1
Exhibit 10.4
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BETWEEN
OFFICEMAX, INC.
AND
XXXXXXX XXXXX
2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
-----------------------------------------
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"Agreement") is entered into as of the 3rd day of January, 2000, between
OFFICEMAX, INC., an Ohio corporation (the "Company"), and XXXXXXX XXXXX
("Executive").
W I T N E S S E T H :
---------------------
WHEREAS, the Company and Executive are parties to an Amended
and Restated Employment Agreement entered into as of October 13, 1998 (the
"Prior Employment Agreement"); and
WHEREAS, the Compensation Committee (the "Compensation
Committee") of the Board of Directors (the "Board") of the Company has approved
and recommended the amendment of the Prior Employment Agreement so as, INTER
ALIA, to provide that the term of this Agreement shall be a rolling five (5)
year "ever green" period and for severance payments and continuation of certain
benefits for no less than five (5) years in the event of the termination of
Executive's employment with the Company for any reason other than death or
"Cause" (as hereinafter defined) on the terms and conditions set forth in this
Agreement; and
WHEREAS, in furtherance of the foregoing, it is deemed
advisable to amend and restate in full the Prior Employment Agreement as
provided herein; and
WHEREAS, the Compensation Committee approved the execution and
delivery of this Agreement by the Company by written action dated January 3,
2000,
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereby agree as follows:
3
1. EMPLOYMENT.
(a) The Company hereby employs Executive as its Chairman of
the Board and Chief Executive Officer, and Executive hereby accepts such
employment, on the terms and conditions set forth herein.
(b) During the term of this Agreement and any renewal hereof
(all references herein to the term of this Agreement shall include references to
the period of renewal hereof, if any), Executive shall be and have the titles,
duties and authority of the Chairman of the Board and Chief Executive Officer of
the Company and shall devote his entire business time and all reasonable efforts
to his employment and perform diligently such duties as are customarily
performed by the chairman of the board, president and chief executive officer of
a company the size and structure of the Company, together with such other duties
as may be reasonably requested from time to time by the Board, which duties
shall be consistent with his position as set forth above and as provided in
Paragraph 2.
(c) Executive shall not, without the prior written consent of
the Company, directly or indirectly, during the term of this Agreement, other
than in the performance of duties naturally inherent to the businesses of the
Company and in furtherance thereof, render services of a business, professional
or commercial nature to any other person or firm, whether for compensation or
otherwise; provided, however, that so long as it does not materially interfere
with his full-time employment hereunder, Executive may attend to outside
investments, serve as a director of a corporation which does not compete with
the Company (as provided in Paragraph 10), and serve as a director, trustee or
officer of, or otherwise participate in, educational, welfare, social, religious
and civic organizations. The Company hereby acknowledges that Executive is
currently serving a three (3) year term as a member of the Advisory Committee of
the New York Stock Exchange Board of Directors and a four (4) year
Page 3
4
term as a member of the Case Western Reserve University Xxxxxxxxxxx School of
Management Visiting Committee.
2. TERM AND POSITIONS.
(a) Subject to the provisions for renewal and termination
hereinafter provided, the term of this Agreement shall begin on the date hereof
and shall continue for five (5) years thereafter. Such term shall automatically
be extended for one additional day as of the end of the first day of the term
hereof and as of the end of each succeeding day thereafter, unless the Agreement
is terminated as provided in Paragraph 8.
