Document:

SPLS EX 10.3 080214

Exhibit 10.3

Staples, Inc.
Employer ID: 
500 Staples Drive
Framingham, MA 01702
«FirstName» «LastName»     EMPLOYEE ID:    
«Address1»    LOCATION:    
«Address2»
«City», «State»  «Zip»    
«Country»

Staples, Inc. (“Staples”) hereby awards to the recipient named above (the “Recipient”) the right to earn a number of shares of Common Stock of Staples determined in the manner set forth below (the “Shares”), in accordance with and subject to the terms, conditions, and restrictions of this Agreement (as defined below) and the Staples’ 2014 Stock Incentive Plan, as further amended or restated from time to time (the “Plan”). If the conditions described below are satisfied, the Shares will be issued on the March [__________] Board Meeting Date (as defined in Section 2(b) of the PSA Terms attached hereto).

Date of Agreement:                                [__________]
Performance Cycle:                                              [__________]
Total Number of Shares at Target                            [__________]
March [__________] Board Meeting Date:                            See Section 2(b) of the PSA Terms

By your acceptance of this Performance Share Award Agreement (“PSA”), you agree that any Shares will be awarded under and governed by the terms and conditions of the Plan, the PSA and the Performance Share Award Agreement  - Terms and Conditions (“PSA Terms”), which is attached hereto (this PSA and the PSA Terms are together referred to as the “Agreement”).

Calculation of Number of Shares Earned.  As more fully described in the PSA Terms, the number of Shares issued on the March [__________]  Board Meeting Date shall be determined based on the product of (i) the Performance Objective Payout Amount (set forth below) determined based on the cumulative level of achievement of Sales Growth (“Sales Growth”) and Return on Net Assets Percentage (“RONA%” and, together with Sales Growth, the “Performance Objectives”), which will be established for each fiscal year of the three-year Performance Cycle and (ii) a total shareholder return multiplier (the “TSR Multiplier”) determined based on a comparison of Staples TSR (as defined below) over the three-year Performance Cycle against the TSR for the S&P 500 for such period.  The Shares, if any, issued to the Recipient on the March [__________]  Board Meeting Date shall fully vest one day following the date of  issuance.  The determination of the number of Shares, if any, to be issued pursuant to this Agreement requires certification of the Staples Compensation Committee and the Staples Board of Directors at the end of the Performance Cycle as to the Performance Objectives Payout Amount and the TSR Multiplier. 
 
Performance Objective Payout Amount. The “Performance Objective Payout Amount” for purposes of calculating the number of Shares earned pursuant to this Agreement shall be equal to the sum of the “Payout Amount” determined for each of the three fiscal years within the Performance Cycle.  The “Payout Amount” for each fiscal year shall be equal to the product of (i) 33.33%, for each of  [__________]  and  [__________], and 33.34% for  [__________] , and (ii) the Total Number of Shares at Target (set forth above) and (iii) the “Payout Factor” for such fiscal year determined based on the level of achievement of Sales Growth and RONA% for such fiscal year.  Each Performance Objective shall be weighted 50% for purposes of determining the Payout Factor.  The Performance Objectives for [__________] , the first year of the Performance Cycle, and the associated Payout Factor for  [__________] based on achievement of those objectives, are set forth below.  The Performance Objectives for each of  [__________] and [__________] shall be established in writing by the Compensation Committee within the first 90 days of each respective fiscal year.  

FY  [__________] Performance Objectives.  

[insert table]

In measuring the achievement of the Performance Objectives for any fiscal year within the Performance Cycle and calculating the related Payout Factor for any fiscal year within the Performance Cycle, achievement will be linearly interpolated between the percentages set forth above based on actual results as determined and certified by the Committee.

    
TSR Multiplier.     The TSR Multiplier shall be (i) +25% if the three-year Staples TSR is in the top one- third of the S&P 500 TSR, (ii) -25% of the three year Staples TSR is in the bottom one-third of the S&P 500 TSR  and (iii) shall otherwise be 0%.  In each case, TSR shall be calculated over the three-year period of the Performance Cycle.    

	
		
	Accepted by:
	Staples, Inc.

