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Exhibit 10.1
SEVERANCE AGREEMENT
INCLUDING RELEASE AND NON-COMPETITION AGREEMENT
This Agreement is made and given this 19th day of September, 2000 (the
"date hereof") by and between Xxxxx X. Xxxxxx ("Xx. Xxxxxx"), a
resident of Palm Beach County, Florida, and Office Depot, Inc. (the
"Company"), a Delaware corporation with its principal place of business
in Palm Beach County, Florida.
RECITALS
A. Xx. Xxxxxx currently serves as Chairman of the Board of Directors of
the Company and until July 14, 2000, he also served as its Chief
Executive Officer; and
B. Xx. Xxxxxx and the Company are parties to a certain Employment
Agreement dated as of January 1, 1998 and a certain Change in Control
Employment Agreement, dated as of September 1996 (collectively herein
the "Employment Agreement"); and
C. Xx. Xxxxxx and the Company have mutually agreed that his tenure as
Chief Executive Officer of the Company (but not as an employee of the
Company) ended, effective as of July 14, 2000, and they have also
reached certain other agreements pertaining to the termination of the
Employment Agreement and his severance from the position of Chief
Executive Officer of the Company, and they now desire to set forth
those agreements herein; and
D. Xx. Xxxxxx has agreed, except as provided herein, to release the
Company from any and all liabilities relating to his employment with
the Company and the termination of that employment, and to enter into
certain other agreements in consideration of the receipt from the
Company of certain payments and other benefits referred to herein; and
E. Xx. Xxxxxx hereby agrees that certain of the payments and benefits
provided in this Agreement exceed any payments or benefits to which Xx.
Xxxxxx is entitled under the Employment Agreement or any other contract
between the Company and Xx. Xxxxxx; and
F. As a condition of the payments and benefits being provided to Xx.
Xxxxxx hereunder (other than the payments and benefits to which Xx.
Xxxxxx otherwise
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would have been entitled under the plans listed on SCHEDULE 1 to this
Agreement (the "Vested Benefits") without this Agreement), receipt and
sufficiency of which are acknowledged by Xx. Xxxxxx, the Company has
required, and Xx. Xxxxxx has agreed to provide the releases, the
agreements of non-competition, non-solicitation, non-interference and
no-hire set forth in this Agreement.
NOW THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS, which the parties
acknowledge are true and correct and are incorporated herein by this reference,
and other good and valuable consideration, the legal sufficiency of which is
acknowledged, the parties hereby agree as follows:
1. AGREEMENTS AS TO PAYMENTS AND BENEFITS.
(a) Effective as of the date hereof, the Employment Agreement is
terminated in its entirety, and the relationship of the
Company and Xx. Xxxxxx shall hereafter be governed by the
terms and provisions of this Agreement, the Chairman's
Agreement being entered into contemporaneously herewith and
the benefit plans listed on SCHEDULE 1 to this Agreement (as
modified by the terms of this Agreement). From and after the
date hereof, Xx. Xxxxxx is no longer an employee of the
Company, although he continues to serve as a director of the
Company.
(b) Effective on the date hereof, the Company shall credit an
Elective Deferral Account established for Xx. Xxxxxx under the
Deferred Compensation Plan, a form of which is attached hereto
as EXHIBIT A (herein the "Plan") in the sum of $8,574,000 (the
"Elective Deferral"). Effective not later than ten (10)
business days after the date hereof, the Company shall deposit
an amount in cash equal to the Elective Deferral into the
trust (the "Trust") established under the Plan document (the
"Plan") attached hereto as EXHIBIT B. The disposition of the
Elective Deferral and the funds held under the Trust shall be
governed by the terms of the Plan and Trust respectively.
(c) Effective not later than five (5) business days after the date
hereof, the Company shall deliver to Xx. Xxxxxx certificate(s)
for 150,000 shares of common stock in XxxxxxxxXxx.xxx, Inc.
(the "PPRO Stock"), endorsed in blank or accompanied by stock
powers in blank, sufficient to enable Xx. Xxxxxx to have such
PPRO Stock transferred into his name on the stock ledger book
of XxxxxxxxXxx.xxx, Inc. Such stock shall be delivered against
the payment by
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Xx. Xxxxxx to the Company (1) of the withholding taxes
required to be withheld and paid by the Company to any
applicable taxing authority in connection with the delivery of
such stock, as set forth in a written notice from the Company
and (2) the sum of $350,000 (which returns to the Company the
consideration originally paid to Xx. Xxxxxx by the Company for
such PPRO Stock), such payments to be made within fifteen (15)
business days from the date of delivery of the PPRO Stock to
Xx. Xxxxxx.