(b) Executive, without any compensation in addition to that
which is specifically provided in this Agreement, shall serve, and shall be
entitled and have the right to serve, as a member of the Board, Chairman of the
Board, President and Chief Executive Officer of the Company. Without limiting
the generality of any of the foregoing, except as hereafter expressly agreed in
writing by Executive (i) Executive shall not be required to report to any single
individual and shall report only to the Board as an entire body, (ii) no
individual shall be elected or appointed as Chairman of the Board, President or
Chief Executive Officer of the Company, (iii) the highest levels of
Vice-Presidents and other executive officers of the Company shall report to no
individual other than Executive, and (iv) no individual or group of individuals
(including a committee established or other designee appointed by the Board)
shall have any authority over or equal to the authority of Executive in his role
as Chairman of the Board, President and Chief Executive Officer (except that the
Compensation Committee shall continue to have such powers as may be required to
maintain the compliance of the Company's benefit plans under Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder), and neither the Company, the Board, nor any member of
the Board shall take any action which will or could have the effect of, or
appear to have the
Page 4
5
effect of, giving such authority to any such individual or group. For service as
a director, officer and employee of the Company, Executive shall be entitled to
the full protection of the applicable indemnification provisions of the
corporate charter, code of regulations, by-laws and other policies and
procedures of the Company.
(c) If:
(i) the Company materially changes Executive's duties
and responsibilities as set forth in Paragraphs 1(b) and 2(b) without
his consent (including, without limitation, by violating any of the
provisions of clauses (i), (ii), (iii) and (iv) of Paragraph 2(b)); or
(ii) Executive's place of employment or the principal
executive offices of the Company are located more than fifty (50) miles
from the geographical center of Cleveland, Ohio; or
(iii) there occurs a material breach by the Company
of any of its obligations under this Agreement, which breach has not
been cured in all material respects within ten (10) days after
Executive gives notice thereof to the Company; or
(iv) there occurs a "Change in Control" (as
hereinafter defined) of the Company, then in any such event Executive
shall have the right to terminate his employment with the Company, but
such termination shall not be considered a voluntary resignation or
termination by Executive of such employment or of this Agreement but
rather a discharge of Executive by the Company without "Cause" (as
hereinafter defined). Executive may exercise that right at any time
within ninety (90) days after the date on which the applicable event
has occurred (the event, for purposes of clause (iii), above,
consisting of the lapsing of the last day of the cure period referred
to therein).
Page 5
6
(d) Executive shall be deemed not to have consented to any
material change in his duties and responsibilities unless he shall give written
notice of his consent thereto to the Board within ninety (90) days after receipt
of a written proposal setting forth such change. If Executive shall not have
given such consent, the Company shall have the opportunity to withdraw such
proposed material change by written notice to Executive given within ten (10)
days after the end of said ninety (90) day period.
(e) The term "Change in Control" means the first to occur of
the following events:
(i) any person or group of commonly controlled
persons owns or controls, directly or indirectly, thirty percent (30%)
or more of the voting control or value of the capital stock of the
Company; or
(ii) the shareholders of the Company approve an
agreement to merge or consolidate with another corporation or other
entity resulting (whether separately or in connection with a series of
transactions) in a change in ownership of thirty percent (30%) or more
of the voting control or value of the capital stock of the Company, or
an agreement to sell or otherwise dispose of all or substantially all
of the Company's assets (including, without limitation, a plan of
liquidation or dissolution), or otherwise approve of a fundamental
alteration in the nature of the Company's business.
3. COMPENSATION.
(a) For all services he may render to the Company during the
term of this Agreement, the Company shall pay to Executive the following:
(i) for the period beginning on the date hereof and
ending January 23, 1999, salary equal to an annual salary of Nine
Hundred Fifty Thousand Dollars ($950,000) MULTIPLIED BY the ratio of
the number of days in the period beginning
Page 6
7
on the date hereof and ending on January 23, 1999 to the total number
of days in the current Fiscal Year (as hereinafter defined);
(ii) for the Fiscal Year beginning on January 24,
1999, and for each Fiscal Year thereafter during the term of this
Agreement, salary as determined by the Compensation Committee, which in
no event shall be less than the annual salary that was payable by the
Company to Executive under this Paragraph 3(a) for the immediately
preceding Fiscal Year; and
(iii) notwithstanding the foregoing, at any time and
from time to time during the term of this Agreement, the Compensation
Committee may increase (but not decrease) Executive's annual salary.