	

______________________
«FirstName» «LastName»
	

______________________
Ronald L. Sargent
Chairman and Chief Executive Officer

PERFORMANCE SHARE AWARD AGREEMENT - Terms and Conditions

1.Award.  If all the conditions set forth in this Agreement are satisfied, on the March  [__________] Board Meeting Date an award of Shares will be issued under the Plan to the Recipient named in the accompanying PSA.  No Shares will be delivered to the Recipient until the March  [__________] Board Meeting Date, if at all, (except as provided in Section 7), and the Recipient shall have no rights to any Shares or any rights associated with such Shares (such as dividend or voting rights) until the March  [__________] Board Meeting Date, if at all.  Except where the context otherwise requires, the term "Staples" shall include any parent and all present and future subsidiaries of Staples as defined in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from time to time (the "Code").  Capitalized terms used but not defined herein shall have the meaning ascribed to them in the PSA.

2.Conditions for the Award.  Except as provided in Sections 3 and 7, an issuance of Shares on the March  [__________] Board Meeting Date shall be made only if:      

(a)    The Recipient is, and has continuously been, an employee of, or a consultant to, Staples (or any Surviving Corporation (as defined below)) beginning with the date of this Agreement and continuing through the March  [__________] Board Meeting Date; and
(b)    The Performance Objectives during the Performance Cycle are achieved and the TSR Multiplier is achieved and applied.  The Committee must determine and certify on the date of its first regularly scheduled meeting following the end of the Performance Cycle (generally in March) whether, and to what extent, the Performance Objectives have been achieved and  the TSR Multiplier has been achieved, and then make a recommendation to the Board of Directors with respect to such determinations.  The Board of Directors, upon recommendation of the Committee, must then determine and certify on the date of its first regularly scheduled meeting following the end of the Performance Cycle (generally in March) whether, and to what extent, the Performance Objectives have been achieved and the TSR Multiplier has been achieved.  The date on which the Board of Directors certifies that the Performance Objectives have been achieved and certifies that the TSR Multiplier has been achieved shall be the “March  [__________] Board Meeting Date” for purposes of this Agreement.  
To determine the number of Shares to be awarded for a Performance Cycle, the Committee shall apply the formula set forth under the heading Calculation of Number of Shares Earned on the PSA that forms a part of this Agreement (subject to the other provisions of this Agreement, including Section 2(a), Section 3, Section 7 and Section 8).  In making its determination, the Committee shall adjust the Performance Objectives and TSR Multiplier to take into account accounting changes, acquisitions and divestitures and related charges, other special one-time or extraordinary gains and/or losses and other one-time or extraordinary events to the extent permitted under the Plan; provided that the Committee may not adjust the Performance Objectives or TSR Multiplier to take into account foreign currency exchange rate fluctuations, changes in corporate tax rates or recurring store closures consistent with historic patterns (with widespread, out of the ordinary store closures not being consistent with historic patterns).  In measuring the achievement of Performance Objectives for any fiscal year within a Performance Cycle and calculating the related Performance Objective Payout Factor at the end of the Performance Cycle, achievement will be linearly interpolated between the percentages set forth in the PSA based upon actual results as determined and certified by the Committee. 
		
	3.
	Employment Events Affecting Payment of Award.  

(a)    Except as provided in Section 3(b) and in Section 7, and subject to Section 8, if the Recipient is terminated by Staples other than for Cause (as defined below) or the Recipient Retires, in each case on or prior to the March  [__________] Board Meeting Date, then the Recipient will nevertheless be issued on the March  [__________] Board Meeting Date a number of Shares determined under Section 2(b) based on the product of (i) the sum of the Payout Amounts for the completed fiscal years within the Performance Cycle during which the Recipient was employed by Staples and, for partial fiscal years during which the Recipient was employed by Staples, a pro rata portion of the Payout Amounts for such fiscal year based on the days which the Recipient was employed by Staples, and (ii) the TSR Multiplier.  For purposes of this Agreement, “Retire” shall mean the Recipient terminates employment with the Company after attaining age 55 and at the time of such termination of employment the sum of the years of service (as determined by the Staples Board of Directors) completed by the Recipient plus the Recipient’s age is greater than or equal to 65.

