Document:

Exhibit 10.2

 

Restricted Stock Award Agreement

 

Staples, Inc.

Employer ID: 04-2896127

500 Staples Drive

Framingham, MA 01702

 

	
   

  	
  ACCOUNT
  ID:

  
	
  «FirstName» «MiddleName» «LastName»

  	
  LOCATION:

  
	
  «Address1»

  	
   

  
	
  «Address2»

  	
   

  
	
  «Address3»

  	
   

  
	
  «City», «State» «Zip»

  	
   

  
	
  «Country»

  	
   

  

 

In
consideration of services rendered to Staples, Inc., you have been awarded
restricted shares of Staples’ Common Stock under Staples, Inc.’s Amended
and Restated 2004 Stock Incentive Plan, as follows:

 

	
  Award No.:

  	
   

  	
   

  	
   

  
	
  Stock Option Plan:

  	
   

  	
  2004RS

  	
   

  
	
  Date of Grant:

  	
   

  	
   

  	
   

  
	
  Total Number of Shares:

  	
   

  	
   

  	
   

  
	
  Fair Market Value per Share:

  	
   

  	
  $

  	
   

  
	
  Total Value of Shares Granted:

  	
   

  	
  $

  	
   

  

 

	
  Vesting Date

  	
   

  	
  Number of Shares

  Vesting on Vesting Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

By
your acceptance of this Restricted Stock Award, you acknowledge that this award
is granted under and governed by the terms and conditions of Staples, Inc.’s
Amended and Restated 2004 Stock Incentive Plan
(as further amended or restated from time to time) and by the terms and
conditions of Staples, Inc.’s Restricted
Stock Award Agreement as attached.

 

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

 

	
  Staples, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Ronald
  L. Sargent

  	
   

  
	
  Chairman
  and Chief Executive Officer

  	
   

  

 

Attachment: 
Staples, Inc. Restricted Stock Award Agreement

 

 

Restricted Stock Award Agreement

 

1.             Award.  In consideration of services rendered,
Staples, Inc., a Delaware corporation (“Staples”), hereby awards to the
Associate named in the accompanying Notice of Award of Restricted Stock (the “Notice”),
pursuant to Staples’ Amended and Restated 2004 Stock Incentive Plan (the “Plan”),
the Total Number of Shares of Common Stock of Staples stated in the Notice (the
“Shares”) subject to the terms and conditions of this Restricted Stock Award
Agreement and the Plan.  Except where the
context otherwise requires, the term “Staples” shall include any parent and all
present and future subsidiaries of Staples as defined in Sections 424(e) and
424(f) of the Internal Revenue Code of 1986, as amended or replaced from
time to time (the “Code”).

 

2.             Transferability of Shares.  Until the Vesting Date described below, the
Shares may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of (whether by operation of law or otherwise) nor shall the
Shares be subject to execution, attachment or similar process, except that the
Shares may be transferred by will or the laws of descent and distribution or, upon
notice to Staples, for estate planning purposes to entities that are
beneficially owned entirely by family members. 
All transferees of the Shares must agree to be governed by all of the
terms and conditions of this Agreement. 
Upon any sale, transfer, assignment, pledge, hypothecation or other
disposition, or any attempt to sell, assign, transfer, pledge, hypothecate or
otherwise dispose, of the Shares contrary to the provisions hereof, or upon the
levy of any execution, attachment or similar process upon the Shares or such
rights, the Shares shall, at the election of Staples, be deemed repurchased by
Staples at a repurchase price of zero and all rights with respect to the Shares
shall be forfeited to Staples.  In
addition, Staples may seek any other legal or equitable remedies available to
it, including rights of specific performance. 
Staples may refuse to recognize as a shareholder of Staples any
purported transferee of or holder of any rights with respect to the Shares and
may retain and/or recover all dividends payable or paid with respect to such
Shares.

 

3.             Vesting of Shares.  Except as otherwise provided in this
Agreement, the transfer restrictions on the Shares shall lapse, and the Shares
shall be considered to “vest”, on the Vesting Date set forth in the Notice.

 

4.             Vesting
Date.

 

(a)  Continuous Relationship
with Staples Required. 
Except as otherwise provided in this Section 4, the Shares shall
not vest unless the Associate is, and has been at all times since the Date of
Award set forth in the Notice, an employee of, or a consultant to, Staples (an “Eligible
Associate”).  In addition, the Shares
shall not vest during any period that the Associate is suspended for an offense
which could lead to a termination by Staples for “cause” (as defined below).

