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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
BETWEEN
XXXXX X. XXXXXXXXX
AND
THE HOME DEPOT, INC.
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EMPLOYMENT AGREEMENT
BETWEEN
XXXXX X. XXXXXXXXX
AND
THE HOME DEPOT, INC.
TABLE OF CONTENTS
PAGE
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1. Employment....................................................................................................1
2. Period of Employment..........................................................................................1
3. Duties During the Period of Employment........................................................................1
3.1 Duties..............................................................................................1
3.2 Scope...............................................................................................1
4. Compensation and Other Payments...............................................................................1
4.1 Salary..............................................................................................1
4.2 Make Whole Payment..................................................................................2
4.3 Annual Bonus........................................................................................2
4.4 Annual Stock Option Grants..........................................................................3
5. Other Executive Benefits......................................................................................3
5.1 Vacation............................................................................................3
5.2 Regular Reimbursed Business Expenses................................................................3
5.3 Benefit Plans.......................................................................................3
5.4 Relocation..........................................................................................4
5.5 Perquisites.........................................................................................4
6. Termination...................................................................................................4
6.1 Death or Disability.................................................................................4
6.2 By the Company for Cause............................................................................5
6.3 By Executive for Good Reason........................................................................5
6.4 Other than for Cause or Good Reason.................................................................6
6.5 Notice of Termination...............................................................................6
6.6 Date of Termination.................................................................................6
7. Obligations of the Company Upon Termination...................................................................6
7.1 Termination by the Company for Cause or Resignation without Good Reason.............................8
7.2 Resignation with Good Reason; Change in Control; Termination without Cause; Death; Disability.......8
7.3 Retirement after Age Seventy-Two...................................................................10
7.4 COBRA Rights.......................................................................................10
8. Change in Control............................................................................................10
9. Mitigation...................................................................................................10
10. Indemnification.............................................................................................10
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11. Restricted Covenants........................................................................................12
11.1 Confidential Information..........................................................................12
11.2 Non-Compete and Non-Solicitation..................................................................12
12. Remedy for Violation of Section 11..........................................................................13
13. Withholding.................................................................................................13
14. Arbitration.................................................................................................13
15. Reimbursement of Legal Expenses.............................................................................14
16. Taxes.......................................................................................................14
17. Successors..................................................................................................15
18. Representations.............................................................................................15
19. Miscellaneous...............................................................................................16
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EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), by and between The Home Depot, Inc., a
Delaware corporation ("Company"), and Xxxxx X. Xxxxxxxxx ("Executive") is
effective as of April 2, 2001 (the "Effective Date"). In consideration of the
mutual covenants set forth herein, the Company and the Executive hereby agree
as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the
Executive, and the Executive agrees to serve the Company, in the capacities
described herein during the Period of Employment (as defined in Section 2 of
this Agreement), in accordance with the terms and conditions of this Agreement.
2. PERIOD OF EMPLOYMENT. The term "Period of Employment" shall
mean the period which commences on the Effective Date and, unless earlier
terminated pursuant to Section 6, ends on the third anniversary of the
Effective Date; provided, however, that the Period of Employment shall
automatically be extended on a day by day basis effective on and after the
first anniversary of the Effective Date (so that the remaining term shall
always be two (2) years) until such date as either the Company or the Executive
shall have terminated such automatic extension provision by giving written
notice to the other. The Executive's eligibility for employment with the
Company under this Agreement is contingent upon the Executive passing the
Company's normal drug screen.
3. DUTIES DURING THE PERIOD OF EMPLOYMENT.
3.1 DUTIES. During the Period of Employment, the
Executive shall be employed as the Executive Vice President - Secretary and
General Counsel of the Company. The Executive shall report directly to the
Company's Chief Executive Officer (the "CEO") and shall perform such duties as
the Executive shall reasonably be directed to perform by the CEO.
3.2 SCOPE. During the Period of Employment, and
excluding any periods of vacation and sick leave to which the Executive is
entitled, the Executive shall devote substantially all of his business time and
attention to the business and affairs of the Company. It shall not be a
violation of this Agreement for the Executive to (i) serve on corporate, civic
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach occasional courses or seminars at educational
institutions, or (iii) manage personal investments, so long as such activities
under clauses (i), (ii) and (iii) do not interfere, in any substantial respect,
with the Executive's responsibilities hereunder.