(b)    If the Recipient (i) dies or (ii) becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code), in each case on or prior to the March  [__________] Board Meeting Date, then the Recipient or his estate will nevertheless be issued on the March  [__________] Board Meeting Date the number of Shares determined under Section 2(b) hereof as if the Recipient were still employed on the March  [__________] Board Meeting Date.  
(c)    If the Recipient‘s relationship with Staples is terminated by Staples for Cause on or prior to the March  [__________] Board Meeting Date no Shares will vest and this Agreement will be of no further force or effect as of the date of the termination of such relationship.  
(d)    Shares will be issued to the Recipient solely on account of the attainment of the Performance Objectives and application of the TSR Multiplier.  Accordingly, no Shares will be issued to the Recipient if the Recipient’s employment with Staples or an Affiliate is terminated as set forth in Section 3(a) or Section 3(b) unless the Committee determines that the Performance Objectives Payout Amount and the TSR Multiplier, calculated in a manner set forth in this Agreement, result in the issuance of Shares hereunder, and the Committee authorizes the issuance of Shares as described in Section 2(b).
4.Delivery of Shares.  Staples shall, within 30 days of the March  [__________] Board Meeting Date (or, if applicable, the date set forth in Section 7), effect the issuance of any Shares earned hereunder by delivering the Shares to a broker designated by the Recipient.  

5.No Special Employment or Similar Rights.  Nothing contained in the Plan or this Agreement shall be construed or deemed by any person under any circumstances to bind Staples to continue the employment or other relationship of the Recipient with Staples for the period prior to or after the March  [__________] Board Meeting Date. 

		
	6.
	Adjustment Provisions.

(a) Liquidation or Dissolution.  In the event of a liquidation or dissolution of Staples, this Agreement shall be of no further force or effect and no Shares shall be awarded hereunder, provided that if such liquidation or dissolution also constitutes a Change in Control as defined in Section 7(a) hereof, then the provisions of Section 7 and not the provisions of this Section 6(a) shall govern.
(b) Reorganization Event.  In the event of a Reorganization Event as defined in Section 10(b)(1) of the Plan, the Recipient shall, with respect to the Shares, be entitled to the rights and benefits, and be subject to the limitations, set forth in Section 10(b) of the Plan; provided that if such Reorganization Event also constitutes a Change in Control as defined in Section 7(a) hereof, then the provisions of Section 7 and not the provisions of this Section 6(b) shall govern.
(c)  Board Authority to Make Adjustments.  Any adjustments under this Section 6 will be made by the Board of Directors, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive.  No fractional shares will be issued with respect to Shares on account of any such adjustments.
		
	7.
	 Change in Control.  

(a)  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 Rule 14a-11 of 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 7(a)(i), Staples; (y) in the case of a Change in Control pursuant to clause (C) of Section 7(a)(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 7(a)(i), the entity acquiring the majority of the assets being sold or disposed of by Staples. 
(b) Effect of Change in Control. Notwithstanding the provisions of Section 2, if (i) a Change in Control of Staples occurs after the date of this Agreement and (ii) within one year following the closing of the Change in Control, but on or prior to the March  [__________] Board Meeting Date, the employment of the Recipient is terminated by the Company without Cause (as defined in Section 8(c) hereof) or the Recipient terminates employment with the Company for Good Reason (as defined below), then the greater of (X) a number of Shares equal to the Number of Shares at Target or (Y) the number of Shares determined to be issuable under Section 2(b) of this Agreement will be issued to the Recipient.  Any Shares issued pursuant to this Section 7 shall be issued (A) within 10 days following the date of termination of employment of the Recipient, provided that the Change in Control qualifies as a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i) or (b) on the March  [__________] Board Meeting Date if the Change in Control does not so qualify.
For purposes of this Agreement, “Good Reason” shall mean (i) a material diminution in the duties, authority and responsibilities of the Recipient, (ii) a material reduction in the Recipient’s base compensation or (iii) the relocation of the Recipient’s principal place of employment by more than an additional 50 miles from his or her primary residence as of the closing of the Change in Control.  In order to terminated on account of Good Reason, (i) the Recipient must provide notice to the Company within 60 days of the event triggering Good Reason, (ii) the Company must have 30 days following the receipt of such notice to cure such event and (iii) the Recipient must actually terminate employment with the Company within six months following the date of the notice.
		
