Employment Agreement - OfficeMax Inc. and Michael Feuer
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BETWEEN
OFFICEMAX, INC.
AND
MICHAEL FEUER
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"Agreement") is entered into as of the 19th day of June, 2003, between
OFFICEMAX, INC., an Ohio corporation (the "Company"), and MICHAEL FEUER
("Executive").
W I T N E S S E T H :
WHEREAS, the Company and Executive are parties to an Amended
and Restated Employment Agreement entered into as of January 3, 2000 (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 as hereinafter
set forth; and
WHEREAS, the Compensation Committee approved the execution and
delivery of this Agreement by the Company at a meeting on June 19, 2003,
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereby agree as follows:
1. Employment.
(a) The Company hereby employs Executive as its
Chairman of the Board and Chief Executive Officer, and Executive hereby accepts
such employment, on the terms and conditions set forth herein.
(b) During the term of this Agreement and any
renewal hereof (all references herein to the term of this Agreement shall
include references to the period of renewal hereof, if any), Executive shall be
and have the titles, duties and authority of the Chairman of the Board and Chief
Executive Officer of the Company and shall devote his entire business time and
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all reasonable efforts to his employment and perform diligently such duties as
are customarily performed by the chairman of the board, president and chief
executive officer of a company the size and structure of the Company, together
with such other duties as may be reasonably requested from time to time by the
Board, which duties shall be consistent with his position as set forth above and
as provided in Paragraph 2.
(c) Executive shall not, without the prior
written consent of the Company, directly or indirectly, during the term of this
Agreement, other than in the performance of duties naturally inherent to the
businesses of the Company and in furtherance thereof, render services of a
business, professional or commercial nature to any other person or firm, whether
for compensation or otherwise; provided, however, that so long as it does not
materially interfere with his full-time employment hereunder, Executive may
attend to outside investments, serve as a director of a corporation which does
not compete with the Company (as provided in Paragraph 10), and serve as a
director, trustee or officer of, or otherwise participate in, educational,
welfare, social, religious and civic organizations.
2. Term and Positions.
(a) Subject to the provisions for renewal and
termination hereinafter provided, the term of this Agreement shall begin on the
date hereof and shall continue for five (5) years thereafter. Such term shall
automatically be extended for one additional day as of the end of the first day
of the term hereof and as of the end of each succeeding day thereafter, unless
the Agreement is terminated as provided in Paragraph 8.
(b) Executive, without any compensation in
addition to that which is specifically provided in this Agreement, shall serve,
and shall be entitled and have the right to serve, as a member of the Board,
Chairman of the Board, President and Chief Executive Officer
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of the Company. Without limiting the generality of any of the foregoing, except
as hereafter expressly agreed in writing by Executive (i) Executive shall not be
required to report to any single individual and shall report only to the Board
as an entire body, (ii) no individual shall be elected or appointed as Chairman
of the Board, President or Chief Executive Officer of the Company, (iii) the
highest levels of Vice-Presidents and other executive officers of the Company
shall report to no individual other than Executive, and (iv) no individual or
group of individuals (including a committee established or other designee
appointed by the Board) shall have any authority over or equal to the authority
of Executive in his role as Chairman of the Board, President and Chief Executive
Officer (except that the Compensation Committee shall continue to have such
powers as may be required to maintain the compliance of the Company's benefit
plans under Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder), and neither the Company, the
Board, nor any member of the Board shall take any action which will or could
have the effect of, or appear to have the 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
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(ii) Executive's place of employment or
the principal executive offices of the Company are located more than
fifty (50) miles from the geographical center of Cleveland, Ohio; or
(iii) there occurs a material breach by
the Company of any of its obligations under this Agreement, which
breach has not been cured in all material respects within ten (10) days
after Executive gives notice thereof to the Company; or
(iv) there occurs a "Change in Control"
(as hereinafter defined) of the Company,
then in any such event, Executive shall have the right to terminate his
employment with the Company, but such termination shall not be considered a
voluntary resignation or termination by Executive of such employment or of this
Agreement but rather a discharge of Executive by the Company without "Cause" (as
hereinafter defined). Executive may exercise that right at any time within
ninety (90) days after the date on which the applicable event has occurred (the
event, for purposes of clause (iii), above, consisting of the lapsing of the
last day of the cure period referred to therein).
