all of
Staples’ assets, and such sale or disposition is consummated.

 

(ii) “Surviving
Corporation” shall mean (x) in the case of a Change in Control pursuant to
clause (A) or clause (B) of Section 3(b)(i), Staples; (y) in
the case of a Change in Control pursuant to clause (C) of Section 3(b)(i),
the surviving or resulting corporation in such merger or consolidation; and (z) in
the case of a Change in Control pursuant to Clause (D) of Section 3(b)(i),
the entity acquiring the majority of the assets being sold or disposed of by
Staples.

 

(c) Continuous Service as Director Required.  Except as otherwise provided in this Section 3(c),
this option shall terminate, and may no longer be exercised by the Optionee, on
the date six months after the Optionee ceases to serve as a director of
Staples.  In the event (1) the
Optionee ceases to serve as a director of Staples due to his or her death or
disability (within the meaning of Section 22(e)(3) of the Code or any
successor provision), or (2) the Optionee dies within six months after he
or she ceases to serve as a director of Staples, then the exercisable portion
of this 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 this option is transferred by will or by the laws of descent and
distribution. In the event the Optionee ceases to serve as a director of Staples
after attaining age 72, then the exercisable portion of this option may be
exercised within three years following the date the optionee ceases to serve as
a director, by the Optionee or by the person to whom this option is transferred
by will or by the laws of descent and distribution Notwithstanding the
foregoing, each option shall terminate, and may no longer be exercised, on the
date 10 years after the Date of Grant.

 

(d) Exercise Procedure. 
Subject to the conditions set forth in this Agreement, this option shall
be exercised by the Optionee’s delivery of written notice of exercise to the
Secretary of Staples specifying the number of shares to be purchased and the
purchase price to be paid therefor and accompanied by payment in full in
accordance with Section 4.  Such exercise
shall be effective upon receipt by the Secretary of Staples of such written
notice together with the required payment. 
The Optionee may purchase fewer than the total number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share.

 

 

4. Payment of Purchase Price.

 

(a) 
Method of Payment.  Payment of the purchase price for shares purchased
upon exercise of this option shall be made (i) by delivery to Staples of
cash or a check to the order of Staples in an amount equal to the purchase
price of such shares, (ii) subject to the consent of Staples, by delivery
to Staples of shares of Common Stock of Staples then owned by the Optionee having
a fair market value equal in amount to the purchase price of such shares, (iii) by
any other means which the Board of Directors determines are consistent with the
purpose of the Plan and with applicable laws and regulations (including,
without limitation, the provisions of Rule 16b-3 under the Securities Exchange
Act of 1934 and Regulation T promulgated by the Federal Reserve Board), or (iv) by
any combination of such methods of payment. 
Notwithstanding the prior sentence, under no circumstances may payment
for shares be made by a promissory note.

 

(b) 
Valuation of Shares or Other Non-Cash Consideration
Tendered in Payment of Purchase Price.  For the purposes hereof, the fair market
value of any share of Staples’ Common Stock or other non-cash consideration
which may be delivered to Staples in exercise of this option shall be
determined in good faith by the Board of Directors of Staples.

 

(c)  Delivery of Shares Tendered in Payment of Purchase Price.  If the Optionee exercises this option by
delivery of shares of Common Stock of Staples, the certificate or certificates
representing the shares of Common Stock of Staples to be delivered shall be
duly executed in blank by the Optionee or shall be accompanied by a stock power
duly executed in blank suitable for purposes of transferring such shares to
Staples, and the Common Stock delivered may not be subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirement and must have been
held for at least six months if such Common Stock was previously issued to the
Optionee through a Staples compensation plan. 
Fractional shares of Common Stock of Staples will not be accepted in
payment of the purchase price of shares acquired upon exercise of this option.

