Document:

EX-4.1

                     EMPLOYEE STOCK INCENTIVE PLAN

                         LARGO VISTA GROUP, LTD.
                      EMPLOYEE STOCK INCENTIVE PLAN

     1.  GENERAL PROVISIONS

     1.1  Purpose.

     The Stock Incentive Plan (the "Plan") is intended to allow
designated officers, employees  and certain non-employees (all of whom are
sometimes collectively referred to herein as "Employees") Largo Vista Group,
Ltd., a Nevada corporation ("Largo Vista") and its Subsidiaries (as that term
is defined below) which it may have from time to time (Largo Vista and
such Subsidiaries are referred to herein as the "Company") to receive
certain options ("Stock Options") to purchase  Largo Vista common stock, one
tenth of one cent ($0.001) par value ("Common Stock"), and to receive grants of
Common Stock subject to certain restrictions ("Awards").  As used in this
Plan, the term "Subsidiary" shall mean each corporation which is a "subsidiary
corporation" of Largo Vista within the meaning of Section 424(f) of the
Internal Revenue Code of 1986, as amended (the "Code").  The purpose of
this Plan is to provide Employees with equity-based compensation incentives
to make significant and extraordinary contributions to the long-term growth and
performance of the Company, and to attract and retain Employees.

     1.2  Administration.

     1.2.1  The Plan shall be administered by the Compensation
Committee (the "Committee") of, or appointed by, the Board of Directors of
Largo Vista (the "Board").   The Committee shall select one of its members as
Chairman and shall act by vote of a majority of a quorum, or by unanimous
written consent.

A majority of its members shall constitute a quorum.  The Committee shall
be governed by the provisions of  Largo Vista Bylaws and of Nevada law
applicable to the Board, except as otherwise provided herein or determined by
the Board.

     1.2.2  The Committee shall have full and complete authority, in
its discretion, but subject to the express provisions of the Plan:  to
approve the Employees nominated by the management of the Company to be granted
Awards or Stock Options; to determine the number of Awards or Stock Options to
be granted to an Employee; to determine the time or times at which Awards or
Stock Options shall be granted; to establish the terms and conditions upon
Which Awards or Stock Options may be exercised; to remove or adjust any
restrictions and conditions upon Awards or Stock Options; to specify, at the
time of grant, provisions relating to exercisability of Stock Options and to
accelerate or otherwise modify the exercisability of any Stock Options; and to
adopt such rules and regulations and to make all other determinations deemed
necessary or desirable for the administration of the Plan.  All interpretations
and constructions of the Plan by the Committee, and all of its actions
hereunder, shall be binding and conclusive on all persons for all purposes.

     1.2.3  The Company hereby agrees to indemnify and hold harmless
each Committee member and each employee of the Company, and the estate and
heirs of such Committee member or employee, against all claims, liabilities,
expenses, penalties, damages or other pecuniary losses, including legal fees,
which such Committee member or employee, his or her estate or heirs may suffer
as a result of his or her responsibilities, obligations or duties in connection
with the Plan, to the extent that insurance, if any, does not cover the payment
of such items.  No member of the Committee or the Board shall be liable for any
action or determination made in good faith with respect to the Plan or any
Award or Stock Option granted pursuant to the Plan.

     1.3  Eligibility and Participation.

     Employees eligible under the Plan shall be approved by the
Committee from those Employees who, in the opinion of the management of the
Company, are in positions which enable them to make significant contributions
to the long-term performance and growth of the Company.  In selecting Employees
to whom Stock Options or Awards may be granted, consideration shall be given to
factors such as employment position, duties and responsibilities, ability,
productivity, length of service, morale, interest in the Company and
recommendations of supervisors.

     1.4  Shares Subject to the Plan.

     The maximum number of shares of Common Stock that may be issued
pursuant to the Plan shall be Ten Million (10,000,000) subject to adjustment
pursuant tothe provisions of paragraph 4.1.  If shares of Common Stock awarded
or issued under the Plan are reacquired by the Company due to a forfeiture or
for any other reason, such shares shall be cancelled and thereafter shall again
be available for purposes of the Plan.  If a Stock Option expires, terminates
or is cancelled for any reason without having been exercised in full, the
shares of Common Stock not purchased thereunder shall again be available for
purposes of the Plan.

