Exhibit 10.4

 

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2013 PERFORMANCE SHARE AWARD AGREEMENT

We are pleased to advise you that the Compensation Committee (the “Committee”)
of the Board of Directors of Office Depot, Inc. (the “Company”) has on
November 12, 2013 (the “Grant Date”) granted you a performance share award
pursuant to the 2003 OfficeMax Incentive and Performance Plan (the “Plan”).
Capitalized terms used but not defined in this 2013 Performance Share Award
Agreement (the “Agreement”) have the meanings given to them in the Plan. This
award is subject to federal and local law and the requirements of the New York
Stock Exchange.

 

1. Performance Shares

You have been granted the right to earn shares of the common stock of the
Company (“Common Stock”) based upon satisfaction of certain performance
conditions pursuant to the provisions and restrictions contained in the Plan and
this Agreement (the “Performance Shares”). The target number of Performance
Shares that have been awarded to you is 1,199,616 (your “Target Award”).

 

2. Vesting

 

  a.

Performance Conditions. Subject to the terms and conditions set forth herein and
in paragraphs 2(b), (c) and (d) below, you will be eligible to earn up to 150%
of your Target Award based on [SPECIFY PERFORMANCE MEASURES] for the period
beginning on January 1, 2014, and ending on December 31, 2016 (the “Performance
Measures” and the “Performance Period”, respectively) relative to the threshold,
target, and maximum levels established by the Committee for each Performance
Measure for the Performance Period. These threshold, target and maximum levels
are displayed in Exhibit A to this Agreement. [TO BE REVISED TO REFLECT
PERFORMANCE MEASURES SET BY COMPENSATION COMMITTEE WITHIN 90 DAYS AFTER
EFFECTIVE DATE OF THIS AGREEMENT: If the Committee determines that the Company
does not achieve at least the threshold level of performance for a Performance
Measure for the Performance Period, you will immediately forfeit the Performance
Shares associated with that Performance Measure. If the Committee determines
that the Company’s achievement is at least equal to the threshold level of
performance for a Performance Measure for the Performance Period, you will be
eligible to earn a portion of the Performance Shares associated with that
Performance Measure based on the interpolation model specified by the Committee
relative to the portion of your Target Award associated with that Performance
Measure. If the Committee determines that the Company’s achievement is above the
target level for a Performance Measure for the Performance Period, the number of
Performance Shares associated with that Performance Measure that you will be
eligible to earn will be increased relative to the portion of your Target Award
associated with that Performance Measure

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  based on the interpolation model specified by the Committee.] The Committee
will determine the number of Performance Shares, if any, that you are eligible
to earn on the foregoing basis as soon as administratively practicable following
December 31, 2016 (your “Eligible Award”). In all cases, the number of
Performance Shares, if any, in your Eligible Award will be rounded up to the
nearest whole number of Performance Shares (as necessary). Upon the Committee’s
determination of your Eligible Award, you will immediately forfeit all
Performance Shares other than your Eligible Award. To become vested in all or a
portion of your Eligible Award, you must satisfy the employment requirements of
paragraph 2(b) below.

 

  b. Employment Requirements.

 

  i) Continuous Employment. Except as provided in paragraph 2(b)(ii) and
2(b)(iii) below, (A) you will vest in your Eligible Award on the date on which
the Committee determines your Eligible Award if you remain continuously employed
with the Company or any Subsidiary during the period beginning on the Grant Date
and ending on December 31, 2016, and (B) you will immediately forfeit all of
your Performance Shares upon your termination of employment with the Company and
its Subsidiaries prior to December 31, 2016.

 

  ii) Death or Disability. If you terminate employment with the Company and its
Subsidiaries prior to December 31, 2016 due to death or Disability, you will
vest in a pro rata portion of your Eligible Award (if any) on the date on which
the Committee determines your Eligible Award and will forfeit the remainder of
your Eligible Award (if any) on such date. The portion of your Eligible Award
that will vest under the immediately prior sentence shall be determined by
multiplying the total number of Performance Shares in your Eligible Award by a
fraction, the numerator of which is the total number of calendar days during
which you were employed by the Company and its Subsidiaries during the
Performance Period and the denominator of which is 1095, rounded up to the
nearest whole number of Performance Shares (as necessary). As used herein, the
term “Disability” shall have the meaning set out in the Employment Agreement
between you and the Company dated as of November 12, 2013 (the “Employment
Agreement”). The determination of Disability must be final under the Employment
Agreement prior to the date on which payment of vested Performance Shares due to
your termination of employment would otherwise be required pursuant to Section 4
below in order to be recognized under this Agreement. This definition of
“Disability” applies in lieu of the definition set out in the Plan.

