Exhibit 10.4


 


EXECUTIVE
OFFICER SEVERANCE PAY POLICY

(Amended and Restated Effective January 1, 2009)


 


Eligibility


 


This
Policy applies to any officer holding the title of vice president or above as
of his/her date of termination of employment. 
Any such officer who is terminated involuntarily for any reason other
than a Disciplinary Reason (“Eligible Officer”) shall be eligible for benefits
under this Policy.


 


The
Company will have no obligation to provide any benefits under this Policy
unless and until the Eligible Officer executes and delivers to the Company a
General Waiver and Release of Claims (“Release”) in a form satisfactory to the
Company.  Nothing in this Policy alters
the at-will employment relationship between any Eligible Officer and the Company.


 


The
Company shall have the authority and discretion to interpret and construe these
eligibility provisions, and the Company’s determinations as to eligibility
shall be made in its sole and absolute discretion.


 


This
Policy shall constitute an “employee welfare benefit plan” within the meaning
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  This Policy shall constitute a “top hat” plan
that only covers a select group of management or highly compensated employees.


 


Severance
Pay


 


Subject
to the eligibility requirements of this Policy, an Eligible Officer will be
entitled to receive severance pay equal to one year’s base salary at his/her
current base salary in effect as of his/her date of termination (“Separation
Date”).  The amount due, if any, will be
reduced by any salary received during the period of time after the Eligible
Officer is notified of the termination of his/her employment and the
commencement of severance pay under this Policy.


 


Subject
to execution of the Release and the expiration of the revocation period
thereunder, the Company shall make severance payments in equal installments
beginning within 60 days of the Eligible Officer’s Separation Date and
continuing according to the Company’s normal payroll schedule, provided that
all benefit payments to an Eligible Officer must be completed within 24 months
following the Eligible Officer’s Separation Date.  In the event that the revocation period under
the Release has not expired prior to the 60th day after the Eligible Officer’s
Separation Date, such Eligible Officer’s severance pay under this Policy shall
be forfeited.


 


Notwithstanding
the preceding paragraph, if an Eligible Officer is a “specified employee,” as
defined in Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and regulations issued thereunder, the following rules shall
apply:


 


1.             For purposes of applying the exception to
Code Section 409A for short-term deferrals, each installment shall be
treated as a separate “payment” for purposes of Code Section 409A.  Accordingly, any benefits paid within 2 1⁄2
months of the end of the taxable year containing the Separation Date shall be
exempt from Code Section 409A and paid in accordance with the first
sentence of the paragraph above.


 

















 


2.             To the extent benefits are not exempt
from Code Section 409A under subparagraph (1) above, if the Eligible
Officer’s severance pay benefit otherwise payable in the first 6 months
following the Separation Date is equal to or less than two times the lesser of
the amounts described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and
(2), such severance benefit shall be exempt from Code Section 409A and
paid in accordance with the first sentence of the paragraph above.


 


3.             To the extent a portion of the Eligible
Officer’s severance pay benefit is not exempt from Code Section 409A
pursuant to subparagraphs (1) and (2) above, such remaining severance
pay benefit will not be paid to the Eligible Officer until the first payroll
date of the 7th month following the Separation Date.  Any deferred payments will be paid in a lump
sum and shall be equal to the portion of the severance pay benefit that exceeds
the Code Section 409A limit. 
Thereafter, the remainder of the Eligible Officer’s severance pay
benefit shall be payable in installments according to the Company’s normal
payroll schedule.


 


In
the event of an Eligible Officer’s death after his Separation Date but before
he receives all benefits to which he otherwise would be entitled under this
Policy, payment of his benefits shall be made to his designated beneficiary (or
estate if no beneficiary has been designated) in a lump sum.


 


The
Company may also, at its sole discretion, continue health/vision/dental group
insurance coverages at the associate rate during the COBRA period on behalf of
the terminated executive officer for up to 12 months following his/her
Separation Date.


 


Any
payments required to meet the Worker Adjustment Retraining and Notification Act
(WARN) and/or any state legal notification requirements may be subtracted from
the severance pay which would otherwise be due under this Policy.


 


Exclusions


 


Notwithstanding
anything in this policy to the contrary, an officer is not eligible for
benefits under this Policy under the following circumstances:


 


·                                          If the officer resigns for any reason.


