Document:

Exhibit 10.18

	
  

  	
  Staples, Inc.

  
	
   

  	
  Employer ID: 04-2896127

  
	
   

  	
  500 Staples Drive

  
	
  Performance Share Award
  Agreement

  	
  Framingham, MA 01702

  
	
  «FirstName» «LastName»

  	
  EMPLOYEE ID:

  
	
  «Address1»

  	
  LOCATION:

  
	
  «Address2»

  	
   

  
	
  «City», «State» «Zip»

  	
   

  
	
  «Country»

  	
   

  
	
   

  	
   

  

 

Staples, Inc. (“Staples”)
hereby agrees to award to the recipient named above (the “Recipient”) on the
date set forth below (the “Vesting Date”) the number of shares of Common Stock
of Staples (the “Shares”), in accordance with and subject to the terms,
conditions, and restrictions of this Agreement (as defined below). If the
conditions described below are satisfied, such award will be made under the
terms of the Staples Amended and Restated 2004 Stock Incentive Plan, as further
amended or restated from time to time (the “Plan”), on the Vesting Date.

	
  Date of Agreement:

  	
   

  
	
  Performance Period:

  	
  FY 20   – FY
  20   (three years)

  
	
  Total Number of Shares @ Target:

  	
   

  
	
  Vesting Date:

  	
  As defined in Section
  2(b) of PSA20  ,

  
	
   

  	
  the date of the first
  regularly

  
	
   

  	
  scheduled meeting of
  the Board of

  
	
   

  	
  Directors in FY
  20   (generally in

  
	
   

  	
  March) at which the
  Board of

  
	
   

  	
  Directors certifies
  that the

  
	
   

  	
  Performance Criteria
  have been satisfied.

  

 

By your acceptance of this Performance Share Award Agreement,
you agree that any Shares will be awarded under and governed by the terms and
conditions of the Plan and by the terms and conditions of the Staples
Performance Share Award Agreement — Terms and Conditions (“PSA20  ”), which is attached hereto (this
Performance Share Award Agreement and the PSA20 
 are together referred to as the “Agreement”).

Performance Criteria: The following Performance
Criteria must be satisfied for an award of Shares to be made under this
Agreement. As more fully described in PSA20  , the number of Shares
awarded on the Vesting Date shall be determined based on the extent to which
the FY 20   - FY 20   Cumulative RONA Dollars are
achieved.  All awards of Shares require
certification of the Staples Board of Directors that the Performance Criteria
have been satisfied.

	
  Performance Share Payout Schedule

  
	
  FY 20  -FY 20   Cumulative
  RONA 

  	
   

  	
  %
  Target Shares Earned

  
	
  Dollars*

  	
   

  	
   

  
	
  Threshold

  	
   

  	
  90%

  
	
  Target

  	
   

  	
  100%

  
	
   

  	
   

  	
  125%

  
	
   

  	
   

  	
  150%

  
	
   

  	
   

  	
  175%

  
	
  Maximum

  	
   

  	
  200%

  

 

* Cumulative RONA Dollars are in
millions.  For purposes of this
Agreement, “Cumulative RONA Dollars” means the cumulative profit generated
across the Staples business units in excess of the capital employed during the
Performance Period calculated in a manner consistent with the method used by
Staples for financial planning purposes; provided that such term specifically
excludes any cash held at the Staples, Inc. level.

You
understand and agree that this Agreement is being awarded to you in exchange
for your execution of a Non-Compete and Non-Solicitation Agreement in a form
approved by Staples.

	
  Accepted by:

  	
   

  	
  Staples, Inc.

  
	
   

   

   

  	
   

  	
   

  

   

  
	
   

  	
   

  	
  Ronald L. Sargent

  
	
  «FirstName» «LastName»

  	
   

  	
  President and Chief Executive Officer

  

 

Attachment:  Staples, Inc. PSA20  

 

STAPLES, INC. PERFORMANCE
SHARE AWARD AGREEMENT — Terms and Conditions

1.              Award.  If all the conditions set forth in this
Agreement are satisfied, on the Vesting Date an award of Shares will be made
under the Plan to the Recipient named in the accompanying Performance Share Award
Agreement. No Shares will be delivered to the Recipient or transferred into the
Recipient’s name until the Vesting Date (except as provided in Section 8), 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 Vesting Date.  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 Performance Share Award
Agreement.

