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EXECUTIVE EMPLOYMENT AGREEMENT
(For Executive Officers Who Also Have a Change of Control Employment Agreement)
THIS AGREEMENT is made as of May 29, 1998 between Office Depot, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxx ("Executive").
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment.
(a) The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in paragraph 4 hereof (the "Employment Term").
(b) The parties hereto have entered into an Employment Agreement
dated as May 28, 1998 by and between the Company and the Executive (the "Change
of Control Employment Agreement") which, by its terms, takes effect during the
"Employment Period" as defined in such agreement. During any such Employment
Period under the Change of Control Employment Agreement, the terms and
provisions of the Change of Control Employment Agreement shall control to the
extent such terms and provisions are in conflict with the terms and provisions
of this Agreement. In addition, during such Employment Period, the Employment
Term hereunder shall be tolled and upon expiration of the Employment Period
under the Change of Control Employment Agreement the Employment Term hereunder
shall recommence.
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as Senior
Vice President of the Company and shall have the normal duties, responsibilities
and authority attendant to such position, subject to the power of the Company's
chief executive officer ("CEO") to expand or limit such duties, responsibilities
and authority.
(b) Executive shall report to the CFO, and Executive shall devote
Executive's best efforts and Executive's full business time and attention
(except for permitted vacation periods and reasonable periods of illness or
other incapacity) to the business and affairs of the Company and its
Subsidiaries; provided that Executive shall, with the prior written approval of
the CEO, be allowed to serve as (i) a director or officer of any non-profit
organization including trade, civic, educational or charitable organizations, or
(ii) a director of any corporation which is not competing with the Company or
any of its Subsidiaries in the office product and office supply industry so long
as such duties do not materially interfere with the performance of Executive's
duties or
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responsibilities under this Agreement. Executive shall perform Executive's
duties and responsibilities under this Agreement to the best of Executive's
abilities in a diligent, trustworthy, businesslike and efficient manner.
(c) Executive shall be based at or in the vicinity of the
Company's headquarters but may be required to travel as necessary to perform
Executive's duties and responsibilities under this Agreement.
(d) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation of which the securities having a majority of the voting power in
electing directors are, at the time of determination, owned by the Company,
directly or through one of more Subsidiaries.
3. Base Salary and Benefits.
(a) Initially, Executive's base salary shall be $250,000.00 per
annum (the "Base Salary"), which salary shall be payable in regular installments
in accordance with the Company's general payroll practices and shall be subject
to customary withholding. Executive's Base Salary shall be reviewed at least
annually by the Compensation Committee of the Board and shall be subject to
adjustment, but not reduction, as they shall determine based on among other
things, market practice and performance. In addition, during the Employment
Term, Executive shall be entitled to participate in certain of the Company's
long term incentive programs established currently or in the future by the
Company for which officers of the Company then at Executive's level are
generally eligible (including, but not limited to, stock option, restricted
stock, performance unit/share plans or long-term cash plans).
(b) In addition to the Base Salary, Executive shall be entitled to
participate in the Company's Management Incentive Plan (the "Bonus Plan") as
administered by [the Board or] the Compensation Committee. If the Board or the
Compensation Committee modifies such Bonus Plan during the Employment Term,
Executive shall continue to participate at a level no lower than the highest
level established for any officer of the Company then at Executive's level. At
the discretion of the Board or the Compensation Committee, Executive may be
offered from time to time the opportunity to participate in other bonus plans of
the Company in lieu of the Bonus Plan and, if Executive chooses to participate
in such plan or plans, the provisions of this paragraph 3(b) shall be tolled
during the period of such participation.
(c) Executive shall be entitled to paid vacation in accordance
with the Company's general payroll practices for officers of the Company then at
Executive's level.
(d) The Company shall reimburse Executive for all reasonable
expenses incurred by Executive in the course of performing Executive's duties
under this Agreement which are consistent with the Company's policies in effect
from time to time with respect to travel,
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entertainment and other business expenses, subject to the Company's requirements
with respect to reporting and documentation of such expenses.
(e) Executive will be entitled to all benefits as are, from time
to time, maintained for officers of the Company then at Executive's level,
including without limitation: medical, prescription, dental, disability,
employee life, group life, split-dollar life, accidental death and travel
accident insurance plans (collectively, "Insurance Benefits"), profit sharing
and retirement benefits.