(d) Effective on the date hereof, all amounts credited to Xx.
Xxxxxx'x account under the Office Depot, Inc. Key Management
Retention Bonus Plan, including without limitation all
discretionary contributions made under the July 1997 Key
Management Retention Plan, shall become 100% vested.
(e) For a period of twenty-four months, ending as of the last day
of the 24th month following the month in which the date hereof
occurs (the "Ending Date"), the Company shall provide Xx.
Xxxxxx with the following benefits:
(i) Xx. Xxxxxx and his eligible dependents will be
entitled to continuation of his Insurance Benefits
(defined below) at no cost to Xx. Xxxxxx or his
eligible dependents, and at a level of coverage
(including, without limitation, any deductibles and
co-payments at least as favorable to Xx. Xxxxxx and
his eligible dependents as that maintained for them
immediately prior to the date hereof). For purposes
of this Agreement, "Insurance Benefits" shall mean
insurance benefits maintained for senior officers of
the Company, including without limitation: medical,
prescription, dental, disability, employee life,
group life, split-dollar life ("Split-Dollar Life
Policy"), accidental death and travel accident
insurance plans.
(ii) Xx. Xxxxxx also will be entitled to receive an
automobile allowance in the amount of $1,250 per
month, reimbursement for the cost of financial and
estate planning and tax preparation, in an amount not
to exceed $20,000 per annum through the Ending Date.
(iii) From and after the Ending Date (defined in Subsection
(d) above), through and including the natural lives
of Xx. Xxxxxx and his spouse, Xxxxxx Xxxxxx, the
Company hereby agrees to (i) provide to each of them
(at no cost to them) extended insurance coverage
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limited to medical, prescription and dental insurance
benefits which are comparable in all material
respects with the medical, prescription and dental
Insurance Benefits provided pursuant to Subsection
1(d)(i) above (the "Extended Insurance Benefits") and
(ii) continue paying premiums on the Split- Dollar
Life Policy (at no cost to Xx. Xxxxxx). The Company,
in its sole discretion, may provide the Extended
Insurance Benefits by purchasing a policy of such
insurance or by a program of self-insurance by the
Company; provided however, that from the date on
which Xx. Xxxxxx becomes eligible for Medicare (or
any successor program) and ending at the end of his
life, the Company shall satisfy the obligation to
provide Extended Insurance Benefits to him by
furnishing to Mr.. Fuente a policy of insurance (the
"Medigap Policy") , supplementing coverage provided
by Medicare, such that the combination of coverages
provided by Medicare and the coverages provided under
the Medigap Policy shall be substantially equivalent
to the insurance provided to him prior to such date.
The Company also shall continue the policy or
policies of insurance (or program of self-insurance)
with respect to Xxxxxx Xxxxxx. Upon her eligibility
for Medicare (or any successor program) , the Company
shall provide a similar Medigap Policy for her,
supplementing coverage provided by Medicare, such
that the combination of coverages provided by
Medicare and the coverages provided under the Medigap
Policy shall be substantially equivalent to the
insurance provided to her prior to such date. In the
event Xx. Xxxxxx should die prior to the death of
Xxxxxx Xxxxxx, then she shall continue to receive the
Extended Insurance Benefits to be provided hereunder
to Xx. Xxxxxx and his eligible dependents hereunder
until she becomes eligible for Medicare and
thereafter she shall receive the Medigap Policy
coverage referred to in the preceding sentence
hereof. during the balance of her life.
(f) The Company shall reimburse Xx. Xxxxxx for the cost of his
legal and accounting fees (and related incidental expenses)
associated with the negotiation and preparation of this
Agreement; provided that the aggregate amount thereof shall
not exceed $25,000.
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2. AGREEMENTS AS TO XX. XXXXXX'X STOCK OPTIONS. The Company and Xx. Xxxxxx
hereby agree as follows with respect to certain stock options granted to him
pursuant to the Company's Long-Term Equity Incentive Plan (the "Option Plan"):
(a) Attached to this Agreement as SCHEDULE 2 is a Grant Summary
Report (the "Report") for Xx. Xxxxxx, reflecting stock options
granted to him, exercised by him and options which are vested
and unvested. The parties agree that such Report is a true,
accurate and complete statement of Xx. Xxxxxx'x option grants
under the Option Plan as of the date hereof and represents his
full entitlement absent the agreements set forth herein.
