Separation Agreement & Release - Home Depot USA Inc. and Dennis J. Carey
SEPARATION AGREEMENT & RELEASE
This is an Agreement between Home Depot U.S.A., Inc. (hereinafter
"Home Depot" or the "Company") and Dennis J. Carey (the "Executive").
WHEREAS, the Company and the Executive intend the terms and conditions
of this Agreement to govern all issues related to the Executive's employment
and termination from the Company; and,
WHEREAS, the Executive acknowledges that he has been given a
reasonable period of time, up to and including twenty-one (21) days, to
consider the terms of this Agreement; and,
WHEREAS, the Company advises the Executive to consult with a lawyer
before signing this Agreement; and,
WHEREAS, the Executive acknowledges that the consideration provided
him under this Agreement is sufficient to support the releases provided by him
under this Agreement; and,
WHEREAS, the Executive represents that he has not filed any charges,
claims or lawsuits against the Company involving any aspect of his employment
which have not been terminated as of the date of this Agreement; and,
WHEREAS, the Executive understands that the Company regards the
representations by him as material and that the Company is relying on these
representations in entering into this Agreement,
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Employment Status and Termination Date. The Executive will provide
services at the direction of the Chief Executive Officer and/or the Executive
Vice President of Strategy, Business Development and Corporate Operations from
April 1, 2002 until September 30, 2002. The Executive will maintain his current
salary and benefits during this time. The Executive will be placed on a paid
Leave of Absence ("LOA") commencing on September 30, 2002 and extending through
September 30, 2003. Executive's last day of employment will be September 30,
2003 ("Termination Date"), or as otherwise provided in Paragraph 10 (Breach by
Executive) below. Executive shall not accrue any vacation days or credit
subsequent to September 30, 2002.
2. Annual Salary. Executive shall continue at his current salary level
during the paid LOA.
3. Annual Bonus. Executive will receive a bonus of $300,000 for Fiscal
Year 2001 and $600,000 for Fiscal Year 2002, such payments to be paid at the
same time as the Company normally pays its other officers their bonuses for
those respective years. Executive will not receive or be eligible for any other
bonus payments of any kind, including any bonus payments relating to Fiscal
Year 2003.
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4. Benefits. The Executive will be eligible to continue to participate in
the Company's Executive benefit plans and programs during the paid LOA.
5. Stock Options.
(a) All of Executive's outstanding, non-vested stock options will
vest in accordance with the terms of the original grant
except that none of such options shall vest after the
Termination Date. All of Executive's vested stock options
must be exercised within 90 days of the Termination Date.
(b) On the Termination Date, the restrictions on all of
Executive's outstanding shares of restricted stock will lapse
immediately.
(c) Executive shall not be eligible to receive any other
equity-based awards after the Effective Date set forth in
Paragraph 17.
6. Outplacement Services. The Company shall provide outplacement services
for the Executive during the paid LOA. Such services shall be provided through
an agency selected by the Company. The Company shall also reimburse Executive
for the reasonable expenses for up to four (4) trips during the paid LOA for
job search purposes, pursuant to the Company's standard expense reimbursement
policies. The expenses for each trip may not exceed $2,500. To be eligible to
receive this reimbursement, Executive must not receive reimbursement from other
parties for the trip(s) and Executive must submit documentation of the expenses
in a form acceptable to the Company.
7. Release of Claims. The Executive and his heirs, assigns, and agents
release, waive and discharge the Company and its past and present directors,
officers, employees, parents, subsidiaries, affiliates, related entities, and
agents from each and every claim, action or right of any sort, known or
unknown, arising on or before the Effective Date.
(a) The foregoing release includes, but is not limited to, any
claim of discrimination on the basis of race, sex, religion,
sexual orientation, national origin, disability, age, or
citizenship status; any other claim based on any local,
state, or federal prohibition, including but not limited to
claims under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act of 1967, as
amended, or the Americans With Disabilities Act; any claim
arising out of or related to any alleged express or implied
employment contract, any other alleged contract affecting
terms and conditions of employment, or an alleged covenant of
good faith and fair dealing; or any claim for severance pay,
bonus, salary, sick leave, stocks, attorneys' fees, holiday
pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit, workers' compensation
or disability.
(b) The Executive represents that he understands the foregoing
release, that rights and claims under the Age Discrimination
in Employment Act of 1967, as amended, are among the rights
and claims against the Company he is releasing, and that he
understands that he is not presently releasing any future
rights or claims that might arise after the Effective Date.
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(c) The Executive further agrees never to sue the Company or
cause the Company to be sued regarding any matter within the
scope of the above release. If the Executive violates this
Release by suing the Company or causing the Company to be
sued, the Company may recover all damages as allowed by law,
including all costs and expenses, including reasonable
attorneys' fees, incurred by the Company in defending against
the suit.