(d) Executive shall be deemed not to have
consented to any material change in his duties and responsibilities unless he
shall give written notice of his consent thereto to the Board within ninety (90)
days after receipt of a written proposal setting forth such change. If Executive
shall not have given such consent, the Company shall have the opportunity to
withdraw such proposed material change by written notice to Executive given
within ten (10) days after the end of said ninety (90) day period.
(e) The term "Change in Control" means the first
to occur of the following events:
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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) consummation of a merger or
consolidation of the Company or a direct or indirect wholly owned
subsidiary thereof 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 approval by
the Company's shareholders of 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 approval by the
Company's shareholders of a fundamental alteration in the nature of the
Company's business.
3. Compensation.
(a) For all services he may render to the
Company during the term of this Agreement, the Company shall pay to Executive
the following:
(i) for the period beginning on the
date hereof and ending January 24, 2004, salary equal to an annual
salary of One Million Dollars ($1,000,000) multiplied by the ratio of
the number of days in the period beginning on the date hereof and
ending on January 24, 2004 to the total number of days in the current
Fiscal Year (as hereinafter defined);
(ii) for the Fiscal Year beginning on
January 25, 2004, 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
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was payable by the Company to Executive under this Paragraph 3(a) for
the immediately preceding Fiscal Year; and
(iii) notwithstanding the foregoing, at
any time and from time to time during the term of this Agreement, the
Compensation Committee may increase (but not decrease) Executive's
annual salary.
Salary payable by the Company to Executive under this Paragraph 3(a) shall be
payable in those installments customarily used in payment of salaries to the
Company's executives (but in no event less frequently than monthly). The term
"Fiscal Year" means the period beginning on the day after the Saturday
immediately preceding the last Wednesday in January of one year and ending on
the Saturday immediately preceding the last Wednesday in January of the
immediately following year.
(b) In addition to the salary provided in
Paragraph 3(a), the Company shall pay to Executive bonus compensation (i) under
the OfficeMax, Inc. Annual Incentive Bonus Plan, or (ii) if such plan ceases to
be in effect in substantially the same form as in effect on the date of this
Agreement, at least annually in respect of each Fiscal Year not later than
ninety (90) days after the close of each Fiscal Year as determined by the
Compensation Committee and based on the performance of the Company (which shall
be based on criteria no less favorable to Executive than criteria used by the
Compensation Committee to determine bonus compensation for other senior
executives of the Company).
4. Salary and Bonus; Payment in the Event of Death. In
the event of Executive's death during the term of this Agreement:
(a) The Company shall pay to Executive a pro
rata portion of the bonus applicable to the Fiscal Year in which such death
occurs, as such bonus is determined
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under Paragraph 3(b). Such pro rata portion shall be determined by multiplying
the amount, if any, of bonus that would have been payable pursuant to such
Paragraph 3(b) if Executive had remained employed under this Agreement for the
entire applicable Fiscal Year and achieved 100% of Executive's personal goals
for the fiscal year by a fraction (the "Partial Year Fraction"), the numerator
of which is the number of days in the applicable Fiscal Year elapsed prior to
the date of death and the denominator of which is three hundred sixty-five
(365).
(b) The pro rata portion of the bonus described
in Paragraph 4(a) shall be paid when and as provided in Paragraph 3(b).
(c) Except as otherwise provided in Paragraphs
4(a), 5, 6 and 7, Executive's employment hereunder shall terminate and Executive
shall be entitled to no further compensation or other benefits under this
Agreement, except as to that portion of any unpaid salary and other benefits
accrued and earned by him hereunder up to and including the date of such death.
