Document:

Exhibit 10.1

 

Staples, Inc.

2010 Long-Term Cash Incentive Plan

 

I.                                         Summary and
Purpose

 

Staples, Inc. (“Staples”) has developed
this 2010 Long-Term Cash Incentive Plan (the “Plan”) to provide opportunities
for Participants (as defined in Section III.A. below) to earn financial
rewards for their role in ensuring that Staples meets its long-term performance
targets.  The Plan aims to align the
interests of the Participants with those of its shareholders.  Awards are based on actual results measured
against pre-established company financial objectives and other long-term
performance goals.

 

The Plan is intended to provide for long-term
cash incentive awards based upon a three (3) year performance cycle (“Performance
Cycle”) under which performance goals will be established separately for each
of the three fiscal years included within such Performance Cycle.  The performance goals for each Participant
will be established within the first 90 days of each fiscal year.  A target award will also be established for
each Participant within the first 90 days of each Performance Cycle, and once
established shall remain fixed for the balance of the Performance Cycle.  One-third of the target award will be applied
as a target amount for each of the fiscal years within the Performance
Cycle.  At the end of the Performance
Cycle, the Compensation Committee of the Board of Directors of Staples (“Committee”)
will determine the amount of the payment to be made to a Participant with
respect to a target award by adding the amount earned in relation to the
performance goals achieved for each fiscal year and (subject to the other
provisions of the Plan) paying that amount to the Participant.  A Participant may be granted more than one
award under this Plan, and may be granted awards that have overlapping
Performance Cycles and fiscal years.

 

II.                                     Term of Plan

 

The Plan will cover five fiscal years of
Staples, beginning with the 2010 fiscal year (beginning January 30, 2010)
and ending with the 2014 fiscal year (ending January 31, 2015).  Each such fiscal year is referred to herein as
a “Plan Year.”  Subject to further
shareholder approval, the term of the Plan may be extended for subsequent
fiscal years.

 

III.                               Eligibility

 

Subject to the determination by the Committee
that the applicable performance goals and all other requirements of the Plan
are met, the following guidelines will be used to determine an individual’s
eligibility for participation in the Plan and eligibility for payment of an
award.

 

A.                                    General
Eligibility Requirements

 

Any associate of Staples or of any entity
that Staples directly or indirectly controls (each, an “Affiliate”) will be
eligible to participate in the Plan. 
Each associate who has been granted an award under the Plan shall be
deemed a “Participant” in this Plan.  A
Participant whose employment with Staples or the Affiliate terminates prior to
the end of a Performance Cycle, other than as a result of retirement, permanent
disability, death, or Change in Control (as defined 

 

 

in Section III. D.
below), will be eligible to receive payment of an award under the Plan for that
Performance Cycle as follows:

 

(i)                                     if a
Participant voluntarily terminates employment with Staples or an Affiliate
before the end of the Performance Cycle, then the associate will be eligible
for a prorated award based on any previously completed Plan Years within the
applicable Performance Cycle;

 

(ii)                                  If a
Participant’s employment with Staples or an Affiliate is terminated by Staples
or an Affiliate without Cause (as defined in Section III.D.5.(iii) below)
before the end of the Performance Cycle, then the associate will be eligible
for a prorated award based on the number of days the associate was employed by
Staples or the Affiliate during (1) the Plan Year in which the associate’s
employment was terminated if such termination occurs after the establishment of
the performance goals and target award for the Participant for that Plan Year,
and (2) any previously completed Plan Years within the applicable
Performance Cycle; and

 

(iii)                               If a Participant’s
employment with Staples or an Affiliate is terminated by Staples or an
Affiliate for Cause before the end of the Performance Cycle, then the associate
will not be eligible to receive payment of an award under the Plan.

 

Awards granted to Participants are intended
to be payable solely on account of the attainment of one or more
pre-established objective performance goals as described in Sections IV and
V.  Accordingly, no award made to a
Participant who terminates employment with Staples or an Affiliate under the
circumstances described immediately above in this Section III.A. will be
paid unless the applicable performance goals were pre-established by the
Committee  in accordance with Section IV.B.,
the Committee determines that the applicable performance goals for the Plan
Years within a particular Performance Cycle were achieved, and the Committee
authorizes the payment of the award as described in Section V.  Payment will be made at the time and in the
manner described in Section V.

 

B.                                    Changes in
Position

 

A Participant who changes from one position
to another will be eligible for a prorated award as follows:

 

(i)                                     A Participant
who transfers from a Plan-eligible position into a position that is not
eligible for participation in this Plan is eligible for a prorated award under
this Plan based on the number of days the associate was a Participant during
the applicable Performance Cycle.  The
associate’s eligibility for a long-term incentive award for the new position,
if any, will be determined in accordance with any applicable plan for that
position.

 

(ii)                                  A Participant
who changes from one Plan-eligible position to another, through a promotion,
transfer or demotion, is eligible for a prorated award for each position based
on the number of days the associate held such position during the Performance
Cycle.

 

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C.                                    Leaves of
Absence

 

A Participant who is on a company-approved
leave of absence in excess of 90 days during a Performance Cycle will not be eligible
for an award for the portion of his or her leave over 90 days unless otherwise
approved by the Committee.

 

D.                                    Retirement,
Disability, Death or Change in Control

 

1.                                      Retirement:  If a Participant terminates his or her
employment with Staples or an Affiliate before the end of the Performance Cycle
and after attaining age 55, and if at the time of such termination of
employment the sum of the years of service (as determined by the Committee)
completed by the associate plus the associate’s age is greater than or equal to
65, then the associate will be eligible for a prorated award based on the
number of days the associate was employed by Staples or the Affiliate during (1) the
Plan Year in which the associate terminates employment if such termination occurs
after the establishment of the performance goals and target award for the
Participant for that Plan Year, and (2) any previously completed Plan
Years within the applicable Performance Cycle.

 

2.                                      Disability:  If a Participant’s employment with Staples or
an Affiliate is terminated due to permanent disability before the end of the
Performance Cycle, then the associate will be eligible for a prorated award
based on the number of days the associate was employed by Staples or the
Affiliate during the applicable Performance Cycle.

 

Awards granted to Participants are intended
to be payable solely on account of the attainment of one or more
pre-established objective performance goals as described in Sections IV and
V.  Accordingly, no award made to a
Participant who  retires or becomes
disabled under the circumstances described immediately above in this Section III.D.
will be paid unless the applicable performance goals were pre-established by
the Committee in accordance with Section IV.B., the Committee determines
that the applicable performance goals for the Plan Years within a particular
Performance Cycle were achieved, and the Committee authorizes the payment of
the award as described in Section V. 
Payment will be made at the time and in the manner described in Section V.

 

3.                                      Death:  If a Participant’s employment with Staples or
an Affiliate is terminated due to death before the end of the Performance
Cycle, then without regard to the amount that would have been earned by the
Participant under the award based upon achievement of the performance goals,
100% of the Participant’s Target Award (as defined in Section IV.C. below)
for such Performance Cycle will be paid to the Participant’s beneficiary (as
defined in Section VII.J. below). 
Payment will be made at the time and in the manner described in Section V.