	8.
	Forfeiture and Recovery for Misconduct

(a)    Right of Recovery.
Notwithstanding any other provision of the Plan or this Agreement to the contrary, if the Board of Directors of Staples (or its authorized designee, the “Board”) determines during the Recovery Period (as defined in this Section 8(a) below) that a Recipient has engaged in any of the conduct set forth in clauses (ii) through (v) of Section 8(c) (which determination shall be conclusive, “Misconduct”), the Board, subject to the limitations set forth in this Section 8, may in its sole discretion (1) terminate such Recipient’s participation in the Plan and/or (2) treat any right to earn Shares pursuant to this Agreement and the Plan as forfeited, and/or (3) demand that the Recipient pay in cash or transfer in Shares the amount described in Section 8(b); provided, however, that in the event the Board determines during the Recovery Period that the Recipient engaged in Misconduct as described in clause (v) of Section 8(c) (“Restatement Misconduct”), the Board shall in all circumstances, in addition to any other recovery action taken, require forfeiture and demand repayment pursuant hereto.
“Recovery Period” means (1) if the Misconduct relates to Restatement Misconduct, or the Misconduct consists of acts or omissions relating to Staples’ financial matters that in the discretion of the Board are reasonably unlikely to be discovered prior to the end of the fiscal year in which the Misconduct occurred and the completion of the outside audit of Staples’ annual financial statements, the period during which the Recipient is employed by Staples and the 

period ending 18 months after the Recipient’s last day of employment; (2) if the Misconduct relates to the breach of any agreement between the Recipient and Staples, the term of the agreement and the period ending six months following the expiration of the agreement, and (3) in all other cases, the period during which the Recipient is employed by Staples and the period ending six months after the Recipient’s last day of employment.  If during the Recovery Period the Board gives written notice to the Recipient of potential Misconduct, the Recovery Period shall be extended for such reasonable time as the Board may specify is appropriate for it to make a final determination of Misconduct and seek enforcement of any of its remedies described above.  Staples’ rights pursuant to this Section 8 shall terminate on the effective date of a Change in Control and no Recovery Period shall extend beyond that date except with respect to any Recipient for which the Board prior to such Change in Control gave written notice to such Recipient of potential Misconduct.
For purposes of administratively enforcing its rights under this Section 8, during any period for which potential Misconduct has been identified by Staples, the Board may (1) suspend such Recipient’s participation in the Plan, or with respect to any award under the Plan, or (2) temporarily withhold, in whole or in part, the award of any Shares pursuant to this Agreement and the vesting of any award or the transfer of any shares relating to any award made under the Plan.
 (b)    Amount of Recovery.
With respect to Misconduct described in Section 8(c)(ii) (breach of agreement) and Section 8(c)(iii) (violation of Code of Ethics), and in addition to Staples’ right to effect a termination of participation and a forfeiture of any right to earn Shares under this Agreement and  the Plan, at the Board’s discretion, vested Shares shall be deemed repurchased by Staples at a repurchase price of zero and ownership of all right, title and interest in and to the Shares shall be forfeited and revert to Staples as of the date of such termination; or, if the Recipient at such time no longer owns such Shares, Staples shall be entitled to recover from the Recipient the gross profit earned by the Recipient upon the disposition (whether by sale, gift, donation or otherwise) of such Shares.
With respect to Misconduct described in Section 8(c)(iv) (intentional deceitful acts), and in addition to Staples’ right to effect a termination of participation and a forfeiture of outstanding awards and the Recipient’s right to earn Shares under this Agreement and the Plan, the Board may recover from the Recipient the amount (in cash or Shares) determined by the Board in its sole discretion to represent the financial impact of the Misconduct upon Staples; provided, however, that such recovery amount shall be reduced by the value of any forfeited outstanding awards under this Agreement (value to be determined by the fair market value of the Shares as of the award grant date for any such forfeited outstanding performance share awards and the issuance date fair market value of any forfeited Shares) and any amounts recovered from the Recipient under Staples’ cash bonus plans and other short term or long term incentive plans as a result of such Misconduct.
With respect to Restatement Misconduct, and in addition to Staples’ right to effect a termination of participation and a forfeiture of outstanding awards and right to earn Shares under this Agreement and the Plan, vested Shares that were the subject of an award with a Performance Cycle that includes any portion of a fiscal year that is the subject of an accounting restatement shall be deemed repurchased by Staples at a repurchase price of zero and ownership of all right, title and interest in and to such Shares shall be forfeited and revert to Staples as of the date of such termination; or, if the Recipient at such time no longer owns such Shares, Staples shall be entitled to recover from the Recipient (1) the gross profit earned by the Recipient upon the disposition (whether by sale, gift, donation or otherwise) of such Shares and (2) the gross profit earned by the Recipient upon the disposition (whether by sale, gift, donation or otherwise) of any securities of Staples during the twenty-four (24) month period following the first public issuance of the financial statements that ate the subject of an accounting restatement.
The term “recover” or “recovered” shall include, but shall not be limited to, any right of set-off, reduction, recoupment, off-set, forfeiture, or other attempt by Staples to withhold or claim payment of an award or any proceeds thereof (including any proceeds from the sale or other disposition of Shares).  For purposes of any recovery of Shares, Staples may treat Shares as fungible and shall not be required to identify, trace, or recover specific Shares.  Staples’ right of forfeiture and recovery of awards shall not limit any other right or remedy available to Staples for an Recipient’s Misconduct, whether in law or equity, including but not limited to injunctive relief, terminating the Recipient’s employment with Staples, or taking other legal action against the Recipient.

