Exhibit 99.11
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made and entered into as of
July 13, 2003, by and among Boise Cascade Corporation, a Delaware corporation
("Parent"), and Xxxxxxx Xxxxx ("Consultant").
PRELIMINARY STATEMENTS:
A. Consultant is the Co-Founder and Chairman of the Board and Chief
Executive Officer of OfficeMax, Inc., an Ohio corporation (the "Company"), and
has entered into an Amended and Restated Employment Agreement, dated as of June
19, 2003, with the Company (the "Employment Agreement").
B. The Company has entered into an Agreement and Plan of Merger, dated as
of July 13, 2003 (the "Merger Agreement"), with Parent and Challis Corporation,
an Ohio corporation and a direct wholly owned subsidiary of Parent ("Sub"),
which provides, among other things, for the merger of Sub with and into the
Company, with the Company as the surviving corporation, as a result of which the
Company will become a wholly owned subsidiary of Parent (the "Transaction").
References herein to the "Company" refer to the Company both before and after
the Transaction. Terms not otherwise defined herein shall have the meanings
ascribed to them in the Merger Agreement.
C. Parent desires to obtain for itself and its subsidiaries, including
the Company following the Transaction, the benefit of Consultant's know-how,
experience and services in the retail marketing and office products industries
(the "Business") in the event Consultant is no longer employed by the Company
after consummation of the Transaction.
D. The Company and Consultant desire to set forth in a written agreement
the terms and conditions under which Consultant will render consulting services
in such event.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. For the period commencing immediately as of the Commencement Date
(defined below) and continuing for a period of five years thereafter, subject to
early termination as provided in Section 4 (the "Consulting Term"), Parent shall
retain Consultant, and Consultant shall provide consulting services for, Parent
and Parent's subsidiaries, including the Company following the Transaction, at
times and places as are mutually convenient to Parent and Consultant; provided,
however, that Consultant shall provide a minimum of (a) 80 hours per month of
consulting services hereunder during the six-month period immediately following
the Commencement Date (the "Initial Period"), and (b) 20 hours per month of
consulting services during the remainder of the Consulting Term, in each case to
the extent such services are requested by Parent. The consulting services to be
provided hereunder shall consist generally of business consultation and advice
relating to the Business when and as reasonably requested from time to time
during the Consulting Term by the Chief Executive Officer of Parent or his or
her lawfully designated representative, so long as such representative is an
executive officer of Parent. The consulting services shall include, if requested
by Parent, direct interaction by
Consultant on behalf of Parent or its subsidiaries, including the Company
following the Transaction, with vendors and other suppliers of the Business. For
purposes of this Agreement, "Commencement Date" means the date following
consummation of the Transaction that Consultant's employment with the Company is
terminated for any reason other than death or Permanent Disability (as defined
in the Employment Agreement) of Consultant or for Cause (as defined in the
Employment Agreement). None of the rights or obligations set forth in this
Agreement shall become effective unless and until the Transaction is
consummated.
2. During the Consulting Term, the Company shall pay Consultant a
consulting fee at an annual rate of $1,000,000, payable in equal monthly
installments on the first day of each month during the Consulting Term, with the
aggregate consulting fee payable hereunder being $5,000,000 (the "Aggregate
Fee"). All payments to be made hereunder to Consultant shall be in addition to
any payments and benefits to be made or provided to Consultant pursuant to the
terms of the Employment Agreement; provided, however, that Paragraph 5(d) of the
Employment Agreement shall not apply to any payments to be made hereunder. At
all times during the Consulting Term, Parent will provide or cause to be
provided to Consultant, in accordance with the Employment Agreement, the
benefits described in Paragraph 8(d)(iv) of the Employment Agreement. Parent
acknowledges that "office space," as used in subclause (B) of Paragraph 8(d)(iv)
of the Employment Agreement, includes office equipment (including furniture,
computers, telephones (including mobile telephones), facsimile machines,
personal digital assistants and other electronic components but excluding any
service or other fees or charges relating to any of the foregoing) consistent
with that available to Consultant from the Company immediately prior to his
termination with the Company. Parent shall update and maintain or cause to be
updated and maintained such office equipment from time to time during the
five-year period set forth in Paragraph 8(d)(iv) of the Employment Agreement on
a basis consistent with that which such office equipment was updated and
maintained while Consultant was employed with the Company. At the end of such
five-year period, the Consultant shall have the option, but not the obligation,
to purchase from Parent or the applicable subsidiary of Parent the office
equipment that is then being provided to Consultant at a price equal to the net
book value of such office equipment, if any, as set forth on the books and
records of Parent or such subsidiary of Parent.
3. Parent shall reimburse Consultant or provide him with an expense
allowance during the Consulting Term for travel or other expenses (including,
without limitation, telephone charges) reasonably and necessarily incurred by
Consultant on Parent's behalf and at Parent's request in connection with
providing the consulting services hereunder; provided, however, that Consultant
shall not be required to perform such consulting services outside of the Greater
Cleveland, Ohio area unless agreed to by Consultant.
4. This Agreement may be terminated by Parent or Consultant (a) by giving
written notice to the other party if the Transaction does not occur by the
Outside Date (as defined in the Merger Agreement) or (b) at any time after the
Initial Period and during the Consulting Term by giving at least 30 days prior
written notice to the other party. This Agreement shall also terminate in the
event of Consultant's death or Permanent Disability during the Consulting Term.
If this Agreement is terminated pursuant to this Section 4, other than pursuant
to clause (a) of this Section 4, Parent shall pay to Consultant, or his heirs or
legal representatives in the event of his death or Permanent Disability, in a
lump sum within 30 days after the date of termination, an
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amount equal to the Aggregate Fee less the amount of all consulting fees
previously paid hereunder through the date of termination.
5. In connection with this Agreement, Consultant shall be an independent
contractor and not an employee of Parent, the Company or any other affiliate of
Parent. Unless requested by Consultant in writing to Parent, payments made to
Consultant hereunder will not be subject to payroll withholding for the payment
of any social security, federal, state or other taxes or similar items.
6. The rights and obligations of Parent under this Agreement shall inure
to the benefit of, and shall be binding on, Parent and its successors and
assigns, and the rights and obligations (other than obligations to perform
consulting services) of Consultant under this Agreement shall inure to the
benefit of, and shall be binding upon, Executive and his heirs, personal
representatives and successors and assigns.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Ohio, without reference to principles of conflict of
laws. This Agreement may not be amended or modified except by a written
agreement executed by the parties hereto or their respective successors and
legal representatives. This Agreement shall not be modified, waived or
discharged except in writing duly signed by each of the parties or their
authorized assignees.
8. All notices, requests, consents and other communications required or
provided under this Agreement shall be in writing and shall be deemed sufficient
if delivered by hand, by facsimile, nationally recognized overnight courier, or
certified or registered mail, return receipt requested, postage prepaid, and
shall be effective upon delivery as follows:
IF TO CONSULTANT:
Xxxxxxx Xxxxx
c/o OfficeMax, Inc.
0000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxxx Xxxxxxx, Xxxx 00000
IF TO PARENT:
Boise Cascade Corporation
0000 Xxxx Xxxxxxxxx Xxxxxx
X.X. Xxx 00
Xxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx,
Senior Vice President
and General Counsel
Either party may change the address and/or facsimile number to which notices are
to be sent to that party by giving written notice of such change of address to
the other party in the same manner above provided for giving notice.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date and year first set forth above.
CONSULTANT:
/s/ Xxxxxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxxx
PARENT:
BOISE CASCADE CORPORATION
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Chairman and CEO
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