5. Options to Acquire Common Shares; Certain Other
Payments.
(a) The Company has granted to Executive under
the Prior Employment Agreement and pursuant to Stock Option Agreements executed
prior to the date hereof options (all of which, together with any additional
options hereafter granted under the Plan (defined below) are referred to as the
"Options") to purchase common shares of the Company, without par value
("Shares"), under the OfficeMax, Inc. Equity-Based Award Plan as in effect 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).
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(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) 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.
(ii) 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 (whether or not vested). 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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(iii) In the event of and in connection
with any Change in Control, all of the Options (whether or not vested)
shall be fully and immediately exercisable by Executive,
notwithstanding the terms of Paragraph 5(b)(i).
(iv) 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 or otherwise, 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 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
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Agreement or any other payment that Executive may receive from the Company or
its affiliates. Such incremental payment shall be made promptly after the amount
has been determined and in any event no later than five (5) business days before
such excise or other similar tax or assessment is due. If it subsequently is
determined (pursuant to final regulations or published rulings of the Internal
Revenue Service, final judgment of a court of competent jurisdiction, Internal
Revenue Service audit assessment, or otherwise) that the amount of such excise
or other similar taxes or assessments payable by Executive is greater than the
amount initially so determined, then the Company shall pay Executive an amount
equal to the sum of: (i) such additional excise or other taxes, plus (ii) any
interest, fines and penalties resulting from such underpayment, plus (iii) an
amount necessary to reimburse Executive for any income, excise or other tax
assessment payable by Executive with respect to the amounts specified in (i) and
(ii) above, and the reimbursement provided by this clause (iii), in the manner
described above in this Paragraph 5(d). Payment thereof shall be made within
five (5) business days after the date upon which such subsequent determination
is made. All calculations required under this Section 5(d) shall be made by the
independent accounting firm that served as the Company's independent accountants
immediately prior to the Change in Control or by such other independent
accountants selected by Executive, the expense of which shall be borne by the
Company.
6. Retirement Benefits. 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).
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7. Life Insurance and Other Benefits.
(a) The Company shall provide to Executive and
his spouse and dependents the life, health and dental insurance coverage
described on Annex A to this Agreement.
(b) The Company shall provide Executive with a
monthly automobile allowance which shall not be less than the monthly automobile
allowance for Executive in effect on the date hereof, adjusted annually to
reflect inflation as measured by changes in the Consumer Price Index or other
comparable index.
(c) Executive shall be entitled to such periods
of vacation and sick leave allowance each year determined by Executive in his
reasonable and good faith discretion, which in any event shall be not less than
as provided under the Company's vacation and sick leave policy for executive
officers.
(d) Executive shall be entitled to participate
in any equity or other employee benefit plan that is generally available to
senior executive officers, as distinguished from general management, of the
Company. Executive's participation in and benefits under any such plan shall be
on the terms and subject to the conditions specified in the governing document
of the particular plan.
(e) The Company shall provide Executive with tax
and financial advisory and tax return preparation services at an annual cost to
the Company not to exceed ten thousand dollars ($10,000), adjusted annually to
reflect inflation as measured by changes in the Consumer Price Index or other
comparable index.
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8. Termination.