8. Confidential Information. The Executive acknowledges that through his
employment with the Company he has acquired and had access to the Company's
confidential and proprietary business information and trade secrets. The
Executive agrees that the Company may prevent the use or disclosure of its
confidential information and proprietary business information and trade secrets
and acknowledges that the Company has taken all reasonable steps necessary to
protect the secrecy of the information. "Confidential Information" shall
include any data or information that is valuable to the Company and not
generally known to competitors of the Company or other outsiders, regardless of
whether the confidential information is in printed, written or electronic form,
retained in the Executive's memory or has been compiled or created by the
Executive. This includes, but is not limited to: technical, financial,
personnel, staffing, payroll, computer systems, marketing, advertising,
merchandising, product, vendor, customer or store planning data, trade secrets,
or other information similar to the foregoing. The Executive agrees that he has
not and in the future will not use or disclose to any third party Confidential
Information, unless compelled by law and after notice to the Company, and
further agrees to return all documents, disks, or any other item or source
containing Confidential Information, or any other Company property, to the
Company on or before September 30, 2002. If the Executive has any question
regarding what data or information would be considered by the Company to be
information subject to this provision, the Executive agrees to contact the
Executive Vice President, Human Resources for written clarification.
9. Non-Competition and Non-Solicitation.
(a) The Executive agrees that he will not, prior to October 1,
2006, enter into or maintain an employment or contractual
relationship, either directly or indirectly, to provide
financial, executive or managerial services in the same or
similar manner as he did for the Company to any company or
entity engaged in any way in a business that competes
directly or indirectly with the Company, its parents,
subsidiaries, affiliates or related entities, in the United
States, Canada, Puerto Rico, Mexico, or any other location in
which the Company, its parents, subsidiaries, affiliates or
related entities currently conduct business or may conduct
business prior to October 1, 2006, without the prior written
consent of the Company. Businesses that compete with the
Company specifically include, but are not limited to, the
following entities and each of their subsidiaries,
affiliates, assigns, or successors in interest: Lowe's
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.; Dekor; Sears
(including, but not limited to, Orchard Supply and Hardware
Company); Wal-Mart; Home Base, Inc; and Menard, Inc.
(b) In the event the Executive wishes to enter into any
relationship or employment prior to October 1, 2006 which
would be covered by the above non-compete provision,
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Executive agrees to request written permission from the
Executive Vice President, Human Resources of the Company
prior to entering any such relationship or employment. The
Company may approve or not approve of the relationship or
employment at its absolute discretion.
(c) The Executive agrees that prior to October 1, 2006, he will
not directly or indirectly solicit any person who is an
employee of the Company to terminate his or her relationship
with the Company without prior written approval from the
Executive Vice President, Human Resources of the Company.
10. Breach by Executive. The Company's obligations to the Executive under
this Agreement are contingent on Executive's performance of his obligations
under this Agreement. Any material breach by Executive of this Agreement will
result in the immediate cancellation of all Executive's stock options and
shares of restricted stock, the immediate termination of Executive's
employment, as well as entitle the Company to all its other remedies allowed in
law or equity, including but not limited to the return of any payments that it
made to Executive under this Agreement and the return to the Company of any
proceeds Executive received from stock options exercised after April 1, 2002 or
from shares of restricted stock.
11. Executive Availability.
(a) During the paid LOA, the Executive agrees to make himself
reasonably available to the Company to respond to requests by
the Company for information pertaining to or relating to the
Company and/or the Company's affiliates, subsidiaries,
agents, officers, directors or employees which may be within
the knowledge of the Executive.
(b) At all times, including after the Termination Date, Executive
agrees to cooperate fully with the Company in connection with
any and all existing or future litigation, charges, or
investigations brought by or against the Company or any of
its past or present affiliates, agents, officers, directors
or employees, whether administrative, civil or criminal in
nature, in which and to the extent the Company deems the
Executive's cooperation necessary.
(c) In conjunction with Executive's commitments under subsections
(a) or (b) of this paragraph, the Company will reimburse the
Executive for reasonable out-of-pocket expenses incurred as a
result of such cooperation.
12. Non-Disparagement. The Executive agrees that he will not make or cause
to be made any statements that disparage, are inimical to, or damage the
reputation of the Company or any of its past or present affiliates,
subsidiaries, agents, officers, directors or employees. In the event such a
communication is made to anyone, including but not limited to the media, public
interest groups and publishing companies, it will be considered a material
breach of the terms of this Agreement and the Executive will be required to
reimburse the Company for any and all compensation and benefits paid under the
terms of this Agreement and all commitments to make additional payments to the
Executive will be null and void.