Salary payable by the Company to Executive under this Paragraph 3(a) shall be
payable in those installments customarily used in payment of salaries to the
Company's executives (but in no event less frequently than monthly). The term
"Fiscal Year" means the period beginning on the day after the Saturday
immediately preceding the last Wednesday in January of one year and ending on
the Saturday immediately preceding the last Wednesday in January of the
immediately following year.
(b) In addition to the salary provided in Paragraph 3(a), the
Company shall pay to Executive bonus compensation (i) under the OfficeMax, Inc.
Annual Incentive Bonus Plan, or (ii) if such plan ceases to be in effect in
substantially the same form as in effect on the date of this Agreement, at least
annually in respect of each Fiscal Year not later than ninety (90) days after
the close of each Fiscal Year as determined by the Compensation Committee and
based on the performance of the Company (which shall be based on criteria no
less favorable to Executive than criteria used by the Compensation Committee to
determine bonus compensation for other senior executives of the Company).
Page 7
8
4. SALARY AND BONUS; PAYMENT IN THE EVENT OF DEATH. In the event of
Executive's death during the term of this Agreement:
(a) The Company shall pay to Executive a pro rata portion of
the bonus applicable to the Fiscal Year in which such death occurs, as such
bonus is determined under Paragraph 3(b). Such pro rata portion shall be
determined by MULTIPLYING the amount, if any, of bonus that would have been
payable pursuant to such Paragraph 3(b) if Executive had remained employed under
this Agreement for the entire applicable Fiscal Year and achieved 100% of
Executive's personal goals for the fiscal year BY a fraction (the "Partial Year
Fraction"), the numerator of which is the number of days in the applicable
Fiscal Year elapsed prior to the date of death and the denominator of which is
three hundred sixty-five (365).
(b) The pro rata portion of the bonus described in Paragraph
4(a) shall be paid when and as provided in Paragraph 3(b).
(c) Except as otherwise provided in Paragraphs 4(a), 5, 6 and
7, Executive's employment hereunder shall terminate and Executive shall be
entitled to no further compensation or other benefits under this Agreement,
except as to that portion of any unpaid salary and other benefits accrued and
earned by him hereunder up to and including the date of such death.
5. OPTIONS TO ACQUIRE COMMON SHARES; CERTAIN OTHER PAYMENTS.
(a) The Company has granted to Executive under the Prior
Employment Agreement and pursuant to Stock Option Agreements executed prior to
the date hereof options (all of which, together with any additional options
hereafter granted under the Plan (defined below) are referred to as the
"Options") to purchase common shares of the Company, without par value, under
the OfficeMax, Inc. Equity-Based Award Plan as in effect on
Page 8
9
the date of this Agreement (the "Plan", the terms in this Paragraph 5 having the
same meaning as under the Plan, unless otherwise defined in this Agreement).
(b) The Compensation Committee has determined that the
following provisions shall apply to the grant of the Options, in addition to or
in substitution for the provisions of the Plan:
(i) Except as otherwise provided in this Agreement,
(A) the Options granted to Executive as of March 9, 1995 (the "1995
Options") shall expire on March 9, 2005, and shall not be exercisable
thereafter, and (B) Executive may exercise, and shall have the
irrevocable and nonforfeitable right to exercise, the 1995 Options to
the extent not previously exercised and thereby purchase any number of
Shares up to but not in excess of the cumulative number of Shares set
forth below on or after the corresponding dates:
- 337,500 Shares on or after January 27, 1996;
- 675,000 Shares on or after January 25, 1997; and
- 1,012,500 Shares on or after January 24, 1998.
(ii) In the event of the cessation of Executive's
employment with the Company for Cause prior to the end of the term of
this Agreement (subject to the provisions of Paragraph 2(c)), any
unexercised Options shall terminate and be of no further force or
effect simultaneously with such cessation; otherwise, the Options and
Executive's right to exercise the Options shall not be affected by the
cessation of his employment with the Company for any reason except as
expressly provided in this Agreement or in the Plan.