(a) The employment of Executive under this
Agreement, and the term hereof, may be terminated by the Company:
(i) on death or Permanent Disability
(as hereinafter defined) of Executive, or
(ii) for Cause at any time by action of
the Board. For purposes hereof, the term "Cause" shall mean:
(A) Executive's fraud,
commission of a felony or of an act or series of acts which
result in material injury to the business reputation of the
Company, commission of an act or series of repeated acts of
dishonesty, which act is or acts are materially inimical to
the best interests of the Company, or Executive's willful and
repeated failure to perform his duties under this Agreement,
which failure has not been cured within fifteen (15) days
after the Company gives notice thereof to Executive;
(B) Executive's material breach
of any material provision of this Agreement, which breach has
not been cured in all substantial respects within ten (10)
days after the Company gives notice thereof to Executive;
(C) Executive's engagement as
an officer, director, employee or consultant of an entity in
competition with the Company (as defined in Paragraph 10(b));
or
(D) Executive's direct or
indirect involvement as a shareholder, proprietor or partner
of an entity in competition with the Company (as defined in
Paragraph 10(b)); provided, however, that ownership of less
than
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one percent (1%) of a class of publicly traded securities of
an entity shall not be deemed to be a violation of the
foregoing clause.
Any termination by reason of the foregoing shall not be in limitation of any
other right or remedy the Company may have under this Agreement or otherwise. On
any termination of this Agreement, Executive shall be deemed to have resigned
from all offices and directorships held by Executive in the Company and in each
of its subsidiaries and affiliates, as the case may be.
(b) In the event of a termination claimed by the
Company to be for "Cause" pursuant to Paragraph 8(a)(ii), Executive shall have
the right to have the justification for said termination determined by
arbitration in Cleveland, Ohio. In such event, Executive shall serve on the
Company within thirty (30) days after termination a written request for
arbitration. The Company immediately shall request the appointment of an
arbitrator by the American Arbitration Association and thereafter the question
of "Cause" shall be determined under the rules of the American Arbitration
Association, and the decision of the arbitrator shall be final and binding on
both parties. The parties shall use all reasonable efforts to facilitate and
expedite the arbitration, and shall act to cause the arbitration to be completed
as promptly as possible. During the pendency of the arbitration, Executive shall
continue to receive all compensation and benefits to which he is entitled
hereunder, and if at any time during the pendency of such arbitration the
Company fails to pay and provide all compensation and benefits to Executive in a
timely manner the Company shall be deemed to have automatically waived whatever
rights it then may have had to terminate Executive's employment for Cause.
Expenses of the arbitration shall be borne by the Company.
(c) In the event of termination for death or
Cause, except as otherwise provided in Paragraphs 4, 5, 6 and 7, Executive shall
be entitled to no further compensation or
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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 (x) the termination of
Executive's employment with the Company by Executive within ninety (90) days
after the occurrence of a Change in Control or (y) the termination of
Executive's employment with the Company within two (2) years after the
occurrence of a Change in Control either (I) by the Company for any reason other
than death, Permanent Disability or for Cause or (II) by Executive pursuant to
Paragraph 2(c)(i), (ii) or (iii), then the Term shall immediately terminate and
Executive shall be entitled to the following benefits:
(i) a lump-sum payment in cash within
five (5) days following Executive's date of termination in an amount equal to
five (5) times the sum of (A) the greater of (I) Executive's base salary in
effect at the time of the Change in Control and (II) Executive's base salary in
effect on Executive's date of termination of employment and (B) the greater of
(I) the highest bonus compensation paid or payable to Executive in respect of
any of the three (3) Fiscal Years immediately preceding the Fiscal Year during
which such termination occurs and (II) Executive's plan/target level bonus for
the Fiscal Year in which Executive's date of termination occurs (without giving
effect to any reductions in plan/target level bonus after the Change in
Control);
(ii) a lump-sum payment in cash within
five (5) days following Executive's date of termination in an amount equal to
Executive's plan/target level bonus for the Fiscal Year in which Executive's
date of termination occurs (without giving effect to any reductions in
plan/target level bonus after the Change in Control) multiplied by the Partial
Year
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Fraction; provided that, if Executive is entitled to receive a retention/stay