(b) The Report reflects that certain option grants remain
unvested, including the following :
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The "Retained Shares"
5-26-98
for 5,069 shares @ $19.7292
for 1,494,932 shares @ $19.7292
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The "Forfeited Shares"
1-04-99 for 4,016 shares @ $24.8959
1-04-99 for 1,495,985 shares @ $24.8959
---------------------------------------------------------------
(c) Xx. Xxxxxx shall retain as fully vested and exercisable the
options to acquire shares in the Company, which are designated
in the table above as the "Retained Shares." Xx. Xxxxxx hereby
forever forfeits and surrenders to the Company the options to
acquire shares in the Company, which are designated in the
table above as the "Forfeited Shares."
(d) The Company hereby further agrees that Xx. Xxxxxx shall have
through and including the latter to occur of: (i) 36 months
from the date hereof OR (ii) 90 days after Xx. Xxxxxx is no
longer a director of the Company, regardless of the reason
therefor, within which to exercise all his vested options .
Notwithstanding the preceding provisions, however, no such
stock option shall be exercisable after the expiration of the
ten year term of such stock option, measured from the date of
its original grant. It is further agreed that
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the Forfeited Shares are hereby deemed stricken from such
SCHEDULE 2. All vested options not exercised within the terms
set forth herein shall be deemed forfeited and surrendered and
Xx. Xxxxxx agrees and acknowledges that he shall thereafter
have no rights in or to any such expired options, or in or to
any other compensation for the value of any such expired
options.
3. SERVICE AS NON-EXECUTIVE CHAIRMAN OF THE COMPANY. The Company and Xx. Xxxxxx
hereby agree to the terms of the agreement attached hereto as SCHEDULE 3 (the
"Chairman's Agreement"), under the terms of which Xx. Xxxxxx agrees to serve as
non-executive Chairman of the Company's Board of Directors, and the Company
agrees to the compensation for such service as set forth in the Chairman's
Agreement.
4. RELEASE BY XX. XXXXXX. Except as otherwise expressly provided herein, in
consideration of the payments and other benefits (other than the Vested
Benefits) (collectively herein the "Consideration") being provided to Xx. Xxxxxx
by the Company under the terms of this Agreement, which Consideration is hereby
acknowledged and agreed to exceed any existing obligations of the Company to Xx.
Xxxxxx and as constituting sufficient consideration for his agreements set forth
herein, Xx. Xxxxxx, for himself and his heirs, executors, administrators,
successors, personal representatives or assigns, hereby RELEASES and FOREVER
DISCHARGES the Company and all of its Subsidiaries and their respective
predecessor entities, officers, directors, shareholders, agents, employees,
legal representatives, successors, trustees, fiduciaries and assigns
(individually a "Released Party" and collectively the "Released Parties") of and
from (and does hereby WAIVE) any and all rights, claims, grievances or causes of
action (or rights to mediation or arbitration), suits, debts, dues, sums of
money, accounts, covenants, contracts, controversies, agreements, promises,
trespasses, damages, judgments, executions, claims for negligence which Xx.
Xxxxxx has or could assert, or which could be asserted on his behalf, against
the Released Parties or any of them, relating in any manner to his hiring by or
employment with the Company, the Employment Agreement (or the termination
thereof) and his separation from such employment, whether by reason of contract
(or alleged breach of contract) or of any state, federal or local law, ordinance
or rule (collectively "Claims"). This Release includes, but is not limited to,
Claims at law or equity or sounding in contract (express or implied) or tort
arising under federal, state or local laws prohibiting discrimination based upon
age, sex, race, physical or mental disability or handicap, his status as a
veteran or any other forms of discrimination. This Release further includes but
is not limited to any and all Claims arising under the Age Discrimination in
Employment Act, the Americans with Disabilities Act of 1990, Title VII of the
Civil Rights Act of 1964, the Labor Management Relations Act, the Florida Human
Rights Act of 1992 or the Employee Retirement Income Security Act (ERISA), as
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amended (the foregoing, together with any other similar or dissimilar laws,
whether federal, state or local intended to provide legal protections against
termination of, or discrimination in employment (herein collectively the
"Protective Laws")), or claims growing out of any legal restrictions on the
Company's right to terminate its employees generally, which Xx. Xxxxxx ever had,
now has, or his heirs, executors, administrators, successors, personal
representatives or assigns hereafter can, shall or may have against the Released
Parties or any of them, whether known, unknown, foreseen, or unforeseen, from
the beginning of the world to the date of this Agreement.