(iii) In the event of the cessation of Executive's
employment with the Company for any reason other than (A) Cause or (B)
Executive's death, in
Page 9
10
addition to any other Options which Executive is then entitled to
exercise hereunder, prior to any of the dates referred to in Paragraph
5(b)(i) Executive shall be entitled to exercise all of the Options. In
the event of the cessation of Executive's employment with the Company
as a result of his death, in addition to any other Options which
Executive is then entitled to exercise hereunder, prior to any of the
dates referred to in Paragraph 5(b)(i), Executive shall be entitled to
exercise a number of Options equal to the additional number he would
have been eligible to exercise on the next date described in Paragraph
5(b)(i) after Executive's death MULTIPLIED BY the Partial Year Fraction
in respect of the Fiscal Year in which such death occurred.
(iv) In the event of and in connection with any
Change in Control, all of the Options shall be fully and immediately
exercisable by Executive, notwithstanding the terms of Paragraph
5(b)(i).
(v) Notwithstanding the provisions of Paragraph
5(b)(i) or of any Stock Option Agreement between the Company and
Executive relating to the period during which Options may be exercised,
if one of the events described in Paragraphs 5(b)(iii) or 5(b) (iv)
occurs, thereby accelerating any dates under Paragraph 5(b) (i) on
which Options first may be exercised, all of the Options shall expire
on the date which is three (3) years after the date of such event, and
shall not be exercisable thereafter.
(c) If the Plan is altered, amended, suspended or discontinued
as provided in Section 11 thereof in a manner that could have the effect of
denying Executive the benefits of the Options as granted under the Plan as in
effect on the date hereof, subject to the provisions of this Agreement, the
terms of the Plan as in effect on the date hereof shall be deemed to be
incorporated into and thereby become obligations of the Company under this
Agreement, notwithstanding such alteration, suspension or discontinuation of the
Plan.
Page 10
11
(d) If all or any portion of the amounts payable to Executive
under this Agreement, including without limitation the amounts payable under
this Paragraph 5(d), the issuance of Shares and the amounts payable under
Paragraph 8(d), constitute "excess parachute payments" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), that
are subject to the excise tax imposed by Section 4999 of the Code (or any
similar tax or assessment), the amounts payable hereunder shall be increased to
the extent necessary to place Executive in the same after-tax position as he
would have been in had no such tax assessment been imposed on any such payment
paid or payable to Executive under this Agreement or any other payment that
Executive may receive in connection therewith. Such incremental payment shall be
made promptly after the amount has been determined and in any event no later
than five (5) business days before such excise or other similar tax or
assessment is due. If it subsequently is determined (pursuant to final
regulations or published rulings of the Internal Revenue Service, final judgment
of a court of competent jurisdiction, Internal Revenue Service audit assessment,
or otherwise) that the amount of such excise or other similar taxes or
assessments payable by Executive is greater than the amount initially so
determined, then the Company shall pay Executive an amount equal to the sum of:
(i) such additional excise or other taxes, PLUS (ii) any interest, fines and
penalties resulting from such underpayment, PLUS (iii) an amount necessary to
reimburse Executive for any income, excise or other tax assessment payable by
Executive with respect to the amounts specified in (i) and (ii) above, and the
reimbursement provided by this clause (iii), in the manner described above in
this Paragraph 5(d). Payment thereof shall be made within five (5) business days
after the date upon which such subsequent determination is made.
6. RETIREMENT BENEFITS. Executive shall participate in all retirement
and other benefit plans of the Company (both qualified and nonqualified)
generally available to
Page 11
12
classifications of employees of the Company of which Executive is a member and
for which Executive qualifies under the terms thereof (and nothing in this
Agreement shall or shall be deemed to in any way adversely affect Executive's
right and benefits thereunder).
7. LIFE INSURANCE AND OTHER BENEFITS.
(a) The Company shall provide to Executive and his spouse and
dependents the life, health and dental insurance coverage described on Annex A
to this Agreement.