The amount that may be recovered under this Section 8 shall be determined on a gross basis without reduction for taxes paid or payable by a Recipient.
(c) Definition of Cause.  "Cause," as determined by Staples (or any successor) (which determination shall be conclusive), shall mean: 
(i)     Willful failure by the Recipient to substantially perform his or her duties with Staples (other than any failure resulting from incapacity due to physical or mental illness); provided, however, that Staples has given the Recipient a written demand for substantial performance, which specifically identifies the areas in which the Recipient’s performance is substandard, and the Recipient has not cured such failure within 30 days after delivery of the demand.  No act or failure to act on the Recipient’s part will be deemed “willful” unless the Recipient acted or failed to act without a good faith or reasonable belief that his or her conduct was in Staples’ best interest; or
(ii)    Breach by the Recipient of any provision of any employment, consulting, advisory, proprietary information, non-disclosure, non-competition, non-solicitation or other similar agreement between the Recipient and Staples, including, without limitation, the Proprietary and Confidential Information Agreement and/or the Non-Compete and Non-Solicitation Agreement; or
(iii)    Violation by the Recipient of the Code of Ethics; or
(iv)    The Recipient’s engagement in intentional deceitful act(s) that results in (1) an improper personal benefit, or (2) injury to Staples; or
(v)    The Recipient’s engagement in fraud or willful misconduct (not acting in good faith or with reasonable belief that conduct was in the best interests of Staples) that significantly contributes to Staples preparing a material financial restatement, other than a restatement of financial statements that became materially inaccurate because of revisions to generally accepted accounting principles; or
(vi)    Failure by the Recipient to devote his or her full working time to the affairs of Staples except as may be authorized in writing by Staples’ CEO or other authorized Staples official; or
(vii)    The Recipient’s engagement in business other than the business of Staples except as may be authorized in writing by Staples’ CEO or other authorized Staples official; or
(viii)    The Recipient’s engagement in misconduct, which is demonstrably and materially injurious to Staples.
For purposes of the definition of Cause contained in Section 8(c)) regarding forfeiture and recovery for Misconduct, any reference therein to Staples (other than with respect to defining the Board of Directors) shall also include any entity that Staples directly or indirectly controls.
9.Withholding Taxes.  Staples’ obligation to deliver the Shares shall be subject to the Recipient’s satisfaction of all applicable federal, state and local income and employment tax withholding requirements.  Staples may deduct any such tax obligations from any payment of any kind otherwise due to the Recipient, including salary and bonus payments, and may withhold or sell a sufficient number of Shares on behalf of the Recipient to satisfy such tax obligations.  Subject to Staples’ prior approval, which may be withheld in its sole discretion, the Recipient may elect to satisfy such tax withholding obligations (i) by causing Staples to withhold Shares or (ii) by delivering to Staples shares of Common Stock already owned by the Recipient.

10.Transferability.  This Agreement may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of (whether by operation of law or otherwise) (collectively, a “transfer”) by the Recipient, except that this Agreement may be transferred by the laws of descent and distribution.  The Recipient may only transfer Shares that may be issued pursuant to this Agreement following a Vesting Date.  