 

4.                                      Change
in Control:  If a Change
in Control of Staples occurs while a Participant is employed by Staples or an
Affiliate and prior to the determination by the Committee whether payment of an
award has been earned under this Plan, then the Committee shall authorize
payment of each such outstanding award in an amount equal to the greater of (x) 100%
of the Participant’s Target Award for the Performance Cycle, or (y) the
amount determined to have been earned by the Participant under the award based
upon achievement of the performance goals if:

 

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(i)                                     At the time the
Change in Control is deemed to occur, the Participant:

 

(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) or an entity directly
or indirectly controlled by the Surviving Corporation 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 Participant’s
principal place of employment of more than an additional 50 miles from the
Participant’s primary residence at the time of the Change in Control; or

 

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

 

(ii)                                  Within one year
following the date of the Change in Control, the Participant 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.

 

Payment will be made at the time and in the manner
described in Section V.

 

5.                                      Definitions:  For purposes of this Plan, 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 part (1) or
(2) of clause (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 Plan, 

 

4

 

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 the above definition of Change in
Control, Staples; (y) in the case of Change in Control pursuant to clause (C) of
the above definition of Change in Control, 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 the above definition of Change
in Control, 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 Participant 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 Participant a written
demand for substantial performance, which specifically identifies the areas in
which the Participant’s performance is substandard, and the Participant has not
cured such failure within 30 days after delivery of the demand.  No act or failure to act on the Participant’s
part will be deemed “willful” unless the Participant 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
Participant of any provision of any employment, consulting, advisory,
proprietary information, non-disclosure, non-competition, non-solicitation or
other similar agreement between the Participant 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 Participant of the Code of Ethics; or

 

(D)                               The Participant’s
engagement in intentional deceitful act(s) that results in (1) an
improper personal benefit, or (2) injury to Staples; or

 

(E)                                 The Participant’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 

 

5

 

restatement of financial statements that became
materially inaccurate because of revisions to generally accepted accounting
principles; or

 

(F)                                 Failure by the
Participant 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

 

(G)                                The Participant’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

 

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

 

For purposes of the definition of Cause
contained in Section III.D.5.(iii) and Section VI. 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.

 

E.                                      Employment
Requirement

 

Except as set forth in Section III.A. or
Section III.D., a Participant must be employed by Staples or the relevant
Affiliate as of the last day of the Performance Cycle in order to be eligible
for payment of an award.  If the
employment of a Participant terminates during a Performance Cycle for any
reason other than as specified in Section III.A. or Section III.D.,
no award will be paid to the Participant for that Performance Cycle.

 

IV.                                Performance
Goals

 

A.                                    General

 

Each award made under this Plan shall be
subject to performance conditions.  It is
intended that awards made to Participants who are, or who are designated by the
Committee as potentially being at the end of a Performance Cycle, a “covered
employee” for purposes of Internal Revenue Code (“Code”) Section 162(m) will
in form and in operation comply with all applicable requirements of Code Section 162(m),
but the Committee reserves the right to make awards to covered employees that
in form or operation do not comply with Code Section 162(m).  Any award made to an associate who is or is
designated as a covered employee  and
that is intended by the Committee to be tax-deductible for purposes of Code Section 162(m) shall
be subject to shareholder approval of this Plan, including the business
criteria set forth in Section IV.B. upon which performance goals may be
established by the Committee.  The
requirements of Code Section 162(m) may (but are not required to) be
applied by the Committee in whole or in part to Participants who are not
covered employees under Code Section 162(m), or the Committee may apply
other performance goals or other conditions to awards made to Participants who
are not covered employees in a manner consistent with the purposes of this
Plan.

 

6

 

B.                                    Rules Applicable
to Covered Employees

 

Within 90 days after the beginning of each of
the three (3) Plan Years contained within a Performance Cycle, the
Committee will establish in writing one or more objective performance goals
applicable to awards for that Plan Year at a time when the outcome of those
goals is substantially uncertain.  The
performance goals for each Plan Year will be based on one or more of the
following business criteria:  sales,
earnings per share, return on net assets, return on equity, adjusted operating
profit, free cash flow, total shareholder return, net income, and customer
service levels.  Compensation payable to
covered employees is intended to be payable solely on account of attainment of
one or more of such performance goals. 
The performance goals may be different for each Plan Year contained
within a Performance Cycle and may vary among Participants.  Performance goals may be expressed (when
applicable) in terms of attaining a specified level of the particular business
criteria, or the attainment of a percentage increase or decrease of the
business criteria.  Performance goals may
be applied to the performance of Staples as a whole, or to the performance of
an Affiliate, division, or business unit of Staples, or an individual
associate, or may be applied to the performance of Staples, an Affiliate,
division, business unit, or individual associate relative to a market index, a
group of other companies, or a combination thereof.  In addition, customer service target levels
will be based on pre-determined tests of customer service levels, including
without limitation scores on blind test (“mystery”) shopping, customer comment
card statistics, customer relations statistics (e.g., number of customer
complaints), delivery response levels or customer satisfaction surveys
conducted by a third party.  The
Committee may determine that special one-time or extraordinary gains, losses
and/or events, including without limitation as a result of certain acquisitions
or divestitures and changes in accounting principles, should or should not be
included in determining whether such performance objectives have been met.

 

If more than one performance goal is
established for a Plan Year, the Committee shall also set the relative
weighting of the performance goals within each such Plan Year.  The performance goals and relative weighting
of performance goals may vary from Plan Year to Plan Year within a Performance
Cycle and among Participants.  For each
performance goal of a Plan Year there must be a minimum level of performance
that is required to be achieved such that if the threshold is not attained, no
portion of the award will be credited to the Participant with respect to that
goal for that Plan Year.  The maximum
amount payable to a Participant with respect to any one Plan Year is $7
million.

 

The communication of an award need not be
made within the first 90 days of the Performance Cycle as long as the Committee
has taken the actions described in this Section IV and the other
applicable requirements of Code Section 162(m) are satisfied.

 

C.                                    Target Awards

 

For each Participant for whom an award is
made, the Committee will establish a target award (a “Target Award”) during the
first 90 days of the Performance Cycle relating to that award.  Once established, the Target Award shall
remain fixed for the balance of that Performance Cycle.  Target Awards may be expressed as a fixed
dollar amount or a percentage (including multiples) of the base salary of a
Participant determined at the time that the Target Award is established.  The percentages or dollar amounts will be
determined by the Committee

 

7

 

based on the Participant’s position and
responsibilities and may vary among Participants.  One-third of the Target Award shall be
applied as a target amount for each Plan Year within the Performance Cycle.