4. COMPENSATION AND OTHER PAYMENTS.
4.1 SALARY. During the Period of Employment, the Company
shall pay the Executive an annualized base salary of not less than five hundred
twenty-five thousand dollars ($525,000) per year (the "Base Salary"). The
Executive's Base Salary shall be paid in accordance with the Company's
executive payroll policy. The Base Salary shall be reviewed by the Compensation
Committee of the Board of Directors of the Company (the "Committee") as soon as
practicable after the end of each fiscal year during the Period of Employment,
beginning
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with the fiscal year ending on February 3, 2002. Based upon such reviews, the
Committee may increase, but shall not decrease, the Base Salary. Any increase
in Base Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement.
4.2 MAKE WHOLE PAYMENT. The Company shall grant the
Executive:
4.2.1 On the Effective Date, a ten (10)-year
stock option grant with respect to two hundred fifty thousand
(250,000) shares of the Company's stock, which shall vest and become
exercisable in equal sixty-two thousand, five hundred (62,500) share
increments on each of the second, third, fourth and fifth
anniversaries of the Effective Date, provided that each tranche shall
vest only if the Executive is employed by the Company on that
tranche's vesting date, except as provided in this Agreement. The
exercise price for this option shall be the closing price of the
Company's stock on the New York Stock Exchange (as reported in The
Wall Street Journal) on the grant date. This option grant shall be
subject to adjustment (in accordance with the terms of the Company's
1997 Omnibus Stock Incentive Plan) for stock splits, stock dividends,
and other similar changes in the Company's capitalization after the
grant date.
4.2.2 On the Effective Date, an award of deferred
restricted stock units corresponding to fifty thousand (50,000) shares
of Company stock. Such award shall vest in equal twelve thousand, five
hundred (12,500) share increments on each of the second, third, fourth
and fifth anniversaries of the Effective Date, provided that each
tranche shall vest only if the Executive is employed by the Company on
that tranche's vesting date, except as provided in this Agreement. On
the April 1 following the fifth anniversary of the Effective Date one
(1) share of stock for each deferrable restricted stock unit shall be
distributed to the Executive, unless such distribution, in whole or in
part, is further deferred by the Executive by December 31, 2005. The
Executive shall receive a dividend equivalent cash payment on all
vested deferred restricted stock units when dividends are paid to
shareholders. Unless otherwise agreed to by the Executive and the
Company, the Company shall, within ten (10) days after termination of
the Executive's employment for any reason, deliver to the Executive
one (1) share of Company stock for each vested deferred restricted
stock unit for which stock has not yet been distributed to the
Executive.
4.2.3 As soon as practicable after the Effective
Date, a lump-sum cash payment of two hundred fifty thousand dollars
($250,000).
4.3 ANNUAL BONUS. Beginning with the Company's fiscal
year ending on February 3, 2002, as soon as practicable after the end of each
fiscal year, the Committee shall review the Executive's performance under this
Agreement as part of Executive's participation under the appropriate bonus plan
of the Company as in effect from time to time. The Executive's annual bonus
shall be at a target of no less than sixty-five (65%) of the Executive's
then-current Base Salary (the "Target Amount") and a maximum of no less than
one-hundred percent (100%) of Executive's then-current Base Salary. The
Executive shall be paid his annual bonus no later than other senior executives
of the Company are paid their annual bonuses.
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Unless the Executive's employment is terminated by the Company for Cause or by
the Executive other than for Good Reason prior to the date on which annual
bonuses for the fiscal year ending February 3, 2002 are paid to other senior
executives of the Company, the Executive will receive for that fiscal year a
bonus of no less than the full Target Amount.
4.4 ANNUAL STOCK OPTION GRANTS.
4.4.1 On the Effective Date, the Committee shall
grant to the Executive ten (10)-year options for seventy thousand
(70,000) shares of Company stock. These options shall vest in four
equal increments of seventeen thousand, five hundred (17,500), with
one tranche vesting on each of the second, third, fourth and fifth
anniversaries of the grant date. This option grant shall be subject to
adjustment (in accordance with the terms of the Company's 1997 Omnibus
Stock Incentive Plan) for stock splits, stock dividends, and other
similar changes in the Company's capitalization after the grant date.