 

(b)  Termination of
Relationship with Staples.  If the Associate ceases to be an Eligible
Associate for any reason prior to the Vesting Date, then, except as provided in
paragraph (c) below or in Section 10, the Shares shall be deemed
repurchased by Staples at a repurchase price of zero and ownership of all
right, title and interest in and

 

 

to the Shares shall be forfeited and revert to Staples on the date such
Associate ceases to be an Eligible Associate. 
If the Associate is an employee on an approved leave of absence, then
the Shares shall not be forfeited as a result of such leave of absence unless
and until the Associate’s employment relationship is ultimately terminated

 

(c)  Vesting Upon Death or
Disability or Retirement.  If the Associate (i) dies; (ii) becomes
disabled (within the meaning of Section 22(e)(3) of the Code); or (iii) terminates
employment on or after the Retirement Age Qualification Date (defined below),
in each case prior to the Vesting Date while he or she is an Eligible Associate,
then the Shares shall vest in full.  For
purposes of this Section 4(c), the “Retirement Age Qualification Date”
shall mean the first Quarterly Measurement Date (defined below) to occur on or
after both (A) the Date of Award and (B) the date that the Associate
has attained age 65.  For purposes of
this Section 4(c), the “Quarterly Measurement Date” means the sixth
Thursday following the end of each fiscal quarter.  In addition and subject to Section 11 of
this Agreement, on the Eligible Associate’s Retirement Age Qualification Date,
a number of unvested Shares that is sufficient to satisfy the Eligible
Associate’s federal, state or local income and employment tax obligations with
respect to the Shares that are triggered by virtue of the Eligible Associate
satisfying the conditions of the Retirement Age Qualification Date shall vest
in full, provided that Staples may only withhold a number of such vested Shares
that is necessary to meet the minimum federal, state or local income and
employment tax withholding requirements.

 

(d)  Repurchase/Forfeiture.
 Upon repurchase/forfeiture of
the Shares for any reason hereunder, the Associate shall cease to have any
rights or privileges as a stockholder of Staples with respect to the Shares
repurchased/forfeited and such Shares shall again be available for subsequent
option grants or awards under the Plan.

 

5.             Delivery of Shares.  Staples shall, upon the Date
of Award, effect issuance of the Shares by registering the Shares in book entry
form with Staples’ transfer agent in the name of the Associate.  No certificate(s) representing all or a
part of the Shares shall be issued until vesting.

 

6.             No Special Employment or
Similar Rights.  Nothing
contained in the Plan or this Agreement shall be construed or deemed by any person
under any circumstances to bind Staples to continue the employment or other
relationship of the Associate with Staples for the period prior to or after
vesting.

 

7.             Rights as a Shareholder.  Except as otherwise provided herein, the
Associate (a) shall have the right to vote the Shares and act in respect
of the Shares at any meeting of shareholders, but (b) shall not have any
rights to receive cash dividends with respect to the Shares until vesting.

 

8.             Adjustment Provisions.

 

(a)  General.   In the event of any recapitalization,
reclassification of shares, combination of shares, stock dividend, stock split,
reverse stock split, spin-off or other similar change in capitalization or
event or any distribution to holders of Common Stock other than an ordinary
cash dividend, the Associate shall, with respect to the Shares, be

 

 

entitled to the rights and benefits, and be subject to the limitations,
set forth in Section 9(a) of the Plan.

 

(b)  Board Authority to Make
Adjustments.  Any
adjustments under this Section 8 will be made by the Board of Directors,
whose determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. 
No fractional shares will be issued with respect to Shares on account of
any such adjustments.

 

9.             Mergers, Consolidations,
Distributions, Liquidations, Etc.  In the event of a merger or consolidation or
any share exchange transaction in which outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity, or in the event of a liquidation of Staples, the Associate
shall, with respect to this Agreement, be entitled to the rights and benefits,
and be subject to the limitations, set forth in Section 9 of the Plan.