2.              Conditions for
the Award.  Except
as provided in Sections 3 and 8, an award of Shares on the Vesting Date shall
be made only if:

(a)           The Recipient is, and has
continuously been, an employee of, or a consultant to, Staples beginning with
the date of this Agreement and continuing through the Vesting Date; and

(b)           The Performance Criteria set forth in
the accompanying Performance Share Award Agreement are satisfied during the
Performance Period.  The Staples Board of
Directors, upon recommendation of the Compensation Committee, must determine
and certify on the date of its first regularly scheduled meeting in FY 20  
(generally in March) whether, and to what extent, the Performance Criteria have
been achieved.  The date on which the
Board of Directors certifies that the Performance Criteria have been satisfied
shall be the “Vesting Date” for purposes of this Agreement.  In making its determination, the Compensation
Committee may adjust the Performance Criteria to take into account accounting
changes, acquisitions and related charges, and other special one-time or
extraordinary gains and/or losses and other one-time or extraordinary events as
permitted under the Plan; provided that the Compensation Committee may not
adjust the Performance Criteria 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).  Awards of Shares shall be made only at the
percentages set forth in the Performance Share Award Agreement under the
heading “% Target Shares Earned”; there will be no pro-rata issuances of Shares
for achievement of other FY 20   — FY 20   Cumulative RONA
Dollar amounts.  If the minimum Threshold
FY 20   — FY 20   Cumulative RONA Dollars is not achieved
during the Performance Period, no Shares will be issued and this Agreement will
be of no force or effect.

3.              Employment Events
Affecting Payment of Award.

(a)           Except as provided in Section 3(b)
and in Section 8, if the Recipient terminates employment with Staples prior to
the Vesting Date, for any reason or no reason, with or without cause, no Shares
will be issued and this Agreement will be of no further force or effect.

(b)           If the Recipient (i) dies, (ii)
becomes disabled (within the meaning of Section 22(e)(3) of the Internal
Revenue Code), or (iii) terminates employment after attaining age 55 and at the
time of such termination of employment the sum of the years of service (as
determined by Staples Board of Directors) completed by the Recipient plus the
Recipient’s age is greater than or equal to 65, in each case prior to the
Vesting Date, then the Recipient or his estate will nevertheless be awarded on
the Vesting Date the number of Shares determined under Section 2(b) hereof as
if the Recipient were still employed on the Vesting Date.

(c)           If (i) the Recipient’s relationship
with Staples is terminated by Staples for Cause (as defined below) or (ii) if
the Recipient retires or resigns and Staples determines within six months
thereafter that the Recipient’s conduct prior to his retirement or resignation
warranted discharge for Cause, or (iii) Staples determines that the Recipient’s
conduct after termination of the employment relationship fails to comply with
the terms of any non-competition, non-solicitation or confidentiality provision
contained in any employment, consulting, advisory, proprietary information,
non-competition, non-solicitation or other similar agreement between the
Recipient and Staples, then, without limiting any other remedy available to
Staples, the Shares (and any shares issued under Section 5 hereof) shall be
repurchased by Staples at a repurchase price of zero and ownership of all
right, title and interest in and to the such shares shall be forfeited and
revert to Staples as of the date of such determination; or, if the Recipient no
longer owns the shares at such time, 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.

4.              Delivery of
Shares.  Staples
shall, within 30 days of the Vesting Date (or, if applicable, the date the
Shares vest under Section 8), effect the issuance of the Shares by delivering
the Shares to a broker designated by the Recipient.

5.              Dividend
Equivalent Rights.  If any Shares are awarded to the Recipient
pursuant to this Agreement, then the Recipient shall also be entitled to
receive a number of shares of Staples Common Stock equal to (A) (i) the number
of Shares awarded to the Recipient under Section 2 multiplied by (ii) the
cumulative amount of cash dividends paid by Staples that the Recipient would
have received had he owned the awarded Shares on each dividend record date
during the Performance Period, divided by (B) the closing price of the Common
Stock on the Vesting Date; provided, however, that cash will be paid in lieu of
any fractional shares the Recipient would be entitled to receive under this
Section 5.

 

6.              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 Vesting Date.