bonus in connection with a Change in Control that is payable with respect to the
fiscal year in which Executive's date of termination occurs, Executive shall
receive the greater of the applicable retention/stay bonus or the pro rata
plan/target bonus provided herein, but Executive shall not be entitled to both
the retention/stay bonus and the pro rata plan/target bonus provided herein; and
(iv) a lump-sum payment in cash within
five days following Executive's date of termination in an amount equal to the
product of five (5) and the annual amount of tax and financial advisory and tax
return preparation services made available to Executive under Paragraph 7(e) for
the Fiscal Year in which Executive's date of termination occurs;
(iv) for a period of five (5) years
after Executive's date of termination, the Company shall (A) continue all
benefits set forth on Annex A of this Agreement (other than the right to payroll
deferrals under the Company's 401(k) Plan) on terms and with coverage levels no
less favorable to Executive than those in effect immediately prior to the Change
in Control; provided, however, that in lieu of the Company match that Executive
would have been entitled to receive with respect to his contributions to any
tax-qualified or non-qualified deferred compensation plan sponsored by the
Company (collectively, the "Company's 401(k) Plan") and the auto allowance the
Executive would have been entitled to receive during the five year period
following his date of termination, Executive shall be entitled to receive a
lump-sum payment in cash within five (5) days following the date of Executive's
termination equal to the sum of (I) the total amount that Executive would have
received under the Company's 401(k) Plan as a Company match if Executive was
eligible to participate in the Company's 401(k) Plan for the five (5) year
period after his date of termination, based on the
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assumption that Executive would have contributed the maximum amount eligible for
a Company match under the Company's 401(k) Plan during such period and (II) the
product of 60 and the monthly auto allowance made available to Executive by the
Company immediately prior to the Change in Control and (B) provide to Executive
office space, secretarial support and continuing use of private telephone
numbers, facsimile numbers and e-mail addresses. The Company shall provide the
items called for in clause (B) of the immediately preceding sentence at a place
and on terms and conditions that Executive, in his sole and reasonable
discretion, determines are commensurate with those available to Executive
immediately prior to such termination; and
(v) full and immediate vesting of all
options, awards of restricted stock and any other equity or equity-based awards
held by the Executive. All options held by the Executive will be exercisable for
the applicable period specified in the relevant option agreement.
(e) In the event of the termination by the
Company of Executive's employment with the Company for any reason other than for
Cause or as a result of Executive's death or Permanent Disability, in addition
to any other rights or remedies Executive may have against the Company as a
result of such termination, (i) the Company shall continue for the remainder of
the term of this Agreement then in effect to pay and provide to Executive all of
the salary and bonus compensation and other rights and benefits provided for
herein; provided, however, that such bonus compensation in respect of each
Fiscal Year included within the payment period shall be equal to the highest
bonus compensation paid or payable to Executive in respect of any of the three
(3) Fiscal Years immediately preceding the Fiscal Year during which such
termination occurs; and (ii) the Company shall until the fifth anniversary of
that termination provide to Executive office space, secretarial support and
continuing use of private
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telephone numbers, facsimile numbers and e-mail addresses. The Company shall
provide the items called for in clause (ii) of the immediately preceding
sentence at a place and on terms and conditions that Executive, in his sole and
reasonable discretion, determines are commensurate with those available to
Executive immediately prior to that termination. Notwithstanding the foregoing,
Executive shall not receive any of the payments or benefits described in this
Paragraph 8(e) with respect to any termination of employment in connection with
which Executive actually receives the payments and benefits described in
Paragraph 8(d).
(f) For purposes of this Agreement, Executive's
"Permanent Disability" shall be deemed to have occurred if Executive, by reason
of his physical or mental disability or illness, shall have been unable to
discharge his duties under this Agreement for one hundred eighty (180)
consecutive days or for two hundred seventy (270) days in any consecutive
twenty-four (24) month period. The date of Permanent Disability shall be such
one hundred eightieth (180th) or two hundred seventieth (270th) 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 discharging his duties
within thirty (30) days after the date of such statement, such Permanent
Disability shall be deemed to have occurred.