4.4.2 The Committee shall in 2002 and subsequent
calendar years grant to the Executive ten (10)-year options for shares
of Company stock. Such annual grants shall be consistent with
competitive pay practices generally and appropriate relative to awards
made to other senior executives of the Company; provided, however,
that each such annual grant shall be for at least seventy thousand
(70,000) shares of Company stock, subject to adjustment (in accordance
with the terms of the Company's 1997 Omnibus Stock Incentive Plan) for
stock splits, stock dividends, and other similar changes in the
Company's capitalization after the Effective Date. These option grants
shall vest in four equal increments, on each of the second, third,
fourth and fifth anniversaries of the grant date (the "Vesting
Scheme"); provided, however, that an annual option grant shall instead
vest pursuant to normal Company practice at the time of grant, so long
as such then-current practice is no slower than the Vesting Scheme.
Any annual option grant may vest subject to a different vesting
schedule, so long as such vesting schedule is no slower than the
faster of the Vesting Scheme or the then-current normal Company
practice at the time of such stock option grant.
5. OTHER EXECUTIVE BENEFITS.
5.1 VACATION. The Executive shall be entitled to six (6)
weeks vacation in each calendar year during the Period of Employment, prorated
for the period from the Effective Date through December 31, 2001.
5.2 REGULAR REIMBURSED BUSINESS EXPENSES. The Company
shall promptly reimburse the Executive for all expenses and disbursements
reasonably incurred by the Executive in the performance of his duties hereunder
during the Period of Employment.
5.3 BENEFIT PLANS. The Executive and his eligible family
members shall be entitled to participate immediately (except for the Company's
401(k) plan, in which the Executive shall be entitled to participate after
satisfying the one (1) year waiting period), on terms no less favorable to the
Executive than the terms offered to other senior executives of the
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Company who perform or have performed in the same capacity as the Executive, in
any group and/or executive life, hospitalization or disability insurance plan,
health program, profit sharing, 401(k) and similar benefit plans (qualified,
non-qualified and supplemental) or other fringe benefits (it being understood
that items such as stock options are not fringe benefits) of the Company
(collectively referred to as the "Benefits"). In the event that any health
programs or insurance policies applicable to the Benefits provided hereunder
contain a preexisting conditions limitation or a waiting period, the Company
shall reimburse the Executive for any COBRA premiums on a tax grossed-up basis.
Anything contained herein to the contrary notwithstanding, the Benefits
described herein shall not duplicate benefits made available to the Executive
pursuant to any other provision of this Agreement.
5.4 RELOCATION. The Company shall pay all costs of
relocation of the Executive and his family to the Atlanta metropolitan area in
accordance with the Company's relocation policy for senior executives
supplemented as follows:
5.4.1 The Company shall reimburse the Executive
for reasonable temporary living expenses for the Executive and his
family in the Atlanta metropolitan area for a period not to exceed
eight (8) months from the Effective Date (including reasonable travel
expenses for the Executive between his primary residence and the
Atlanta metropolitan area);
5.4.2 The Company shall reimburse the Executive
for reasonable travel and accommodation expenses for the Executive and
his family for up to six (6) house and/or school selection trips.
5.4.3 The Company will make available to the
Executive the opportunity to sell his present primary residence at
appraised value through a relocation firm mutually acceptable to the
Executive and the Company; and
5.4.4 All relocation payments and benefits will
be fully grossed-up for any applicable taxes.
5.5 PERQUISITES. The Company shall provide the Executive
such perquisites of employment as are commonly provided to other senior
executives of the Company.
