Executive Employment Agreement/ Rick Lepley



 






EXHIBIT 10.14




EXECUTIVE EMPLOYMENT AGREEMENT



(For Executive Officers Who Also Have a Change of Control Employment Agreement)




     THIS AGREEMENT is made as of March 22, 2004 between Office Depot, Inc., a Delaware corporation
(the “Company”), and Rick Lepley (“Executive”). This Agreement replaces
and supersedes any and all prior employment agreements, letters of understanding, or other
agreements of any sort whatsoever, existing between the Company and Executive, of whatsoever
nature.



NOW THEREFORE,




     In consideration of the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:



     1. Employment.



     (a) The Company shall employ Executive, and Executive hereby accepts employment with the
Company, upon the terms and conditions set forth in this Agreement for the period beginning on the
date hereof and ending as provided in paragraph 4 hereof (the “Employment Term”).



     (b) The parties hereto have entered into an Employment Agreement dated as of the same date as
this Agreement by and between the Company and the Executive (the “Change of Control Employment
Agreement”) which, by its terms, takes effect during the “Employment Period” as defined in such
agreement. During any such Employment Period under the Change of Control Employment Agreement, the
terms and provisions of the Change of Control Employment Agreement shall control to the extent such
terms and provisions are in conflict with the terms and provisions of this Agreement. In addition,
during such Employment Period, the Employment Term hereunder shall be tolled and upon expiration of
the Employment Period under the Change of Control Employment Agreement the Employment Term
hereunder shall recommence.



     2. Position and Duties.



     (a) During the Employment Period, Executive shall serve as an Executive Vice President of the
Company and shall have such duties, responsibilities and authority as are assigned to him from time
to time by the Chairman and Chief Executive Officer (“CEO”), its President, North America
(“President”) or the Board of Directors (the “Board”) to alter, expand or limit such
duties, responsibilities and authority. Executive’s scope of duties shall at all times be subject
to the power of the Company’s CEO or the Board to modify or alter such duties.



 









 





     (b) Executive shall report to the President, North America or to such other person(s) as the
CEO may direct from time to time, and Executive shall devote Executive’s best efforts and
Executive’s full business time and attention (except for permitted vacation periods and reasonable
periods of illness or other incapacity) to the business and affairs of the Company and its
Subsidiaries; provided that Executive shall, with the prior written approval of the
CEO, be allowed to serve as (i) a director or officer of any non-profit organization including
trade, civic, educational or charitable organizations, or (ii) a director of any corporation which
is not competing with the Company or any of its Subsidiaries in the office product and office
supply industry so long as such duties do not materially interfere with the performance of
Executive’s duties or responsibilities under this Agreement. Executive shall perform Executive’s
duties and responsibilities under this Agreement to the best of Executive’s abilities in a
diligent, trustworthy, businesslike and efficient manner.



     (c) Executive shall be based at or in the vicinity of the Company’s headquarters but
may be required to travel as necessary to perform Executive’s duties and responsibilities under
this Agreement.



     (d) For purposes of this Agreement, “Subsidiaries” shall mean any corporation of which
the securities having a majority of the voting power in electing directors are, at the time of
determination, owned by the Company, directly or through one of more Subsidiaries.



     3. Base Salary and Benefits.



     (a) Initially, Executive’s base salary as Executive Vice President shall be $500,000 per annum
(the “Base Salary”), which salary shall be payable in regular installments in accordance
with the Company’s general payroll practices and shall be subject to customary withholding. This
rate of pay shall be applicable for so long as Executive is serving in the capacity of Executive
Vice President, North American Retail Stores. At such time as Executive is assigned other, or
different job responsibilities, his Base Salary may be higher or lower, and such change shall not
trigger a right to terminate this Agreement for “Good Reason” as set forth herein. In no event
shall Executive’s Base Salary be set at an annual rate of pay less than $375,000 if his position
assignment changes during the first 12 months of this Agreement, or $400,000 if his position
assignment changes during the second 12 months of this Agreement, or later, regardless of any other
duties to which he may be assigned in the future, or if proposed to be set at less than $375,000 or
$400,000 (whichever is then applicable in accordance with the first clause of this sentence),
Executive shall have the option of accepting such lower Base Salary, or he shall have the right to
terminate this Agreement for “Good Reason.” Executive’s Base Salary shall be reviewed at least
annually by the Compensation Committee of the Board and shall be subject to adjustment, as they
shall determine based on among other things, market practice and performance, subject to the
preceding sentence of this subparagraph 3(a). In addition, during the Employment Term, Executive
shall be entitled to participate in the Company’s Long Term Incentive Plan.