		
	11.
	Miscellaneous.  

(a)  Except as provided herein, this Agreement may not be amended or otherwise modified unless evidenced in writing and signed by Staples and the Recipient unless the Board of Directors determines that the amendment or modification, taking into account any related action, would not materially and adversely affect the Recipient.
(b)  All notices under this Agreement shall be mailed or delivered by hand to Staples at its main office, Attn: Secretary, and to the Recipient to his or her last known address on the employment records of Staples or at such other address as may be designated in writing by either of the parties to one another.
(c)  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.SPLS EX 10.4 080214

Exhibit 10.4
 
Staples, Inc.
Employer ID:
500 Staples Drive
Framingham, MA 01702

ACCOUNT ID:    «AccountID»

«FirstName» «LastName»     
«Address1»    
«Address2»
«City», «State»  «Zip»    
«Country»

In consideration of services rendered to Staples, Inc., you have been awarded restricted stock units under Staples, Inc.’s 2014 Stock Incentive Plan as follows:

Restricted Stock Unit Award No.:    «GrantNumber»
Stock Plan:    2014RSU
Date of Award:        
Total Number of Units:    «UnitsGranted»
Fair Market Value per Unit:    «FairValue»
Total Value of Units Granted:    
Vesting Date:    

Each restricted stock unit represents the right to receive one share of Staples, Inc. Common Stock.
    
By your acceptance of this Restricted Stock Unit Award, you acknowledge that this award is granted under and governed by the terms and conditions of Staples, Inc.’s 2014 Stock Incentive Plan (as further amended or restated from time to time) and by the terms and conditions of Staples, Inc.’s Restricted Stock Unit Award Agreement which is attached hereto.

	
		
	 
	Staples, Inc.

	

	

Ronald L. Sargent
Chairman and Chief Executive Officer

STAPLES, INC.
RESTRICTED STOCK UNIT AWARD AGREEMENT
(DIRECTORS)

    
1.  Award.  In consideration of services rendered, Staples, Inc., a Delaware corporation (“Staples"), hereby awards to the Director named in the Notice of Award (the “Notice”), pursuant to Staples’ 2014 Stock Incentive Plan (the "Plan"), the Total Number of Units stated in the Notice of Award (the "Units").  Each Unit represents the right to receive one share of Common Stock of Staples (each, a “Share” and collectively, the “Shares”) subject to the terms and conditions of this Restricted Stock Unit Award Agreement and the Plan.  Except where the context otherwise requires, the term "Staples" shall include any parent and all present and future subsidiaries of Staples as defined in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from time to time (the "Code").
2. Transferability.  Until the Units have vested as described below, the Units may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of (whether by operation of law or otherwise) nor shall any Units or Shares be subject to execution, attachment or similar process, except that the Units may be transferred by will or the laws of descent and distribution.  All transferees of the Units or Shares must agree to be governed by all of the terms and conditions of this Agreement.  Upon any sale, transfer, assignment, pledge, hypothecation or other disposition, or any attempt to sell, assign, transfer, pledge, hypothecate or otherwise dispose, of the Units or Shares received upon settlement of a Unit contrary to the provisions hereof, or upon the levy of any execution, attachment or similar process upon the Units or Shares or such rights, any Units or Shares shall, at the election of Staples, be deemed repurchased by Staples at a repurchase price of zero and all rights with respect to the Units and Shares shall be forfeited to Staples.  In addition, Staples may seek any other legal or equitable remedies available to it, including rights of specific performance.   Staples may refuse to recognize as a shareholder of Staples any purported transferee of or holder of any rights with respect to the Units and any Shares received upon settlement of a Unit and may retain and/or recover all dividends, dividend equivalents and other distributions payable or paid with respect to such Units and Shares.
3.  Vesting of Units.  Except as otherwise provided in this Agreement, the transfer restrictions on the Units shall lapse, and the Units shall be considered to “vest”, on the Vesting Date set forth in the Notice.      
4.  Vesting Date.
(a)  Continuous Relationship with Staples Required.  For purposes of this Agreement, an “Eligible Director” is an individual that is, and has been at all times since the Date of Award, a director of Staples.  If the Director is an Eligible Director on the Vesting Date, the Units shall no longer be subject to forfeiture as provided in this Section 4.  
(b)   Termination of Relationship with Staples.  If the Director ceases to be an Eligible Director for any reason before the Vesting Date, then, except as provided in paragraph (c) below, all right, title and interest in and to the Units and the Shares that would be received upon settlement of the Units shall be forfeited on the date such Director ceases to be an Eligible Director.  If the Director is on an approved leave of absence, then the Units and the related Shares shall not be forfeited, as a result of such leave of absence, unless and until the Director’s position as a director is ultimately terminated. 
(c)  Vesting Upon Death, Disability, Retirement or Change in Control.  If the Director (i) dies; (ii) becomes disabled (within the meaning of Section 409A of the Code (a “Disability”)); or (iii) terminates his or her position as a director of Staples and separates from service within the meaning of Section 409A of the Code upon or after reaching age 72 (a “Retirement”), or if a Change in Control occurs, in each case prior to the Vesting Date,  while he or she is an Eligible Director, then the Units shall vest in full and the Shares to be received upon settlement of the Units shall be issued at the time set forth in Section 5 below.  In addition and subject to Section 11 of this Agreement, if the Director reaches age 72 before the Vesting Date while he or she is an Eligible Director, a number of Units that is sufficient to satisfy the Eligible Director’s federal, state or local income and employment tax obligations with respect to the Units that are triggered by such event shall no longer be subject to repurchase/forfeiture as provided in this Section 4.
(d)  Repurchase/Forfeiture.  Upon repurchase/forfeiture of the Units for any reason hereunder, the Director shall cease to have any rights or privileges with respect to the Units repurchased/forfeited and the Shares that would be received upon settlement of the Units, and such Units and the related Shares shall again be available for subsequent grants or awards under the Plan.

