Document:

Exhibit 10.33

 

AMENDED AND RESTATED SEVERANCE BENEFITS
AGREEMENT

 

December 13,
2005

 

Ronald L.
Sargent

c/o Staples, Inc.

500 Staples
Drive

Framingham, MA
01702

 

Dear Mr. Sargent:

 

You are
employed by Staples, Inc. and/or one of its subsidiaries (“Staples”) and
entered into a Severance Benefits Agreement with Staples on April 5, 2002
(the “Prior Agreement”).  This letter
agreement (this “Agreement”) amends and restates the Prior Agreement in its
entirety.  Staples agrees to provide you
with the severance benefits set forth in this Agreement if your employment is
terminated under the circumstances described below:

 

1.                                       Term
Of Agreement.  The term of this
Agreement shall begin on the date it is signed and shall continue in full force
and effect until such time as you or Staples has delivered to the other 90-days
advance written notice of your or its election to terminate this Agreement.
This Agreement is not a contract to employ you for a definite time period, it
being acknowledged that your employment is “at will” and that either you or
Staples may terminate the employment relationship at any time.

 

2.                                       Notice
Of Termination And Other Matters. 
Any termination of your employment, whether by you or Staples, will be
communicated by written notice (“Notice of Termination”) to the other party.
The Notice of Termination will specify the provisions of this Agreement, if
any, upon which termination is based and its effective date, which in no case
will be more than 180 days after the Notice of Termination. All notices and
communications provided for in this Agreement will be in writing and will be
effective when delivered or mailed by U.S. registered or certified mail, return
receipt requested, postage prepaid, addressed to the Chairman of the
Compensation Committee of the Board of Directors of Staples, 500 Staples Drive,
Framingham, MA 01702, and to you at the address shown above or to such other
address as either Staples or you may have furnished to the other in writing.

 

3.                                       Compensation
Upon Termination.  Staples will provide
you with the severance benefits listed below in the event of a Qualified
Termination. A “Qualified Termination” means your employment is terminated for
any reason other than because (i) you die or become Disabled, (ii) Staples
terminates you for “Cause,” or (iii) you resign without “Good Reason.”

 

(a)                                  Staples
will pay you 24 months severance pay, in equal monthly installments. Your
monthly severance payments will equal the sum of (i) your monthly base
salary rate in effect immediately prior to the Qualified Termination (or any
higher rate in effect within the 90 days prior to the Notice of Termination)
plus (ii) one-twelfth of an amount equal to the average annual bonus paid
to (or accrued for) you by Staples during the three full fiscal years preceding
such Qualified Termination. Annual salary rates will be prorated where
applicable and annual bonus averages will be computed on years available if
less than three years. Any partial year bonus you have earned will be
annualized. Staples will reduce the amount of any monthly payments set forth
above by 50% of any cash compensation earned by or accrued for you as a result
of services you

 

 

render for a third party during the month
immediately preceding the date of such payment unless the Qualified Termination
occurs within 24 months after a Change of Control.

 

(b)                                 Staples
will provide you with 24 months of life, dental, accident and group health
insurance benefits substantially similar to those available to similarly
situated officers (but not disability insurance); provided, however, that
Staples will not provide any such benefit for any portion of this period that
you receive an equivalent benefit from another party.

 

(c)                                  The
vesting schedule of any outstanding options to purchase shares of Staples’
Common Stock and/or Staples Performance Accelerated Restricted Stock will not
be accelerated in the event of a Qualified Termination, unless specifically
provided to the contrary in the respective option agreements, except that in
the event Staples terminates your employment without Cause, all outstanding
options to purchase shares of Staples’ Common Stock granted to you will become
exercisable in full upon such termination and any vesting restrictions
applicable to outstanding restricted stock awards issued to you will lapse upon
such termination.

 

(d)                                 Staples
will provide you with 12 additional months of the benefits set forth in
paragraphs (a) and (b) above if such Qualified Termination is within
two years after a Change in Control.

 

(e)                                  Gross-Up Payment.