5. WAIVER. Xx. Xxxxxx also WAIVES ANY AND ALL RIGHTS under the laws of any
jurisdiction in the United States that would limit the release and waiver of
Claims specified in Section 4 hereof, but only to the extent necessary to remove
any such limitation on such release and/or waiver. He understands, among other
matters, that he is waiving and releasing the Released Parties and each of them
from and against any and all Claims for pain and suffering, emotional distress,
compensatory and punitive damages and for employment discrimination based upon
age (including claims under the federal Age Discrimination in Employment Act of
1967, as amended - "ADEA") or any comparable state laws. He also understands
that he is waiving and releasing any Claims based upon gender, national origin,
race or color, mental or physical handicap or disability or religious belief.
Xx. Xxxxxx expressly waives and releases any right to reinstatement or future
employment by the Company or any Released Party.
6._COVENANTS NOT TO XXX. (a) Xx. Xxxxxx COVENANTS NOT TO XXX the Released
Parties, or any Released Party, for any Claims released hereby. Xx. Xxxxxx
represents that he has not filed any complaints or lawsuits against the Company
in any forum and that he will not file any such complaint, or lawsuit at any
time arising out of or related to his employment by the Company or his
separation from such employment. He further agrees that if he violates this
covenant or any other provision of this Agreement, he shall indemnify the
Company for all reasonable costs and attorneys' fees incurred by it in enforcing
this covenant and this Agreement. It is further understood that this Agreement
does not prevent Xx. Xxxxxx from filing a charge or complaint with, or
participating in any investigation or proceeding conducted by, the Equal
Employment Opportunity Commission, although he hereby waives any right to
recover any damages or other relief in any claim or suit brought by or through
the Equal Employment Opportunity Commission or any other state or local agency
on his behalf, except where this waiver may be prohibited by law.
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(b) The Company shall not, and shall cause each of the Released Parties not to,
bring against Xx. Xxxxxx or to name Xx. Xxxxxx in any action or proceeding
relating to or in connection with his hiring by, employment with, or termination
from employment by the Company or any Subsidiary; provided that the Company
shall not hereby be precluded from bringing an action or naming Xx. Xxxxxx in
any action with respect to conduct by Xx. Xxxxxx with respect to which the
Company would not be obligated to indemnify Xx. Xxxxxx under Section 145 of the
Delaware General Corporation Law by reason of the fact that Xx. Xxxxxx did not
meet the applicable standards of conduct set forth in such statute. The Company
represents that neither it, nor to the best of its knowledge after due inquiry,
has any Released Party filed any complaint or lawsuit against Xx. Xxxxxx in any
forum and that it shall not (and shall use its best efforts to ensure that any
Released Party does not) file any such complaint or lawsuit against Xx. Xxxxxx
in any forum arising out of or related to Xx. Xxxxxx'x employment with the
Company or his separation from such employment. In the event of a violation of
this section 6(b) by the Company, the Company shall indemnify Xx. Xxxxxx for all
reasonable costs and attorneys' fees incurred by him as a result of such
violation.
7. NO ADMISSION OF LIABILITY. Xx. Xxxxxx understands and agrees that this
Agreement shall not in any way be construed as an admission by the Company of
any unlawful or wrongful acts whatsoever against him, and the Company
specifically disclaims any liability to or wrongful acts against Xx. Xxxxxx.
8. EXCLUSIONS FROM RELEASE. Xx. Xxxxxx is not releasing and hereby expressly
retains any and all rights and claims to which he is entitled under (i) the
terms of this Agreement, including without limitation the payments and other
benefits due to him under this Agreement and (ii) the Vested Benefits. Xx.
Xxxxxx also excludes from this Release and retains any claim for indemnification
and any hold harmless claim to which he may be entitled as a former officer and
director of the Company, whether by contract, under the Delaware statutes, the
Bylaws of the Company, or the Company's policy or policies of directors and
officers liability insurance ("D&O Insurance"). The Company hereby affirmatively
agrees to honor such indemnification obligations and to continue to cover Xx.
Xxxxxx under the Company's D&O Insurance for so long as any potential liability
exists for acts he performed while employed by the Company and/or any
Subsidiary.
9. RESIGNATIONS. To the extent he has not already done so, Xx. Xxxxxx hereby
resigns any and all offices held by him in the Company or in any Subsidiary of
the Company, as
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such terms are defined in the Severance Agreement, effective not later than the
date hereof, with the sole exception of the position of non-executive Chairman
of the Board of Directors and the position of Director of the Company, as set
forth in the Chairman's Agreement.
