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ODP > SEC Filings for ODP > Form 8-K on 18-Nov-2013All Recent SEC Filings

Show all filings for OFFICE DEPOT INC

Form 8-K for OFFICE DEPOT INC


18-Nov-2013

Change in Directors or Principal Officers, Regulation FD Disclosure, Financial S


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Mr. Roland Smith

Effective November 12, 2013, Mr. Smith was appointed Chairman and Chief Executive Officer of Office Depot, Inc. (the "Company"). Prior to joining the Company, Mr. Smith served as the President and Chief Executive Officer of Delhaize America, LLC, the U.S. division of Delhaize Group, and Executive Vice President of Delhaize Group, an international food retailer, from October 2012 to September 2013. Mr. Smith was a Special Advisor to The Wendy's Company ("Wendy's"), a restaurant owner, operator and franchisor, from September 2011 to December 2011, and served as President and Chief Executive Officer from July 2011 to September 2011. Mr. Smith served as President and Chief Executive Officer of Wendy's/Arby's Group, Inc. and Chief Executive Officer of Wendy's International, Inc. from September 2008 to July 2011. Mr. Smith also served as Chief Executive Officer of Triarc Companies, Inc. from June 2007 to July 2011 and Chief Executive Officer of Arby's Restaurant Group, Inc. ("Arby's"), a restaurant owner, operator and franchisor, from April 2006 to September 2008. Mr. Smith served as President and Chief Executive Officer of American Golf Corporation and National Golf Properties, an owner and operator of golf courses, from February 2003 to November 2005. He was President and Chief Executive Officer of AMF Bowling Worldwide, Inc., an owner and operator of bowling centers, from April 1999 until January 2003.

Mr. Smith is Chairman of the Board of Directors for Carmike Cinemas, Inc., where he is also Chairman of the Compensation and Nominating Committee, and is also a Director of The Wendy's Company. Mr. Smith is 59.

Mr. Smith's experience as a senior executive, having served as president and chief executive officer of public and private companies and on numerous boards, as well as his retail experience and experience managing complex integrations and turnarounds, led the board to conclude that he should be nominated as a director and appointed chairman of the board. Mr. Smith will not be a member of any committee of the board of directors.

Further information about Mr. Smith and his appointment is included in the Company's news release issued on November 12, 2013, which is attached as Exhibit 99.1 to this Report.

Description of Agreements with Mr. Smith

Employment Agreement between Office Depot, Inc. and Mr. Smith.

The Company entered into an Employment Agreement (the "Employment Agreement") with Mr. Smith to serve as the Company's Chairman and Chief Executive Officer effective November 12, 2013 (the "Effective Date").

This summary does not purport to be complete and is subject to and qualified in its entirety by reference to the text of the Employment Agreement, included as Exhibit 10.1 to this filing. Exhibit 10.1 is incorporated by reference into this Item 5.02.

Term. The Employment Agreement provides that Mr. Smith's employment will commence on the Effective Date and end on November 13, 2016 (the "Term"), unless otherwise terminated as described below. On November 13, 2016, and on each anniversary thereof, the Term will automatically extend for an additional one-year period, unless either party gives the other party at least 90 days prior written notice of non-renewal.

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Chairman. At each annual meeting of shareholders during the Term, the Company will nominate Mr. Smith for election as a director. If elected, he will also be appointed chairman of the board.

Outside Positions. Mr. Smith will maintain the outside board positions included in his biography set forth above. Mr. Smith will also be permitted to (a) with the prior written consent of the board, act or serve as a director, trustee, committee member or principal of any type of business, civic or charitable organization as long as such activities are disclosed in writing to the board, and (b) purchase or own less than two percent (2%) of the publicly traded securities of any entity; provided that, such ownership is a passive investment and that Mr. Smith is not a controlling person of the entity; and provided further that, the activities described above do not materially interfere with the performance of Mr. Smith's material duties and responsibilities to Company.

Base Salary. During the Term, Mr. Smith will receive an annual base salary of $1,400,000, subject to annual review by the board for possible increase (but not decrease).

Bonuses. Beginning in 2014, Mr. Smith will be eligible to receive an annual target bonus of 150% of his base salary, based on achievement of certain performance goals to be established by the board or the compensation committee of the board. In the event that Mr. Smith achieves superior performance goals established by the board or the compensation committee, then he will be eligible to receive a bonus award up to 300% of his base salary. Except as otherwise provided in the Employment Agreement, Mr. Smith must be employed by the Company on the last day of any calendar year in order to receive any annual bonus.