 

V.                                    Payment
Calculations and Committee Certification

 

At the end of the Performance Cycle, the
Committee shall determine the amount, if any, to be paid to each Participant
based on the extent that the performance goals established for the Participant
for each Plan Year within the Performance Cycle were achieved and shall
authorize payment by Staples to the Participant.  To determine the amount of payment for a
Performance Cycle, the Committee will add the amounts earned in relation to the
performance goals achieved for each Plan Year and (subject to the other
provisions of the Plan, including Section III.A., Section III.D., and
Section VI.) pay that sum in accordance with this Section V.  In measuring the achievement of performance
goals for any Plan Year and calculating any payment at the end of a Performance
Cycle, awards (unless otherwise expressly provided therein) will be linearly
interpolated between the percentages set forth in the award agreement based
upon actual results as determined by the Committee.  Payments shall be made in cash, including by check
or electronic deposit.

 

Prior to the occurrence of a Change in
Control (as defined in Section III.D.5. above), the Committee may exercise
its discretion in a uniform and non-discriminatory manner for similarly
situated Participants to reduce (but not increase) any award otherwise payable
under this Plan in accordance with objective or subjective factors if necessary
or appropriate to limit the amount payable under an award to an amount
consistent with the purposes of the Plan and the intended economic benefits of
participation in the Plan.  The exercise
of negative discretion with respect to one Participant shall not be permitted
to result in an increase in the amount payable to another Participant.

 

The Committee shall certify the achievement
of the performance goals in writing prior to making any payment of an award
that was granted to an associate designated as a covered employee for purposes
of Code Section 162(m).

 

Subject to the rules regarding
forfeiture and repayment for Misconduct described in Section VI. and the rules regarding
deferral of payment and amendment and termination of the Plan described in Section VII.,
payment of any earned award will be made in a lump sum within 90 days of the
earlier of the Participant’s death or the end of the Performance Cycle
established for such award; provided, however, in the event that it is not
administratively feasible to make payment at that time, distribution may be
made at a later date within the same calendar year that includes the last day
of the Performance Cycle (or the Participant’s death, as the case may be) as
determined in the discretion of the Committee.

 

VI.                                Forfeiture and
Recovery for Misconduct

 

A.                                    Right of
Recovery

 

Notwithstanding
any other provision of this Plan to the contrary, if the Board of Directors of
Staples (or its authorized designee, the “Board”) determines during the
Recovery Period (as defined in Section VI.A. below) that a Participant has
engaged in any of the conduct set forth in 

 

8

 

clauses (B) through (E) of Section III.D.5.(iii),
which determination shall be conclusive (“Misconduct”), the Board, subject to
the limitations set forth in this Section VI., may in its sole discretion (1) terminate
such Participant’s participation in the Plan, or with respect to any award
under the Plan, and treat any outstanding award as forfeited, (2) require
forfeiture, in whole or in part, of payment of any award that has been
previously approved by the Committee for payment under this Plan which remains
in whole or in part unpaid, and/or (3) demand that the Participant pay to
Staples in cash the amount described in Section VI.B.; provided, however,
that in the event the Board determines during the Recovery Period that the
Participant engaged in Misconduct as described in clause (E) of Section III.D.5.(iii) (“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 Participant is employed by Staples and
the period ending 18 months after the Participant’s last day of employment; (2) if
the Misconduct relates to the breach of any agreement between the Participant
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 Participant is employed by Staples and the period
ending six months after the Participant’s last day of employment.  If during the Recovery Period the Board gives
written notice to the Participant 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 VI.
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 Participant for
which the Board prior to such Change in Control gave written notice to such
Participant of potential Misconduct.

 

For purposes
of administratively enforcing its rights under this Section VI.A., during
any period for which potential Misconduct has been identified by Staples, the
Board may (1) suspend such Participant’s participation in the Plan, or
with respect to any award under the Plan, or (2) temporarily withhold, in
whole or in part, payment of any award that has been previously approved by the
Board for payment under this Plan which remains in whole or in part unpaid.

 

B.                                    Amount of
Recovery

 

With respect to Misconduct described in
Sections III.D.5.(iii)(B) (breach of agreement) and Section III.D.5.(iii)(C) (violation
of Code of Ethics), and in addition to its right to effect a termination of
participation and a forfeiture of outstanding awards under this Plan, the Board
may recover from the Participant the amount of any payments made to the
Participant under this Plan during the last 12 months of employment with
Staples.

 

With respect to Misconduct described in Section III.D.5.(iii)(D) (intentional
deceitful acts), and in addition to its right to effect a termination of
participation and a forfeiture of outstanding awards under this Plan, the Board
may recover from the Participant the greater of 

 

9

 

(A) the amount paid to the Participant
with respect to any award made under this Plan with a Performance Cycle that
includes any period during which the Misconduct occurred, or with a Performance
Cycle which was directly impacted by the Misconduct, or (B) the amount
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 Plan (value to be determined by the target award for such awards) and any
amounts recovered from the Participant 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 its right to effect a termination of participation and a
forfeiture of outstanding awards under this Plan, the Board shall seek to
recover the entire amount paid to the Participant with respect to any award
made under this Plan with a Performance Cycle that includes any portion of a
fiscal year that is the subject of an accounting restatement relating to the
Misconduct (the “Restated Fiscal Year”). 
In the Board’s discretion, it may also seek to recover the entire amount
paid to the Participant with respect to any other award made under this Plan
with a Performance Cycle that includes any portion of the fiscal year following
the Restated Fiscal Year.

 

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. 
Staples’ right of forfeiture and recovery of awards shall not limit any
other right or remedy available to Staples for a Participant’s Misconduct,
whether in law or equity, including but not limited to injunctive relief,
terminating the Participant’s employment with Staples, or taking other legal
action against the Participant.

 

The
amount that may be recovered under this Section VI. shall be determined on
a gross basis without reduction for taxes paid or payable by a Participant.

 

VII.                            General

 

A.                                    Plan
Administration

 

The Plan will be administered by the
Committee.  The Committee will have
complete discretionary authority and control with respect to the administration
of the Plan, including the authority for determining Target Awards, selecting
business criteria and establishing performance goals; for adopting and
repealing rules and regulations relating to the Plan; and for making decisions
and interpretations regarding the provisions of the Plan, including determining
to what extent, if any, specific items are to be considered in the relevant
business criteria or performance goals for any particular business, the
satisfaction of performance goals and the payment of awards under the
Plan.  The Committee may correct any
defect, supply any omission, or reconcile any inconsistency in the Plan or any
award in the manner and to the extent it shall deem expedient to carry the Plan
into effect, and it shall be the sole and final judge of such expediency.  All decisions by the Committee shall be made
in the Committee’s sole discretion, and shall be final and binding on all
persons having or claiming any interest in the Plan or in any award.  The Committee may delegate ministerial duties
under the Plan to one or more administrators who may be associates of Staples
or an Affiliate.  Except for the
administration of awards granted to covered employees, the Committee may
delegate non-ministerial duties to any 

 

10

 

officer of Staples or an Affiliate.  No director or associate acting pursuant to
the authority delegated by the Committee shall be liable for any action or
determination relating to or under the Plan made in good faith.