 

(i)                                     Section280G.  In the event that you become entitled to
payments and/or benefits provided by this Agreement as a result of a Change in
Control (collectively the “Company Payments”), and such Company Payments will
be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), Staples shall pay to
you at the time specified in paragraph (iv) below an additional amount
(the “Section 280G Gross-up Payment” or a “Gross-up Payment”) such that
the net amount retained by you, after deduction of any Excise Tax on the
Company Payments and any U.S. federal, state, and local income or payroll tax
upon the Section 280G Gross-up Payment provided, but before deduction for
any U.S. federal, state, and local income or payroll tax on the Company
Payments, shall be equal to the Company Payments.   For purposes of determining whether
any of the Company Payments and Section 280G Gross-up Payments
(collectively the “Total Payments”) will be subject to the Excise Tax and the
amount of such Excise Tax, (i) the Total Payments shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and
all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Excise Tax, unless and except to
the extent that Staples determines, after consultation with its tax advisors to
the extent it deems necessary, that such Total Payments (in whole or in part)
either do not constitute “parachute payments,” represent reasonable
compensation for services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the “base amount” or are otherwise not subject to the
Excise Tax, and (ii) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by Staples in accordance with the
principles of Section 280G of the Code and the Treasury Regulations
thereunder.

 

(ii)                                  Section 409A.  In the event that, notwithstanding the
provisions of Section 3(f) below, any payments and/or benefits
provided by this Agreement constitute nonqualified deferred compensation under Section 409A
of the Code (collectively, the “Deferred Payments”) and you become subject to
the tax and interest imposed under Section 409A (the “409A Liability”),
Staples shall pay to you at the time specified in paragraph (iv) below, an
additional amount (the “Section 409A Gross-Up Payment” or “Gross-Up
Payment”) such that net amount retained by you after deduction of any 409A
Liability and any U.S. federal, state and local

 

2

 

income or payroll tax upon the Section 409A
Gross-Up Payment, but before deduction for any U.S. federal, state and local
income or payment tax on the Deferred Payments, shall be equal to the Deferred
Payments.

 

(iii)                               Adjustment
of Gross-Up Payment.  For purposes of determining the
amount of any Gross-up Payment, you shall be deemed to pay U.S. federal income
taxes at the highest marginal rate of U.S. federal income taxation in the
calendar year in which the Gross-up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
in which you reside for the calendar year in which the Company Payments or Deferred
Payments are to be made, net of the maximum reduction in U.S. federal income
taxes which could be obtained from deduction of such state and local taxes if
paid in such year. In the event that the Excise Tax or the 409A Liability is
subsequently determined by Staples to be less than the amount taken into
account hereunder at the time a Gross-up Payment is made, you shall repay to
Staples, at the time that the amount of such reduction in Excise Tax or the
409A Liability is determined, the portion of the prior Gross-up Payment
attributable to such reduction (plus the portion of a Gross-up Payment
attributable to the Excise Tax or the 409A Liability and U.S. federal, state
and local income tax imposed on the portion of a Gross-up Payment being repaid
by you if such repayment results in a reduction in the Excise Tax or the 409A
Liability or a U.S. federal, state and local income tax deduction).
Notwithstanding the foregoing, in the event any portion of a Gross-up Payment
to be refunded to Staples has been paid to any U.S. federal, state and local
tax authority, repayment thereof (and related amounts) shall not be required
until actual refund or credit of such portion has been made to you, and such
repayment shall include all interest received or credited to you by such tax
authority for the period it held such portion. 
Staples shall determine the course of action to be pursued (and the
method of allocating the expense thereof) if your claim for refund or credit is
denied.

 

In the event
that the Excise Tax or 409A Liability is later determined by Staples or the
Internal Revenue Service to exceed the amount taken into account hereunder at
the time a Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of a Gross-up
Payment), Staples shall make an additional Gross-up Payment in respect of such
excess (plus any interest or penalties payable with respect to such excess) at
the time that the amount of such excess is finally determined.

 

(iv)                              Payment
Date. 
Any Gross-up Payment or portion thereof provided for in this Section 3(e) shall
be paid not later than the thirtieth (30th) day preceding the due date for your
tax return (the “Return Due Date”) on which you are required to report the
Excise Tax or the 409A Liability, as the case may be; provided, however, that
if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, Staples shall pay to you on such day an
estimate, as determined in good faith by Staples, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest
at the rate provided in Section 1274(b)(2)(B) of the Code), subject
to further payments pursuant to this Section 3(e) as soon as the amount
thereof can reasonably be determined, but in no event later than the ninetieth
(90th) day after the Return Due Date.  In
the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, you shall pay to Staples the amount
that is equal to such excess amount no later than the fifth (5th) day after you
receive (A) notice of such determination or (B) Staples’ request for
payment, whichever occurs first.