In addition, Mr. Smith will be eligible to receive an initial performance bonus of up to $2,000,000 on March 15, 2014, with the amount paid to be determined by the board based on Mr. Smith's achievement of defined performance objectives set forth in the Employment Agreement.

Option Grant. On the Effective Date, Mr. Smith was granted a ten-year non-qualified option (the "Option") to purchase 1,500,000 shares of the Company's common stock. Certain characteristics of the Option are described below under "Non-Qualified Stock Option Award Agreement Between the Company and Mr. Smith."

Restricted Stock Unit Grants. On the Effective Date, Mr. Smith was granted 1,199,616 restricted stock units ("Restricted Stock Units"). Certain characteristics of the Restricted Stock Units are described below under "Restricted Stock Unit Award Agreement Between the Company and Mr. Smith."

Performance Shares Grant. On the Effective Date, Mr. Smith was granted 1,199,616 performance shares ("Performance Shares"). Certain characteristics of the Performance Shares are described below under "Performance Share Award Agreement Between the Company and Mr. Smith."

Other Long-Term Incentive Compensation. Commencing with the Company's 2016 fiscal year Mr. Smith will be eligible to receive equity awards on a basis no less favorable than is provided to other executives of the Company.

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Clawback. The incentive-based compensation or other amounts paid to Mr. Smith pursuant to the Employment Agreement or any other agreement or arrangement with the Company will be subject to clawback under any Company clawback policy that is uniformly applicable to all senior executives of the Company.

Employee Benefits. During the Term, Mr. Smith will be eligible to participate in all employee benefit plans, practices and programs maintained by the Company, on a basis which is no less favorable than is provided to other similarly situated executives of the Company.

Miscellaneous. Mr. Smith will also be eligible for five weeks of vacation and payment or reimbursement of relocation expenses on the terms set forth in the Employment Agreement. Mr. Smith will also be reimbursed for the legal fees he incurred in negotiating and entering into the Employment Agreement and related agreements up to a maximum of $50,000.

Indemnification/Director and Officer Liability Insurance. Mr. Smith is eligible for indemnification for claims on the terms set forth in the Employment Agreement. In addition, the Company will maintain director and officer liability insurance that covers Mr. Smith for the Term and for a period of six years thereafter.

Termination of Employment. The Company and Mr. Smith shall have the right to terminate employment as set forth below:

Either the Company or Mr. Smith can terminate his employment at any time and for any reason; provided, that Mr. Smith is required to give the Company at least sixty (60) days advance written notice of any termination of employment.

If Mr. Smith's employment is terminated because he does not extend the Employment Agreement, by Company for Cause (as defined in the Employment Agreement), or by Mr. Smith without Good Reason (as defined in the Employment Agreement), then Mr. Smith will be eligible to receive any accrued but unpaid base salary, accrued but unused vacation, earned but unpaid annual bonus for the most recently completed calendar year, reimbursement for unreimbursed business expenses, and any other employee benefits (excluding equity compensation) as to which Mr. Smith may be eligible (collectively, the "Accrued Items") provided that, in no event will he be eligible for severance or termination payments.

If Mr. Smith terminates his employment for Good Reason or the Company terminates his employment without Cause, then Mr. Smith will be eligible to receive the Accrued Items and, subject to certain requirements described in the Employment . . .



Item 7.01. Regulation FD Disclosure.

On November 14, 2013, the Company received an approximately $35 million cash distribution related to OfficeMax Incorporated's October 2004 investment in Boise Cascade Holdings, L.L.C. Additional information on this distribution is included in the Company's news release issued November 15, 2013, which is attached as Exhibit 99.2 to this Report and incorporated herein by reference.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 10.1    Employment Agreement between the Company and Mr. Smith

Exhibit 10.2    2013 Non-Qualified Stock Option Award Agreement between the Company
                and Mr. Smith

Exhibit 10.3    2013 Restricted Stock Unit Award Agreement between the Company and
                Mr. Smith

Exhibit 10.4    2013 Performance Share Award Agreement between the Company and Mr.
                Smith

Exhibit 99.1    Office Depot, Inc. News Release dated November 12, 2013

Exhibit 99.2    Office Depot, Inc. News Release dated November 15, 2013

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