Equity Based Employee Benefit Plans

Under the 2014 Stock Incentive Plan, the Company may grant restricted stock and restricted stock units (collectively, “Restricted Shares”) and non-qualified stock options to associates. In addition, Staples offers its associates the opportunity for share ownership pursuant to the 2012 Employee Stock Purchase Plan. During the first half of 2015 and 2014, the Company issued 1.3 million shares and 2.1 million shares, respectively, pursuant to this plan.

In connection with its equity-based employee compensation and benefit plans, Staples recognized $17 million and $34 million in compensation expense for the second quarter and first half of 2015, respectively, and $16 million and $37 million in compensation expense for the second quarter and first half of 2014, respectively. As of August 1, 2015, Staples had $104 million of unamortized stock compensation expense associated with these plans which will be expensed over the period through June 2018.

Restricted shares

The following table summarizes the activity during first half of 2015 related to Restricted Shares (shares in millions):



	Restricted Shares (1)
	Number of Shares (Millions)		Weighted Average Grant Date Fair Value per Share
Outstanding at January 31, 2015	9		$	13.14
Granted	3		14.80
Vested	(4	)	13.30
Outstanding at August 1, 2015	8		$	13.73


(1)	Excludes unvested performance shares

Performance shares

In April 2013, March 2014 and March 2015, the Company entered into long-term performance share agreements with certain executives. Vesting is 50% based on satisfaction of certain sales growth metrics and 50% based on achievement of certain return on net assets percentage targets. Payout under these arrangements may range from 25% to 200% of target, depending on actual performance. Vesting is based on performance in each fiscal year, with metrics established at the beginning of each year. Any award earned based on performance will be increased or decreased by 25% if the Company's cumulative total shareholder return ("TSR") over the three year performance period is in the top or bottom one-third of the S&P 500 TSR, respectively. Shares earned, if any, will be issued on a fully-vested basis at the conclusion of the three-year performance period only if the grantee is still actively employed by or serving as a consultant to the Company at that time, with certain exceptions for retirement, death, disability, and termination without cause.

The agreements entered into in March 2015 pertain to fiscal years 2015, 2016 and 2017. The aggregate target number of shares for each year is 0.5 million. The 2015 tranche had an aggregate grant-date fair value of $8 million.

The agreements entered into in March 2014 pertain to fiscal years 2014, 2015 and 2016. The aggregate target number of shares for each year is 0.6 million. The 2015 tranche had aggregate grant-date fair value of $9 million.

The agreements entered into in April 2013 pertained to fiscal years 2013, 2014 and 2015, with an aggregate targeted number of shares for each year of 0.5 million. The 2015 tranche had an aggregate grant-date fair value of $8 million.

Stock options

No stock options were granted during the first half of 2015. During the first half of 2015 the Company issued 0.4 million shares upon the exercise of stock options.