6. TERMINATION.
6.1 DEATH OR DISABILITY. This Agreement and the Period
of Employment shall terminate automatically upon the Executive's death. If the
Company determines in good faith that the Disability of the Executive has
occurred (pursuant to the definition of "Disability" set forth below), it may
give to the Executive written notice of its intention to terminate the
Executive's employment. In such event, the Executive's employment with the
Company shall terminate effective on the thirtieth (30th) day after receipt by
the Executive of such notice given at any time after a period of one hundred
twenty (120) consecutive days of Disability or a period of one hundred eighty
(180) days of Disability within any twelve (12) consecutive months, and, in
either case, while such Disability is continuing ("Disability Effective Date");
provided that,
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within the thirty (30) days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" means the Executive's inability to substantially
perform his duties hereunder, with reasonable accommodation, as evidenced by a
certificate signed either by a physician mutually acceptable to the Company and
the Executive or, if the Company and the Executive cannot agree upon a
physician, by a physician selected by agreement of a physician designated by
the Company and a physician designated by the Executive; provided, however,
that if such physicians cannot agree upon a third physician within thirty (30)
days, such third physician shall be designated by the American Arbitration
Association. Until the Disability Effective Date, the Executive shall be
entitled to all compensation provided for under Section 4 hereof. It is
understood that nothing in this Section 6.1 shall serve to limit the Company's
obligations under Section 7.2 hereof.
6.2 BY THE COMPANY FOR CAUSE. During the Period of
Employment after the Effective Date, the Company may terminate the Executive's
employment immediately for "Cause." For purposes of this Agreement, "Cause"
shall mean that the Executive (i) has been convicted of a felony involving
theft or moral turpitude, (ii) has engaged in conduct that constitutes willful
gross neglect or willful gross misconduct with respect to the Executive's
employment duties which results in material economic harm to the Company, or
(iii) has engaged in willful conduct that constitutes a material violation of
any of the Company's (A) mutual attraction policy, (B) substance abuse policy,
or (C) compliance policies (each as shall be in place from time to time);
provided, however, that for the purposes of determining whether conduct
constitutes willful gross misconduct or willful conduct or whether neglect
constitutes willful gross neglect, no act or omission on Executive's part shall
be considered "willful" unless it is done by the Executive in bad faith and
without reasonable belief that the Executive's action or inaction was in the
best interests of the Company. Notwithstanding the foregoing, the Company may
not terminate the Executive's employment for Cause unless (a) a determination
that Cause exists is made and approved by a majority of the Company's Board of
Directors, (b) the Executive is given at least thirty (30) days' written notice
of the Board meeting called to make such determination, and (c) the Executive
and his legal counsel are given the opportunity to address such meeting.
6.3 BY EXECUTIVE FOR GOOD REASON. During the Period of
Employment, the Executive's employment hereunder may be terminated by the
Executive for Good Reason upon fifteen (15) days' written notice. For purposes
of this Agreement, "Good Reason" shall mean, without the Executive's consent:
6.3.1 Assignment to the Executive of any duties
inconsistent in any material respect with the Executive's position
(including status, offices, titles and reporting relationships),
authority, duties or responsibilities as contemplated by Section 3 of
this Agreement, or any other action by the Company which results in a
significant diminution in such position, authority, duties or
responsibilities, excluding any isolated and inadvertent action not
taken in bad faith and which is remedied by the Company within ten
(10) days after receipt of notice thereof given by the Executive;
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6.3.2 Any failure by the Company to comply with
any of the provisions of Section 4 or 5 of this Agreement other than
an isolated and inadvertent failure not committed in bad faith and
which is remedied by the Company within ten (10) days after receipt of
notice thereof given by the Executive;
6.3.3 The Executive being required to relocate to
a principal place of employment more than twenty-five (25) miles from
his principal place of employment with the Company in Atlanta,
Georgia, as of the Effective Date;
6.3.4 Delivery by the Company of a notice
discontinuing the automatic extension provision of Section 2 of this
Agreement; or
6.3.5 Any purported termination by the Company of
the Executive's employment otherwise than as expressly permitted by
this Agreement.
6.4 OTHER THAN FOR CAUSE OR GOOD REASON. The Executive
or the Company may terminate this Agreement for any reason other than for Good
Reason or Cause, respectively, upon thirty (30) days' written notice to the
Company or Executive, as the case may be. If the Executive terminates the
Agreement for any reason, he shall have no liability to the Company or its
subsidiaries or affiliates as a result thereof. If the Company terminates the
Agreement, or if the Agreement terminates because of the death of the
Executive, the obligations of the Company shall be as set forth in Section 7
hereof.