 

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  iii) Termination of Employment without Cause or for Good Reason Prior to
Change in Control. In the event of your termination of employment with the
Company and its Subsidiaries during the Performance Period without Cause or for
Good Reason prior to December 31, 2016 and prior to the effective date of a
Change in Control, you will vest in a pro rata portion of your Eligible Award
(if any) on the date on which the Committee determines your Eligible Award and
will forfeit the remainder of your Eligible Award (if any) on such date. The
portion of your Eligible Award that will vest under the immediately prior
sentence shall be determined by multiplying the total number of Performance
Shares in your Eligible Award by a fraction, the numerator of which is the total
number of calendar days during which you were employed by the Company and its
Subsidiaries during the Performance Period and the denominator of which is 1095,
rounded up to the nearest whole number of Performance Shares (as necessary). As
used herein, the terms “Cause”, “Good Reason” and “Change in Control” shall have
the meanings set out in the Employment Agreement.

 

  c. Change in Control. In the event of a Change in Control, (A) with respect to
any portion of the Performance Shares associated with [LIST MARKET-BASED
PERFORMANCE MEASURES], performance shall be measured as of the effective date of
the Change in Control, and (B) with respect to any portion of the Performance
Shares associated with [LIST NON-MARKET-BASED PERFORMANCE MEASURES], performance
shall be deemed to be achieved at target. The Committee will determine the
number of Performance Shares, if any, that you are eligible to earn on the
foregoing basis on or within 60 days following the effective date of the Change
in Control (your “CIC Award”). In all cases, the number of Performance Shares,
if any, in your CIC Award will be rounded up to the nearest whole number of
Performance Shares (as necessary). Upon the Committee’s determination of your
CIC Award, you will immediately forfeit all Performance Shares other than your
CIC Award. Except as provided in the immediately following sentence, (A) you
will vest in your CIC Award on the date on which the Committee determines your
CIC Award if you remain continuously employed with the Company or any Subsidiary
during the period beginning on the Grant Date and ending on December 31, 2016,
and (B) you will immediately forfeit your CIC Award upon your termination of
employment with the Company and its Subsidiaries prior to December 31, 2016. In
the event of your involuntary termination of employment with the Company and its
Subsidiaries without Cause or your termination of employment with the Company
and its Subsidiaries for Good Reason, in either case within 12 months after the
effective date of a Change in Control, you will fully vest in your CIC Award on
the date of your employment termination. In the event of your involuntary
termination of employment with the Company and its Subsidiaries without Cause or
your termination of employment with the Company and its Subsidiaries for Good
Reason, in either case more than 12 months after the effective date of a Change
in Control, the treatment specified in paragraph 2(b)(iii above will apply to
the CIC Award. However, in either case, if the CIC Award is not assumed,
substituted or otherwise continued on an equivalent basis by the surviving
entity in the Change in Control, the CIC Award shall become fully vested on the
effective date of the Change in Control.

 

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  d. No Other Special Vesting Rights. The provisions of Section 24.1 of the Plan
with respect to change in control do not apply to your Performance Shares.

 

3. Rights as Stockholder

You shall have no voting, dividend or any other rights as a stockholder of the
Company with respect to your Performance Shares. Upon the issuance of shares
Common Stock pursuant to Section 4 below, you shall obtain full voting and other
rights of a stockholder of the Company as to such shares.

 

4. Payment

On each of the following dates, the vested portion of your Eligible Award or CIC
Award as applicable, shall be paid to you:

 

  a. The effective date of a Change in Control;

 

  b. Within 60 days following the date of your termination of employment
(subject to delay pursuant to Section 10(b)); or

 

  c. During the period beginning January 1, 2017 and ending March 15, 2017.

The Company will make payment by issuing to you and registering in your name a
certificate or certificates for (or evidencing in book entry or similar account)
a number of shares of the Common Stock equal to the vested portion of your
Eligible Award or CIC Award. Such shares will not be subject to any restrictions
under this Agreement, but may be subject to certain restrictions under
applicable securities laws.