 

(v)                                 IRS
Controversy.  You shall notify Staples in writing
of any claim by the Internal Revenue Service that, if successful, would require
the payment by Staples of a Gross-up Payment. 
Such notification shall be given as soon as practicable but no later
than ten (10) business days after you are informed in writing of such
claim and shall apprise Staples of the nature of such claim and the date on
which such claim

 

3

 

is requested to be paid.  You shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on which you give
such notice to Staples (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due).  If Staples notifies you in writing prior to
the expiration of such period that it desires to contest such claim, you shall:

 

A)                                  give
Staples any information reasonably requested by Staples relating to such claim;

 

B)                                    take
such action in connection with contesting such claim as Staples shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
selected by Staples and reasonably satisfactory to you;

 

C)                                    cooperate
with Staples in good faith in order to effectively contest such claim; and

 

D)                                   permit
Staples to control any proceedings relating to such claim as provided below;
provided, however, that Staples shall bear and pay directly all costs and
expenses (including, but not limited to, additional interest and penalties and
related legal, consulting or other similar fees) incurred in connection with
such contest and shall indemnify and hold you harmless, on an after-tax basis,
for any Excise Tax or other tax (including interest and penalties with respect
thereto) imposed with respect to the payment of such costs and expenses.

 

Staples shall
control all proceedings taken in connection with such claim and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct you to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and you agree to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as
Staples shall determine; provided, however, that if Staples directs you to pay
such claim and sue for a refund, Staples shall indemnify and hold you harmless,
on an after-tax basis, from any Excise Tax or other tax (including interest or
penalties with respect thereto) imposed with respect to any advance made by
Staples to you or with respect to any imputed income with respect to any such
advance; and provided, further, that if you are required to extend the statute
of limitations to enable Staples to contest such claim, you may limit this
extension solely to such claim.  Staples’
control of the contest shall be limited to issues with respect to which a
Gross-up Payment would be payable hereunder and you shall be entitled to settle
or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority. 
In addition, no position may be taken nor any final resolution be agreed
to by Staples without your consent if such position or resolution could
reasonably be expected to adversely affect you (including any other tax
position unrelated to the matters covered hereby).

 

In the event
that you receive a refund of the Excise Tax previously paid, you shall repay to
Staples, within five (5) business days following the receipt of such
refund of the Excise Tax previously paid, the amount of such refund plus any
interest received by you from the Internal Revenue Service on the refund, and
an amount equal to the reduction in your U.S. federal, state and local income
tax assuming that the repayment is deductible, using the assumptions set forth
in Section 3(e)(ii).  If, after you
receive an amount advanced by Staples in connection with an Excise Tax claim, a
determination is made that you shall not be entitled to any refund with respect
to such claim and Staples does not notify you in writing of its intent to

 

4

 

contest the denial of such
refund prior to the expiration of thirty (30) days after such determination,
such advance shall be forgiven and shall not be required to be repaid.

 

(vi)                              Copies
of Communications.  Staples and you shall promptly deliver to
each other copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax, the 409A
Liability and other taxes covered by this Section 3.

 

(f)                                    You
and Staples intend that this Agreement and any deferral of compensation
pursuant to its terms comply with the requirements of Section 409A of the
Code so that any payments hereunder are not subject to the taxes and interest
imposed by such section.  Accordingly,
you and Staples agree that:

 

(i)                                     notwithstanding
anything to the contrary in this Agreement, to the extent that you would
otherwise be entitled under this Agreement to any payment (including any
payment under Section 3(h) below) during the six months beginning on
the date of your Qualified Termination that constitutes nonqualified deferred
compensation under Section 409A of the Code, such payment will be paid to
you within ten (10) business days following the earlier of your death or
the date that is six months after the date of your Qualified Termination; and

 

(ii)                                  notwithstanding
anything to the contrary in this Agreement, to the extent that you would
otherwise be entitled under this Agreement to any benefit (other than a
payment) during the six months beginning on the date of your Qualified
Termination that constitutes nonqualified deferred compensation under Section 409A
of the Code, (i) such benefit will be delayed until the date that is six
months after the date of your Qualified Termination and the applicable period
for such benefit will be reduced by six months (ii) Staples will pay to
you within ten (10) business days following the date that is six months
after the date of your Qualified Termination a lump sum cash payment equal to
the lowest cost that you would incur on an after-tax basis to obtain such
benefit for yourself (including family or dependent coverage, if applicable) on
an individual basis during such six month period.