 

B.                                    Employment at
Will

 

The Plan does not create an express or
implied contract of employment between Staples or any Affiliate and a
Participant.  Staples (and where
applicable, the Affiliates) and the Participants each retain the right to
terminate the employment relationship at any time and for any reason.

 

C.                                    Amendment and
Termination of Plan

 

Staples reserves the right at any time prior
to actual payment of awards to amend, terminate or discontinue the Plan in
whole or in part whenever it is considered necessary.

 

The Plan may be amended or terminated by
either the Board of Directors of Staples or the Committee, provided that (1) subject
to Section VII.F. (regarding Code Section 409A compliance), no
amendment or termination of the Plan after the end of a Performance Cycle may
adversely affect the rights of Participants with respect to their awards for
that Performance Cycle, and (2) no amendment which would require
stockholder approval under Code Section 162(m) may be effected
without such stockholder approval.  For
avoidance of doubt, neither the application of Section VI. regarding
forfeiture and repayment for Misconduct nor the exercise of negative discretion
as described in Section V. shall be deemed to be an amendment of the Plan.

 

Notwithstanding the foregoing provisions of
this Section VII.C., any termination of the Plan that provides for an
acceleration of the time or form of payment of an award must comply with the
terms and conditions regarding plan terminations and liquidations as set forth
in Code Section 409A and Treasury Regulation Section 1.409A-3(f)(ix) which
are incorporated by reference as if fully set forth in this Section VII.C.

 

D.                                    Rights are
Non-Assignable

 

Neither a Participant nor any beneficiary or
other person shall have any right to assign the right to receive payments
hereunder, in whole or in part, which payments are non-assignable and
non-transferable, whether voluntarily or involuntarily.

 

E.                                      Withholding

 

All required deductions, including without limitation
with respect to federal, state or local taxes, will be withheld from the awards
prior to distribution.

 

F.                                      Code Section 409A
Compliance

 

Awards under the Plan are intended to comply
with Code Section 409A, and all awards shall be interpreted in accordance
with Code Section 409A and Department of Treasury regulations and other
guidance issued thereunder.  Generally,
this Plan is intended to comply with Code Section 409A on the basis that
payment distributions are to be made upon the earlier 

 

11

 

of a Participant’s death or at a specified
time (or pursuant to a fixed schedule) stated in the Plan or in the relevant
award at the date of deferral of compensation, without regard to other
distribution events described in Code Section 409A(a)(2)(A) and
without application of the six month delay for specified employees described in
Code Section 409A(a)(2)(B). 
Notwithstanding such intention, to the extent required by Code Section 409A,
any reference to “permanent disability” shall be interpreted to mean “disability”
as defined for purposes of Code Section 409A.  Similarly, any reference to “termination of
employment,” “discharge,” “resignation,” or “retirement” shall not be
sufficient to constitute a payment event for purposes of Code Section 409A
unless such event also constitutes a “separation from service” as defined by
Code Section 409A.

 

If a Participant is a “specified employee” as
defined in Code Section 409A (and as applied according to procedures of
Staples and its Affiliates) as of the Participant’s separation from service, to
the extent any payment under this Plan constitutes deferred compensation (after
taking into account any applicable exemptions from Code Section 409A) that
is payable upon a separation from service, then, to the extent required by Code
Section 409A, no payments due under this Plan may be made until the
earlier of:  (1) the first day of
the seventh month following the Participant’s separation from service, or (2) the
Participant’s date of death; provided, however, that any payments delayed
during this six-month period shall be paid in the aggregate in a lump sum, with
interest from the scheduled payment date to the date of actual payment at an
annual rate equal to the prime rate as set forth in the Eastern edition of The
Wall Street Journal on the business day immediately preceding Participant’s
date of separation from service, on the first day of the seventh month
following the Participant’s separation from service.

 

Notwithstanding any provision of the Plan or
any award to the contrary, in the event that the Committee determines that any
award may not or does not comply with Code Section 409A, the Board of
Directors of Staples or the Committee may adopt such amendments to the Plan and
the affected award (without Participant consent) or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the Committee determines are necessary
or appropriate to comply with the requirements of Code Section 409A.  If this Plan or an award fails to meet the
requirements of Code Section 409A, neither Staples nor any of its
Affiliates shall have any liability for any tax, penalty or interest imposed on
a Participant by Code Section 409A, and the Participant shall have no
recourse against Staples or any of its Affiliates for payment of any such tax,
penalty, or interest imposed by Code Section 409A.

 

G.                                    Elective
Deferral of Payment of Awards

 

At the time of grant of an award (or at such
earlier or later time as the Committee determines appropriate in light of the
provisions of Code Section 409A), the Committee may permit a Participant
who is otherwise eligible to participate in a non-qualified deferred
compensation plan sponsored by  Staples
or an Affiliate to defer all or a part of any payment that might otherwise be
payable with respect to an award under this Plan under the terms and conditions
of such non-qualified deferred compensation plan.

 

12

 

H.                                    Mandatory
Deferral of Payment of Awards

 

In addition to any deferral of payment
required for payment of awards to any specified employee under Code Section 409A,
if the payment of any award in any year could, in the Committee’s opinion, when
considered with a Participant’s other compensation, result in Staples’
inability to deduct any portion of such award payment because the Participant
is or is expected to be a covered employee for purposes of Code Section 162(m),
then to the extent permitted under Code Section 409A, the Committee in its
sole discretion may defer the payment date applicable to an award until the
first day of the seventh month following the Participant’s termination of
employment.  Any such deferral shall not
be deemed to be an amendment of the Plan for purposes of Section VII.C.

 

I.                                         Unfunded Plan

 

It is intended that the Plan be an “unfunded”
plan for federal tax purposes and that it not constitute an “employee benefit
pension plan” for purposes of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”).  To the
extent that the Plan is subject to ERISA, the Plan shall be administered as an
unfunded employee pension plan benefiting a select group of management or
highly compensated employees under the provisions of ERISA.

 

J.                                      Beneficiary

 

A Participant may file with the Committee a
written designation of death beneficiary on such form as may be prescribed by
the Committee and may, from time to time, amend or revoke such
designation.  If no death beneficiary is
designated or the designated beneficiary fails to survive the Participant, the
executor or administrator of the Participant’s estate shall be deemed to be the
Participant’s death beneficiary.

 

K.                                    Notice

 

All notices under this Plan or with respect
to any award made hereunder shall be in writing and mailed or delivered by hand
to Staples at its main office, Attention: Secretary, and to the Participant at
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.

 

L.                                     Severability

 

If any provision of the Plan is held to be
invalid or unenforceable, the other provisions of the Plan shall not be
affected but shall be applied as if the invalid or unenforceable provision had
not been included in the Plan.

 

M.                                  Governing Law

 

The provisions of this Plan and all awards
made hereunder shall be governed by and interpreted in accordance with the laws
of the State of Delaware, without regard to any applicable conflicts of law.