 

10.           Vesting
Following a Change in Control.

 

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

 

(i)  A “Change in Control” shall be deemed to have occurred if (A) any
“person”, as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) (other than Staples, any
trustee or other fiduciary holding securities under an employee benefit plan of
Staples, or any corporation owned directly or indirectly by the stockholders of
Staples in substantially the same proportion as their ownership of stock of
Staples), is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of Staples
representing 30% or more of the combined voting power of Staples’ then
outstanding securities (other than pursuant to a merger or consolidation
described in clause (1) or (2) of subsection (C) below); (B) individuals
who, as of the date hereof, constitute the Board of Directors of Staples (as of
the date hereof, the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board of Directors, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for election
by Staples’ stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of Staples, as such terms are used in Rule 14a-11 of Regulation
14A under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent Board; (C) the
stockholders of Staples approve a merger or consolidation of Staples with any
other corporation, and such merger or consolidation is consummated, other than (1) a
merger or consolidation which would result in the voting securities of Staples
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 75% of the combined voting power of the voting
securities of Staples or such surviving entity outstanding immediately after
such merger or consolidation, or (2) a merger or consolidation effected to
implement a

 

 

recapitalization of Staples (or similar transaction) in which no “person”
(as defined above) acquires more than 30% of the combined voting power of
Staples’ then outstanding securities; or (D) the stockholders of Staples
approve an agreement for the sale or disposition by Staples of all or
substantially all of Staples’ assets, and such sale or disposition is consummated.

 

(ii) “Surviving Corporation” shall mean (x) in the case of a
Change in Control pursuant to clause (A) or clause (B) of Section 10(a)(i),
Staples; (y) in the case of a Change in Control pursuant to clause (C) of
Section 10(a)(i), the surviving or resulting corporation in such merger or
consolidation; and (z) in the case of a Change in Control pursuant to
Clause (D) of Section 10(a)(i), the entity acquiring the majority of
the assets being sold or disposed of by Staples.

 

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

 

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

 

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

 

(E)           The Associate’s
engagement in fraud or willful misconduct (not acting in good faith or with
reasonable belief that conduct was in the best interests of Staples) that
significantly contributes to Staples preparing a material financial
restatement, other than a restatement of financial statements that became
materially inaccurate because of revisions to generally accepted accounting
principles; or

 

(F)           Failure by the
Associate 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 Associate’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 Associate’s
engagement in misconduct, which is demonstrably and materially injurious to
Staples.

 

For purposes of the definition of Cause contained in this Section 10(a) and
for purposes of Section 12 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.

 

(b)  Effect of Change in
Control.  If a Change
in Control of Staples occurs, the Shares shall become vested as follows:

 

(i)  If, upon the Change in Control, the Associate

 

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

 

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

 

(ii) If, within one year following the date of the Change in
Control, the Associate either

 

(A) is discharged
without cause (as defined in Section 10(a) above) 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, then
the vesting of Shares shall be accelerated such that all of Shares shall vest
effective upon the date of such discharge, resignation or retirement (which
shall be considered a Vesting Date hereunder).

 

11.           Withholding
Taxes.  Staples’
obligation to vest the Shares shall be subject to the Associate’s satisfaction
of all applicable federal, state and local income and employment tax
withholding requirements.  Staples may
deduct any such tax obligations from any payment of any kind otherwise due to
the Associate, including salary and bonus payments, and may withhold or sell a
sufficient number of Shares on behalf of the Associate to satisfy such tax
obligations.

 

 

12.          Forfeiture and Recovery for
Misconduct.

 

(a)           Right
of Recovery.

 

Notwithstanding
any other provision of the Plan, the Notice or this Agreement to the contrary,
if the Board of Directors of Staples (or its authorized designee, the “Board”)
determines during the Recovery Period (as defined in Section 12(a) below)
that an Associate has engaged in any of the conduct set forth in clauses (B) through
(E) of Section 10(a)(iii) (which determination shall be
conclusive, “Misconduct”), the Board, subject to the limitations set forth in
this Section 12, may in its sole discretion (1) terminate such
Associate’s participation in the Plan, and/or (2) treat any outstanding
unvested Shares granted under the Plan as forfeited, and/or (3) demand
that the Associate pay in cash or transfer in Shares the amount described in Section 12(b);
provided, however, that in the event the Board determines during the Recovery
Period that the Associate engaged in Misconduct as described in clause (E) of
Section 10(a)(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 Associate is employed by Staples and
the period ending 18 months after the Associate’s last day of employment; (2) if
the Misconduct relates to the breach of any agreement between the Associate 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 Associate is employed by Staples and the period ending six
months after the Associate’s last day of employment.  If during the Recovery Period the Board gives
written notice to the Associate 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 12
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 Associate for
which the Board prior to such Change in Control gave written notice to such
Associate of potential Misconduct.