 

5. Withholding

You are required to pay to the Company all applicable federal, state, local or
other taxes, domestic or foreign, with respect to your Performance Shares (the
“Required Tax Payments”). Unless you make other arrangements with the consent of
the Company, all Required Tax Payments will be satisfied by the Company
withholding Shares otherwise to be delivered to you, having a Fair Market Value
on the date the tax is to be determined, sufficient to make the Required Tax
Payments. The Company will withhold the whole number of Shares sufficient to
make the Required Tax Payments and will make a cash payment to you for the
difference between the Fair Market Value of the Shares withheld and the Required
Tax Payments on the payment date specified in Section 4 above (but if this would
cause adverse accounting then the Company will withhold one less Share and you
must pay in cash the additional withholding).

 

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6. Transferability of Performance Shares

Your Performance Shares may not be sold, pledged, assigned or transferred in any
manner; any such purported sale, pledge, assignment or transfer shall be void
and of no effect.

 

7. Conformity with Plan

Your Performance Shares are intended to conform in all respects with, and are
subject to, all applicable provisions of the Plan which is incorporated herein
by reference. Inconsistencies between this Agreement and the Plan shall be
resolved in accordance with the terms of the Plan except as expressly provided
otherwise in this Agreement. The Committee reserves its right to amend or
terminate the Plan at any time without your consent; provided, however, that
your Performance Shares shall not, without your written consent, be adversely
affected thereby (except to the extent the Committee reasonably determines that
such amendment or termination is necessary or appropriate to comply with
applicable law or the rules or regulations of any stock exchange on which the
Company’s stock is listed or quoted). All interpretations and determinations of
the Committee or its delegate shall be final, binding and conclusive upon you
and your legal representatives with respect to any question arising hereunder or
under the Plan or otherwise, including guidelines, policies or regulations which
govern administration of the Plan. By acknowledging this Agreement, you agree to
be bound by all of the terms of the Plan and acknowledge availability and
accessibility of the Plan document, the Plan Prospectus, and either the
Company’s latest annual report to shareholders or annual report on Form 10-K on
the Plan and/or Company websites. You understand that you may request paper
copies of the foregoing documents by contacting the Company’s Director,
Executive Compensation & International Compensation and Benefits.

 

8. Restrictions on Shares

If the Committee determines that the listing, registration or qualification upon
any securities exchange or under any law of shares subject to the grant of the
Performance Shares is necessary or desirable as a condition of, or in connection
with, the granting of same or the issue or purchase of shares thereunder, no
shares may be issued unless such listing, registration or qualification is
effected free of any conditions not acceptable to the Committee. All
certificates for shares of Common Stock delivered under the Plan shall be
subject to such stop-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any listing standards of any exchange or
self-regulatory organization on which the Common Stock of the Company is listed,
and any applicable federal or state laws; and the Committee may cause a legend
or legends to be placed on any such certificates to make appropriate reference
to such restrictions. In making such determination, the Committee may rely upon
an opinion of counsel for the Company. The Company shall have no liability to
deliver any shares under the Plan or make any other distribution of the benefits
under the Plan unless such delivery or distribution

 

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would comply with all applicable state, federal, and foreign laws (including,
without limitation and if applicable, the requirements of the Securities Act of
1933), and any applicable requirements of any securities exchange or similar
entity. The Committee shall be permitted to amend this Agreement in its
discretion to the extent the Committee determines that such amendment is
necessary or desirable to achieve compliance with the Dodd-Frank Wall Street
Reform and Consumer Protection Act and the guidance thereunder.

 

9. Non-Compete, Confidentiality, and Non-Solicitation Requirements

Your Performance Shares are also subject to your complying with and not
breaching the non-compete, confidentiality, and non-solicitation covenants in
the Employment Agreement.

 

10. Compliance with Section 409A

 

  a. This Agreement is intended to comply with Section 409A of the Internal
Revenue Code of 1986, as amended, and the Department of Treasury regulations and
other guidance thereunder (collectively, “Section 409A”) or an exemption
thereunder and shall be construed and administered in accordance with
Section 409A and any such exemption thereunder. Notwithstanding any other
provision of this Agreement, payments provided under this Agreement may only be
made upon an event and in a manner that complies with Section 409A or an
applicable exemption. Any payments under this Agreement that may be excluded
from Section 409A as a short-term deferral shall be excluded from Section 409A
to the maximum extent possible.