 

***

 

13Exhibit 10.2

 

STAPLES,
INC.

 

Amended and
Restated 

Supplemental Executive Retirement Plan

(as amended
through June 7, 2010)

 

WHEREAS, Staples, Inc. (the “Company”)
heretofore adopted the Staples, Inc. Supplemental Executive Retirement
Plan (the “Plan”), an unfunded plan maintained for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees within the meaning of the United States Code of Federal Regulations Section 2520.104-23
and Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee
Retirement Income Security Act of 1974 (“ERISA”); and

 

WHEREAS, the Company desires to
amend the Plan to satisfy the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code);

 

NOW, THEREFORE, effective January 1,
2008, the Plan is amended and restated to comply with Section 409A of the
Code, with the Plan being operated in good faith compliance with Code Section 409A
for the period January 1, 2005 to December 31, 2007.

 

Section 1. 
Purpose of Plan

 

The
purpose of the Plan is to permit certain executives of the Company to elect to
defer receipt of a portion of their annual compensation in supplement to their
pre-tax contributions made to the Staples, Inc. Employees’ 401(k) Savings
Plan (the “401(k) Plan”).

 

The
Plan is intended to qualify as an unfunded, deferred compensation plan for a
select group of management or highly compensated employees under ERISA.

 

The
obligation of the Company to make payments under the Plan constitutes solely an
unsecured (but legally enforceable) promise of the Company to make such
payments, and no person, including any employee, shall have any lien, prior
claim or other security interest in any property of the Company as a result of
this Plan.  Rather, any employee
participating in the Plan shall have the status of a general unsecured creditor
of the Company.  It is the intention of
the parties hereunder that the Plan be unfunded for tax purposes and for
purposes of Title I of ERISA.  The
Company shall be the sole owner and beneficiary of any account provided for
herein below and any property used to measure such account shall remain the
sole and exclusive property of the Company.

 

Section 2. 
Definitions

 

2.1                               “Administrator” means the Committee on Employee Benefit Plans
as described in Section 15.

 

2.2                               “Beneficiary” means the person or entity determined to be a
Participant’s beneficiary pursuant to Section 12.

 

2.3                               “Board” means the board of directors of the Company.

 

2.4                               “Change in Control” means a “change in ownership” of the
Company, a “change in effective control” of the Company, or a “change in the
ownership of a substantial portion of the assets” of the Company (within the
meaning of Section 409A of the Code).

 

1

 

2.5                               “Code” means the Internal Revenue Code of 1986, as amended
from time to time.

 

2.6                               “Company” means Staples, Inc.

 

2.7                               “Compensation” means the annual compensation paid to a Participant
in cash by the Company for the calendar year (after any requisite tax
withholding and payroll deductions), including base pay, other regular
earnings, overtime, shift differentials, commissions, any amounts deferred
under a salary reduction agreement pursuant to the 401(k) Plan or under a “cafeteria
plan” (within the meaning of Section 125 of the Code) maintained by the
Company, but exclusive of payments from the Executive Officer Incentive Plan,
the Key Management Bonus Plan, the Retail Management Bonus Plan and the Long
Term Cash Incentive Plan or any other bonus payments, severance pay, expense
reimbursements, awards, any moving expenses paid by the Company, car allowance,
taxable fringe benefits, group term life insurance over $50,000, expatriate
compensation, exercised stock options and short and long-term disability paid
by a third party.

 

2.8                               “ERISA” means the Employee Retirement Income Security Act
of 1974, as amended from time to time.

 

2.9                               “401(k) Plan” means the Staples, Inc. Employees’ 401(k) Savings
Plan, as amended from time to time.

 

2.10                        “Participant” means an employee of the Company who is eligible to
participate in the Plan pursuant to Section 2.

 

2.11                        “Plan” means the Staples, Inc. Supplemental Executive
Retirement Plan, as set forth herein and as amended from time to time.

 

2.12                        “Plan Year” means the calendar year.

 

Section 3. 
Eligible Employees

 

The
employees eligible to participate in the Plan shall be those individuals who
qualify under the criteria set forth on Schedule A and who have both attained
age twenty-one (21) and completed “six (6) Months of Service” (as defined,
for purposes of eligibility to participate, under the 401(k) Plan, the
terms of which are incorporated herein by this reference).

 

Section 4.  Election to Defer Compensation

 

An eligible employee may begin participating in the
Plan, as of the first day of the calendar quarter (October 1, January 1,
April 1 or July 1, the “entry date”) coinciding with or next
following the date on which the eligibility requirements (set forth under Section 3)
are first satisfied, by making a deferral election during the thirty (30) day
period immediately preceding such entry date. 
Any such deferral election shall be made in accordance with the
provision of Section 409A of the Code and shall apply only to Compensation
earned after the applicable entry date. In this regard, a Participant may elect
to defer one percent (1%) to one hundred percent (100%) of his Compensation,
less any requisite tax withholding and payroll deductions, for the balance of
the Plan Year.  Any election so made
shall be binding for each following Plan Year, provided that it may be revised
or revoked on or before December 31 for any subsequent Plan Year, or such
earlier date as the Administrator may specify.

 

2

 

A
Participant may elect to defer a specified percentage (from one percent (1%) to
one hundred percent (100%)) of any payments from the Executive Officer
Incentive Plan, the Key Management Bonus Plan and the Retail Management Bonus
Plan (which are intended to qualify as “performance-based compensation” within
the meaning of Section 409(A) of the Code) to be paid on behalf of
the Participant for a fiscal year by filing an election with the Administrator
(pursuant to Section 5) on or prior to the last day of the sixth month of
such fiscal year.

 

A
Participant may elect to defer a specified percentage (from one percent (1%) to
one hundred percent (100%)) of any payments from the Long Term Cash Incentive
Plan, which are intended to qualify as “performance-based compensation” within
the meaning of Section 409A of the Code, to be paid on behalf of the
Participant upon the conclusion of a three (3) fiscal year period, by
filing an election with the Administrator (pursuant to Section 5) on or
prior to the last day of the sixth month of the first fiscal year of the three (3) fiscal
year period.

 

An
otherwise eligible employee who fails to begin participating in the Plan as of
the first possible entry date may not begin participating until the first day
of any following Plan Year.

 

Section 5. 
Accounts

 

Each
Participant may elect to establish a separate “in-service withdrawal account”
for each year of participation, such account to be established and maintained
on the Company’s books and shall record (a) any Compensation deferred by
the Participant under the Plan which the Participant has elected to be credited
into such account, and (b) the allocation of any hypothetical investment
experience. There shall also be established for each Participant a separate “retirement
account” which shall record (a) any Compensation deferred by the
Participant, under the Plan which the Participant has not elected to be
credited to the “in-service withdrawal account” and any Company contributions
made on his behalf under the Plan and (b) the allocation of any hypothetical
investment experience.  Each Participant’s
account hereunder shall be reduced by any distributions made plus any federal,
state and/or local tax withholding and any social security withholding tax as
may be required by law.