 

For
purposes of administratively enforcing its rights under this Section 12,
during any period for which potential Misconduct has been identified by
Staples, the Board may (1) suspend such Associate’s participation in the
Plan, or with respect to any award under the Plan, or (2) temporarily
withhold, in whole or in part, the vesting of any award or the transfer of any
Shares relating to any award made under the Plan.

 

(b)         Amount
of Recovery.

 

With
respect to Misconduct described in Section 10(a)(iii)(B) (breach of
agreement) and Section 10(a)(iii)(C) (violation of Code of Ethics),
and in addition to its right to effect a termination of participation and a
forfeiture of outstanding unvested 

 

 

Shares under the Plan, at the Board’s
discretion, vested Shares shall be deemed repurchased by Staples at a
repurchase price of zero and ownership of all right, title and interest in and
to the Shares shall be forfeited and revert to Staples as of the date of such
termination; or, if the Associate at such time no longer owns such Shares,
Staples shall be entitled to recover from the Associate the gross profit earned
by the Associate upon the disposition (whether by sale, gift, donation or
otherwise) of such Shares.

 

With
respect to Misconduct described in Section 10(a)(iii)(D) (intentional
deceitful acts), and in addition to its right to effect a termination of
participation and a forfeiture of outstanding unvested Shares under the Plan,
the Board may recover from the Associate the amount (in cash or Shares)
determined by the Board in its sole discretion to represent the financial
impact of the Misconduct upon Staples; provided, however, that such recovery
amount shall be reduced by the grant date fair market value of any forfeited unvested
Shares and any amounts recovered from the Associate 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 unvested Shares under the
Plan, vested Shares granted under the Plan to or for the benefit of the
Associate during the twenty-four (24) month period following the first public
issuance of the financial statements that are the subject of an accounting
restatement shall be deemed repurchased by Staples at a repurchase price of
zero and ownership of all right, title and interest in and to such Shares shall
be forfeited and revert to Staples as of the date of such termination; or, if
the Associate at such time no longer owns such Shares, Staples shall be
entitled to recover from the Associate (1) the gross profit earned by the
Associate upon the disposition (whether by sale, gift, donation or otherwise)
of such Shares and (2) the gross profit earned by the Associate upon the
disposition (whether by sale, gift, donation or otherwise) of any securities of
Staples during such twenty-four (24) month period.

 

The
term “recover” or “recovered” shall include, but shall not be limited to, any
right of set-off, reduction, recoupment, off-set, forfeiture, or other attempt
by Staples to withhold or claim payment of an award or any proceeds thereof
(including any proceeds from the sale or other disposition of Shares).  For purposes of any recovery of Shares,
Staples may treat Shares as fungible and shall not be required to identify,
trace, or recover specific Shares. 
Staples’ right of forfeiture and recovery of awards shall not limit any
other right or remedy available to Staples for an Associate’s Misconduct,
whether in law or equity, including but not limited to injunctive relief,
terminating the Associate’s employment with Staples, or taking other legal
action against the Associate.

 

The
amount that may be recovered under this Section 12 shall be determined on
a gross basis without reduction for taxes paid or payable by an Associate.

 

 

13.           Miscellaneous.

 

(a)  Except as provided herein, this Agreement may not be amended
or otherwise modified unless evidenced in writing and signed by Staples and the
Associate unless the Board of Directors determines that the amendment or
modification, taking into account any related action, would not materially and
adversely affect the Associate.

 

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

 

(c)  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.Exhibit 10.3

 

Stock Option Grant

 

Staples, Inc.

Employer ID: 04-2896127

500 Staples Drive

Framingham, MA 01702

 

	
   

  	
   

  	
  ACCOUNT
  ID:

  
	
  «FirstName» «MiddleName» «LastName»

  	
   

  	
  LOCATION:

  
	
  «Address1»

  	
   

  	
   

  
	
  «Address2»

  	
   

  	
   

  
	
  «Address3»

  	
   

  	
   

  
	
  «City», «State» «Zip»

  	
   

  	
   

  
	
  «Country»

  	
   

  	
   

  

 

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

 

	
  Type
  of Option:

  	
   

  	
  Non-Qualified Stock Option

  	
   

  
	
  Grant
  No.:

  	
   

  	
   

  	
   

  
	
  Stock
  Option Plan:

  	
   

  	
  2004

  	
   

  
	
  Date
  of Grant:

  	
   

  	
   