 

(g)                                 You
and Staples further agree to make such revisions to this Agreement as may be
required to conform the provisions of this Agreement to the requirements of Section 409A
and any regulations or other Internal Revenue Service guidance issued
thereunder.

 

(h)                                 If
Staples determines that during any portion of the applicable period following
your Qualified Termination you are precluded from participating in a plan
providing any benefit that you would otherwise be entitled under this
Agreement, Staples will pay to you within thirty (30) days following such
determination a lump sum cash payment equal to the lowest cost that you would
incur on an after-tax basis to obtain such benefit for yourself (including
family or dependent coverage, if applicable) on an individual basis for such
portion of the applicable period; provided, however, that Staples will not pay
you the amount of any damages, costs or expenses resulting from the absence of
such benefit other than the cost of maintaining such benefit.

 

(i)                                     You
will not be entitled to any of the compensation or benefits set forth in this Section 3
if Staples determines, within 60 days after your termination, that your conduct
prior to your termination would have warranted a discharge for “Cause,” or if,
after your termination, you have violated the terms of any non-competition or
confidentiality provision contained in any employment, consulting, advisory,
non-disclosure, non-competition or other similar agreement between you and
Staples.

 

5

 

(j)                                     The
provisions of this Agreement shall be effective for Qualified Terminations
occurring after the date of this Agreement, provided, however, that this
Agreement shall be effective for a Qualified Termination as a result of a
resignation only if (x) such Qualified Termination occurs after the earlier of (i) the
date that is at least 12 months after the date of this Agreement or (ii) the
first date upon which this Agreement may be effective with respect to such a
Qualified Termination without causing severance payments or benefits hereunder
to constitute Deferred Payments subject to a 409A Liability, and (y) you remain
continually employed by Staples prior to such date.

 

4.                                       Definitions.  For the purposes of this Agreement, the terms
listed below are defined as follows:

 

(a)                                  Change
In Control.  A “Change in Control”
will be deemed to have occurred only if any of the following events occur:

 

(i)                                     any
“person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (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;

 

(ii)                                  individuals
who constitute the Board (as of the date hereof, the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board, 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) will be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or

 

(iii)                               the
stockholders of Staples approve a merger or consolidation of Staples with any
other corporation, other than (A) a merger or consolidation which would
result in the voting securities of Staples outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 75% of the
combined voting power of the voting securities of Staples or such surviving
entity outstanding immediately after such merger or consolidation or (B) a
merger or consolidation effected to implement a recapitalization of Staples (or
similar transaction) in which no “person” (as hereinabove defined) acquires
more than 50% of the combined voting power of Staples’ then outstanding
securities; or

 

(iv)                              the
stockholders of Staples approve a plan of complete liquidation of Staples or an
agreement for the sale or disposition by Staples of all or substantially all of
Staples’ assets.

 

(b)                                 Disabled.  You are “disabled” for the purposes of this
Agreement, if you have been absent from the full-time performance of your duties
with Staples for six (6) consecutive months because of incapacity due to
physical or mental illness, and, within thirty (30) days after being sent a
written Notice of Termination, you fail to resume performance of your essential
job duties, with or without reasonable accommodation.

 

6

 

(c)                                  Cause.  A termination for “Cause” by Staples will
occur whenever:

 

(i)                                     you
willfully fail to substantially perform your duties with Staples (other than
any failure resulting from incapacity due to physical or mental illness);
provided, however, that Staples has given you a written demand for substantial
performance, which specifically identifies the areas in which your performance
is substandard, and you have not cured such failure within 30 days after
delivery of the demand. No act or failure to act on your part will be deemed “willful”
unless you acted or failed to act without a good faith or reasonable belief
that your conduct was in Staples’ best interest.

