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 December
2, 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 one hundred forty nine thousand five
hundred thirty three (149,533) (your “Target Award”).

 

2. Vesting

 

  a.

Performance Conditions. Subject to the terms and conditions set forth herein and
in Sections 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

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  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 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 Section 2(b) below.

 

  b. Employment Requirements.

 

  i. Continuous Employment. Except as provided in Sections 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). For this purpose, you
will be considered “Disabled” if you have been determined to be eligible to
commence benefits under the Company’s long-term disability program; the
effective date of your Disabled status will be the later of the date on which
such determination is made or the date as of which you are

 

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  determined to be eligible to commence such benefits. Your Disabled status must
become effective under the preceding sentence 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.

 

  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 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).

 

  c.

Change in Control. In the event of a Change in Control, (A) with respect to any
portion of the Performance Shares associated with 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 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

 

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  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 any case, and notwithstanding the first sentence of
this Section 2(c), 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.

 

  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.

 

  e. Definitions.

 

  i. Cause. As used herein, the term “Cause” shall mean:

 

  A. your willful failure to perform your material duties (other than any such
failure resulting from incapacity due to physical or mental illness);

 

  B. your willful failure to comply with any valid and legal directive of the
Board;

 

  C. your engagement in dishonesty, illegal conduct or misconduct, which is, in
each case, materially injurious to Company or its affiliates;

 

  D. your embezzlement, misappropriation or fraud, whether or not related to
your employment with Company;

 

  E. your conviction of or plea of guilty or nolo contendere to a crime that
constitutes a felony (or state law equivalent) or a crime that constitutes a
misdemeanor involving moral turpitude;

 

  F. your willful violation of a material policy of Company;

 

  G. your willful unauthorized disclosure of confidential information (within
the meaning of the confidentiality covenant that you were required to sign as a
condition of your employment with the Company); or

 

  H. your material breach of any material obligation under any written agreement
between you and Company.

 

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Termination of your employment shall not be deemed to be for Cause unless and
until Company delivers to you a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the Board, finding that you are
guilty of the conduct described in any of (A) - (H) above, after having afforded
you a reasonable opportunity to appear (with counsel) before the Board. Except
for a failure, breach or refusal which, by its nature, cannot reasonably be
expected to be cured, you shall have thirty (30) business days from the delivery
of written notice by Company within which to cure any acts constituting Cause;
provided, however, that if Company reasonably expects irreparable injury from a
delay of thirty (30) business days, Company may give you notice of such shorter
period within which to cure as is reasonable under the circumstances, which may
include the termination of your employment without notice and with immediate
effect. No act or failure by you shall be considered “willful” if such act is
done by you in the good faith belief that such act is or was in the best
interests of Company or one or more of its businesses.

 

  ii. Good Reason. As used herein, the term “Good Reason” shall mean:

 

  A. a material reduction in your base salary with the Company;

 

  B. a material reduction in your target bonus opportunity with the Company;

 

  C. a relocation of your principal place of employment by more than 50 miles
(without your prior written consent);

 

  D. a material, adverse diminution in your authority, duties or
responsibilities (other than temporarily while you are physically or mentally
incapacitated); or

 

  E. a material adverse change in the reporting structure applicable to you.

You cannot terminate your employment for Good Reason unless you have provided
written notice to Company of the existence of the circumstances providing
grounds for termination for Good Reason within ninety (90) days of the initial
existence of such grounds and Company has had at least thirty (30) days from the
date on which such notice is provided to cure such circumstances. If you do not
terminate your employment for Good

 

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Reason within one hundred and eighty (180) days after the first occurrence of
the applicable grounds, then you will be deemed to have waived your right to
terminate for Good Reason with respect to such grounds.

 

  iii. Change in Control. As used herein, the term “Change in Control” shall
have the meaning set forth in the Office Depot, Inc. 2007 Long-Term Incentive
Plan.

 

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 (if any) 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 of 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

 

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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).

 

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

 

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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 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 that
you were required to sign as a condition of your employment with the Company.

 

10. Compliance with Section 409A

 

  a. This Agreement shall be construed and administered in accordance with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), or
an applicable exemption from Code Section 409A.

 

  b.

To the extent that any compensation payable under this Agreement constitutes
deferred compensation within the meaning of Code Section 409A and the Department
of Treasury regulations and other guidance thereunder, (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
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”), (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

 

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  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), and (iii) to the extent necessary to comply
with Section 409A, the definition of change in control that applies under
Section 409A shall apply under this Agreement to the extent that it is more
restrictive than the definition of Change in Control that would otherwise apply.
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.

 

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.

 

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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

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 performance shares 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

 

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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/ Stephen E. Hare                        

Stephen E. Hare

Date: December 2, 2013            

 

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