10. REPRESENTATIONS OF XX. XXXXXX.
As a material inducement to the Company to enter into this Agreement and to
provide the payments, benefits and covenants to Xx. Xxxxxx set forth herein, Xx.
Xxxxxx represents, acknowledges and agrees as follows:
(a) The businesses in which the Company is engaged are very competitive. The
Company has developed certain strategies and plans for enhancing its position in
the market and remaining competitive, including plans and strategies extending
into the future for as long as five (5) years. The Company's strategies and
plans are highly confidential and are not disseminated to shareholders or the
public and certainly not to competitors. Xx. Xxxxxx acknowledges that, during
his employment with the Company and/or any Subsidiary, he has been involved in
creating and has been made aware of information of substantial value to the
Company both in its domestic and international markets, which information is not
old and is not generally known in the trade and which gives the Company an
advantage over its competitors who do not know or use it, all of which is
referred to herein as "Confidential Information". As used herein Confidential
Information shall include without limitation trade secrets, methods and
techniques of marketing and merchandising discounted office supplies to the
public at retail, by way of catalogs, contract sales, Internet and electronic
commerce, financial information of every nature (including forecasts,
projections and other financial information extending well into the future),
pricing information, customer information, present and future business plans of
the Company, real estate strategies of any sort, plans for mergers or
acquisitions, store planograms or other plans, patents, trademarks, copyrighted
writings, other intellectual property of every kind or description, and any
other document or information in whatsoever form (whether on paper, in
electronic form, etc.), which a prudent business person, in the normal course of
operating a business of the type and scope of the Company's business, would deem
to be confidential, proprietary or trade secret information relating to the
Company or its shareholders, directors, officers, representatives, employees,
predecessors, successors, affiliates or assigns.
(b) Xx. Xxxxxx has participated in numerous key management committees and
attended weekly meetings of the most senior officers of the Company. He also
attended numerous meetings and conferences in late 1999 involving the Monitor
Company in its capacity as a strategic consultant to the Company, and he has
attended meetings of the Board of Directors of
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the Company at which various confidential strategic matters, including possible
acquisitions, have been discussed. In this key management position as well as
prior positions, Xx. Xxxxxx has been privy to the Company's highly confidential
strategies and plans for current operations and future development throughout
the United States and internationally. Xx. Xxxxxx has special knowledge about
the internal organization, personnel, and strengths and weaknesses of the
Company that may effect its ability to compete in the market place. In addition
to tangible strategies and plans, Xx. Xxxxxx has special knowledge of the
Company's and its officers' intangible business philosophies, personalities,
views of competitors' strengths and weaknesses, and corporate culture that
combine to make the Company unique and competitive in the market place.
(c) The Company and Xx. Xxxxxx have taken reasonable measures to protect the
confidentiality of the Confidential Information, and Xx. Xxxxxx acknowledges
that disclosure of any such Confidential Information, especially to any
competitor of the Company, would result in irreparable harm to the Company. Xx.
Xxxxxx acknowledges that, even without disclosing specific material plans or
strategies of the Company, Xx. Xxxxxx has special knowledge of the Company that
would provide a competitor with an unfair advantage over the Company should Xx.
Xxxxxx be employed by a competitor or were he to divulge any Confidential
Information to a competitor or to any person who might transmit or use such
Confidential Information in competing with the Company.
(d) Given the extensive and pervasive nature of Xx. Xxxxxx'x knowledge of the
Company, which encompasses every material item of Confidential Information in
the possession of the Company; the highly competitive nature of the businesses
in which the Company engages; the importance to the Company of ensuring that
such trade secrets and Confidential Information not fall into the hands of any
Competitor (defined below) or parties with which the Company does business; and
the inevitability of disclosure of Confidential Information, including trade
secrets in the event Xx. Xxxxxx should work for a Competitor, Xx. Xxxxxx hereby
agrees that a five (5) year period of non-competition, as set forth in Section
11 below, is both reasonable and necessary for the adequate protection of the
Company.