 

(ii)                                  you
breach any of the terms of the Proprietary and Confidential Information
Agreement or Non-Competition Agreement (or other similar agreement) between you
and Staples, or

 

(iii)                               you
violate the Code of Ethics or attempt to secure any improper personal profit in
connection with the business of Staples, or

 

(iv)                              you
fail to devote your full working time to the affairs of Staples except as may
be authorized in writing by the Board of Directors of Staples, or

 

(v)                                 you
engage in business other than the business of Staples except as may be
authorized in writing by the Board of Directors of Staples, or

 

(vi)                              you
engage in misconduct which is demonstrably and materially injurious to Staples;

 

provided that
in each case Staples has given you written notice of its intent to terminate
your employment under this Section 5(c) and an opportunity to
present, in person, to the Board of Directors of Staples, any objections you
may have to such termination.

 

(d)                                 Good
Reason.  A termination by you for “Good
Reason” will occur whenever any of the following circumstances have taken
place, without your written consent within 90 days prior to your Notice of
Termination:

 

(i)                                     your
position, duties, responsibilities, power, title or office was significantly
diminished (a change in your reporting relationship, standing alone, shall not
be deemed significant);

 

(ii)                                  your
annual base salary was reduced;

 

(iii)                               you
were not allowed to participate in a cash bonus program in a manner
substantially consistent with past practice in light of Staples’ financial
performance and attainment of your specified goals, your participation in any
other material compensation plan (other than any stock option or stock award
program which programs are within the full discretion of the Compensation
Committee) was substantially reduced, both in terms of the amount of benefits
provided and the level of participation relative to other participants; unless
such circumstances are fully corrected prior to the Date of Termination
specified in your Notice of Termination;

 

(iv)                              you
were not provided with paid vacation or other benefits substantially similar to
those enjoyed by you under any of Staples’ life insurance, medical, health and
accident, or disability plans in which you were participating, or Staples took
any action which would directly or indirectly materially reduce

 

7

 

any of such benefits or the number of your
paid vacation days; unless such circumstances are fully corrected prior to the
Date of Termination specified in your Notice of Termination;

 

(v)                                 in
the event of a Change in Control, Staples or any person in control of Staples
requires you to perform your principal duties in a new location outside a
radius of 50 miles from your business location at the time of the Change in
Control; or

 

(vi)                              Staples
fails to obtain a satisfactory agreement from any successor to assume and agree
to perform this Agreement, as contemplated in Section 5.

 

Notwithstanding
the foregoing, any general reduction of salary or reduction (or elimination) of
other compensation, bonus and/or benefits for its officers which are
substantially comparable for all such officers (but not occurring within 24
months after a Change of Control) will not be considered “Good Reason.”

 

5.                                       Successors;
Binding Agreement.  Staples will
require any successor (whether direct, indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of its business or
assets expressly to assume and agree to perform this Agreement to the same
extent that Staples would be required to perform it if no such succession had
taken place. Any failure to obtain an assumption of this Agreement prior to the
effectiveness of any succession will be a breach of this Agreement and will
entitle you to compensation in the same amount and on the same terms as you
would be entitled hereunder. As used in this Agreement, “Staples” means Staples
as defined above and any successor to its business or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
This Agreement will inure to the benefit of and be enforceable by your personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amount would
still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, will be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or if there
is no such designee, to your estate.

 

6.                                       Arbitration.  The parties agree that any legal disputes
(including but not limited to claims arising under federal or state statute,
contract, tort, or public policy) that may occur between you and Staples, and
that arise out of, or are related in any way to, your employment with or
termination of employment from Staples or the termination of this Agreement,
and which disputes cannot be resolved informally, will be resolved exclusively
though final and binding arbitration. The parties will be precluded from
raising in any other forum, including, but not limited to, any federal or state
court of law, or equity, any claim which could be raised in arbitration;
provided, however that nothing in this Agreement precludes you from filing a charge
or from participating in an administrative investigation of a charge before an
appropriate government agency or Staples from initiating an arbitration over a
matter covered by this Agreement.

 

Each party may
demand arbitration, no later than three hundred (300) days after the date on
which the claim arose, by submitting to the other party a written demand which
states: (i) the claim asserted, (ii) the facts alleged, (iii) the
applicable statute or principal of law (e.g., breach of contract) upon which the
demand is based, and (iv) the remedy sought. Any response to such demand
must be made, in writing, within twenty (20) days after receiving the demand,
and will specifically admit or deny each factual allegation.