6.5 NOTICE OF TERMINATION. Any termination by the
Company or by the Executive shall be communicated by a Notice of Termination to
the other party hereto given in accordance with Section 19.2 of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written
notice which (i) indicates the specific termination provision in this Agreement
relied upon, (ii) sets forth in reasonable detail, if necessary, the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date. The failure by the Executive or Company
to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of the basis for termination shall not waive any right
of such party hereunder or preclude such party from asserting such fact or
circumstance in enforcing his or its rights hereunder.
6.6 DATE OF TERMINATION. "Date of Termination" means the
date specified in the Notice of Termination; provided, however, that if the
Executive's employment is terminated by reason of death or Disability, the Date
of Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION. The following
provisions describe the obligations of the Company to the Executive under this
Agreement upon termination of his employment. However, except as explicitly
provided in this Agreement, nothing in this Agreement shall limit or otherwise
adversely affect any rights which the Executive may have under applicable law,
under any other agreement with the Company, or under any compensation or
benefit plan, program, policy or practice of the Company.
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7.1 TERMINATION BY THE COMPANY FOR CAUSE OR RESIGNATION
WITHOUT GOOD REASON. In the event this Agreement terminates by reason of the
termination of the Executive's Employment by the Company for Cause or by reason
of the resignation of the Executive other than for Good Reason, the Company
shall pay to the Executive all Accrued Obligations (as defined below) in a lump
sum in cash within thirty (30) days after the Date of Termination. "Accrued
Obligations" shall mean, as of the Date of Termination, the sum of (i) the
Executive's Base Salary through the Date of Termination to the extent not
theretofore paid, (ii) except as otherwise previously requested by the
Executive, the amount of any bonus, incentive compensation, deferred
compensation and other cash compensation accrued by the Executive as of the
Date of Termination to the extent not theretofore paid and (iii) any vacation
pay, expense reimbursements and other cash entitlements accrued by the
Executive as of the Date of Termination to the extent not theretofore paid.
7.2 RESIGNATION WITH GOOD REASON; CHANGE IN CONTROL;
TERMINATION WITHOUT CAUSE; DEATH; DISABILITY. If (i) the Company shall
terminate the Executive's employment other than for Cause, (ii) the Executive
shall terminate his employment at any time for Good Reason or for any reason
within twelve (12) months after a Change in Control or (iii) the Executive's
employment shall terminate due to death or Disability, the Executive shall
receive in addition to the Accrued Obligations, the following:
7.2.1 Salary and Target Bonus continuation in
accordance with the normal pay practices of the Company for
twenty-four (24) months from the date of such termination;
7.2.2 Immediate full vesting in (i.e., full
exercisability for) any options previously granted and not yet vested
as of the Date of Termination, including but not limited to any such
options granted under subsection 4.2.1 or subsection 4.4, and
continued exercisability for the shorter of the original term of the
respective options or the third anniversary of the Date of
Termination;
7.2.3 Continued exercisability for all vested but
unexercised options as of the Date of Termination for the shorter of
the original term of the respective options or the third anniversary
of the Date of Termination;
7.2.4 Delivery of one (1) share of Company stock
for each deferred restricted stock unit awarded to the Executive for
which stock has not yet been distributed to the Executive, as provided
under subsection 4.2.2;
7.2.5 Immediate full vesting in all other
otherwise unvested shares of restricted stock of the Company, deferred
stock units or other equity-based awards (if any) previously awarded
to the Executive, with immediate termination of all restrictions on
such awards and continued exercisability (if applicable) for the
shorter of the original term or the third anniversary of the Date of
Termination;
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7.2.6 Receipt of any other compensation and
Benefits accrued or earned and vested (if applicable) by the Executive
as of the Date of Termination (but not duplicative of the Accrued
Obligations); and
7.2.7 For twenty-four (24) months after the
termination of the Executive's employment, the Company shall continue
welfare benefits to the Executive and/or the Executive's eligible
family members at least equal to those which would have been provided
to them in accordance with Section 5.3 of this Agreement if the
Executive's employment had not been terminated, including (but not by
way of limitation) health insurance and life insurance.