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     (b) In addition to the Base Salary, Executive shall be entitled to participate in the
Company’s Management Incentive Plan (the “Bonus Plan”) as administered by the Compensation
Committee of the Board of Directors. If the Board or the Compensation Committee modifies such
Bonus Plan during the Employment Term, Executive shall continue to participate at a level no lower
than the highest level established for any officer of the Company then at Executive’s level. At
the discretion of the Board or the Compensation Committee, Executive may be offered from time to
time the opportunity to participate in other bonus plans of the Company in lieu of the Bonus Plan
and, if Executive chooses to participate in such plan or plans, the provisions of this paragraph
3(b) shall be tolled during the period of such participation.



     (c) Executive shall be entitled to paid vacation in accordance with the Company’s general
payroll practices for officers of the Company then at Executive’s level.



     (d) The Company shall reimburse Executive for all reasonable expenses incurred by Executive in
the course of performing Executive’s duties under this Agreement which are consistent with the
Company’s policies in effect from time to time with respect to travel, entertainment and other
business expenses, subject to the Company’s requirements with respect to reporting and
documentation of such expenses.



     (e) Executive will be entitled to all benefits as are, from time to time, maintained for
officers of the Company then at Executive’s level, including without limitation: medical,
prescription, dental, disability, employee life, group life, accidental death and travel accident
insurance plans (collectively, “Insurance Benefits”), profit sharing and retirement
benefits.



     4. Term.



     (a) The Employment Term shall end on the eighteen (18) month anniversary of the date of this
Agreement; provided that (i) the Employment Term shall be extended for successive
periods of one (1) year each (each of which is referred to as an “extension term” of the Employment
Term) in the event that written notice of termination hereof is not given by one party hereof to
the other at least six months prior to the end of the Employment Term or the then applicable
extension term, as the case may be; provided further that (ii) the Employment Term
shall terminate prior to such date (A) upon Executive’s death or permanent disability or
incapacity (as determined by the Board in its good faith judgment), (B) upon the mutual agreement
of the Company and Executive, (C) by the Company’s termination of this Agreement for Cause (as
defined below) or without Cause or (D) by Executive’s termination of this Agreement for Good Reason
(as defined below) or without Good Reason.



     (b) If the Employment Term is terminated by the Company without Cause or is terminated by the
Executive for Good Reason, Executive (and Executive’s family with respect to clause (iii) below)
shall be entitled to receive (i) Executive’s Base Salary through the eighteenth month anniversary
of such termination and Executive’s Pro Rata Bonus (as defined in



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paragraph (h) below), if and only if Executive has not breached the provisions of paragraphs
5, 6 and 7 hereof, (ii) vested and earned (in accordance with the Company’s applicable plan or
program) but unpaid amounts under incentive plans, deferred compensation plans, and other employer
programs of the Company in which Executive is then participating (other than the Pro Rata Bonus),
and (iii) Insurance Benefits through the eighteenth month anniversary of such termination pursuant
to the Company’s insurance programs, as in effect from time to time, to the extent Executive
participated immediately prior to the date of such termination; provided that any
such continuation of health insurance benefits will run concurrently with and satisfy the
continuation coverage requirements of the Consolidated Omnibus Reconciliation Act of 1985
(“COBRA”), and provided further that any health insurance benefits which Executive becomes entitled
to receive as a result of any subsequent employment shall serve as primary coverage for Executive
and Executive’s family. The amounts payable pursuant to paragraph 4(b)(i) and (ii) shall be
payable, at the Company’s discretion, in one lump sum payment within 30 days following termination
of the Employment Term or in any other manner consistent with the Company’s normal payment
policies. No payment of any sum nor the receipt of any benefit shall be due to Executive under this
subsection (b) unless and until Executive shall have executed and delivered to the Company a
release of any and all claims against the Company and its Subsidiaries (and their respective
present and former officers, directors, employees and agents – collectively the “Released
Parties”) and a covenant not to sue the Released Parties, all in form and substance as provided
by counsel to the Company (the “Release”) and any waiting period or revocation period
provided by law for the effectiveness of such Release shall have expired without Executive’s having
revoked such Release. In the event Executive shall decline or fail for any reason to execute and
deliver such Release, then Executive shall be entitled to receive only those amounts provided
pursuant to subsection 4(c) below provided for an Executive whose employment is terminated by the
Company for Cause or by Executive without Good Reason.