(b) The Company shall provide Executive with a monthly
automobile allowance which shall not be less than the monthly automobile
allowance for Executive in effect on the date hereof, adjusted annually to
reflect inflation as measured by changes in the Consumer Price Index or other
comparable index.
(c) Executive shall be entitled to such periods of vacation
and sick leave allowance each year determined by Executive in his reasonable and
good faith discretion, which in any event shall be not less than as provided
under the Company's vacation and sick leave policy for executive officers.
(d) Executive shall be entitled to participate in any equity
or other employee benefit plan that is generally available to senior executive
officers, as distinguished from general management, of the Company. Executive's
participation in and benefits under any such plan shall be on the terms and
subject to the conditions specified in the governing document of the particular
plan.
(e) The Company shall provide Executive with tax and financial
advisory and tax return preparation services at an annual cost to the Company
not to exceed five thousand dollars ($5,000), adjusted annually to reflect
inflation as measured by changes in the Consumer Price Index or other comparable
index.
Page 12
13
8. TERMINATION.
(a) The employment of Executive under this Agreement, and the
term hereof, may be terminated by the Company:
(i) on death or Permanent Disability (as hereinafter
defined) of Executive, or
(ii) for Cause at any time by action of the Board.
For purposes hereof, the term "Cause" shall mean:
(A) Executive's fraud, commission of a
felony or of an act or series of acts which result in material
injury to the business reputation of the Company, commission
of an act or series of repeated acts of dishonesty, which act
is or acts are materially inimical to the best interests of
the Company, or Executive's willful and repeated failure to
perform his duties under this Agreement, which failure has not
been cured within fifteen (15) days after the Company gives
notice thereof to Executive;
(B) Executive's material breach of any
material provision of this Agreement, which breach has not
been cured in all substantial respects within ten (10) days
after the Company gives notice thereof to Executive;
(C) Executive's engagement as an officer,
director, employee or consultant of an entity in competition
with the Company (as defined in Paragraph 10(b)); or
(D) Executive's direct or indirect
involvement as a shareholder, proprietor or partner of an
entity in competition with the Company (as defined in
Paragraph 10(b)); provided, however, that ownership of less
than
Page 13
14
one percent (1%) of a class of publicly traded securities of
an entity shall not be deemed to be a violation of the
foregoing clause.
Any termination by reason of the foregoing shall not be in limitation of any
other right or remedy the Company may have under this Agreement or otherwise. On
any termination of this Agreement, Executive shall be deemed to have resigned
from all offices and directorships held by Executive in the Company and in each
of its subsidiaries and affiliates, as the case may be.
(b) In the event of a termination claimed by the Company to be
for "Cause" pursuant to Paragraph 8(a)(ii), Executive shall have the right to
have the justification for said termination determined by arbitration in
Cleveland, Ohio. In such event, Executive shall serve on the Company within
thirty (30) days after termination a written request for arbitration. The
Company immediately shall request the appointment of an arbitrator by the
American Arbitration Association and thereafter the question of "Cause" shall be
determined under the rules of the American Arbitration Association, and the
decision of the arbitrator shall be final and binding on both parties. The
parties shall use all reasonable efforts to facilitate and expedite the
arbitration, and shall act to cause the arbitration to be completed as promptly
as possible. During the pendency of the arbitration, Executive shall continue to
receive all compensation and benefits to which he is entitled hereunder, and if
at any time during the pendency of such arbitration the Company fails to pay and
provide all compensation and benefits to Executive in a timely manner the
Company shall be deemed to have automatically waived whatever rights it then may
have had to terminate Executive's employment for Cause. Expenses of the
arbitration shall be borne by the Company.
(c) In the event of termination for death or Cause, except as
otherwise provided in Paragraphs 4, 5, 6 and 7, Executive shall be entitled to
no further compensation or other benefits under this Agreement, except as to
that portion of any unpaid salary and other
Page 14
15
benefits accrued and earned by him hereunder up to and including the effective
date of such termination.
