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Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of May 17, 1998 between Office
Depot, Inc., a Delaware corporation (the "COMPANY"), and Bruce Nelson
("EXECUTIVE").
In consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT
The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in paragraph 4 hereof (the "Employment Term").:
2. POSITION AND DUTIES
(a) During the Employment Period, Executive shall serve as a
CEO and President of Viking Products, Inc. and shall have the normal duties,
responsibilities and authority of an Executive Officer of the Company, subject
to the power of the Company's chief executive officer ("CEO") to expand or
limit such duties, responsibilities and authority.
(b) Executive shall devote Executive's best efforts and
Executive's full business time and attention (except for permitted vacation
periods and reasonable periods of illness or other incapacity) to the business
and affairs of the Company and its Subsidiaries; PROVIDED THAT Executive shall,
with the prior approval of the CEO, be allowed to serve as (i) a director or
officer of any non-profit organization including trade, civic, educational or
charitable organizations, or (ii) a director of any corporation which is not
competing with the Company or any of its Subsidiaries in the office product and
office supply industry so long as such duties do not materially interfere with
the performance of Executive's duties or responsibilities under this Agreement.
Executive shall perform Executive's duties and responsibilities under this
Agreement to the best of Executive's abilities in a diligent, trustworthy,
businesslike and efficient manner.
(c) For purposes of this Agreement, "SUBSIDIARIES" shall mean
any corporation of which the securities having a majority of the voting power
in electing directors are, at the time of determination, owned by the Company,
directly or through one or more Subsidiaries.
3. BASE SALARY AND BENEFITS
(a) Initially, Executive's base salary shall be $600,000 per
annum (the "BASE SALARY"), which salary shall be payable in regular
installments in accordance with the Company's general payroll practices and
shall be subject to customary withholding. Executive's Base Salary shall be
reviewed at least annually by the CEO and shall be subject to adjustment as the
CEO shall determine based on among other things, market practice and
performance. In addition,
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during the Employment Term, Executive shall be entitled to participate in
certain of the Company's long term incentive programs established currently or
in the future by the Company for which officers of the Company then at
Executive's level are generally eligible (including, but not limited to, stock
option, restricted stock, performance unit/share plans or long-term cash
plans).
(b) In addition to the Base Salary, Executive shall be
entitled to participate in the Company's Management Incentive Plan (the "Bonus
Plan") as administered by the Compensation Committee. If the Compensation
Committee (or the Company's Board of Directors (the "Board")) modifies such
Bonus Plan during the Employment Term, Executive shall continue to participate
at a level no lower than the highest established for any officer of the Company
then at Executive's level.
(c) Executive shall be entitled to paid vacation in
accordance with the Company's general payroll practices for officers of the
Company then at Executive's level.
(d) The Company shall reimburse Executive for all reasonable
expenses incurred by Executive in the course of performing Executive's duties
under this Agreement which are consistent with the Company's policies in effect
from time to time with respect to travel, entertainment and other business
expenses, subject to the Company's requirements with respect to reporting and
documentation of such expenses.
(e) Executive will be entitled to all benefits currently or
in the future maintained for officers of the Company then at Executive's level,
including without limitation: medical and dental insurance, life insurance and
short-term and long-term disability insurance, supplemental health and life
insurance, profit sharing and retirement benefits.
4. TERM
(a) The Employment Term shall end on the second anniversary
of the Merger (as defined in the Agreement and Plan of Merger among Office
Depot, Inc., VK Acquisition Corp. and Viking Office Products Inc. dated May
17,1998; PROVIDED THAT (i) the Employment Term shall be extended for one year
in the event that written notice of the termination of this Agreement is not
given by one party hereof to the other at least six months prior to the end of
the Employment Term; PROVIDED FURTHER that (ii) the Employment Term shall
terminate prior to such date (A) upon Executive's death or permanent disability
or incapacity (as determined by the Board in its good faith judgment), (B) upon
the mutual agreement of the Company and Executive, (C) by the Company's
termination of this Agreement for Cause (as defined below) or without Cause or
(D) by Executive's termination of this Agreement for Good Reason (as defined
below) or without Good Reason.