9. Reimbursement. The Company shall reimburse Executive
or provide him with an expense allowance during the term of this Agreement for
travel, entertainment and other expenses reasonably and necessarily incurred by
Executive in connection with the Company's
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business. Executive shall furnish such documentation with respect to
reimbursement to be paid under this Paragraph 9 as the Company shall reasonably
request.
10. Covenants and Confidential Information.
(a) During the term of this Agreement, including
any periods during which Executive is not providing services to the Company but
is receiving payments or benefits hereunder (including the benefits provided
under Paragraph 8(d), 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
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(iv) Disclose, divulge, discuss, copy or
otherwise use or suffer to be used in any manner, in competition with,
or contrary to the interests of, the Company any confidential
information or trade secrets of the Company, it being acknowledged by
Executive that all such information regarding the business of the
Company compiled or obtained by, or furnished to, Executive while
Executive shall have been employed by or associated with the Company is
confidential information and the Company's exclusive property.
(b) For purposes of this Agreement, an entity
shall be deemed to be in competition with the Company if and only if more than
twenty-five per cent (25%) of the gross revenues of such entity are derived from
the business of selling office supplies, office furniture, computers, and such
other products of the type as are sold at or from a majority of OfficeMax stores
on the date of the termination of Executive's employment hereunder.
(c) Executive expressly agrees and understands
that the remedy at law for any breach by him of this Paragraph 10 will be
inadequate and that the damages flowing from such breach are not readily
susceptible to being measured in monetary terms. Accordingly, it is acknowledged
that, upon adequate proof of Executive's violation of any legally enforceable
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
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Paragraph 10, and hereby acknowledges and agrees that the same are reasonable in
time and territory, are designed to eliminate competition which otherwise would
be unfair to the Company, do not stifle the inherent skill and experience of
Executive, would not operate as a bar to Executive's sole means of support, are
fully required to protect the legitimate interests of the Company and do not
confer a benefit upon the Company disproportionate to the detriment to
Executive.
11. Withholding Taxes. Certain payments to Executive
under this Agreement may be subject to withholding on account of federal, state
and local taxes as required by law. Except with respect to income realized by
Executive as described in Paragraph 5(d), if any particular payment required
hereunder is insufficient to provide the amount of such taxes required to be
withheld, the Company may withhold such taxes from any other payment due
Executive. Except with respect to income realized by Executive as described in
Paragraph 5(d), in the event all cash payments due Executive are insufficient to
provide the required amount of such withholding taxes, Executive, within five
(5) days of written notice from the Company, shall pay to the Company the amount
of such withholding taxes in excess of all cash payments due Executive at the
time such withholding is required to be made by the Company.
12. Severable Provisions. The provisions of this
Agreement are severable and if any one or more provisions may be determined to
be illegal or otherwise unenforceable, in whole or in part, the remaining
provisions and any partially unenforceable provision to the extent enforceable
in any jurisdiction nevertheless shall be binding and enforceable.
13. Binding Agreement. The rights and obligations of the
Company under this Agreement shall inure to the benefit of, and shall be binding
on, the Company and its successors and assigns, and the rights and obligations
(other than obligations to perform services)
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of Executive under this Agreement shall inure to the benefit of, and shall be
binding upon, Executive and his heirs, personal representatives and successors
and assigns.
14. Enforcement of Rights; Arbitration.
(a) If the Company terminates Executive's
employment with the Company other than for Cause or as a result of his death or
Permanent Disability or Executive alleges that the Company otherwise has
breached or the Company otherwise breaches this Agreement or any of its
obligations hereunder, in order for Executive to enforce and continue to enjoy
his rights hereunder, including without limitation the right to continue to
receive compensation and other payments and benefits hereunder for the remainder
of the term of this Agreement, Executive shall be under no duty to seek other
employment or otherwise mitigate his damages as a result of such termination of
employment or alleged breach or breach by the Company.