  	
   

  
	
  Total
  Number of Option Shares:

  	
   

  	
   

  	
   

  
	
  Option
  Price per Share:

  	
   

  	
  US$

  	
   

  
	
  Total
  Exercise Price of Option Shares:

  	
   

  	
  US$

  	
   

  

 

	
  Vesting
  Date

  	
   

  	
  Number of Shares

  Vesting on Vesting Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

By your acceptance of this
Stock Option Grant, you agree that this option is granted under and governed by
the terms and conditions of Staples, Inc.’s Amended and Restated 2004 Stock Incentive Plan (as further amended or
restated from time to time) and by the terms and conditions of Staples, Inc.’s
Non-Qualified Stock Option Agreement (NQS42004),
which is attached hereto.

 

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

 

Staples, Inc.

 

 

Ronald
L. Sargent

Chairman
and Chief Executive Officer

 

Attachment:  Staples, Inc. Non-Qualified Stock Option
Agreement

 

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

1.             Grant of Option.  Staples, Inc., a Delaware corporation (“Staples”),
hereby grants to the Optionee named in the accompanying Stock Option Grant (the
“Option Grant”) the option, pursuant to Staples’ Amended and Restated 2004
Stock Incentive Plan noted in the Option Grant (the “Plan”), to purchase an
aggregate of the Total Number of Option Shares of Common Stock of Staples
stated in the Option Grant at a price per share equal to the Option Price per
Share stated in the Option Grant, purchasable as set forth in and subject to
the terms and conditions of this Option Agreement and the Plan.  Except where the context otherwise requires,
the term “Staples” shall include the parent and all present and future
subsidiaries of Staples as defined in Sections 424(e) and 424(f) of
the Internal Revenue Code of 1986, as amended or replaced from time to time
(the “Code”).

 

2.             Non-Qualified
Stock Option.  This option
is not intended to qualify as an incentive stock option within the meaning of Section 422
of the Code.

 

3.              Exercise
of Option and Provisions for Termination.

 

(a)  Vesting Schedule.  Except as otherwise provided in this
Agreement, this option may be exercised up to and including the tenth
anniversary of the Date of Grant stated in the Option Grant (hereinafter the “Expiration
Date”).  This option shall become
exercisable (or “vest”) in installments for the number of shares set forth in the
table in the Option Grant commencing on each of the respective Vesting Dates
noted (each a “Vesting Date”).  The right
of exercise shall be cumulative so that if the option is not exercised to the
maximum extent permissible during any exercise period, it shall be exercisable,
in whole or in part, with respect to all shares not so purchased at any time
prior to the Expiration Date or the earlier termination of this option.  This option may not be exercised at any time
after the Expiration Date.

 

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

 

(c)  Continuous Relationship with Staples
Required.  Except as
otherwise provided in this Section 3, this option may not be exercised
unless the Optionee, at the time he or she exercises this option, is, and has
been at all times since the Date of Grant of this option, an employee or
director of, or a consultant, advisor or service provider to, Staples (an “Eligible
Optionee”).  In addition, this option may
not be exercised while the Optionee is suspended for an offense which could
lead to a termination by Staples for “cause” (as defined below).

 

(d)  Termination of Relationship with Staples.  If the Optionee ceases to be an Eligible
Optionee for any reason, then, except as provided in this paragraph (d),  in paragraph (e) below or for Cause (as
defined in Section 11), the right to exercise this option shall terminate six
(6) months after such cessation (but in no event after the Expiration
Date), provided that this option shall be exercisable only to the extent

 

1

 

that
the Optionee was entitled to exercise this option on the date of such cessation.  Notwithstanding the foregoing sentence or the
vesting schedule set forth in Section 3(a) above, if the Optionee
terminates employment 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
Board of Directors of Staples) completed by the Optionee plus the Optionee’s
age is greater than or equal to 65, this option shall be exercisable for the
Total Number of Option Shares for a period of three (3) years after the
date of the Optionee’s termination (but in no event after the Expiration
Date).  In addition, if the Optionee is
an employee on an approved leave of absence, then this option shall not
terminate as a result of such leave of absence unless and until the Optionee’s
employment relationship is ultimately terminated.  If the Optionee ceases to be an Eligible
Optionee under circumstances where Section 12 below does not apply, and
the Optionee becomes an Eligible Optionee within six (6) months after he
or she ceased to be an Eligible Optionee, then this option shall not terminate
and shall be reinstated.