(b) If the Employment Term is terminated by the Company
without Cause or is terminated by the Executive for Good Reason, Executive (and
Executive's family with respect to clause (iii) below) shall be entitled to
receive (i) Executive's Base Salary through the second anniversary of such
termination and Executive's Pro Rata Bonus, if and only if Executive has not
breached the provisions of paragraph 5, 6 and 7 hereof, (ii) vested and earned
(in accordance with
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the Company's applicable plan or program) but unpaid amounts under incentive
plans, health and welfare plans, deferred compensation plans, and other
employer programs of the Company which Executive participates (other than the
Pro Rata Bonus) and (iii) life insurance and medical insurance through the
second anniversary of such termination pursuant to the Company's insurance
programs to the extent Executive participated immediately prior to the date of
such termination; PROVIDED THAT the insurance Executive or Executive's family
is entitled to pursuant to this clause (iii) shall be reduced by the amount of
any such insurance Executive or Executive's family is entitled to receive as a
result of any other employment. The amounts payable pursuant to paragraph
4(b)(i) and (ii) shall be payable, at the Company's discretion, in one lump sum
payment within 30 days following termination of the Employment Term or in any
other manner consistent with the Company's normal payment policies.
(c) If the Employment Term is terminated by the Company for
Cause or by the Executive without Good Reason, Executive shall be entitled to
receive (i) Executive's Base Salary through the date of such termination and
(ii) vested and earned (in accordance with the Company's applicable plan or
program) but unpaid amounts under incentive plans, health and welfare plans,
deferred compensation plans, and other employer programs of the Company which
Executive participates; provided, however, Executive shall not be entitled to
payment of a Pro Rata Bonus.
(d) If the Employment Term is terminated upon Executive's
death or permanent disability or incapacity (as determined by the Board in its
good faith judgment), Executive, or Executive's estate if applicable, shall be
entitled to receive the sum of (i) Executive's Base Salary through the date of
such termination and (ii) vested and earned (in accordance with the Company's
applicable plan or program) but unpaid amounts under incentive plans, health
and welfare plans, deferred compensation plans, and other employer programs of
the Company which Executive participates. The amount payable pursuant to this
paragraph 4(d) shall be payable, at the Company's discretion, in one lump sum
payment within 30 days following termination of the Employment Term or in any
other manner consistent with the Company's normal payment policies.
(e) Except as otherwise provided herein, fringe benefits and
bonuses hereunder (if any) which accrue or become payable after the termination
of the Employment Term shall cease upon such termination.
(f) For purposes of the Agreement, Agreement, "CAUSE" shall
mean:
(i) the willful and continued failure of the
Executive to perform substantially the Executive's duties with the
Company or one of its affiliates (other than any such failure
resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the
Executive by the Board or the CEO which specifically identifies the
manner in which the Board or the CEO believes that the Executive has
not substantially performed the Executive's Duties, or
(ii) the willful engaging by the Executive in
illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company.
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For purposes of this provision, no act of failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive's action or omission was in the
best interest of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the CEO or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interest of
the Company.
(g) For purposes of this Agreement, "GOOD REASON" shall mean
a material breach by the Company of a material provision of this Agreement
which has not been cured by the Company within thirty (30) days after written
notice of noncompliance has been given by Executive to the Company.
(h) For purposes of the Agreement, "PRO RATA BONUS" shall
mean the sum of (i) the pro rata portion (calculated as if the "target" amount
under such plan has been reached) under any current annual incentive plan from
the beginning of the year of termination through the date of termination and
(ii) if and to the extent Executive is vested, the pro rata portion (calculated
as if the "target" amount under such plan has been reached) under any long-term
incentive plan or performance plan from the beginning of the period of
determination through the date of termination.
5. CONFIDENTIAL INFORMATION. Executive acknowledges that the
information, observations and data obtained by Executive while employed by the
Company and its Subsidiaries concerning the business or affairs of the Company
or any other Subsidiary ("CONFIDENTIAL INFORMATION") are the property of the
Company or such Subsidiary. Therefore, Executive agrees that Executive shall
not disclose to any unauthorized person or use for Executive's own purposes any
Confidential Information without the prior written consent of the Board or the
CEO, unless and to the extent that the aforementioned matters become generally
known to and available for use by the public other than as a result of
Executive's acts or omissions. Executive shall deliver to the Company at
termination of the Employment Term, or at any other time the Company may
request, all memoranda, notes, plans, record, reports, computer tapes,
printouts and software and other documents and data (and copies therein) in any
form or medium relating to the Confidential Information, Work Product (as
defined below) or the business of the Company or any Subsidiary that Executive
may then possess or have under Executive's control.