11. NON-COMPETITION. In consideration of the valuable payments, benefits and
covenants of the Company being provided to Xx. Xxxxxx hereunder, specifically
including an allocation by the parties of the sum of $3.2 million to this
Covenant of Non-Competition, and the covenants contained in Sections 12 - 14
below, Xx. Xxxxxx agrees that for a period of five (5) years from the date
hereof (the "Noncompete Period"), Xx. Xxxxxx shall not directly or indirectly
own any
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interest in (except as provided below), manage, control, participate in, consult
with, render services for, or in any manner engage in any business (herein a
"Competitor") which engages in the sale (as a 10% or greater part of its
business), within any geographical area in which the Company or any Subsidiary
of the Company engages in such businesses on the date hereof, of either (i) the
sale of office products, office supplies, office business machines, electronics
or cellular telephones or (ii) the sale of any other product or service (x) sold
by the Company at the time of determination under this Section 11 and (y) which
represented at least five percent (5%) of the Company's revenues during the
Company's fiscal year ending immediately prior to the year in which such
determination is made.
Nothing herein shall prohibit Xx. Xxxxxx from being a passive owner of not more
than 2% of the outstanding stock of any class of a corporation which is publicly
traded or 10% of any class of equity of any other entity, so long as Xx. Xxxxxx
has no active participation in the business of such corporation.
12. NON-SOLICITATION; NO-HIRE; NON-INTERFERENCE. During the Noncompete Period,
Xx. Xxxxxx shall not directly, or indirectly through another entity or person,
(i) induce or attempt to induce any employee of the Company or of 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 Non-Compete Period 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 or business relation and the
Company or any Subsidiary ; provided, however, that the foregoing shall not
prohibit Xx. Xxxxxx from (I) hiring any individual whose employment is
involuntarily terminated by the Company or any Subsidiary or (ii) engaging in
any business-related recruiting activities generally, which are not targeted at
employees of the Company or any Subsidiary.
13. CONFIDENTIALITY AGREEMENT. Xx. Xxxxxx hereby agrees not to disclose any
Confidential Information about the Company during the longer of the Non-Compete
Period or three years following his last date of service as a Director of the
Company. As used herein, the term Confidential Information shall not include,
however, information which (i) is or becomes generally available to the public
or within the industries and businesses in which the Company operates, other
than as a result of a disclosure by Xx. Xxxxxx, (ii) becomes available to Mr.
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Fuente on a non-confidential basis from a source other than the Company or any
of its present or former employees, provided that such source is not known by
Xx. Xxxxxx after reasonable inquiry to be bound by an agreement or other
obligation of confidentiality to the Company or (iii) that Xx. Xxxxxx is
required to divulge pursuant to court order by a governmental body or agency.
14. DUTIES AS A DIRECTOR. Notwithstanding the provisions of Sections 11-13
above, as long as Xx. Xxxxxx is a Director of the Company, he acknowledges and
agrees that he is in a fiduciary relationship to the Company and shall govern
his activities in accordance with the standards required and expected of a
Director of a Delaware corporation, and to the extent that the provisions of
Sections 11-13 above may be deemed in any manner as requiring a lower standard
than the standards imposed upon a Director of a Delaware corporation, then such
higher standard shall govern his conduct during the continuation of his service
as a Director of the Company.
15. REFORMATION OF THIS AGREEMENT. If, at the time of enforcement of any of the
provisions of this Agreement regarding Non-Competition, Non-Solicitation,
No-Hire or Non-Interference, any court shall hold that the duration, scope or
geographical restrictions stated herein are unreasonable under the circumstances
then existing, the parties agree that it is their mutual desire and intent that
the Company shall be afforded the maximum duration, scope or area reasonable
under such circumstances, and each of them hereby requests such court to reform
this Agreement so that the maximum duration, scope and geographical restrictions
available under applicable law at the time of enforcement of this Agreement
shall be substituted by such court for the duration, scope or geographical area
stated herein and that the court shall be allowed to revise the restrictions
contained in the Noncompete, Non-Solicitation, No-Hire or Non-Interference
provisions hereof to such provisions as are deemed reasonable by the court at
the time such enforcement is requested.
16. INJUNCTIVE RELIEF. In the event of the breach or any threatened breach (that
is an anticipatory breach of this Agreement) by Xx. Xxxxxx of any of the
provisions of the Noncompete, Non-Solicitation, No-Hire, Non-Interference, No
Comment and Confidentiality covenants and agreements (collectively the
"Non-Compete Agreements") set forth in this Agreement, Xx. Xxxxxx agrees that
the Company will suffer irreparable harm and that the Company, in addition and
supplementary to any and all 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 the Noncompete
Agreements herein or to
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prevent any violation or threatened violation that is an anticipatory breach of
the provisions hereof. Xx. Xxxxxx agrees to waive, and does hereby waive, any
requirements for the posting of any bond or other security to secure such
relief, provided such waiver is allowed by the laws of the jurisdiction in which
the action is pending. In addition, in the event of any breach or violation by
Xx. Xxxxxx of the Noncompete Agreements, the Noncompete Period shall be tolled
until such breach or violation has been duly cured and thereafter the Noncompete
Period shall be extended for an additional period of time equivalent to the time
during which Xx. Xxxxxx was in breach of the Noncompete agreement.