(d) In the event of the termination by the Company of
Executive's employment with the Company for any reason other than on death or
for Cause, in addition to any other rights or remedies Executive may have
against the Company as a result of such termination, (i) the Company shall
continue for the remainder of the term of this Agreement then in effect to pay
and provide to Executive all of the salary and bonus compensation and other
rights and benefits provided for herein; provided, however, that such bonus
compensation in respect of each Fiscal Year included within the payment period
shall be equal to the highest bonus compensation paid or payable to Executive in
respect of any of the three (3) Fiscal Years immediately preceding the Fiscal
Year during which such termination occurs; and (ii) the Company shall until the
fifth anniversary of that termination provide to Executive office space,
secretarial support and continuing use of private telephone numbers, facsimile
numbers and e-mail addresses. The Company shall provide the items called for in
clause (ii) of the immediately preceding sentence at a place and on terms and
conditions that Executive, in his sole and reasonable discretion, determines are
commensurate with those available to Executive immediately prior to that
termination.
(e) For purposes of this Agreement, Executive's "Permanent
Disability" shall be deemed to have occurred after one hundred twenty (120) days
in the aggregate during any consecutive twelve (12) month period, or after
ninety (90) consecutive days, during which one hundred twenty (120) or ninety
(90) days, as the case may be, Executive, by reason of his physical or mental
disability or illness, shall have been unable to discharge his duties under this
Agreement. The date of Permanent Disability shall be such one hundred twentieth
(120th) or ninetieth (90th) day, as the case may be. In the event either the
Company or
Page 15
16
Executive, after receipt of notice of Executive's Permanent Disability from the
other, disputes Executive's Permanent Disability, Executive promptly shall
submit to a physical examination by the chief of medicine of any major
accredited hospital in the Cleveland, Ohio, area and, unless such physician
shall issue his written statement to the effect that in his opinion, based on
his diagnosis, Executive is capable of resuming his employment and devoting his
full time and energy to discharging his duties within thirty (30) days after the
date of such statement, such Permanent Disability shall be deemed to have
occurred.
9. REIMBURSEMENT. The Company shall reimburse Executive or provide him
with an expense allowance during the term of this Agreement for travel,
entertainment and other expenses reasonably and necessarily incurred by
Executive in connection with the Company's business. Executive shall furnish
such documentation with respect to reimbursement to be paid under this Paragraph
9 as the Company shall reasonably request.
10. COVENANTS AND CONFIDENTIAL INFORMATION.
(a) During the term of this Agreement, including any periods
during which Executive is not providing services to the Company but is receiving
payments of compensation hereunder (but not including payments under Paragraphs
5, 6 or 7), Executive shall not, directly or indirectly, do or suffer any of the
following:
(i) Own, manage, control or participate in the
ownership, management, or control of, or be employed or engaged by or
otherwise affiliated or associated as a consultant, independent
contractor or otherwise with, any other corporation, partnership,
proprietorship, firm, association or other business entity, or
otherwise engage in any business, which is in competition with the
Company (as described in Paragraph 10(b)); provided, however, that the
ownership of not more than
Page 16
17
one percent (1%) of any class of publicly traded securities of any
entity shall not be deemed a violation of this covenant;
(ii) Employ, assist in employing, or otherwise
associate in business with any senior executive of the Company who was
so employed or retained at any time during the one (1) year period
preceding the date on which Executive's employment with the Company
ceases;
(iii) Induce any person who is a senior executive or
officer of the Company to terminate said relationship; and
(iv) Disclose, divulge, discuss, copy or otherwise
use or suffer to be used in any manner, in competition with, or
contrary to the interests of, the Company any confidential information
or trade secrets of the Company, it being acknowledged by Executive
that all such information regarding the business of the Company
compiled or obtained by, or furnished to, Executive while Executive
shall have been employed by or associated with the Company is
confidential information and the Company's exclusive property.
(b) For purposes of this Agreement, an entity shall be deemed
to be in competition with the Company if and only if more than twenty-five per
cent (25%) of the gross revenues of such entity are derived from the business of
selling office supplies, office furniture, computers, and such other products of
the type as are sold at or from a majority of OfficeMax stores on the date of
the termination of Executive's employment hereunder.