6. INVENTIONS AND PATENTS. Executive acknowledges that all
inventions, innovations, improvements, development, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) that relate to the Company's or any of its Subsidiaries' actual or
anticipated business, research and development or existing or future products
or services and that are conceived, developed or made by Executive while
employed by the Company and its Subsidiaries ("WORK PRODUCT") belong to the
Company or such Subsidiary. Executive shall promptly disclose such Work Product
to the Board or the CEO and perform all actions reasonably requested by the
Board or the CEO (whether during or after the Employment
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Term) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
7. NON-COMPETE, NON-SOLICITATION.
(a) In further consideration of the compensation to be paid
to Executive hereunder, Executive acknowledges that in the course of
Executive's employment with the Company Executive shall become familiar with
the Company's trade secrets and with other Confidential Information concerning
the Company and its Subsidiaries and that Executive's services shall be of
special, unique and extraordinary value to the Company and its Subsidiaries.
Therefore, Executive agrees that, during the Employment Term and for one year
thereafter (the "NONCOMPETE PERIOD"), Executive shall not directly or
indirectly own any interest in, manage, control, participate in, consult with,
render services for, or in any manner engage in any business competing with the
businesses of the Company or its Subsidiaries, as such businesses exist or are
in process on the date of the termination of Executive's employment, within any
geographical area in which the Company or its Subsidiaries engage or plan to
engage in such businesses. Nothing herein shall prohibit Executive from being a
passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.
(b) During the Noncompete Period, Executive shall not
directly or indirectly through another entity (i) induce or attempt to induce
any employee of the Company or any Subsidiary to leave the employ of the
Company or such Subsidiary, or in any way interfere with the relationship
between the Company or any Subsidiary and any employee thereof, (ii) hire any
person who was an employee of the Company or any Subsidiary at any time during
the Employment Term or (iii) induce or attempt to induce any customer,
supplier, licensee, licensor, franchisee or other business relation of the
Company or any Subsidiary to cease doing business with the Company or such
Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
Subsidiary (including, without limitation, making any negative statements or
communications about the Company or its Subsidiaries).
(c) If, at the time of enforcement of this paragraph 7, a
court shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained in this paragraph 7 are
reasonable.
(d) In the event of the breach or a threatened breach by
Executive of any of the provisions of this paragraph 7, the Company, in
addition and supplementary to other rights and remedies existing in its favor,
may apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent
any violations for the provisions hereof (without posting a bond or other
security). In addition, in the event of any alleged breach or violation by
Executive of this paragraph 7, the Noncompete Period shall be tolled until such
breach or violation has been duly cured.
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8. EXECUTIVE'S REPRESENTATIONS. Executive hereby represents
and warrants to the Company that (i) the execution, delivery and performance of
this Agreement by Executive do not and shall not conflict with, breach, violate
or cause a default under any contract, agreement, instrument, order, judgment
or decree to which Executive is a party or by which Executive is bound, (ii)
Executive is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity and
(iii) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Executive, enforceable
in accordance with its terms. Executive hereby acknowledges and represents that
Executive has had an opportunity to consult with independent legal counsel
regarding Executive's rights and obligations under this Agreement and that
Executive fully understands the terms and conditions contained herein.
9. SURVIVAL. Paragraphs 5, 6 and 7 and paragraphs 9 through
16 shall survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Term.
10. NOTICES. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed by first
class mail, return receipt requested, to the recipient at the address below
indicated:
NOTICE TO EXECUTIVE:
Name: Bruce Nelson
Address: 67 Marguerite
Rancho Palos Verdes, CA 90274
NOTICE TO THE COMPANY:
Office Depot, Inc.
2200 Germantown Road
Delray Beach, Florida 33445
Attention: Chief Financial Officer
and
Office Depot, Inc.
2200 Germantown Road
Delray Beach, Florida 33445
Attention: Executive Vice President - Human Resources
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered or mailed.
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11. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not effect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
12. COMPLETE AGREEMENT. This Agreement and those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
in any way.
13. NO STRICT CONSTRUCTION. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be
applied against any party.
14. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
15. SUCCESSORS AND ASSIGNS. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive, the Company
and their respective heirs, successors and assigns, except that Executive may
not assign Executive's rights or delegate Executive's obligations hereunder
without the prior written consent of the Company.
16. CHOICE OF LAW. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Florida, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
17. AMENDMENT AND WAIVER. The provisions of this Agreement
may be amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
OFFICE DEPOT, INC.
By: /s/ Thomas Kroeger
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Name: Thomas Kroeger
Its: Executive Vice President -
Human Resources
EXECUTIVE
/s/ Bruce Nelson
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Name: Bruce Nelson