 

  b. Compliance with Section 409A shall include the following: (i) any
provisions of this Agreement that provide for payment of compensation that is
subject to Section 409A and that has payment triggered by your termination of
employment from service shall be deemed to provide for payment that is triggered
only by your “separation from service” within the meaning of Treasury Regulation
Section §1.409A-1(h) (a “Section 409A Separation from Service”), and (ii) if you
are a “specified employee” within the meaning of Treasury Regulation Section
§1.409A-1(i) on the date of your Section 409A Separation from Service (with such
status determined by the Company in accordance with rules established by the
Company in writing in advance of the “specified employee identification date”
that relates to the date of such Section 409A Separation from Service or in the
absence of such rules established by the Company, under the default rules for
identifying specified employees under Treasury Regulation Section 1.409A-1(i)),
such compensation triggered by such Section 409A Separation from Service shall
be paid to you six months following the date of such Section 409A Separation
from Service (provided, however, that if you die after the date of such
Section 409A Separation from Service, this six month delay shall not apply from
and after the date of your death). You acknowledge and agree that the Company
has made no representation regarding the tax treatment of any payment under this
Agreement and, notwithstanding anything else in this Agreement, that you are
solely responsible for all taxes due with respect to any payment under this
Agreement.

 

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11. Employment and Successors

Nothing in the Plan or this Agreement shall serve to modify or amend any
employment agreement you may have with the Company or any Subsidiary or to
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate your employment at any time, or confer upon you any right to continue
in the employ of the Company or any Subsidiary for any period of time or to
continue your present or any other rate of compensation subject to the terms of
any employment agreement you may have with the Company. The grant of your
Performance Shares shall not give you any right to any additional awards under
the Plan or any other compensation plan the Company has adopted or may adopt.
The agreements contained in this Agreement shall be binding upon and inure to
the benefit of any successor of the Company.

 

12. Amendment

The Committee may amend this Agreement by a writing that specifically states
that it is amending this Agreement, so long as a copy of such amendment is
delivered to you, provided that no such amendment shall adversely affect in a
material way your rights hereunder without your written consent (except to the
extent the Committee reasonably determines that such amendment or termination is
necessary or appropriate to comply with applicable law or the rules or
regulations of any stock exchange on which the Company’s stock is listed or
quoted). Without limiting the foregoing, the Committee reserves the right to
change, by written notice to you, the provisions of the Performance Shares or
this Agreement in any way it may deem necessary or advisable to carry out the
purpose of the grant of the Performance Shares as a result of any change in
applicable law or regulation or any future law, regulation, ruling, or judicial
decisions; provided that, any such change shall be applicable only to that
portion of your Performance Shares that are then subject to restrictions as
provided herein.

 

13. Notices

Any notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company as follows:

Office Depot, Inc.

c/o Vice President, Global Compensation, Benefits, and HRIM

6600 North Military Trail, C278

Boca Raton, FL 33496

 

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Any notice to be given under the terms of this Agreement to you shall be
addressed to you at the address listed in the Company’s records. By a notice
given pursuant to this Section, either party may designate a different address
for notices. Any notice shall be deemed to have been duly given when personally
delivered (addressed as specified above) or when enclosed in a properly sealed
envelope (addressed as specified above) and deposited, postage prepaid, with the
U.S. postal service or an express mail company.

 

14. Severability

If all or any part of this Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any portion of this Agreement or the Plan not
declared to be unlawful or invalid. Any section of this Agreement (or part of
such a section) so declared to be unlawful or invalid shall, if possible, be
construed in a manner that will give effect to the terms of such section or part
of a section to the fullest extent possible while remaining lawful and valid.

 

15. Entire Agreement

This Agreement contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements or understandings,
oral or written, with respect to the subject matter herein. By acknowledging
this Agreement, you accept the Performance Shares in full satisfaction of any
and all obligations of the Company to grant equity compensation awards to you as
of the date hereof.

 

16. Governing Law

This Agreement will be governed by and enforced in accordance with the laws of
the State of Florida, without giving effect to its conflicts of laws rules or
the principles of the choice of law.

 

17. Venue

Any action or proceeding seeking to enforce any provision of or based on any
right arising out of this Agreement may be brought against you or the Company
only in the courts of the State of Florida or, if it has or can acquire
jurisdiction, in the United States District Court for the Southern District of
Florida, West Palm Beach Division; and you and the Company consent to the
jurisdiction of such courts in any such action or proceeding and waive any
objection to venue laid therein.

To confirm your understanding and acknowledgment of the terms contained in this
Agreement, please sign and date this Agreement below.

Very truly yours,

OFFICE DEPOT, INC.

 

Acknowledged: /s/ Roland C. Smith Roland C. Smith

Date: 11/13/13

 

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