 

(e)  Exercise Period Upon Death or Disability.  If the Optionee dies or becomes disabled
(within the meaning of Section 22(e)(3) of the Code) prior to the
Expiration Date while he or she is an Eligible Optionee, or if the Optionee
dies within six (6) months after the Optionee ceases to be an Eligible
Optionee (other than as a result of a termination of such relationship by
Staples for Cause) this option (i) shall be exercisable, within the period
of 12 months following the date of death or disability of the Optionee (but in
no event after the Expiration Date), by the Optionee or by the person to whom
this option is transferred by will or the laws of descent and distribution, and
(ii) notwithstanding the vesting schedule set forth in Section 3(a) above,
shall be exercisable for 100% of the Total Number of Option Shares.  Except as otherwise indicated by the context,
the term “Optionee,” as used in this option, shall be deemed to include the
estate of the Optionee or any person who acquires the right to exercise this
option by bequest or inheritance or otherwise by reason of the death of the Optionee.

 

4.              Payment
of Purchase Price.

 

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

 

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

 

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

 

2

 

Common
Stock was previously issued to the Optionee through a Staples compensation
plan.  Fractional shares of Common Stock
of Staples will not be accepted in payment of the purchase price of shares
acquired upon exercise of this option.

 

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

 

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

 

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

 

6.             Transferability
of Option.  This option
is personal and no rights granted hereunder may be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
nor shall any such rights be subject to execution, attachment or similar
process, except that this option may be transferred by will or the laws of
descent and distribution or, upon notice to Staples, for estate planning
purposes to entities that are beneficially owned entirely by family members.  All transferees of this option must agree to
be governed by all of the terms and conditions of this Agreement.  Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option or of such rights contrary to
the provisions hereof, or upon the levy of any attachment or similar process
upon this option or such rights, this option and such rights shall, at the
election of Staples, become null and void.

 

7.             No Special
Employment or Similar Rights.  Nothing contained in the Plan or this option
shall be construed or deemed by any person under any circumstances to bind
Staples to continue the employment or other relationship of the Optionee with
Staples for the period within which this option may be exercised.

 

8.             Rights as a
Shareholder.  The
Optionee shall have no rights as a shareholder with respect to any shares which
may be purchased by exercise of this option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) unless and until a certificate representing such shares is duly issued
and delivered to the Optionee.  No
adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.

 

9.              Adjustment
Provisions.

 

(a)  General.  In the event of any recapitalization,
reclassification of shares, combination of shares, stock dividend, stock split,
reverse stock split, spin-off or other similar change in capitalization or
event or any distribution to holders of Common Stock other than an ordinary
cash dividend, the Optionee

 

3

 

shall,
with respect to this option or any unexercised portion hereof, be entitled to
the rights and benefits, and be subject to the limitations, set forth in Section 9(a) of
the Plan.

 

(b)  Board Authority to Make Adjustments.  Any adjustments under this Section 9
will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive.  No fractional shares
will be issued pursuant to this option on account of any such adjustments.

 

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

 

11.       Exercisability and Vesting
Following a Change in Control.

 

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

 

(i) 
A “Change in Control” shall be deemed to have occurred if (A) any “person”,
as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”) (other than Staples, any trustee or
other fiduciary holding securities under an employee benefit plan of Staples,
or any corporation owned directly or indirectly by the stockholders of Staples
in substantially the same proportion as their ownership of stock of Staples),
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of Staples representing
30% or more of the combined voting power of Staples’ then outstanding securities(other
than pursuant to a merger or consolidation described in clause (1) or (2) of
subsection (C) below); (B) individuals who, as of the date hereof,
constitute the Board of Directors of Staples (as of the date hereof, the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board of
Directors, provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by Staples’ stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of Staples, as such
terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act)
shall be, for purposes of this Agreement, considered as though such person were
a member of the Incumbent Board; (C) the stockholders of Staples approve a
merger or consolidation of Staples with any other corporation, and such merger
or consolidation is consummated, other than (1) a merger or consolidation
which would result in the voting securities of Staples outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 75%
of the combined voting power of the voting securities of Staples or such
surviving entity outstanding immediately after such merger or consolidation, or
(2) a merger or consolidation effected to implement a recapitalization of
Staples (or similar transaction) in which no “person” (as defined above)
acquires more than 30% of the combined voting power of Staples’ then outstanding
securities; or (D) the stockholders of Staples approve an agreement for
the sale or disposition by Staples of all or substantially all of Staples’ assets,
and such sale or disposition is consummated.