7.2.8 For purposes of this Agreement, a "Change
in Control" shall be deemed to have occurred if:
7.2.8.1 Any "person" (as defined in
Section 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), excluding for this
purpose, (i) the Company or any subsidiary of the Company, or
(ii) any employee benefit plan of the Company or any
subsidiary of the Company, or any person or entity organized,
appointed or established by the Company for or pursuant to
the terms of any such plan which acquires beneficial
ownership of voting securities of the Company, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly of securities of the
Company representing more than twenty percent (20%) of the
combined voting power of the Company's then outstanding
securities; provided, however, that no Change in Control will
be deemed to have occurred as a result of a change in
ownership percentage resulting solely from an acquisition of
securities by the Company; or
7.2.8.2 During any two (2) consecutive
years (not including any period beginning prior to April 2,
2001, individuals who at the beginning of such two (2) year
period constitute the Board of Directors of the Company and
any new director (except for a director designated by a
person who has entered into an agreement with the Company to
effect a transaction described elsewhere in this definition
of Change in Control) whose election by the Board or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved (such individuals and any
such new director being referred to as the "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board; or
7.2.8.3 Consummation of a reorganization,
merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the
individuals and entities who were
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the beneficial owners of outstanding voting securities of the
Company immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty
percent (50%) of the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the company
resulting from such Business Combination (including, without
limitation, a company which, as a result of such transaction,
owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the
outstanding voting securities of the Company; or
7.2.8.4 Approval by the stockholders of
the Company of a complete liquidation or dissolution of the
Company.
7.3 RETIREMENT AFTER AGE SEVENTY-TWO. Termination of the
Executive's employment due to involuntary retirement on or after the Executive
reaching age seventy-two (72) will not be a termination of employment covered
by Section 7.2.
7.4 COBRA RIGHTS. It is understood that the Executive's
rights under this Section 7 are in lieu of all other rights which the Executive
may otherwise have had upon termination of employment under this Agreement;
provided, however, that no provision of this Agreement is intended to adversely
affect the Executive's rights under the Consolidated Omnibus Budget
Reconciliation Act of 1985.
8. CHANGE IN CONTROL. In the event of a Change in Control of the
Company, (i) all prior grants to the Executive of stock options, restricted
stock, deferred restricted stock units or other equity-based awards (including,
but not limited to, grants under subsections 4.2.1, 4.2.2, and 4.4) shall
become fully vested and exercisable (and, if subject to a term for exercise,
shall remain exercisable through the end of their original terms); and (ii) the
Executive shall be entitled to receive any other Change-in-Control protection
applicable to other senior executives of the Company, except to the extent that
the application thereof would reduce the Executive's rights or benefits under
this Agreement.
9. MITIGATION. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement.
Any severance benefits payable to the Executive shall not be subject to
reduction for any compensation received from other employment.
10. INDEMNIFICATION. The Company shall maintain, for the benefit
of the Executive, director and officer liability insurance in form at least as
comprehensive as, and in an amount that is at least equal to, that maintained
by the Company on the Effective Date. In addition, the Executive shall be
indemnified by the Company against liability as an officer of the Company and
any subsidiary or affiliate of the Company to the maximum extent permitted by
applicable law. The Executive's rights under this Section 10 shall continue so
long as he may be subject to such liability, whether or not this Agreement may
have terminated prior thereto.
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11. RESTRICTED COVENANTS.
11.1 CONFIDENTIAL INFORMATION. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company, or any of
its subsidiaries, affiliates and businesses, which shall have been obtained by
the Executive pursuant to his employment by the Company or any of its
subsidiaries and affiliates and which shall not have become public knowledge
(other than by acts by the Executive or his representatives in violation of
this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Subsection 11.1 constitute a basis
for deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.
11.2 NON-COMPETE AND NON-SOLICITATION. During the Period
of Employment and for a period of two (2) years immediately thereafter, the
Executive covenants and agrees as follows:
11.2.1 He shall not, without the prior written
consent of the Company, Participate (as defined below) in the
management of the following entities and each of their subsidiaries:
- Xxxx'x Companies, Inc. (including,
but not limited to, Eagle Hardware
and Garden);
- Hechinger Investment Company, Inc.