 

5. Delivery of Shares; Compliance With Securities Law, Etc.

 

(a) General.  Staples
shall, upon payment of the option price for the number of shares purchased and
paid for, make prompt delivery of such shares to the Optionee, provided that if
any law or regulation requires Staples to take any action with respect to such
shares before the issuance thereof, then the date of delivery of such shares
shall be extended for the period necessary to complete such action.

 

(b) Listing, Qualification, Etc.  This option shall be subject to the requirement
that if, at any time, counsel to Staples shall determine that the listing,
registration or qualification of the shares subject hereto upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of non-public information
or the satisfaction of any other condition is necessary as a condition of, or
in connection with, the issuance or purchase of shares hereunder, this option
may not be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, disclosure, or satisfaction of such other
condition shall have been affected or obtained on terms acceptable to the Board
of Directors.  Nothing herein shall be
deemed to require Staples to apply for, effect or obtain such listing,
registration, qualification, or disclosure or satisfy such other condition.

 

6. Transferability of Option. 
This option is personal and may not be transferred other than by will or
the laws of descent and distribution or, upon notice to Staples, for estate
planning purposes to entities that are beneficially owned entirely by family
members, and this option shall be exercised during the lifetime of the Optionee
only by the Optionee or his or her legal representative.  Other than pursuant to the prior sentence, no
rights granted hereunder may be transferred, assigned, pledged or hypothecated
in any way (whether by operation of law or otherwise) nor shall any such rights
be subject to execution, attachment or similar process.  All transferees of this Option must agree to
be governed by all of the terms and conditions of this Agreement.  Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option or of such rights contrary to
the provisions hereof, or upon the levy of any attachment or similar process
upon this option or such rights, this option and such rights shall, at the
election of Staples, become null and void.

 

7. Limitation of Rights

 

(a) No Right to Continue as a Director.  Neither the Plan, nor the granting of this
option nor any other action taken pursuant to the Plan, shall constitute or be
evidence of any agreement or understanding, express or implied, that Staples
will retain the Optionee as a director for any period of time.

 

(b) No Stockholders’ Rights for Options.  The Optionee shall have no rights as a
stockholder with respect to the shares of Common Stock covered by this 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 9 of the Plan) for which the record date is prior to the date
such certificate is issued.

 

 

8. Adjustment Provisions for Recapitalizations and Related Transactions.  In the event of any recapitalization,
reclassification of shares, stock dividend, stock split, reverse stock split,
spin-off or other similar change in capitalization or event or any distribution
to holders of Common Stock other than an ordinary cash dividend, the Optionee
shall, with respect to this option or any unexercised portion thereof, be
entitled to the rights and benefits, and be subject to the limitations, set
forth in Section 9 of the Plan.

 

9. Mergers, Consolidations, Asset Sales, Liquidations, Etc.  In the event of a merger or consolidation or
any share exchange transaction in which outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity, or in the event of a liquidation of Staples, prior to the
Expiration Date or termination of this option, the Optionee shall, with respect
to this option or any unexercised portion thereof, be entitled to the rights
and benefits, and be subject to the limitations, set forth in Section 9 of
the Plan.

 

10. Withholding Taxes. 
Staples’ obligation to deliver shares of Common Stock upon the exercise
of this option shall be subject to the Optionee’s satisfaction of all
applicable federal, state and local income and employment tax withholding
requirements.

 

11. Miscellaneous.

 

(a) Except
as provided herein, this option may not be amended or otherwise modified unless
evidenced in writing and signed by Staples and the Optionee unless the Board of
Directors of Staples determines that the amendment or modification, taking into
account any related action, would not materially and adversely affect the
Optionee.  However, in no event may this
Option be converted into a stock appreciation right.  This Option Agreement may be executed in
multiple counterparts, each of which shall represent the same option agreement.

 

(b) All
notices under this option shall be mailed or delivered by hand to Staples at
its main office, Attn: Secretary, and to the Optionee to his or her last known
address on the records of Staples or at such other address as may be designated
in writing by either of the parties to one another.

 

(c) This
option shall be governed by and construed in accordance with the laws of the
State of Delaware.

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