 

(ii) “Surviving
Corporation” shall mean (x) in the case of a Change in Control pursuant to
clause (A) or clause (B) of Section 11(a)(i), Staples; (y) in
the case of a Change in Control pursuant to clause (C) of Section 11(a)(i),
the surviving or resulting corporation in such merger or consolidation; and

 

4

 

(z) in
the case of a Change in Control pursuant to Clause (D) of Section 11(a)(i),
the entity acquiring the majority of the assets being sold or disposed of by Staples.

 

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

 

(A) willful failure by the Optionee to
substantially perform his or her duties with Staples (other than any failure
resulting from incapacity due to physical or mental illness).  No act or failure to act on the Optionee’s
part will be deemed “willful” unless the Optionee 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 Optionee of any provision of any
employment, consulting, advisory, proprietary information, non-disclosure,
non-competition, non-solicitation or other similar agreement between the
Optionee 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 Optionee of the Code of
Ethics; or

 

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

 

(E) The Optionee’s engagement in fraud or willful
misconduct (not acting in good faith or with reasonable belief that conduct was
in the best interests of Staples) that significantly contributes to Staples
preparing a material financial restatement, other than a restatement of
financial statements that became materially inaccurate because of revisions to
generally accepted accounting principles; or

 

(F) failure by the Optionee to devote his or her
full working time to the affairs of Staples except as may be authorized in
writing by Staples’ CEO or other authorized Company official; or

 

(G) the Optionee’s engagement in business other
than the business of Staples except as may be authorized in writing by Staples’
CEO or other authorized Company official; or

 

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

 

For
purposes of the definition of Cause contained in this Section 11(a) and
for purposes of Section 12 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.

 

(b)  Effect of Change in Control.  Notwithstanding the provisions of Section 3(a),
if a Change in Control of Staples occurs, this option shall become exercisable
for additional shares of Common Stock as follows:

 

(i) 
If, upon the Change in Control, the Optionee

 

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

 

5

 

employment
of more than an additional 50 miles from the Optionee’s primary residence at
the time of the Change in Control, or

 

(B) accepts (or elects to continue) employment
with the Surviving Corporation (regardless of position, compensation or
location), then (x) effective immediately prior to the Change in Control,
the vesting schedule of this option stated in Section 3(a) above
shall accelerate such that an additional 25% of the Total Number of Option
Shares shall become immediately exerciseable, and (y) on each Vesting Date
which had not yet occurred as of the date of the Change in Control, this option
shall become exercisable for such number of additional shares of Common Stock
as is determined by dividing the balance of the Total Number of Option Shares
remaining unvested following the acceleration of vesting referred to in clause (x) above,
by the number of Vesting Dates which had not occurred as of the date of the
Change in Control.

 

(ii) 
If, upon the Change in Control,

 

(A) the Optionee is either offered employment
in accordance with clause (A) of Section 11(b)(i) or accepts
employment in accordance with clause (B) of Section 11(b)(i), and

 

(B) within one year following the date of the
Change in Control, the Optionee either (1) is discharged without cause (as
defined in Section 11(a)) or (2) 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,

 

then
the vesting of this option shall be accelerated such that this option shall
become exercisable in full effective upon the date of such discharge or
resignation (and this option shall remain exercisable following such discharge
or resignation for such period, if any, as is provided in Section 3).

 

(iii) If
the Optionee is not offered employment in accordance with clause (A) of Section 11(b)(i) and
does not accept employment in accordance with clause (B) of Section 11(b)(i) (other
than as a result of retirement), then the vesting of this option shall be
accelerated such that this option shall become exercisable in full effective
immediately prior to the Change in Control.

 

12.       Forfeiture
and Recovery for Misconduct.

 

(a)           Right of Recovery.

 

Notwithstanding
any other provision of the Plan, the Notice or this Agreement to the contrary,
if the Board of Directors of Staples (or its authorized designee, the “Board”)
determines during the Recovery Period (as defined in Section 12(a) below)
that an Optionee has engaged in any of the conduct set forth in clauses (B) through
(E) of Section 11(a)(iii) (which determination shall be
conclusive, “Misconduct”), the Board, subject to the limitations set forth in
this Section 12, may in its sole discretion (1) terminate such Optionee’s
participation in the Plan, and/or (2) terminate the right to exercise any
options granted under the Plan not previously exercised, and/or (3) demand
that the Optionee pay in cash or transfer in Shares the amount described in Section 12(b);
provided, however, that in the event the Board determines during the Recovery
Period that the Optionee engaged in Misconduct as described in clause (E) of
Section 11(a)(iii) (“Restatement Misconduct”), the Board shall in all
circumstances, in addition to any other recovery action taken, require
forfeiture and demand repayment pursuant hereto.