     (c) If the Employment Term is terminated by the Company for Cause or by the Executive without
Good Reason, Executive shall be entitled to receive (i) Executive’s Base Salary through the date of
such termination and (ii) vested and earned (in accordance with the Company’s applicable plan or
program) but unpaid amounts under incentive plans, health and welfare plans, deferred compensation
plans, and other employer programs of the Company which Executive participates; provided, however,
that Executive shall not be entitled to payment of a Pro Rata Bonus.



     (d) If the Employment Term is terminated upon Executive’s death or permanent disability or
incapacity (as determined by the Board in its good faith judgment), Executive, or Executive’s
estate if applicable, shall be entitled to receive the sum of (i) Executive’s Base Salary through
the date of such termination and Executive’s Pro Rata Bonus (as defined in paragraph (h) below) and
(ii) vested and earned (in accordance with the Company’s applicable plan or program) but unpaid
amounts under incentive plans, health and welfare plans, deferred compensation plans, and other
employer programs of the Company which Executive participates. The amounts payable pursuant to
this paragraph 4(d) shall be payable, at the Company’s discretion, in one lump sum payment within
30 days following termination of the Employment Term or in any other manner consistent with the Company’s normal
payment policies.



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     (e) Except as otherwise provided herein, fringe benefits and bonuses (if any) which accrue or
become payable after the termination of the Employment Term shall cease upon such termination.



     (f) For purposes of this Agreement, “Cause” shall mean:




     (i) the continued failure of the Executive to perform substantially the Executive’s
duties with the Company or one of its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the CEO which specifically identifies the
manner in which the CEO believes that the Executive has not substantially performed the
Executive’s duties, or




     (ii) the engaging by the Executive in illegal conduct or gross misconduct in violation
of the Company’s Code of Ethical Behavior.


Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or upon the instructions of the CEO or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good
faith and in the best interests of the Company. The cessation of employment of the Executive shall
not be deemed to be for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the Company’s Board of Directors, finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.




     (g) For purposes of this Agreement, “Good Reason” shall mean:




     (i) the assignment to the Executive of any duties inconsistent with the Executive’s position,
authority, duties or responsibilities as contemplated by paragraph 2 of this Agreement, or any
other action by the Company which results in a material diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive, and excluding further any change in the reporting relationships of
the Executive as directed by the CEO or the Board and specifically excluding further any change in
the reporting relationships of the Executive as directed by the CEO or the Board;




     (ii) any failure by the Company to comply with any of the provisions of paragraph 3 of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;



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     (iii) the Company’s requiring the Executive to be based at any location other than as provided
in paragraph 2(c) hereof; or




     (iv) any purported termination by the Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement; or



     (h) For purposes of this Agreement, “Pro Rata Bonus” shall mean the sum of (i) the pro
rata portion (calculated as if the “target” amount under such plan has been reached) under any
current annual incentive plan from the beginning of the year of termination through the date of
termination and (ii) if and to the extent Executive is vested, the pro rata portion (calculated as
if the “target” amount under such plan has been reached) under any long-term incentive plan or
performance plan from the beginning of the period of determination through the date of termination.



     5. Confidential Information. Executive acknowledges that the information,
observations and data obtained by Executive while employed by the Company and its Subsidiaries
concerning the business or affairs of the Company or any other Subsidiary (“Confidential
Information”) are the property of the Company or such Subsidiary. Therefore, Executive agrees
that Executive shall not disclose to any unauthorized person or use for Executive’s own purposes
any Confidential Information without the prior written consent of the CEO, unless and to the extent
that the aforementioned matters become generally known to and available for use by the public other
than as a result of Executive’s acts or omissions. Executive shall deliver to the Company at the
termination of the Employment Term, or at any other time the Company may request, all memoranda,
notes, plans, records, reports, computer tapes, printouts and software and other documents and data
(and copies thereof) in any form or medium relating to the Confidential Information, Work Product
(as defined below) or the business of the Company or any Subsidiary that Executive may then possess
or have under Executive’s control.