(c) Executive expressly agrees and understands that the remedy
at law for any breach by him of this Paragraph 10 will be inadequate and that
the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that, upon adequate
proof of Executive's violation of any legally enforceable
Page 17
18
provision of this Paragraph 10, the Company shall be entitled to immediate
injunctive relief and may obtain a temporary order restraining any threatened or
further breach. Nothing in this Paragraph 10 shall be deemed to limit the
Company's remedies at law or in equity for any breach by Executive of any of the
provisions of this Paragraph 10 which may be pursued or availed of by the
Company.
(d) Executive has carefully considered the nature and extent
of the restrictions upon him and the rights and remedies conferred upon the
Company under this Paragraph 10, and hereby acknowledges and agrees that the
same are reasonable in time and territory, are designed to eliminate competition
which otherwise would be unfair to the Company, do not stifle the inherent skill
and experience of Executive, would not operate as a bar to Executive's sole
means of support, are fully required to protect the legitimate interests of the
Company and do not confer a benefit upon the Company disproportionate to the
detriment to Executive.
11. WITHHOLDING TAXES. Certain payments to Executive under this
Agreement may be subject to withholding on account of federal, state and local
taxes as required by law. Except with respect to income realized by Executive as
described in Paragraph 5(d), if any particular payment required hereunder is
insufficient to provide the amount of such taxes required to be withheld, the
Company may withhold such taxes from any other payment due Executive. Except
with respect to income realized by Executive as described in Paragraph 5(d), in
the event all cash payments due Executive are insufficient to provide the
required amount of such withholding taxes, Executive, within five (5) days of
written notice from the Company, shall pay to the Company the amount of such
withholding taxes in excess of all cash payments due Executive at the time such
withholding is required to be made by the Company.
Page 18
19
12. SEVERABLE PROVISIONS. The provisions of this Agreement are
severable and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions and any
partially unenforceable provision to the extent enforceable in any jurisdiction
nevertheless shall be binding and enforceable.
13. BINDING AGREEMENT. The rights and obligations of the Company under
this Agreement shall inure to the benefit of, and shall be binding on, the
Company and its successors and assigns, and the rights and obligations (other
than obligations to perform services) of Executive under this Agreement shall
inure to the benefit of, and shall be binding upon, Executive and his heirs,
personal representatives and successors and assigns.
14. ENFORCEMENT OF RIGHTS; ARBITRATION.
(a) If the Company terminates Executive's employment with the
Company other than for Cause or as a result of his death or Permanent Disability
or Executive alleges that the Company otherwise has breached or the Company
otherwise breaches this Agreement or any of its obligations hereunder, in order
for Executive to enforce and continue to enjoy his rights hereunder, including
without limitation the right to continue to receive compensation and other
payments and benefits hereunder for the remainder of the term of this Agreement,
Executive shall be under no duty to seek other employment or otherwise mitigate
his damages as a result of such termination of employment or alleged breach or
breach by the Company.
(b) The Company shall indemnify and reimburse Executive for
his costs and expenses, including reasonable attorneys' fees, incurred in
connection with enforcing his rights hereunder.
(c) Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of
Page 19
20
the American Arbitration Association then pertaining in the City of Cleveland,
Ohio, and judgment upon the award rendered by the arbitrator or arbitrators may
be entered in any court having jurisdiction thereof. The arbitrator or
arbitrators shall be deemed to possess the powers to issue mandatory orders and
restraining orders in connection with such arbitration; provided, however, that
nothing in this Paragraph 14 shall be construed so as to deny the Company the
right and power to seek and obtain injunctive relief in a court of equity for
any breach or threatened breach by Executive of any of his covenants contained
in Paragraph 10 hereof.