 

6

 

“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 Optionee is employed by Staples and the
period ending 18 months after the Optionee’s last day of employment; (2) if
the Misconduct relates to the breach of any agreement between the Optionee 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 Optionee is employed by Staples and the period ending six
months after the Optionee’s last day of employment.  If during the Recovery Period the Board gives
written notice to the Optionee 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 12
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 Optionee for
which the Board prior to such Change in Control gave written notice to such Optionee
of potential Misconduct.

 

For
purposes of administratively enforcing its rights under this Section 12,
during any period for which potential Misconduct has been identified by
Staples, the Board may (1) suspend such Optionee’s participation in the
Plan, or with respect to any award under the Plan, or (2) temporarily
withhold, in whole or in part, the vesting of any award or the transfer of any
Shares relating to any award made under the Plan.

 

(b)          Amount of Recovery.

 

With
respect to Misconduct described in Section 11(a)(iii)(B) (breach of
agreement) and Section 11(a)(iii)(C) (violation of Code of Ethics),
and in addition to its right to effect a termination of participation and terminate
the right to exercise any options granted under the Plan not previously
exercised, at the Board’s discretion, Staples shall be entitled to repurchase
from the Optionee at the Exercise Price the shares of Common Stock previously
purchased by the Optionee hereunder, or, if the Optionee at such time no longer
owns such shares, Staples shall be entitled to recover from the Optionee the
gross profit earned by the Optionee upon the purchase and disposition (whether
by sale, gift, donation or otherwise) of such shares.

 

With
respect to Misconduct described in Section 11(a)(iii)(D) (intentional
deceitful acts), and in addition to its right to effect a termination of
participation and terminate the right to exercise any options granted under the
Plan not previously exercised, the Board may recover from the Optionee the
amount (in cash or shares) determined by the Board in its sole discretion to
represent the financial impact of the Misconduct upon Staples; provided,
however, that such recovery amount shall be reduced by the grant date fair
market value of terminated unexercised options and any amounts recovered from the
Optionee 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 terminate the right to exercise any options
granted under the Plan not previously exercised, the Board shall recover from
the Optionee at the Exercise Price the shares of Common Stock previously
purchased by the Optionee pursuant to options granted under the Plan to or for
the benefit of the Optionee during the twenty-four (24) month period following
the first public issuance of the financial statements that are the subject of
an accounting restatement, or, if the Optionee at such time no longer owns such
shares, Staples shall be entitled to recover from the Optionee (1) the gross
profit earned by the Optionee upon the disposition (whether by sale, gift, donation
or otherwise) of such shares, and (2) the 

 

7

 

gross profit earned by the Optionee upon the
disposition (whether by sale, gift, donation or otherwise) of any securities of
Staples during such twenty-four (24) month period.

 

The
term “recover” or “recovered” shall include, but shall not be limited to, any
right of set-off, reduction, recoupment, off-set, forfeiture, or other attempt
by Staples to withhold or claim payment of an award or any proceeds thereof
(including any proceeds from the sale or other disposition of Shares).  For purposes of any recovery of shares, Staples
may treat shares as fungible and shall not be required to identify, trace, or
recover specific Shares.  Staples’ right
of forfeiture and recovery of awards shall not limit any other right or remedy
available to Staples for an Optionee’s Misconduct, whether in law or equity,
including but not limited to injunctive relief, terminating the Optionee’s
employment with Staples, or taking other legal action against the Optionee.

 

13.          Withholding Taxes.  Staples’ obligation to deliver shares upon
the exercise of this option shall be subject to the Optionee’s satisfaction of
all applicable federal, state and local income and employment tax withholding requirements.  Staples may deduct any such tax obligations
from any payment of any kind otherwise due to the Optionee, including salary
and bonus payments, and may withhold or sell a sufficient number of shares otherwise
issuable pursuant to the exercise of this option on behalf of the Optionee to
satisfy such tax obligations.

 

14.       Miscellaneous.

 

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

 

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

 

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

 

8

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