     6. Inventions and Patents. Executive acknowledges that all inventions, innovations,
improvements, developments, methods, designs, analyses, drawings, reports and all similar or
related information (whether or not patentable) that relate to the Company’s or any of its
Subsidiaries’ actual or anticipated business, research and development or existing or future
products or services and that are conceived, developed or made by Executive while employed by the
Company and its Subsidiaries (“Work Product”) belong to the Company or such Subsidiary.
Executive shall promptly disclose such Work Product to the CEO and perform all actions reasonably
requested by the CEO (whether during or after the Employment Term) to establish and confirm such
ownership (including, without limitation, assignments, consents, powers of attorney and other
instruments).



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     7. Non-Compete, Non-Solicitation.



     (a) In further consideration of the compensation to be paid to Executive hereunder, Executive
acknowledges that in the course of Executive’s employment with the Company Executive shall become
familiar with the Company’s trade secrets and with other Confidential Information concerning the
Company and its Subsidiaries and that Executive’s services shall be of special, unique and
extraordinary value to the Company and its Subsidiaries. Therefore, Executive agrees that, during
the Employment Term and for a period of eighteen (18) months thereafter (the “Noncompete
Period”), Executive shall not directly or indirectly own any interest in, manage, control,
participate in, consult with, render services for, or in any manner engage in any business
competing with the businesses of the Company or its Subsidiaries, as such businesses exist or are
in process on the date of the termination of Executive’s employment, within any geographical area
in which the Company or its Subsidiaries engage or plan to engage in such businesses. Nothing
herein shall prohibit Executive from being a passive owner of not more than 2% of the outstanding
stock of any class of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation. The Company presently does not enforce this
paragraph 7(a) in California. However, Executive is still required to sign this Agreement since
Executive may already work, or may work in the future, in a state where this paragraph 7(a) is
fully enforceable. Moreover, the Company reserves its right to enforce this paragraph 7(a) in all
other states in which it is enforceable, and in California in the future, to reflect any
legislative or legal developments which will permit its enforcement to the fullest extent permitted
by California law.



     (b) During the Noncompete Period, Executive shall not directly or indirectly through another
entity (i) induce or attempt to induce any employee of the Company or any Subsidiary to leave the
employ of the Company or such Subsidiary, or in any way interfere with the relationship between the
Company or any Subsidiary and any employee thereof, (ii) hire any person who was an employee of the
Company or any Subsidiary at any time during the Employment Term or (iii) induce or attempt to
induce any customer, supplier, licensee, licensor, franchisee or other business relation of the
Company or any Subsidiary to cease doing business with the Company or such Subsidiary, or in any
way interfere with the relationship between any such customer, supplier, licensee, licensor,
franchisee, or business relation and the Company or any Subsidiary (including, without limitation,
making any negative statements or communications about the Company or its Subsidiaries).



     (c) The provisions of this paragraph 7 will be enforced to the fullest extent permitted by the
law in the state in which Executive resides or is employed at the time of the enforcement of the
provision. If, at the time of enforcement of this paragraph 7, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area



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reasonable under such circumstances shall be substituted for the stated duration, scope or
area and that the court shall be allowed to revise the restrictions contained herein to cover the
maximum period, scope and area permitted by law. Executive agrees that the restrictions contained
in this paragraph 7 are reasonable.




     (d) In the event of the breach or a threatened breach by Executive of any of the provisions of
this paragraph 7, the Company, in addition and supplementary to other rights and remedies existing
in its favor, may apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security). In addition, in the event of an
alleged breach or violation by Executive of this paragraph 7, the Noncompete Period shall be tolled
until such breach or violation has been duly cured.



     8. Executive’s Representations. Executive hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by Executive do not and
shall not conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or by which Executive is bound,
(ii) Executive is not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the execution and delivery
of this Agreement by the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents
that Executive has had an opportunity to consult with independent legal counsel regarding
Executive’s rights and obligations under this Agreement and that Executive fully understands the
terms and conditions contained herein.



     9. Survival. Paragraphs 5, 6 and 7 and paragraphs 9 through 16 shall survive and
continue in full force in accordance with their terms notwithstanding any termination of the
Employment Term.



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     10. Notices. Any notice provided for in this Agreement shall be in writing and shall
be either personally delivered, or mailed by first class mail, return receipt requested, to the
recipient at the address below indicated:



     Notices to Executive:



     Rick Lepley



     At his most recent address as reflected in the employment records of the Company.