 

Section 6. 
Manner of Election

 

Any
election(s) made by a Participant pursuant to this Plan shall be made at
the time(s) and in the manner as the Administrator shall from time to time
prescribe.

 

Section 7. 
Company Contributions

 

Each
year, the Company shall contribute to the Plan on behalf of each Participant, a
matching contribution equal to one hundred percent (100%) of the first four
percent (4%) of the Participant’s Compensation (excluding any bonuses) deferred
under the Plan, and with respect to any bonus payments from the Executive
Officer Incentive Plan, Key Management Bonus Plan and the Retail Management
Bonus Plan deferred under the Plan for the fiscal year, a matching contribution
in an amount equal to one hundred percent (100%) of the first four percent (4%)
of any such bonuses deferred.

 

The
Company reserves the right to make a supplemental matching contribution for any
Participant at the end of the year to ensure the full matching contribution is
received.

 

In addition to the matching
contribution described above, for any Plan Year, the Company may elect to 

 

3

 

allocate an additional
discretionary contribution to the account of any Participant, or any group of
Participants, as selected by the Board, in any amount and manner as determined
by the Board.

 

Section 8.  Investment of Accounts

 

The Administrator, in its
discretion, may from time to time designate one or more investment media in
which the portion of a Participant’s account representing his deferrals shall
be hypothetically invested.  The
Administrator shall provide the Participant the opportunity to determine how
such portion of the Participant’s account shall be deemed to be hypothetically
invested from among the available investment options, and may permit changes in
those investment directions at whatever frequency it deems appropriate and
within whatever limitations are applicable to any investment option.  As of January 1, 2008, a Participant may
also direct the hypothetical investment of the portion of his account
attributable to any Company contributions made on his behalf, after September 30,
2004.  If a Participant makes an
investment selection, the Administrator may follow such investment selection
but shall not be legally bound to do so.

 

Any Company contributions
made on behalf of a Participant beginning October 1, 2004 through December 31,
2007 were hypothetically invested in insurance contracts designated by the
Administrator. Such rate of interest for each calendar year was the insurer’s
declared crediting rate on such insurance policies, as of December 1 of
the preceding year, plus 125 basis points, with the rate being rounded to the
nearest one tenth of a percent.

 

The portion, if any, of a
Participant’s account derived from Company matching contributions made prior to
October 1, 2004 shall be credited with gains and losses as if it had been
invested in Staples, Inc. common stock, provided however, that a
Participant shall have the same investment diversification rights (except with
respect to the available investment options), as exist under the 401(k) Plan.

 

Beginning with the Plan Year
2011, the portion of any Participant’s account that is hypothetically invested
in an insurance contract’s fixed account shall be credited with a rate of
interest announced by the Administrator at the beginning of the Plan Year.  The Administrator shall choose the rate that
is the higher of (1) the insurance carrier’s fixed account crediting rate
at the beginning of the Plan Year; or (2) the Internal Revenue Service’s mid-term
Applicable Federal Rate (AFR) for January 1 of the Plan Year, compounded
annually.

 

Section 9.  Vested Status of a Participant’s Account

 

A Participant shall at all
times have a nonforfeitable (“vested”) right to the fair market value of any
in-service withdrawal account(s) established under Section 5.

 

Subject to the following
provisions of this Section, if a Participant separates from service with the
Company (within the meaning of Section 409A of the Code) for any reason on
or after his Normal Retirement Age (within the meaning of the 401(k) Plan),
or prior to that date as a result of the Participant’s “disability”, or as a
result of the Participant’s death, such Participant shall have a nonforfeitable
(vested) right to the fair market value of the Participant’s retirement
account.  For this purpose, a Participant
shall be considered “disabled” if he is determined to be “permanently and
totally disabled” by the Social Security Administration.

 

Except as otherwise provided herein below, if a
Participant separates from service with the Company for any other reason other
than Normal Retirement, death, or disability, such Participant shall be
entitled to receive the vested value of his retirement account.  For this purpose, each Participant shall at
all times have a nonforfeitable (vested) right to his retirement account
derived from any Compensation deferred 

 

4

 

pursuant to Section 4.  However, with respect to any Company matching
contributions made on the Participant’s behalf pursuant to Section 7, the
Participant shall have a nonforfeitable (vested) right to a percentage of the
fair market value of such portion of his retirement account as follows:

 

	
  Years of Service

  	
   

  	
  Vested Percentage

  	
   

  
	
  Less than 1 year

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  1 year but less than 2 years

  	
   

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2 years but less than 3 years

  	
   

  	
  40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  3 years but less than 4 years

  	
   

  	
  60

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  4 years but less than 5 years

  	
   

  	
  80

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  5 years or more

  	
   

  	
  100

  	
  %

  

 

For this purpose, a
Participant shall be credited with Year(s) of Service in accordance with
the terms of the 401(k) Plan as then in effect (as it pertains to vesting
purposes).  Provided, however, that any
member of the Company’s board of directors who is not an employee of the
Company, who subsequently becomes an eligible employee and then a Participant,
shall be credited with any prior service as a director in determining said
Participant’s Year(s) of Service.

 

With respect to any
additional discretionary contributions made on the Participant’s behalf pursuant
to Section 7, the Participant shall have a nonforfeitable (vested) right
to a percentage of the fair market value of such portion of his retirement
account in accordance with the vesting schedule established by the
Administrator at the time such additional discretionary contribution is made by
the Company.

 

The nonvested portion of a
Participant’s retirement account, as determined above, shall be forfeited as of
the Participant’s separation from service. 
If any contributions have been made to a trust with respect to such
account, the forfeited portion shall remain in such trust and be used to fund
future contributions by the Company and/or used to pay Plan administrative
expenses

 

Section 10.  Payment of a Participant’s Account

 

Each Participant may also
elect, on the election form used to make his or her initial deferral election
hereunder, or through such other method acceptable to the Administrator, either
of the following modes of distribution for his retirement account:

 

(a)          a single lump sum payment;
or

 

(b)         annual installments over a
period of up to fifteen (15) years, the amount of each installment to equal the
balance of the Participant’s vested retirement account as of the date of the
distribution divided by the number of installments remaining to be paid.  Each subsequent installment shall be made in
the calendar month containing the one (1) year anniversary of the prior
payment.   Such installment election
however, shall be given effect only if the Participant separates from service
after having both attained age fifty-five (55) and completed five (5) years
of service (as measured from date of hire and each anniversary date, without
regard to hours).

 

If a Participant does not
otherwise have a valid distribution election on file, or if the balance of the
Participant’s retirement account does not exceed the amount in effect for the
applicable year under Code 

 

5

 

Section 402(g)(1)(B) as
of the date of the Participant’s separation from service, the Participant’s
vested retirement account shall be distributed in a lump sum payment.