 

The
arbitration will be conducted in accordance with the Rules for Employment
Arbitration of the American Arbitration Association (AAA) and any arbitration
will take place in Framingham, Massachusetts. Each party will bear its own
costs and attorney’s fees. The arbitrator will have the power to award any
types of

 

8

 

legal or equitable relief that
would be available in a court of competent jurisdiction, including, but not
limited to, the costs of arbitration, attorney’s fees, emotional distress damages,
and punitive damages for causes of action when such damages are available under
law. Any relief or recovery to which you are entitled from any claims arising
out of your employment, termination, or any claim of unlawful discrimination
will be limited to that awarded by the arbitrator.

 

7.                                       Waiver
Of Jury Trial.  If any claim arising
out of your employment or termination is found not to be subject to final and
binding arbitration, the parties agree to waive any right to a jury trial if
such claim is filed in court.

 

8.                                       Miscellaneous.

 

(a)                                  The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
which will remain in full force and effect.

 

(b)                                 The
validity, interpretation, construction and performance of this Agreement will
be governed by the laws of the Commonwealth of Massachusetts.

 

(c)                                  No
waiver by you or Staples at any time of any breach of, or compliance with, any
provision of this Agreement to be performed by Staples or you, respectively,
will be deemed a waiver of that or any other provision at any subsequent time.

 

(d)                                 You
must execute a legally enforceable separation agreement and general release in
a form acceptable to Staples prior to the receipt of any payments or benefits
set forth above. Any payments made to you will be paid net of any applicable
withholding required under federal, state or local law.

 

(e)                                  This
Agreement is the exclusive agreement with respect to the severance benefits
payable to you in the event of a termination of your employment. All prior
negotiations and agreements, including without limitation the Prior Agreement,
are hereby merged into this Agreement.

 

(continued on next page)

 

9

 

If this
Agreement sets forth our agreement, kindly sign and return to Staples the
enclosed copy of this Agreement.

 

Sincerely,

 

	
  STAPLES,
  INC.

  
	
   

  
	
  By:

  
	
   

  
	
   

  
	
        /s/
  Richard J. Currie

  	
   

  
	
  Chairman of
  the Compensation

  
	
  Committee of
  the Board of Directors

  

 

10

 

I have been
advised of my right to consult with counsel regarding this Agreement and have
decided to sign below knowingly, voluntarily, and free from duress or coercion.

 

Agreed to this
13th day of December, 2005

 

 

	
        /s/
  Ronald L. Sargent

  	
   

  
	
  Ronald L.
  Sargent

  

 

11Exhibit 10.15
 
PROMISSORY NOTE
 
$13,122,500.00
 
December 23, 2005
Paramus, New Jersey
 
WHEREAS, pursuant to the Letter Agreement dated November 16, 1999 (the “Letter Agreement”) between Steven Roth (the “Executive”) and Vornado Realty Trust (the “Company”), the Company agreed to make up to $15,000,000 in the aggregate of revolving credit loans to the Executive;
 
WHEREAS, the Executive desires to borrow $13,122,500 pursuant to the Letter Agreement.
 
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
 
1. DEFINITIONS
 
Capitalized terms used but not defined in this Note shall have the respective meanings assigned to such terms in the Stock Pledge Agreement and the Loan Documents, as such terms are defined below.
 
2. PROMISE TO PAY, INTEREST, MATURITY, PAYMENTS
 
FOR VALUE RECEIVED, Executive promises to pay to the order of the Company, at its office located at 210 Route 4 East, Paramus, New Jersey 07652, or such other place as designated in writing by the holder hereof, the aggregate principal sum of THIRTEEN MILLION, ONE HUNDRED TWENTY-TWO THOUSAND, FIVE HUNDRED DOLLARS ($13,122,500.00) on December 23, 2011 (“Maturity”), with interest on the unpaid principal amount hereof from the date hereof until Maturity, payable quarterly in arrears on the 10th day following payment of the Company’s regular quarterly dividend (or if no dividend is paid, at the end of the applicable calendar quarter), at a rate per annum equal to 4.45%.  If the interest required to be paid under the terms of this Note shall at any time exceed the rate of interest which the Company is permitted by law to charge in the State of New Jersey, then the interest rate to be paid hereunder shall be the maximum rate permitted by law.
 