17. ACKNOWLEDGMENTS BY XX. XXXXXX. XX. XXXXXX ACKNOWLEDGES THAT THE COMPANY HAS
GIVEN HIM ADEQUATE TIME WITHIN WHICH TO CONSIDER THIS AGREEMENT AND HAS ADVISED
HIM IN WRITING TO CONSULT WITH COUNSEL BEFORE SIGNING THIS AGREEMENT, AND XX.
XXXXXX HAS HAD AMPLE OPPORTUNITY TO CONSULT WITH COUNSEL PRIOR TO SIGNING THIS
AGREEMENT. XX. XXXXXX ACKNOWLEDGES THAT HE UNDERSTANDS THIS AGREEMENT AND HAS
ENTERED INTO THIS AGREEMENT FREELY AND VOLUNTARILY.
18. ACKNOWLEDGMENTS BY THE PARTIES. THE PARTIES ACKNOWLEDGE THAT FOR A PERIOD OF
SEVEN (7) DAYS FOLLOWING THE EXECUTION OF THIS AGREEMENT BY XX. XXXXXX, I.E. ON
OR PRIOR TO SEPTEMBER 26, 2000, XX. XXXXXX MAY REVOKE THIS AGREEMENT. SUCH
REVOCATION SHALL BE MADE IN WRITING AND DELIVERED TO THE EXECUTIVE VICE
PRESIDENT, HUMAN RESOURCES, OF THE COMPANY. IF NOT SO REVOKED IN WRITING SO
DELIVERED ON OR BEFORE SUCH DATE, THIS AGREEMENT SHALL THEREAFTER BE
IRREVOCABLE.
19. TAX PROVISIONS AND AGREEMENTS. The parties hereby agree that all sums due
and payable to Xx. Xxxxxx hereunder (other than amounts payable under the
Chairman's Agreement) are subject to withholding for applicable federal, state
and local taxes. To the extent any such sums are paid into a deferral account,
Xx. Xxxxxx acknowledges that he has received his own personal tax and legal
advice regarding the nature of such account(s) and that he is not relying on any
representation of the Company insofar as the nature of such account(s) for the
deferral of income taxes. Xx. Xxxxxx further agrees to remit to the Company at
any time, upon written request from the Company, any amount which the Company,
upon the advice of its internal or external tax advisers, is required to remit
to any revenue agency, including the Internal Revenue Service, by reason of any
requirement that
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the Company withhold and remit income taxes due and owing by Xx. Xxxxxx, and Xx.
Xxxxxx hereby agrees to indemnify and hold the Company harmless (including any
penalties, interest or related reasonable legal or accounting fees incurred by
the Company) against any failure on his part to remit in a timely and prompt
manner any such payment required of him by the Company. Each party hereby agrees
that in filing his/its tax returns, he/it shall do so in accordance with the
provisions of this Agreement. Xx. Xxxxxx agrees and acknowledges that he has
relied exclusively upon the advice of this own tax and accounting consultants
concerning the structure of the payments and benefits provided pursuant to this
Agreement and any resulting tax implications to him.
20. MISCELLANEOUS PROVISIONS.
(a) DEFINITIONS. As used herein, the term "business day" shall mean any day
Monday through Friday, which is not a legal holiday in the State of
Florida. As used herein, the term "Subsidiary" of the Company shall
refer to any entity owned by, controlled by, or under common control
with, the Company.
(b) 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.
(c) 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.
(d) NO STRICT CONSTRUCTION; NO WAIVER. 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, including by reason of the fact that such
party or its legal counsel drafted this Agreement. No failure of either
party to insist upon strict performance of any provision of this
Agreement shall be deemed a waiver of that or of any other right of
such party hereunder.
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(e) 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.
(f) SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to
the benefit of and be enforceable by Xx. Xxxxxx, the Company and their
respective heirs, successors and assigns, except that Xx. Xxxxxx may
not assign Xx. Xxxxxx'x rights or delegate Xx. Xxxxxx'x obligations
hereunder without the prior written consent of the Company. Without
limiting the preceding sentence, this Agreement shall be binding upon
any successor of the Company by purchase, merger or otherwise, and the
Company shall require any successor (whether direct or indirect) to all
or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement.