4. Term.
(a) The Employment Term shall end on the first anniversary of the
date of this Agreement; provided that (i) the Employment Term shall be extended
for one year in the event that written notice of the termination of this
Agreement is not given by one party hereof to the other at least six months
prior to the end of the Employment Term; provided further that (ii) the
Employment Term shall terminate prior to such date (A) upon Executive's death
or permanent disability or incapacity (as determined by the Board in its good
faith judgment), (B) upon the mutual agreement of the Company and Executive, (C)
by the Company's termination of this Agreement for Cause (as defined below) or
without Cause or (D) by Executive's termination of this Agreement for Good
Reason (as defined below) or without Good Reason.
(b) If the Employment Term is terminated by the Company without
Cause or is terminated by the Executive for Good Reason, Executive (and
Executive's family with respect to clause (iii) below) shall be entitled to
receive (i) Executive's Base Salary through the first anniversary of such
termination and Executive's Pro Rata Bonus (as defined in paragraph (h) below),
if and only if Executive has not breached the provisions of paragraphs 5, 6 and
7 hereof, (ii) vested and earned (in accordance with the Company's applicable
plan or program) but unpaid amounts under incentive plans, deferred compensation
plans, and other employer programs of the Company in which Executive is then
participating (other than the Pro Rata Bonus), and (iii) Insurance Benefits
through the first anniversary of such termination pursuant to the Company's
insurance programs, as in effect from time to time, to the extent Executive
participated immediately prior to the date of such termination; provided that
any health insurance benefits which Executive becomes entitled to receive as a
result of any subsequent employment shall serve as primary coverage for
Executive and Executive's family. The amounts payable pursuant to paragraph
4(b)(i) and (ii) shall be payable, at the Company's discretion, in one lump sum
payment within 30 days following termination of the Employment Term or in any
other manner consistent with the Company's normal payment policies.
(c) If the Employment Term is terminated by the Company for Cause
or by the Executive without Good Reason, Executive shall be entitled to receive
(i) Executive's Base Salary through the date of such termination and (ii) vested
and earned (in accordance with the Company's applicable plan or program) but
unpaid amounts under incentive plans, health and welfare plans, deferred
compensation plans, and other employer programs of the Company which Executive
participates; provided, however, that Executive shall not be entitled to payment
of a Pro Rata Bonus.
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(d) If the Employment Term is terminated upon Executive's death or
permanent disability or incapacity (as determined by the Board in its good faith
judgment), Executive, or Executive's estate if applicable, shall be entitled to
receive the sum of (i) Executive's Base Salary through the date of such
termination and Executive's Pro Rata Bonus (as defined in paragraph (h) below)
and (ii) vested and earned (in accordance with the Company's applicable plan or
program) but unpaid amounts under incentive plans, health and welfare plans,
deferred compensation plans, and other employer programs of the Company which
Executive participates. The amounts payable pursuant to this paragraph 4(d)
shall be payable, at the Company's discretion, in one lump sum payment within 30
days following termination of the Employment Term or in any other manner
consistent with the Company's normal payment policies.
(e) Except as otherwise provided herein, fringe benefits and
bonuses (if any) which accrue or become payable after the termination of the
Employment Term shall cease upon such termination.
(f) For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of
its affiliates (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the CEO which
specifically identifies the manner in which the CEO believes that the
Executive has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal
conduct or gross misconduct [which is materially and demonstrably
injurious to the Company].
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the CEO or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company. The cessation of employment of the Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than three
quarters of the entire membership of the Board at a meeting of the Board called
and held for such purpose (after reasonable notice is provided to the Executive
and the Executive is given an opportunity, together with counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board, the
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Executive is guilty of the conduct described in subparagraph (i) or (ii) above,
and specifying the particulars thereof in detail.
(g) For purposes of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by paragraph 2 of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of paragraph 3 of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to be based at
any location other than as provided in paragraph 2(c) hereof; or
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement.
(h) For purposes of this Agreement, "Pro Rata Bonus" shall mean
the sum of (i) the pro rata portion (calculated as if the "target" amount under
such plan has been reached) under any current annual incentive plan from the
beginning of the year of termination through the date of termination and (ii) if
and to the extent Executive is vested, the pro rata portion (calculated as if
the "target" amount under such plan has been reached) under any long-term
incentive plan or performance plan from the beginning of the period of
determination through the date of termination.