(including, but not limited to,
Home Quarters, Hechinger, and
Builder's Square);
- Payless Cashways, Inc.;
- Sears (including, but not limited
to, Orchard Supply and Hardware
Company);
- Home Base, Inc.; and
- Xxxxxx, Inc.
For purposes of this subsection 11.2.1 "Participate"
shall mean: (A) holding a position in which the Executive directly
manages such a business entity; (B) holding a position in which anyone
else who directly manages such a business entity is in the Executive's
reporting chain or chain-of-command, regardless of the number of
reporting levels between them; or (C) providing input, advice,
guidance, or suggestions regarding the management of such a business
entity to anyone responsible therefor.
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11.2.2 He shall not directly or indirectly solicit
or encourage any employee of the Company who was an employee of the
Company as of the Executive's Date of Termination, to leave the
Company or accept any position with any other entity.
11.2.3 He shall not directly or indirectly contact
any then-existing customers or vendors of the Company for the purpose
of soliciting or encouraging such customers or vendors to alter their
relationship with the Company in any way that would be adverse to the
Company.
12. REMEDY FOR VIOLATION OF SECTION 11. The Executive
acknowledges that the Company has no adequate remedy at law and will be
irreparably harmed if the Executive breaches or threatens to breach the
provisions of Subsections 11.1, 11.2.1, 11.2.2 or 11.2.3 of this Agreement,
and, therefore, agrees that the Company shall be entitled to injunctive relief
to prevent any breach or threatened breach of such Section and that the Company
shall be entitled to specific performance of the terms of such Section in
addition to any other legal or equitable remedy it may have. Nothing in this
Agreement shall be construed as prohibiting the Company from pursuing any other
remedies at law or in equity that it may have or any other rights that it may
have under any other agreement.
13. WITHHOLDING. Anything in this Agreement to the contrary
notwithstanding, all payments required to be made by the Company hereunder to
the Executive shall be subject to withholding, at the time payments are
actually made to the Executive and received by him, of such amounts relating to
taxes as the Company may reasonably determine it should withhold pursuant to
any applicable law or regulation. In lieu of withholding such amounts, in whole
or in part, the Company may, in its sole discretion, accept other provision for
payment of taxes as required by law, provided that it is satisfied that all
requirements of law as to its responsibilities to withhold such taxes have been
satisfied.
14. ARBITRATION. Any dispute or controversy between the Company
and the Executive, whether arising out of or relating to this Agreement, the
breach of this Agreement, or otherwise, 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 the Executive, 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, either party may, without inconsistency with this
arbitration provision, apply to any court 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, 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 the
Executive. The Company and the Executive
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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 Atlanta, Georgia or such other location to
which the parties may agree. The Company shall pay the costs of any arbitrator
appointed hereunder.
15. REIMBURSEMENT OF LEGAL EXPENSES. In the event that the
Executive is successful, whether in mediation, arbitration or litigation, in
pursuing any claim or dispute involving the Executive's employment with the
Company, including any claim or dispute relating to (i) this Agreement, (ii)
termination of the Executive's employment with the Company or (iii) the failure
or refusal of the Company to perform fully in accordance with the terms hereof,
the Company shall promptly reimburse the Executive for all costs and expenses
(including, without limitation, attorneys' fees) relating solely, or allocable,
to such successful claim. In any other case, the Executive and the Company
shall each bear all their own respective costs and attorneys' fees.