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13. Insider Trading. The Executive acknowledges that prior to the
Termination Date, he remains subject to the restrictions of the Company's
Insider Trading Policy. After the Termination Date, the Insider Trading Policy
will no longer apply to the Executive. However, the Executive acknowledges that
through his employment with the Company he may have learned material,
non-public information regarding the Company. The federal securities laws
prohibit trading by persons while aware of material, non-public information.
The Executive should seek advice of his legal counsel prior to conducting any
transactions in the Company's stock if the Executive thinks he may possess such
information.
14. Future Employment. The Executive hereby understands and agrees that he
will not be re-employed by the Company in the future and that Executive will
never knowingly apply to the Company, its subsidiaries, affiliates, parents or
divisions for any job or position in the future.
15. Severability of Provisions. In the event that any provision in this
Agreement is determined to be legally invalid or unenforceable by any court of
competent jurisdiction, and cannot be modified to be enforceable, the affected
provision shall be stricken from the Agreement, and the remaining terms of the
Agreement and its enforceability shall remain unaffected.
16. Right to Revoke this Agreement. The Executive may revoke this
Agreement in writing within seven (7) days of signing it. The Agreement will
not take effect until the Effective Date. If the Executive revokes this
Agreement, all of its provisions shall be void and unenforceable.
17. Effective Date. The Effective Date shall be the day after the end of
the revocation period described in Paragraph 16.
18. Confidentiality. The Executive shall keep strictly confidential all
the terms and conditions, including amounts, in this Agreement and shall not
disclose them to any person other than the Executive's spouse and the
Executive's legal or financial advisor, unless compelled by law to do so. If a
person not a party to this Agreement requests or demands, by subpoena or
otherwise, that the Executive disclose or produce this Agreement or any terms
or conditions thereof, the Executive shall immediately notify the Company and
shall give the Company an opportunity to respond to such notice before taking
any action or making any decision in connection with such request or subpoena.
19. Arbitration. Any dispute regarding any aspect of this Agreement or any
act which allegedly has or would violate any provision of this Agreement
("arbitrable dispute") will be submitted for final and binding arbitration in
Delaware before an experienced employment arbitrator licensed to practice law
in Delaware and selected in accordance with the rules of the American
Arbitration Association, as the exclusive remedy for such claim or dispute. The
decision of the arbitrator shall be final and binding and judgment on the award
may be entered in any court of competent jurisdiction. Should any party to this
Agreement hereafter institute any legal action or administrative proceeding
against the other with respect to any claim waived by this Agreement or pursue
any arbitrable dispute by any method other than said arbitration, the
responding party shall be entitled to recover from the initiating party all
damages as allowed by law, including but not limited to reasonable attorneys'
fees, costs and expenses incurred as a
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result of such action. This paragraph is not applicable to claims of violation
of Paragraphs 8, 9, 12 or 18 (Confidential Information; Non-Competition and
Non-Solicitation; Non-Disparagement; Confidentiality) of this Agreement.
20. Non-Assignment. The Executive represents and warrants that as of the
date of this Agreement he has not assigned or transferred, or purported to
assign or transfer, to any person, firm, corporation, association or entity
whatsoever any released claim. Executive hereby agrees to indemnify and hold
the Company harmless against, without any limitation, any and all rights,
claims, warranties, demands, debts, obligations, liabilities, costs, court
costs, expenses, including attorneys' fees, causes of action or judgments based
on or arising out of any such assignment or transfer.
21. Entire Agreement. This Agreement constitutes the entire understanding
between the parties. The parties have not relied on any oral statements that
are not included in this Agreement. Any modifications to this Agreement must be
in writing and signed by the Executive and an authorized Executive or agent of
the Company.
22. Governing Law. This Agreement shall be construed, interpreted and
applied in accordance with the law of the State of Delaware, without giving
effect to the choice of law provisions thereof. Executive and the Company
hereby irrevocably submit to the exclusive concurrent jurisdiction of the
courts of Delaware. Executive and the Company also both irrevocably waive, to
the fullest extent permitted by applicable law, any objection either may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute, and
both parties agree to accept service of legal process in Delaware.
THE EXECUTIVE UNDERSTANDS AND ACKNOWLEDGES THE SIGNIFICANCE AND
CONSEQUENCES OF THIS AGREEMENT, THAT THE CONSIDERATION PROVIDED HEREIN IS FAIR
AND ADEQUATE, AND REPRESENTS THAT THE TERMS OF THIS AGREEMENT ARE FULLY
UNDERSTOOD AND VOLUNTARILY ACCEPTED.
Home Depot U.S.A., Inc.
By: /s/ Dennis Donovan 8/14/02
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Dennis Donovan Date
/s/ Dennis J. Carey
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Dennis J. Carey Date
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