 

Any Participant, who on or
before December 31, 2003 elected annual cash installments over a period
not exceeding five (5) years, shall retain the right to have his vested retirement
account distributed in the manner so elected, without regard to age or service.

 

Upon a Participant’s separation from service
with the Company (within the meaning of Section 409A of the Code),
distribution of the Participant’s vested retirement account shall normally be
made or commence in the calendar month following the month in which the
separation from service occurs; provided, however, that, to the extent
permitted under Section 409A of the Code, in the event that it is not
administratively feasible to have payment made at that time, distribution can
be made at a later date within the same calendar year; and provided further
that, if the Company is subject to the provisions of Section 409A(2)(B)(i) of
the Code, and if the Participant is a “specified employee” of the Company (as
determined under said Section 409A), distribution shall be made or
commence in the seventh (7th) calendar month following the month in which the separation from
service occurs; provided, however, that, to the extent permitted under Section 409A
of the Code, in the event that it is not administratively feasible to have
payment made at that time, distribution can be made at a later date within the
same calendar year. For purposes of identifying a “specified employee,” the definition
of compensation under Section 1.415(c)-2(d)(2) of the Income Tax
Regulations shall apply, the specified employee identification date shall be December 31,
and the specified employee effective date shall be the first day of the fourth
month following such identification date.

 

Subject to the following
provisions of this Section, a Participant may elect to change the mode of
distribution for his retirement account, subject to the following conditions: (i) any
such election may not take effect until twelve (12) months after the date on
which the election is made; and (ii) the payment with respect to such
election must be deferred for a period of at least five (5) years from the
date on which payment would otherwise have been made or commenced; and (iii) in
the event of an installment election, the election shall be given effect only
if the Participant separates from service after having both attained age
fifty-five (55) and completed five (5) years of service (as measured from
the Participant’s date of hire and each anniversary date, without regard to
hours).

 

Subject to the following
provisions of this Section, any “in-service” withdrawal account(s) established
for a Participant under Section 5 shall be distributed in a lump sum
payment on the date designated by the Participant as part of his annual
deferral election with respect to which the in-service withdrawal account was
established under the Plan, which date may not be earlier than five years
following the year of the deferral election. However, a Participant may elect
to extend any in-service withdrawal date for a period of not less than 5 years;
provided such election was made at least 12 months prior to the date on which
the payment would otherwise have been made.

 

Provided, however, that a
Participant shall be permitted to make withdrawal and/or distribution elections
in 2006 and 2007 subject to the provisions of IRS Notice 2006-79 and withdrawal
and/or distribution elections in 2008 subject to the provisions of IRS Notice
2007-86 or any subsequent guidance.

 

Notwithstanding the foregoing provisions of this Section 10,
if distribution of a Participant’s vested retirement account is to be made or
commence prior to the selected distribution date of any in-service withdrawal
account, any remaining in-service withdrawal account(s) shall be
distributed at the same time and in the same manner as the Participant’s
retirement account.

 

6

 

Section 11.  Death Benefit

 

In the event of the death of
a Participant while in the employ of the Company or any “affiliate” thereof,
vesting in the Participant’s retirement account shall be one hundred percent
(100%), if not otherwise one hundred percent (100%) vested under Section 9,
with the fair market value of the Participant’s retirement account, (and any
outstanding in-service withdrawal account(s)), being distributed to the
Participant’s Beneficiary in a lump-sum cash payment. In the event of the death
of a Participant after termination of employment, but prior to the complete
distribution of his vested account under the Plan, the balance of the
Participant’s vested retirement account (and any remaining in-service
withdrawal account(s)) shall be distributed to the Participant’s Beneficiary in
a lump-sum payment.

 

Any such lump sum death
benefit shall be distributed in the calendar month following the calendar month
of the Participants death; provided, however, that, to the extent permitted
under Section 409A of the Code, in the event that it is not
administratively feasible to have payment made at that time, distribution can
be made at a later date within the same calendar year.

 

Section 12.  Beneficiary Designation

 

A Participant’s Beneficiary
hereunder shall be the same person or persons designated by the Participant under
the 401(k) Plan unless a separate Beneficiary designation has been
established under the Plan in the manner prescribed by the Administrator.

 

In the absence of any such
designation, or if no designated Beneficiary survives the Participant, any
amounts payable following the Participant’s death shall be paid to the
Participant’s surviving spouse, or if none, to the Participant’s estate.

 

Section 13. 
Domestic Relations Orders

 

If a domestic relations
order issued by any court of proper authority directs assignment of all or any
portion of a Participant’s vested account(s) to the Participant’s spouse
or former spouse as part of a divorce settlement, the portion so assigned shall
be distributed, in a lump-sum, to the spouse or former spouse within ninety (90)
days following the close of the Plan Year in which the order was received by
the Administrator or, if later, following the close of the Plan Year in which
the order clearly specifies the amount to be assigned and any other terms
necessary to comply with such order and with the provisions of Code Section 409A.

 

Section 14. 
Distribution in the event of Unforeseeable Emergency

 

In
the event of an “unforeseeable emergency” (within the meaning of Section 409A
of the Code), a Participant may, by filing a written election with the
Administrator, elect to receive a distribution from the Plan in an amount not
to exceed the lesser of (i) the fair market value of the Participant’s
vested retirement account or (ii) the amount necessary to satisfy the
unforeseeable emergency, subject to ordinary income tax withholding.

 

Section 15.  Administration

 

The Committee on Employee
Benefit Plans, as constituted pursuant to the terms of the 401(k) Plan
(the “Administrator”), shall have the general authority to control and manage
the operation and administration of the Plan. 
In connection herewith, the Administrator shall also have the following
powers and duties:  (1) to adopt rules and
regulations necessary for the performance of its duties under the Plan; (2) to
construe the Plan and to decide all questions arising under the Plan; (3) to
act for the Company in connection with any administrative or judicial
proceeding affecting the Plan; (4) to employ, subject to the requirements
of the financial officers of the Company, persons to render accounting,
actuarial, legal, 

 

7

 

investment or insurance
advice and to rely on such advice; (5) to determine the eligibility of
Participants to receive benefits and the amount of benefits to which any
Participant or Beneficiary may be entitled under the Plan and to enforce the
claims procedure set forth in Section 16; and (6) such other
responsibilities as are provided for under the terms of this Plan.

 

In connection with the
administration of the Plan, any two of the Chief Executive Officer, President,
Chief Financial Officer, Treasurer, Secretary or Executive Vice President —
Human Resources of Staples, Inc., acting jointly, by and on behalf of the
Company, are hereby authorized:

 

(1)                            to negotiate,
fix and vary the terms of, and to execute and deliver, contracts, agreements,
indentures, trusts, assignments, concessions, licenses, options, and all other
similar instruments;

 

(2)                            to appoint
trustees and to engage any agents or contractors, including banks, insurance
brokers, and attorneys;

 

(3)                            to amend or
terminate the Plan;

 

(4)                            to otherwise do
all acts and things necessary or suitable in connection with the exercise of
any of the aforementioned powers;

 

provided, however, that no such authorization
shall extend to any implementation, amendment, approval, or modification of the
Plan which is reserved to the Board or stockholders of the Company by the Plan,
statute, rule or regulation, including without limitation, rules promulgated
under Section 16 of the Securities and Exchange Act of 1934.

