OFFICE DEPOT, INC. (NASDAQ:ODP) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02.
On March26, 2018, Office Depot, Inc. (the “Company”) appointed Dan Stone, 46, to serve as the Company’s President, CompuCom effective April1, 2018.
Mr.Stone served as Chief Executive Officer of CompuCom Services, Inc. (“CompuCom”) from November 2016 until the Company’s acquisition of CompuCom in November 2017, as well as Executive Vice President and President, End-User Enablement and Tech Zone from February 2015 to November 2016. Prior to joining CompuCom, Mr.Stone served as President and General Manager of Lenovo Latin America from 2013 to 2016. Previously, Mr.Stone served as the Chief Strategy Officer at Lenovo Group Ltd. from 2012 to 2013, and also held roles at McKinsey& Company. Mr.Stone has been chairman of the board of directors of Powermat, a private wireless charging company since March 2017 and previously served as the board of directors observer for XTR3D, an Israeli 3D camera company, from 2011 to 2016.
The Company and Mr.Stone entered into a Letter Agreement (the “Letter Agreement”), which sets forth the terms of Mr.Stone’s employment with the Company as President, CompuCom effective April1, 2018 (the “Effective Date”).
As President, CompuCom, Mr.Stone’s annual base salary will be $575,000. Mr.Stone will also (i)be eligible to participate in the Office Depot, Inc. 2018 Corporate Incentive Plan with a target incentive payout for 2018 set at 75% of his annual eligible earnings; (ii)receive a long term incentive award for 2018 equal to a value of $1,000,000 under the Office Depot, Inc. 2018 Long Term Incentive Plan on the Effective Date; and (iii)be eligible for the Company’s Executive Car Allowance Program. In addition, Mr.Stone will be eligible to receive a retention bonus of up to $1,000,000 (the “Retention Bonus”) to a retention agreement which the Company and Mr.Stone entered into on March26, 2018 (the “Retention Agreement”). The Retention Bonus will vest in two equal installments of $500,000 with the first installment vesting on December31, 2018 and the second installment vesting on December31, 2019, subject to Mr.Stone’s being actively employed by the Company on each vesting date.
If Mr.Stone is involuntarily terminated by the Company without Cause (as defined in the Letter Agreement) or voluntarily resigns for Good Reason (as defined in the Letter Agreement), Mr.Stone will be entitled to receive the following severance benefits:
| (i) | 18 months of Mr.Stone’s base salary at the rate in effect on the date of his employment termination; |
| (ii) | 18 times the difference between the Company’s monthly COBRA charge on the date of Mr.Stone’s employment termination for the type of Company-provided group health plan coverage in effect for Mr.Stone on that date and the applicable active employee charge for such coverage; |
| (iii) | a bonus calculated based on actual performance under the Company’s annual bonus plan for the Company’s fiscal year in which the termination occurs, and Mr.Stone’s annual eligible earnings in the fiscal year in which the termination occurs, with payment under this subsection (iii)being made to Mr.Stone at the same time as payments made to other participants in the corporate bonus program, as described in the Letter Agreement; and |
| (iv) | any earned but unpaid annual bonus for the completed fiscal year preceding the fiscal year of termination, which unpaid bonus will be paid when annual bonuses are paid to other senior executives for such fiscal year. |
Any incentive-based compensation or other amounts paid to Mr.Stone to the Letter Agreement or any other agreements or arrangements with the Company will be subject to clawback under any applicable Company clawback policy (including any such policy adopted by the Company to applicable law, government regulation or stock exchange listing requirement).
In addition, Mr.Stone is eligible to participate in the Company’s Executive Change in Control Plan which provides for severance benefits in the event that he is involuntarily terminated following a Change in Control, as will be defined therein, at the Tier 1 level. The Executive Change in Control Plan is previously described and filed as Exhibit 10.1 to the Company’s Current Report on Form8-Kfiled on August7, 2014.
Mr.Stone’s employment with the Company is also subject to the execution by him of the Company’s AssociateNon-Competition,Confidentiality andNon-SolicitationAgreement (the “Associate Agreement”), which agreement contains customary covenants regarding confidentiality,non-disclosure,non-competition,non-solicitation,non-disparagement,and proprietary rights. The Associate Agreement is substantially similar to the Form of Associate Agreement between the Company and certain executives of the Company previously filed as Exhibit 10.51 to its Annual Report on Form10-Kon February22, 2011.
About OFFICE DEPOT, INC. (NASDAQ:ODP)
Office Depot, Inc. (Office Depot) is a provider of office products and services. The Company sells products and services to consumers through three segments: North American Retail Division, North American Business Solutions Division and International Division. It operates under the Office Depot and OfficeMax brands. It also offers products under various labels, including Foray, Ativa, TUL, WorkPro, Brenton Studio, Highmark, Grand & Toy and Viking Office Products. It offers its products under supplies, technology, furniture and other categories. The supplies category includes products, such as paper, binders and school supplies. The technology category includes products, such as desktop and laptop computers, monitors, cables, software, telephones and wireless communications products, as well as services for technology products. The furniture and other category include products, such as desks, chairs, luggage, sales in its copy and print centers, and other miscellaneous items.