7.              Adjustment
Provisions.

(a) Changes in Capitalization.   In the event of any change in capitalization
of Staples, as described in Section 9(a) 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 9(a) of the Plan.

(b) 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 8(a) hereof, then the provisions of Section 8 and
not the provisions of this Section 7(b) shall govern.

(c) Reorganization
Event.  In the event
of a Reorganization Event as defined in Section 9(c)(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 9(c) of the
Plan; provided that if such Reorganization Event also constitutes a Change in
Control as defined in Section 8(a) hereof, then the provisions of Section 8 and
not the provisions of this Section 7(c) shall govern.

(d)  Board Authority to Make Adjustments.  Any adjustments under this Section 7 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.

8.               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
10(a)(i), Staples; (y) in the case of a Change in Control pursuant to clause
(C) of Section 10(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 10(a)(i), the entity acquiring the majority of the assets being
sold or disposed of by Staples.

(iii) “Cause,” as determined by Staples or the
Surviving Corporation (which determination shall be conclusive), shall mean:

(A) 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

(B) 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

(C) Violation by the Recipient
of the Code of Ethics or an attempt by the Recipient to secure any improper
personal profit in connection with the business of Staples; or

(D) 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 Company official; or

(E) 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 Company official; or

(F) The Recipient’s engagement
in misconduct, which is demonstrably and materially injurious to Staples.

(b) Effect of Change in Control.
Notwithstanding the provisions of Section 2, if a Change in Control of Staples
occurs prior to the Vesting Date and while the Recipient is employed by
Staples, then the greater of (X) a number of Shares determined as if the Target
FY 20__ - FY 20__ Cumulative RONA Dollars were achieved or (Y) the number of
Shares determined to be issuable under Section 2(b) of this Agreement will be
awarded (and the corresponding shares under Section 5 hereof will be issued)
if:

(i) Upon the Change in Control, the Recipient:

(A) Is not offered
employment with the Surviving Corporation (or is not allowed to continue his or
her employment, if the Surviving Corporation is Staples) in a position (1) in
which the title, employment duties and responsibilities, conditions of
employment, and the level of compensation and benefits are at least equivalent
to those in effect during the 90-day period immediately preceding the Change in
Control and (2) that does not involve a relocation of the Recipient’s principal
place of employment of more than an additional 50 miles from the Recipient’s
primary residence at the time of the Change in Control, or

(B) Does not
accept (or continue) employment with the Surviving Corporation (regardless of
position, compensation or location) (other than as a result of retirement);

(ii) Within one year following the date of the Change
in Control, the Recipient either:

(A) Is discharged
without Cause; or

(B) Resigns or
retires because his or her title or employment duties and responsibilities are
diminished, his or her conditions of employment are adversely changed, the
level of his or her compensation and benefits are reduced, or his or her
principal place of employment is relocated by more than an additional 50 miles
from his or her primary residence at the time of the Change in Control; or

(iii) The Recipient continues to be employed by
Staples or the Surviving Corporation on the Vesting Date.

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.  In the sole discretion of Staples Board of
Directors, the Recipient may surrender to Staples a number of Shares sufficient
to satisfy the Recipient’s tax withholding obligations.

10.       Deferral.  In
the sole discretion of the Staples Board of Directors, the Recipient may elect
to defer delivery of the Shares; provided, however, that any such deferral must
comply with the requirements of Section 409A of the Internal Revenue Code.

11.       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 the Vesting Date.

12.       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.Exhibit 10.19

	
  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 (NQS42004), which is attached hereto.

Staples, Inc.

Ronald L. Sargent

Chairman and Chief Executive Officer

Attachment: Staples, Inc.
Non-Qualified 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 prior to the fourth
anniversary date of the Date of Grant, no additional shares of Common Stock
shall become exercisable on any of the anniversary dates 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,
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 55 if at the time of such cessation of service the sum of the
years of service as a director of Staples (as determined by the Board of
Directors of Staples) completed by the Optionee plus the Optionee’s age is
greater than or equal to 65.

(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 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 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 55, if at the time of such
cessation of service the sum of the years of service as a director of Staples
(as determined by the Board of Directors of Staples) completed by the Optionee
plus the Optinee’s age is greater than or equal to 65, 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(a) 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(a) 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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