5.  Settlement of Units.  Settlement of the vested portion of the Total Number of Units shall be made in a single lump sum payment on the first business day following the earliest to occur of the Vesting Date, the death of the Director, the Disability of the Director, the Retirement of the Director, or the consummation of a Change in Control.  Staples shall settle any vested Units through issuance of Shares by registering the Shares in book entry form with Staples' transfer agent in the name of the Director.   No certificate(s) representing all or a part of the Shares shall be issued until settlement. 
6.  No Rights to Continue as a Director.  Nothing contained in the Plan or this Agreement shall be construed or deemed by any person under any circumstances to bind Staples to continue the relationship of the Director with Staples for the period before or after the Vesting Date. 
7.  Rights as a Shareholder.  Except as otherwise provided herein, the Director (a) shall not have the right to vote any Shares nor act in respect of any Shares at any shareholder meeting prior to being issued the Shares in connection with the settlement of the Units, and (b) shall not have any right to receive cash dividends with respect to the Units or Shares prior to being issued Shares in connection with the settlement of the Units.
8.  Adjustment Provisions.
(a)  General.   In the event of any recapitalization, reclassification of shares, combination 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 Director shall, with respect to the Units and Shares, be entitled to the rights and benefits, and be subject to the limitations, set forth in Section 10 of the Plan.
(b)  Board Authority to Make Adjustments.  Any adjustments under this Section 8 will be made by the Board of Directors, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive.  No fractional shares will be issued with respect to Units or Shares on account of any such adjustments.
9.  Mergers, Consolidations, Distributions, 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, the Director shall, with respect to this Agreement, be entitled to the rights and benefits, and be subject to the limitations, set forth in Section 10 of the Plan.
10.  Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:  
(a)  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; provided, however, that such Change in Control also qualifies as a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i). 

(b) "Surviving Corporation" shall mean (x) in the case of a Change in Control pursuant to clause (A) or clause (B) of Section 10(a), Staples; (y) in the case of a Change in Control pursuant to clause (C) of Section 10(a), 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 10(a), the entity acquiring the majority of the assets being sold or disposed of by Staples.  
11.  Withholding Taxes.  Notwithstanding anything to the contrary in this Agreement, any provisions providing for the issuance of Shares upon settlement of the Units shall be subject to the Director's satisfaction of all applicable federal, state and local income tax withholding requirements.  
12.  Compliance with Section 409A of the Code.  This Agreement is intended to comply with the requirements of Section 409A of the Code and shall be construed consistently therewith.  In any event, Staples makes no representation or warranty and shall have no liability to the Director or any other person if any provisions of or payments, compensation or other benefits under the Plan or this Agreement are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but do not satisfy the conditions of that section.
13.  Miscellaneous.  
(a)  Except as provided herein, this Agreement may not be amended or otherwise modified unless evidenced in writing and signed by Staples and the Director unless the Board of Directors determines that the amendment or modification, taking into account any related action, would not  materially and adversely affect the Director.
(b)  All notices under this Agreement shall be mailed or delivered by hand to Staples at its main office, Attn: Secretary, and to the Director to his/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 Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

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