3. PREPAYMENT
 
This Note may prepaid in whole or in part at any time without penalty or premium.
 
4. COLLATERAL
 
This Note is secured by the Executive’s Stock Pledge Agreement, dated December 29, 1992, as amended on May 29, 2002 (the “Stock Pledge Agreement”), and such other security or supporting documents as are executed in conjunction with therewith, including without limitation the Letter Agreement (the “Loan Documents”).  The Company or any subsequent holder of this Note is entitled to all the benefits provided for in the Loan Documents or referred to therein.
 
5. ENFORCEMENT EXPENSES
 
In the event Executive fails to pay any amounts due hereunder when due, and this Note is collected by legal proceedings (including proceedings in the probate or bankruptcy courts) Executive shall pay to the holder thereof, in addition to such amounts due, all costs of collection or enforcement, including reasonable 

 

 

attorneys
fees and court costs which shall be added to the principal of, and be collectible
as part of, this Note.

 
6. WAIVER OF PRESENTMENT, OFFSET, COUNTERCLAIMS, DEFENSES
 

Executive, on
behalf of himself and his successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and nonpayment
of this Note, and expressly agrees that this Note, or any payment hereunder,
may be extended from time to time and that the holder hereof may accept
security for this Note or release security for this Note, all without in any
way affecting the liability of Executive hereunder.  In addition, Executive, on behalf of himself
and his successors and assigns, hereby expressly acknowledges and agrees that
he and they shall be unconditionally liable for the repayment of all amounts
due hereunder and, without limiting the foregoing, Executive, on behalf of
himself and his successors and assigns, hereby forever expressly waives any
claim or right of offset and any similar claim or right, whether now existing
or later acquired and whether granted by contract or by law, against any
amounts otherwise due him or them.

 
7. EVENT OF DEFAULT
 
Failure by Executive to pay any sum due hereunder when due and payable which has not been cured by Executive within 30 days following actual receipt of written notice given by the Company, or the occurrence of an event of default under any of the Loan Documents, shall constitute an event of default under this Note and the Company may, at its sole option exercised by notice to Executive, declare the entire outstanding principal balance hereof, together with all unpaid interest accrued hereon, to be immediately due and payable in full.  Upon the occurrence of an event of default, the Company may exercise all rights and remedies available to it under the Stock Pledge Agreement or otherwise.
 
8. HEADINGS
 
The Section headings in this Note are included herein for convenience of reference only and shall not constitute a part of this Note for any other purpose.
 
9. ENTIRE AGREEMENT
 
This Note, the Stock Pledge Agreement and the other Loan Documents constitute the entire agreement between the Company and Executive with respect to the subject matter hereof and all understandings, oral representations and agreements heretofore or simultaneously had among the parties with respect to the transaction governed by the Loan Documents are merged in, and are contained in, such documents and instruments.
 
10. GOVERNING LAW AND CONSENT TO JURISDICTION
 
THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT REGARD TO THAT STATE’S RULES GOVERNING CONFLICTS OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO JURISDICTION AND TO LAYING VENUE IN THE COUNTY OF BERGEN, STATE OF NEW JERSEY.
 
11. WAIVER OF JURY TRIAL
 
The parties hereby agree not to elect a trial by jury of any issue triable of right by jury, and waive any right to trial by jury fully to the extent that any such right shall now or hereinafter exist with regard to this Note, or any claim, counterclaim or other action arising in connection herewith or therewith.  This waiver of right to trial by jury is given knowingly and voluntarily by each of the Company and Executive, and is intended to encompass individually each instance and each issue as to which the right to a trial by jury would otherwise accrue.  Each party is hereby authorized to file a copy of this paragraph in any proceeding as conclusive evidence of this waiver by the other party.

 

 

12. SEPARABILITY
 
In any case any provision herein shall be deemed to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
 
IN WITNESS WHEREOF, the parties have caused this Note to be duly executed as of the date written above.
 

	STEVEN ROTH
	 
	VORNADO REALTY TRUST

	 
	 
	 

	 
	 
	 

	/s/ Steven Roth
	 
	 
	By:

	     Steven Roth
	 
	/s/ Joseph Macnow
	 

	 
	 
	Name:  Joseph Macnow

	 
	 
	Title:  Executive Vice President, Chief Financial Officer

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