(b) The Company shall indemnify and reimburse
Executive for his costs and expenses, including reasonable attorneys' fees,
incurred in connection with enforcing his rights hereunder.
(c) Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Rules of 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
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right and power to seek and obtain injunctive relief in a court of equity for
any breach or threatened breach by Executive of any of his covenants contained
in Paragraph 10 hereof.
15. Notices. Any notice to be given under this Agreement
shall be personally delivered in writing or shall have been deemed duly given
when received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested, and if mailed to the Company,
shall be addressed to its principal place of business, attention: General
Counsel, and if mailed to Executive, shall be addressed to him at his home
address last known on the records of the Company, or at such other address or
addresses as either the Company or Executive may hereafter designate in writing
to the other.
16. Waiver. The failure of either party to enforce any
provision or provisions of this Agreement shall not in any way be construed as a
waiver of any such provision or provisions as to any future violations thereof,
nor prevent that party thereafter from enforcing each and every other provision
of this Agreement. The rights granted the parties herein are cumulative and the
waiver of any single remedy shall not constitute a waiver of such party's right
to assert all other legal remedies available to it under the circumstances.
17. Miscellaneous. This Agreement supersedes all prior
agreements and understandings between the parties and may not be modified or
terminated orally. No modification, termination or attempted waiver shall be
valid unless in writing and signed by the party against whom the same is sought
to be enforced.
18. Governing Law. This Agreement shall be governed by
and construed according to the laws of the State of Ohio.
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19. Captions and Paragraph Headings. Captions and
paragraph headings used herein are for convenience and are not a part of this
Agreement and shall not be used in construing it.
20. Miscellaneous. Where necessary or appropriate to the
meaning hereof, the singular and plural shall be deemed to include each other,
and the masculine, feminine and neuter shall be deemed to include each other.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective on the day and year first set forth above.
OFFICEMAX, INC.
By /s/ Ross H. Pollock
----------------------
Ross H. Pollock
Secretary
/s/ Michael Feuer
----------------------
Michael Feuer
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ANNEX A
Benefits Summary for Mr. Feuer
MEDICAL INSURANCE
OfficeMax offers a Section 125, self-insured medical plan to all full-time
Associates after three months of service. The Plan maximum lifetime benefit is
$1,000,000. The Plan is designed to pay in-network charges at 80%. Expenses for
prescription drugs and preventive services are not subject to a deductible.
DENTAL INSURANCE
OfficeMax offers a Section 125, self-insured dental plan to all full-time
Associates after six months of service. The annual maximum Plan benefit is
$1,000. There is a schedule that is followed for preventive and restorative
care.
LIFE INSURANCE
Through an insurance company, OfficeMax provides each full-time Associate with 1
1/2 times his or her salary in group, term-life insurance. Mr. Feuer holds the
plan maximum limit of $500,000. The group life insurance policy has an
Accidental Death and Dismemberment (AD&D) clause. An additional benefit (not to
exceed $500,000) would be payable in the event of accidental loss of life/limb
based on the policy's defined schedule. This policy remains in effect until age
70, then follows a benefit reduction schedule. In addition, OfficeMax carries a
$500,000 term life insurance policy on Mr. Feuer's life, the benefits of which
are payable to his estate.
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 Mr. Feuer 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 Mr.
Feuer's salary and bonus compensation as a result of his Permanent Disability.
401(k) PLAN
OfficeMax offers a Section 401(k) Plan to all Associates after one year of
service. Mr. Feuer is fully vested in his payroll deferrals to the Plan. The
Plan offers a company match of 50% of the
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first 3% of compensation contributed by the Associate. The Plan is subject to
non-discrimination rules which currently limit Mr. Feuer's maximum annual
contribution below the annual maximum allowed under the IRC. The Company does
not offer any other retirement plans.
AUTO ALLOWANCE
$1,000 per month