15. NOTICES. Any notice to be given under this Agreement shall be
personally delivered in writing or shall have been deemed duly given when
received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested, and if mailed to the Company,
shall be addressed to its principal place of business, attention: General
Counsel, and if mailed to Executive, shall be addressed to him at his home
address last known on the records of the Company, or at such other address or
addresses as either the Company or Executive may hereafter designate in writing
to the other.
16. WAIVER. The failure of either party to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision of
this Agreement. The rights granted the parties herein are cumulative and the
waiver of any single remedy shall not constitute a waiver of such party's right
to assert all other legal remedies available to it under the circumstances.
17. MISCELLANEOUS. This Agreement supersedes all prior agreements and
understandings between the parties and may not be modified or terminated orally.
No modification, termination or attempted waiver shall be valid unless in
writing and signed by the party against whom the same is sought to be enforced.
Page 20
21
18. GOVERNING LAW. This Agreement shall be governed by and construed
according to the laws of the State of Ohio.
19. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience and are not a part of this Agreement and shall
not be used in construing it.
20. MISCELLANEOUS. Where necessary or appropriate to the meaning
hereof, the singular and plural shall be deemed to include each other, and the
masculine, feminine and neuter shall be deemed to include each other.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective on the day and year first set forth above.
OFFICEMAX, INC.
By /s/ XXXX X. XXXXXXX
----------------------------------
Xxxx X. Xxxxxxx
Secretary
/s/ XXXXXXX XXXXX
----------------------------------
Xxxxxxx Xxxxx
Page 21
22
ANNEX A
Benefits Summary for Xx. Xxxxx
MEDICAL INSURANCE
OfficeMax offers a Section 125, self-insured medical plan to all full-time
Associates after three months of service. The Plan maximum lifetime benefit is
$1,000,000. The Plan is designed to pay in-network charges at 80%. Expenses for
prescription drugs and preventive services are not subject to a deductible.
DENTAL INSURANCE
OfficeMax offers a Section 125, self-insured dental plan to all full-time
Associates after six months of service. The annual maximum Plan benefit is
$1,000. There is a schedule that is followed for preventive and restorative
care.
LIFE INSURANCE
Through an insurance company, OfficeMax provides each full-time Associate with 1
1/2 times his or her salary in group, term-life insurance. Xx. Xxxxx holds the
plan maximum limit of $500,000. The group life insurance policy has an
Accidental Death and Dismemberment (AD&D) clause. An additional benefit (not to
exceed $500,000) would be payable in the event of accidental loss of life/limb
based on the policy's defined schedule. This policy remains in effect until age
70, then follows a benefit reduction schedule. In addition, OfficeMax carries a
$500,000 term life insurance policy with Prudential Insurance on Xx. Xxxxx'x
life, the benefits of which are payable to his estate in the event of his death.
SHORT-TERM DISABILITY
OfficeMax offers a Section 125, Short-Term Disability Plan to all full-time
Associates after six months of service. The benefit (up to $1,000 per week) is
payable for short-term disability leaves lasting up to 13 weeks. There is a
seven-day waiting period before benefits are payable.
LONG-TERM DISABILITY
Through an insurance company, OfficeMax provides each full-time Associate with
Long-Term disability benefits after three months of service. The benefits are
payable after 90 days of disability at 60% of salary up to a monthly maximum of
$10,000. Any such Long-Term disability benefits received by Xx. Xxxxx following
the termination of his employment as a result of his Permanent Disability (as
such term is defined in the Employment Agreement to which this Annex A is
attached) will be credited against the Company's obligations to continue Xx.
Xxxxx'x salary and bonus compensation as a result of his Permanent Disability.
401(k) PLAN
OfficeMax offers a Section 401(k) Plan to all Associates after one year of
service. Xx. Xxxxx is fully vested in his payroll deferrals to the Plan. The
Plan offers a company match of 50% of the first 3% of compensation contributed
by the Associate. The Plan is subject to non-discrimination rules which
currently limit Xx. Xxxxx'x maximum annual contribution below the annual maximum
allowed under the IRC. The Company does not offer any other retirement plans.
Page 22