(g) 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.
(h) JURISDICTION AND VENUE. Each party agrees that this Agreement is made
and entered into in Palm Beach County, Florida, and each party hereby
consents to exclusive jurisdiction in the courts of Palm Beach County,
Florida and/or the United States courts sitting in such location with
respect to any matter permitted to be adjudicated hereunder in a court
of law.
(i) AMENDMENT AND WAIVER. The provisions of this Agreement may be amended
or waived only with the prior written consent of the Company and Xx.
Xxxxxx, 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.
(j) FURTHER ASSURANCES; COOPERATION. In the event either party is required
to execute any other documentation subsequent to the execution of this
Agreement for the purpose of giving effect to any provision hereof (for
example, any letters of resignation by Xx. Xxxxxx from offices held by
him or other similar administrative or executory documentation), then
each of the Company and Xx. Xxxxxx hereby agrees to provide
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such documentation. In addition, each party hereby agrees to cooperate
with the other in any matters in which the parties may have an
interest. For example, Xx. Xxxxxx hereby agrees to provide assistance
and testimony, as may be required, in any litigation in which the
Company may be involved and as to which his assistance or testimony may
be helpful or necessary. The Company agrees to cooperate in scheduling
such matters so as not to unreasonably interfere with Xx. Xxxxxx'x
other activities, including any employment in which he may be engaged.
Xx. Xxxxxx shall use his best efforts to meet any scheduling
requirements imposed by any court or by legal process. The Company
shall reimburse Xx. Xxxxxx for the reasonable costs he incurs in
connection with the foregoing assistance, and, in the event he is no
longer receiving payments under the Chairman's Agreement, shall pay him
a fee of $1,000 per day for his services. The Company agrees to provide
Xx. Xxxxxx with legal defense of any claim asserted against him by
reason of his serving as an officer or director of the Company or any
Subsidiary, provided that Xx. Xxxxxx agrees to cooperate and does
cooperate fully with such defense counsel. If Xx. Xxxxxx has a
reasonable dispute with the Company concerning any legal defense
provided by the Company, Xx. Xxxxxx shall be entitled to engage his own
defense counsel, and the reasonable fees and expenses of such counsel
shall be paid by the Company.
(k) CONSTRUCTION. This Agreement shall not be construed against or in favor
of either party by reason of such party's having prepared or drafted
this Agreement, it being understood that each party has had the benefit
of legal counsel or the opportunity to consult legal counsel of his or
its choosing. The captions in this Agreement are provided as a matter
of convenience only and shall not be used as an aid in the construction
of any provision of this document.
21. ARBITRATION. Any dispute or controversy between the Company and Xx. Xxxxxx
arising out of or relating to this Agreement or the breach of this Agreement
shall be settled by arbitration administered by the American Arbitration
Association ("AAA") in accordance with its Commercial Arbitration Rules then in
effect, and judgment on the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. Any arbitration shall be held before a
single arbitrator who shall be selected by the mutual agreement of the Company
and Xx. Xxxxxx, unless the parties are unable to agree to an arbitrator, in
which case the arbitrator will be selected under the procedures of the AAA. The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction. However,
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either party may, without inconsistency with this arbitration provision, apply
to any court otherwise having jurisdiction over such dispute or controversy and
seek interim provisional, injunctive or other equitable relief until the
arbitration award is rendered or the controversy is otherwise resolved. Except
as necessary in court proceedings to enforce this arbitration provision or an
award rendered hereunder, or to obtain interim relief, or as may otherwise be
required by law, neither a party nor an arbitrator may disclose the existence,
content or results of any arbitration hereunder without the prior written
consent of the Company and Xx. Xxxxxx. The Company and Xx. Xxxxxx acknowledge
that this Agreement evidences a transaction involving interstate commerce.
Notwithstanding any choice of law provision included in this Agreement, the
United States Federal Arbitration Act shall govern the interpretation and
enforcement of this arbitration provision. The arbitration proceeding shall be
conducted in Palm Beach County, Florida or such other location to which the
parties may agree. The Company shall pay the costs of any arbitrator appointed
hereunder and of the arbitration proceedings.
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IN TESTIMONY WHEREOF, the parties have signed this Severance Agreement Including
RELEASE AND NON-COMPETITION AGREEMENT this 19th day of September, 2000.
XX. XXXXXX OFFICE DEPOT, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxxx
------------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxx Xxxxxxx
Title: EVP - Human Resources
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