5. Confidential Information. Executive acknowledges that the
information, observations and data obtained by Executive while employed by the
Company and its Subsidiaries concerning the business or affairs of the Company
or any other Subsidiary ("Confidential Information") are the property of the
Company or such Subsidiary. Therefore, Executive agrees that Executive shall not
disclose to any unauthorized person or use for Executive's own purposes any
Confidential Information without the prior written consent of the CEO, unless
and to the extent that the aforementioned matters become generally known to and
available for use by the public other than as a result of Executive's acts or
omissions. Executive shall deliver to the Company at the termination of the
Employment Term, or at any other time the Company may request, all memoranda,
notes, plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) in any form or medium relating to the
Confidential
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Information, Work Product (as defined below) or the business of the Company or
any Subsidiary that Executive may then possess or have under Executive's
control.
6. Inventions and Patents. Executive acknowledges that all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) that relate to the Company's or any of its Subsidiaries' actual or
anticipated business, research and development or existing or future products or
services and that are conceived, developed or made by Executive while employed
by the Company and its Subsidiaries ("Work Product") belong to the Company or
such Subsidiary. Executive shall promptly disclose such Work Product to the CEO
and perform all actions reasonably requested by the CEO (whether during or after
the Employment Term) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
7. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of Executive's
employment with the Company Executive shall become familiar with the Company's
trade secrets and with other Confidential Information concerning the Company and
its Subsidiaries and that Executive's services shall be of special, unique and
extraordinary value to the Company and its Subsidiaries. Therefore, Executive
agrees that, during the Employment Term and for one year thereafter (the
"Noncompete Period"), Executive shall not directly or indirectly own any
interest in, manage, control, participate in, consult with, render services for,
or in any manner engage in any business competing with the businesses of the
Company or its Subsidiaries, as such businesses exist or are in process on the
date of the termination of Executive's employment, within any geographical area
in which the Company or its Subsidiaries engage or plan to engage in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the Employment Term
or (iii) induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company or any Subsidiary to cease
doing business with the Company or such Subsidiary, or in any way interfere with
the relationship between any such customer, supplier, licensee, licensor,
franchisee, or business relation and the Company or any Subsidiary (including,
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without limitation, making any negative statements or communications about the
Company or its Subsidiaries).
(c) If, at the time of enforcement of this paragraph 7, a court
shall hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Executive agrees that the restrictions
contained in this paragraph 7 are reasonable.
(d) In the event of the breach or a threatened breach by Executive
of any of the provisions of this paragraph 7, the Company, in addition and
supplementary to other rights and remedies existing in its favor, may apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof (without posting a bond or other security). In
addition, in the event of an alleged breach or violation by Executive of this
paragraph 7, the Noncompete Period shall be tolled until such breach or
violation has been duly cured.
8. Executive's Representations. Executive hereby represents and
warrants to the Company that (1) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which Executive is bound, (ii)
Executive is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity and (iii)
upon the execution and delivery of this Agreement by the Company, this Agreement
shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms. Executive hereby acknowledges and represents that
Executive has had an opportunity to consult with independent legal counsel
regarding Executive's rights and obligations under this Agreement and that
Executive fully understands the terms and conditions contained herein.
9. Survival. Paragraphs 5, 6 and 7 and paragraphs 9 through 16
shall survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Term.
10. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed by first class mail,
return receipt requested, to the recipient at the address below indicated:
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Notices to Executive:
Name: Xxxxxxx X. Xxxxx
Address: c/o Office Depot
0000 Xxx Xxxxxxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
Notices to the Company:
Office Depot, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
and
Office Depot, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Attention: Executive Vice President - Human Resources
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or mailed.
11. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
12. Complete Agreement. This Agreement and those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way (provided, however that during the "Employment Period," as defined in
the Change of Control Employment Agreement, the terms and provision of the
Change of Control Employment Agreement shall be effective and shall control to
the extent there is any conflict between such agreement and this Agreement).
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13. No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
14. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
15. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
Executive's rights or delegate Executive's obligations hereunder without the
prior written consent of the Company.
16. Choice of Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Florida, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Florida or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Florida.
17. Amendment and Waiver. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
OFFICE DEPOT, INC.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Its: Executive Vice President -
Human Resources
EXECUTIVE
/s/ Xxxxxxx Xxxxx
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Name:
May 29, 1998
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Date:
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