16. TAXES. In the event that the aggregate of all payments or
benefits made or provided to, or that may be made or provided to, the Executive
under this Agreement and under all other plans, programs and arrangements of
the Company (the "Aggregate Payment") is determined to constitute a "parachute
payment," as such term is defined in Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended, the Company shall pay to the Executive, prior to the
time any excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended ("Excise Tax") is payable with respect to such Aggregate
Payment, an additional amount which, after the imposition of all income and
excise taxes thereon, is equal to the Excise Tax on the Aggregate Payment. The
determination of whether the Aggregate Payment constitutes a parachute payment
and, if so, the amount to be paid to the Executive and the time of payment
pursuant to this Section 16 shall be made by an independent auditor (the
"Auditor") jointly selected by the Company and the Executive and paid by the
Company. The Auditor shall be a nationally recognized United States public
accounting firm which has not, during the two (2) years preceding the date of
its selection, acted in any way on behalf of the Company or any affiliate
thereof. If the Executive and the Company cannot agree on the firm to serve as
the Auditor, then the Executive and the Company shall each select one
accounting firm and those two firms shall jointly select the accounting firm to
serve as the Auditor. Notwithstanding the foregoing, in the event that the
amount of the Executive's Excise Tax liability is subsequently determined to be
greater than the Excise Tax liability with respect to which an initial payment
to the Executive under this Section 16 has been made, the Company shall pay to
the Executive an additional amount with respect to such additional Excise Tax
(and any interest and penalties thereon) at the time and in the amount
determined by the Auditor so as to make the Executive whole, on an after-tax
basis, with respect to such Excise Tax (and any interest and penalties thereon)
and such additional amount paid by the Company. In the event the amount of the
Executive's Excise Tax liability is subsequently determined to be less than the
Excise Tax liability with respect to which an initial payment to the Executive
has been made, the Executive shall, as soon as practical after the
determination is made, pay to the Company the amount of the overpayment by the
Company, reduced by the amount of any relevant taxes already paid by the
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Executive and not refundable, all as determined by the Auditor. The Executive
and the Company shall cooperate with each other in connection with any
proceeding or claim relating to the existence or amount of liability for Excise
Tax, and all expenses incurred by the Executive in connection therewith shall
be paid by the Company promptly upon notice of demand from the Executive.
17. SUCCESSORS.
17.1 This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
heirs and legal representatives.
17.2 This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
17.3 The Company shall require any successor (whether
direct or indirect, by purchase, merger, reorganization, consolidation,
acquisition of property or stock, liquidation, or otherwise) to all or a
substantial portion of its business and/or assets, by agreement in form and
substance reasonably satisfactory to the Executive, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform this Agreement if no such succession
had taken place. Regardless of whether such an agreement is executed, this
Agreement shall be binding upon any successor of the Company in accordance with
the operation of law, and such successor shall be deemed the "Company" for
purposes of this Agreement.
17.4 As used in this Agreement, the term "Company" shall
include any successor to the Company's business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of law, or
otherwise.
18. REPRESENTATIONS.
18.1 The Company represents and warrants that (i) the
execution of this Agreement has been duly authorized by the Company, including
action of the Board and Committee, (ii) the execution, delivery and performance
of this Agreement by the Company does not and will not violate any law,
regulation, order, judgment or decree or any agreement, plan or corporate
governance document of the Company and (iii) upon the execution and delivery of
this Agreement by the Executive, this Agreement shall be the valid and binding
obligation of the Company, enforceable in accordance with its terms, except to
the extent enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights generally and by
the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
18.2 The Executive represents and warrants to the Company
that (i) the execution, delivery and performance of this Agreement by the
Executive does not and will not violate any law, regulation, order, judgment or
decree or any agreement to which the Executive
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is a party or by which he is bound, (ii) the Executive is not a party to or
bound by any employment agreement, noncompetition agreement or confidentiality
agreement with any person or entity that would interfere with this Agreement or
his performance of services hereunder, and (iii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid
and binding obligation of the Executive, enforceable in accordance with its
terms, except to the extent enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the effect of general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at law).
19. MISCELLANEOUS.
19.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, without reference to
principles of conflicts of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
19.2 All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party, by
overnight courier, or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: Xxxxx X. Xxxxxxxxx
00 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
If to the Company: The Home Depot, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
or to such other address as either of the parties shall have furnished to the
other in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
19.3 None of the provisions of this Agreement shall be
deemed to impose a penalty.
19.4 The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
19.5 Any party's failure to insist upon strict compliance
with any provision hereof shall not be deemed to be a waiver of such provision
or any other provision hereof.
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19.6 This Agreement supersedes any prior employment
agreement or understandings, written or oral between the Company and the
Executive and contains the entire understanding of the Company and the
Executive with respect to the subject matter hereof.
19.7 This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates written below.
THE HOME DEPOT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxxx
Chief Executive Officer
Date: April 2, 2001
----------------------------------------
XXXXX X. XXXXXXXXX
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Date: April 2, 2001
----------------------------------------
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