     Notices to the Company:



Office Depot, Inc.

2200 Old Germantown Road

Delray Beach, Florida 33445

Attention: Chairman and Chief Executive Officer



and



Office Depot, Inc.

2200 Old Germantown Road

Delray Beach, Florida 33445

Attention: Executive Vice President — Human Resources


or such other address or to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement shall be
deemed to have been given when so delivered or mailed.




     11. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.



     12. Complete Agreement. This Agreement and those documents expressly referred to
herein and other documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject matter hereof in
any way (provided, however that during the “Employment Period,”



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as defined in the Change of Control Employment Agreement, the terms and provision of the
Change of Control Employment Agreement shall be effective and shall control to the extent there is
any conflict between such agreement and this Agreement).




     13. No Strict Construction. The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.



     14. Counterparts. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one and the same
agreement.



     15. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective heirs, successors and
assigns, except that Executive may not assign Executive’s rights or delegate Executive’s
obligations hereunder without the prior written consent of the Company.



     16. Choice of Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by, and construed in accordance with, the laws of the State of Florida, without giving
effect to any choice of law or conflict of law rules or provisions (whether of the State of Florida
or any other jurisdiction) that would cause the application of the laws of any jurisdiction other
than the State of Florida.



     17. Amendment and Waiver. The provisions of this Agreement may be amended or waived
only with the prior written consent of the Company and Executive, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.



     18. Confidentiality of this Agreement. The parties agree that the terms of this
Agreement are confidential. Executive shall not divulge or publicize the terms hereof except as
may be necessary to enforce the promises, covenants and/or understandings contained herein or as
either party may be required to do so by law, court order, subpoena or other judicial action or
government taxing authorities. Executive may disclose the contents of this Agreement to his
immediate family, attorneys and accountants, provided however, that any further disclosure of the
terms of this Agreement by any of these persons to anyone not included within the terms of this
paragraph may be deemed a breach of the Agreement by Executive.



     19. Arbitration Provisions. Except as to the right of the Company to resort to any
court of competent jurisdiction to obtain injunctive relief or specific enforcement of the
Executive’s obligations of confidentiality and non-competition under this Employment Agreement (or
otherwise), any dispute or controversy between the Company and Executive arising out of or relating
to Executive’s employment or termination of employment, this



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Agreement or the breach of this Agreement, including but not limited to disputes involving
discrimination arising under common law, and/or federal, state and local laws, shall be settled by
arbitration administered by the American Arbitration Association (“AAA”) in accordance with
its National Rules for the Resolution of Employment Disputes then in effect, and judgment on the
award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Any
arbitration shall be held before a single arbitrator who shall be selected by the mutual agreement
of the Company and Executive, unless the parties are unable to agree to an arbitrator, in which
case the arbitrator will be selected under the procedures of the AAA. The arbitrator shall have
the authority to award any remedy or relief that a court of competent jurisdiction could order or
grant, including, without limitation, the issuance of an injunction. Executive agrees to abide by
and accept the final decision of the arbitrator as to the ultimate resolution of any and all
covered disputes and understands that arbitration replaces any right to trial by a judge or jury.
However, either party may, without inconsistency with this arbitration provision, apply to any
court otherwise having jurisdiction over such dispute or controversy and seek interim provisional,
injunctive or other equitable relief until the arbitration award is rendered or the controversy is
otherwise resolved. Except as necessary in court proceedings to enforce this arbitration provision
or an award rendered hereunder, or to obtain interim relief, or as may otherwise be required by
law, neither a party nor an arbitrator may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of the Company and Executive. The Company
and Executive acknowledge that this Agreement evidences a transaction involving interstate
commerce. Notwithstanding any choice of law provision included in this Agreement, the United
States Federal Arbitration Act shall govern the interpretation and enforcement of this arbitration
provision. The arbitration proceeding shall be conducted in Palm Beach County, Florida unless the
parties mutually agree to another location. The Company shall pay the costs of any arbitrator
appointed hereunder.




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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.


	 	 	 	 	 
	 	OFFICE DEPOT, INC.

 	 
	 	By:  	/s/ BRUCE
NELSON	 
	 	 	Name: Bruce Nelson 	 	 
	 	 	Its: Chairman and CEO	 
	 



	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	/s/ RICK
LEPLEY	 
	 	Name:  	Rick Lepley 	 
	 	Date: March 22, 2004	 
	 





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