 


·                                          If the officer’s employment is terminated for
a Disciplinary Reason. 


 


If
the officer’s employment is not terminated involuntarily by the Company.  A transfer or other relocation of an officer’s
place of work is not a termination under this Policy if the officer continues
employment with OfficeMax or, if not, the transfer or relocation offered is to
a site within a reasonable distance of the officer’s immediately prior work
site.


 


·                                          Mandatory retirement pursuant to the Company’s
Executive Officer Mandatory  Retirement
Policy will not be deemed an involuntary termination of employment for  purposes of benefits under this Policy.


 


By
his/her acceptance of severance benefits under this Policy, an Eligible Officer
thereby waives his/her right to receive any other severance pay or salary
continuation severance benefits under any other Company plan or program or
arrangement with the Company.


 


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Any
obligation of the Company to provide severance pay and/or other benefits
pursuant to this Policy shall immediately terminate if it is determined by the
Company that the Eligible Officer has breached any obligation under his/her
General Waiver and Release of claims and/or any obligation to the Company,
including but not limited to obligations under a Nondisclosure and
Non-Competition Agreement or Sign-on Award Agreement, or if the Eligible
Officer is offered another position with OfficeMax that is reasonably
consistent with his/ her education, training, prior compensation and previous
experience and is located within a reasonable distance from his/her prior
worksite.


 


Definition
of Disciplinary Reason


 


For
the purpose of this Policy, “Disciplinary Reason” includes documented unacceptable
job performance where at least two corrective action notices have been issued
to the Eligible Officer in the twelve months preceding the termination of
employment (corrective action notices to persons holding the title of Vice
President or above shall be issued only after consultation with the senior-most
Human Resources Executive Officer of the Company) and misconduct, including but
not limited to refusal to obey instructions which are issued by a superior in
the normal course of business; gross negligence; willful failure to perform the
job in a satisfactory manner; reckless disregard for or knowing violation of
any Company policy, work rule, or procedure; theft of Company or another
associate’s property; an act of embezzlement, fraud, or like violation of law;
wrongful engagement in any activity that would breach the duty of loyalty to
the Company; wrongful disclosure of confidential information of the Company; or
a violation of the Company’s Code of Ethics.


 


Plan
Administration and Interpretation


 


The
senior-most Human Resources Executive Officer of the Company is the Plan
Administrator for purposes of Section 3(16) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”).  The Plan Administrator shall have the sole
authority in the exercise of his/her discretion to interpret, apply, and
administer the terms of the Plan and to determine eligibility for benefits of
the Plan and the amount of any benefits under the Plan, and his/her
determination of any such matters shall be final and binding.  Benefits under the Plan will be paid only if
the Plan Administrator determines in his/her discretion that a participant or
beneficiary is entitled to them.  The Plan
Administrator may designate one or more individuals to carry out his/her functions
as Plan Administrator.


 


Claims
Procedure


 


Severance
benefits will be provided to each participant as provided in the Plan.  If a participant believes that he/she has not
been provided with the severance benefits to which he/she is entitled under the
Plan, then the participant may file a request for review within 90 days after
the date he/she should have received such benefits under the Plan.  The request for review must be submitted to
the Plan Administrator.  The Plan
Administrator will respond to the request for review within 90 days after it is
received setting forth, in writing, the reasons for its determination.  If the participant’s request for review is
denied, the participant may, within 60 days after receiving written notice of
such denial, file an appeal to the General Counsel of the Company, setting
forth the reason why the participant disagrees with the initial
determination.  The General Counsel shall
respond to this request for reconsideration within 60 days after it is received
setting forth, in writing, the reasons for its determination.  If the participant subsequently wishes to
file a claim against the Plan, any legal action must be filed within 90 days
after the General Counsel’s final decision. 
No action at law or in equity shall be brought to 


 


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recover
benefits under this Plan until the claims procedure rights herein provided have
been exercised and the Plan benefits requested in such claims process have been
finally denied in whole or in part.


 


Plan
Termination and Amendment


 


The Company reserves the right
to amend, modify, or terminate the Plan at any time, in its sole discretion,
without prior notice to participants. 
Any such amendment or termination shall be made by the Board of
Directors of the Company or by action of a person or persons duly authorized by
such Board.  All participants shall
receive any benefits to which they have become entitled under the Plan on or
before the date the Plan terminates.


 


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