 

Section 16. 
Claims Procedure

 

(a)                            Application for
Benefits.  The Administrator shall
furnish to each Participant information about the benefits to which he or she
is entitled under the Plan.  The
Administrator may require any person claiming benefits under the Plan to submit
a written application, together with such documents, evidence, and information
as it considers necessary to process the claim.

 

(b)                           Action on
Application.  Within ninety (90) days
after receipt of an application and all necessary documents and information,
the Administrator shall furnish the claimant with a written notice of its
decision.  If the Administrator denies
the claim in whole or in part, the notice will set forth (1) specific reasons
for the denial, with specific reference to Plan provisions upon which the
denial is based; (2) a description of any additional information or
material necessary to process the application with an explanation why such
material or information is necessary; and (3) an explanation of the Plan’s
claim review procedure.

 

If special circumstances
require an extension of time for processing the claim, the Administrator shall
furnish the claimant written notice of the extension before the end of the
initial ninety (90)-day period.  In no
event shall the extension exceed a period of ninety (90) days from the end of
the initial period.  The notice shall
explain the circumstances requiring an extension of time and the date by which
the Administrator expects to render a decision.

 

(c)                            Claim
Review.  The claimant who does not agree
with the decision rendered on his application may request that the
Administrator review the decision.  The
request must be made within sixty (60) days after the claimant receives the
decision, or if the application has neither been approved nor denied within the
ninety (90)-day period specified in subsection (b), then the request must be
made within sixty (60) days after expiration of the ninety (90)-day period.

 

8

 

Each request for review must be in writing and addressed to the
Administrator.  Concurrently with filing
the request for review, or within the sixty (60) days request period, the
claimant may submit in writing to the Administrator a statement of the issues
raised by his appeal and supporting arguments and comments.

 

During the pendency of his
appeal, the claimant may inspect all documents which are reasonably pertinent
to his case, upon reasonable notice to the Administrator.  However, under no circumstance shall the
Administrator be required to disclose to any claimant information concerning
any person other than the Participant whose benefit is being claimed, to the
extent such information is normally treated as confidential.

 

Where the Administrator believes that the issues raised by the claimant’s
appeal may be more efficiently or fairly processed by taking testimony of the
claimant or others, it shall set the matter for oral hearing and give the
claimant reasonable notice of the time and place.  Whether or not an oral hearing is scheduled,
the Administrator shall proceed promptly to resolve all issues raised by the
claimant’s appeal and shall render a written decision on the merits, with a
statement of the reasons and references to the pertinent supporting provisions
of the Plan, within sixty (60) days following receipt of the claimant’s request
for review.

 

If
special circumstances require an extension of time, the Administrator shall
render a decision as soon as possible, but not later than one hundred and
twenty (120) days after receipt of the request for review.  If an extension is required, the
Administrator shall furnish to the claimant written notice of the extension,
including an explanation of the circumstances requiring the extension, before
the extension period begins.

 

Section 17. 
Securing Payment of Plan Benefits

 

The
Plan shall be operated at all times as an unfunded plan as required under
ERISA.  However, the Company reserves the
right to take reasonable steps to secure the payment of Plan benefits to the
greatest extent possible without compromising the unfunded status of the
Plan.  Those steps may include, but is
not limited to, the establishment of an irrevocable nonqualified grantor trust
(within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A
of the Code).

 

Section 18. 
Amendment

 

The Company, by resolution
of the Board, shall have the right to amend, suspend or terminate the Plan at
any time subject to the provisions of Section 409A of the Code; provided,
however, that, subject to the provisions of Section 15, any two of the
Chief Executive Officer, President, Chief Financial Officer, Treasurer,
Secretary or Executive Vice President — Human Resources of Staples, Inc.,
acting jointly, by and on behalf of the Company shall have such right. Provided
however, that any termination of the Plan, with respect to some or all of the
Participants, and any resulting distribution of the account balances of such
affected Participants, shall be made in accordance with the provisions of Section 409A
of the Code and shall not constitute the impairment of such Participant’s
rights hereunder.

 

Section 19.  No Liability

 

No member of the Board or of
the committee serving as the Administrator, and no officer or employee of the
Company shall be liable to any person for any action taken or omitted in
connection with the administration of the Plan unless attributable to his own
fraud or willful misconduct; nor shall the Company be liable to any person for
any such action unless attributable to fraud or willful misconduct on the part
of the Administrator or a director, officer or employee of the Company.

 

9

 

Section 20.  No Assignment

 

Except as otherwise provided herein, a Participant’s
right to the amount credited to his or her account(s) under the Plan shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of the
Participant or the Participant’s Beneficiary. 
Provided, however, that the Company shall have the unrestricted right to
set off against or recover out of any payments or benefits becoming payable to
or for the benefit of a Participant, at the time such payments or benefits
otherwise become payable hereunder, any amounts owed or owing to the Company by
such Participant.

 

Section 21. 
Successors and Assigns

 

The provisions of this Plan
shall be binding upon and inure to the benefit of the Company, its successors
and assigns, and the Participant, his beneficiaries, heirs, legal
representatives and assigns.

 

Section 22.  No
Contract of Employment

 

Nothing
contained herein shall be construed as a contract of employment between a
Participant and the Company, or as a right of the Participant to continue in
employment with the Company, or as a limitation of the right of the Company to
discharge the Participant at any time, with or without cause.

 

Section 23. 
Termination of Plan Upon Change in Control

 

The
Company may elect to terminate the Plan within thirty (30) days preceding or
the twelve (12) months following a Change in Control, subject to the provisions
of Section 409A of the Code).  For
this purpose, the Plan shall be treated as terminated only if substantially
similar arrangements sponsored by the Company are terminated, so that all
Participants in the Plan and all participants under substantially similar
arrangements are required to receive all amounts deferred under the terminated
arrangements within twelve (12) months of the date of termination of the
arrangements.

 

Section 24. 
Governing Law

 

This
Plan shall be interpreted in a manner consistent with Code Section 409A
and the guidance issued thereunder by the Department of the Treasury and the
Internal Revenue Service and shall also be subject to and construed in
accordance with the provisions of ERISA, where applicable, and otherwise by the
laws of the Commonwealth of Massachusetts, without regard to the conflict of
law provisions of any jurisdiction.

 

10

 

SCHEDULE A

 

Any
employee at Grade Level of 41 and above, except as otherwise specified by the
Board.  However, as of September 1,
2009, any participating employee or any employee who at the time of a grade
level change to an ineligible grade is participating in the Plan shall remain
an eligible participant until such time as they terminate employment with the
Company.

 

11

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