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Exhibit 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BETWEEN
OFFICEMAX, INC.
AND
XXXXXXX XXXXX
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"Agreement") is entered into as of the 13th day of October, 1998, between
OFFICEMAX, INC., an Ohio corporation (the "Company"), and XXXXXXX XXXXX
("Executive").
W I T N E S S E T H :
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WHEREAS, the Company and Executive are parties to an Amended
and Restated Employment Agreement entered into as of March 5, 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 October 13,
1998,
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereby agree as follows:
1. Employment.
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(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
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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 term as a
member of the Case Western Reserve University Xxxxxxxxxxx School of Management
Visiting Committee.
2. Term and Positions.
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(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 t he 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
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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 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).
(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 fifteen (15) 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 fifteen (15) day period.
(e) The term "Change in Control" means the first to occur of the
following events:
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- (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.
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(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 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.
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(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).
4. Salary and Bonus; Payment in the Event of Death.
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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.
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(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
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on 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 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.
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(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.
(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
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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.
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Executive shall participate in all retirement and other benefit plans of the
Company (both qualified and nonqualified) generally available to 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.
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(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.
8. Termination.
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(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
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(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 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
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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 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 one death or Cause, in
addition to whatever other rights or remedies Executive may have against the
Company as a result of such termination, 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 the greater of
(i) the bonus compensation paid or payable to Executive in respect of the Fiscal
Year immediately preceding the Fiscal Year during which such termination occurs
or (ii) the average of the bonus compensation paid or payable to Executive in
respect of each of the three (3) Fiscal Years immediately preceding the Fiscal
Year during which such termination occurs.
(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
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
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discharging his duties within thirty (30) days after the date of such statement,
such Permanent Disability shall be deemed to have occurred.
9. Reimbursement.
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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.
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(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 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
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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 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.
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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
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withholding taxes in excess of all cash payments due Executive at the time such
withholding is required to be made by the Company.
12. Severable Provisions.
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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.
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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
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(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 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.
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15. Notices.
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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.
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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.
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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.
18. Governing Law.
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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.
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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.
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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
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Xxxx X. Xxxxxxx
Secretary
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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ANNEX A
Benefits Summary for Xx. Xxxxx
MEDICAL INSURANCE
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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
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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
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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.
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
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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.