     2.  PROVISIONS RELATING TO STOCK OPTIONS

     2.1  Grants of Stock Options.

     The Committee may grant Stock Options in such amounts, at such
times, and to such Employees nominated by the management of the Company as the
Committee, in its discretion, may determine.   Stock Options granted under the
Plan shall constitute "incentive stock options" within the meaning of Section
422 of the Code, if so designated by the Committee on the date of grant.  The
Committee shall also have the discretion to grant Stock Options which do not
constitute incentive stock options, and any such Stock Options shall be
designated non-statutory stock options by the Committee on the date of grant.
The aggregate fair market value (determined as of the time an incentive stock
option is granted) of the Common Stock with respect to which incentive stock
options are exercisable for the first time by any Employee during any one
calendar year (under all plans of the Company and any parent or subsidiary of
the Company) may not exceed the maximum amount permitted under Section 422 of
the Code (currently one hundred thousand dollars ($100,000.00)).  Non-statutory
stock options shall not be subject to the limitations relating to incentive
stock options contained in the preceding sentence.  Each Stock Option shall
be evidenced by a written agreement (the "Option Agreement") in a form
approved by the Committee, which shall be executed on behalf of the Company and
by the Employee to whom the Stock Option is granted, and which shall be
subject to the terms and conditions of this Plan.  In the discretion of the
Committee, Stock Options may include provisions (which need not be uniform),
authorized by the Committee in its discretion, that accelerate an Employee's
rights to exercise Stock Options following a "Change in Control," upon
termination of such Employee employment by the Company without "Cause" or by
the Employee for "Good Reason," as such terms are defined in paragraph 3.1
hereof.  The holder of a Stock Option shall not be entitled to the privileges
of stock ownership as to any shares of Common Stock not actually issued to
such holder.

     2.2  Purchase Price.

     The purchase price ("Exercise Price") of shares of Common Stock
subject to each Stock Option ("Option Shares") shall be fifty percent (50%) of
the fair market value of the Common Stock on the date of exercise.  For an
employee holding greater than ten percent (10%) of the total voting power of
all stock of the Company, either Common or Preferred, the Exercise Price of an
incentive stock option shall be at least one hundred and ten percent (110%) of
the fair market value of the Common Stock on the date of the grant of the
option.

     2.3  Option Period.

     The Stock Option period (the "Term") shall commence on the date of
grant of the Stock Option and shall be ten (10) years or such shorter period
as is determined by the Committee.    Each Stock Option shall provide that it
is exercisable over its term in such periodic installments as the
Committee in its sole discretion may determine.  Such provisions need not be
uniform.  Section 16(b) of the Exchange Act exempts persons normally subject to
the reporting requirements of Section 16(a) of the Exchange Act ("Section 16
Reporting Persons") pursuant to a qualified employee stock option plan from the
normal requirement of not selling until at least six (6) months and one day
from the date the Stock Option is granted.

     2.4  Exercise of Options.

     2.4.1  Each Stock Option may be exercised in whole or in part (but
not as to fractional shares) by delivering it for surrender or endorsement to
the Company, attention of the Corporate Secretary, at the principal office
of the Company, together with payment of the Exercise Price and an executed
Notice and Agreement of Exercise in the form prescribed by paragraph 2.4.2.
Payment may be made (i) in cash, (ii) by cashier's or certified check, (iii) by
surrender of previously owned shares of the Company's Common Stock valued
pursuant to paragraph 2.2 (if the Committee authorizes payment in stock in its
discretion), (iv) by withholding from the Option Shares which would otherwise
beissuable upon the exercise of the Stock Option that number of Option Shares
equal to the exercise price of the Stock Option, if such withholding is
authorized by the Committee in its discretion, (v) by cashless exercise as
established by Largo Vista or (vi) in the discretion of the Committee, by the
delivery to the Company of the optionee's promissory note secured by the Option
Shares, bearing interest at a rate sufficient to prevent the imputation of
interest under Sections 483 or 1274 of the Code, and having such other terms
and conditions as may be satisfactory to the Committee.

     2.4.2  Exercise of each Stock Option is conditioned upon the
agreement of the Employee to the terms and conditions of this Plan and of such
Stock Option as evidenced by the Employee's execution and delivery of a Notice
and Agreement of Exercise in a form to be determined by the Committee in its
discretion.  Such Notice and Agreement of Exercise shall set forth the
agreement of the Employee that:  (a) no Option Shares will be sold or otherwise
distributed in violation of the Securities Act of 1933 (the "Securities Act")
or any other applicable federal or state securities laws, (b) each Option Share
certificate may be imprinted with legends reflecting any applicable federal and
state securities law restrictions and conditions, (c) the Company may comply
with said securities law restrictions and issue "stop transfer" instructions
to its Transfer Agent and Registrar without liability, (d) if the Employee is
a Section 16 Reporting Person, the Employee will furnish to the Company a
copy of each Form 4 or Form 5 filed by said Employee and will timely file all
reports required under federal securities laws, and (e) the Employee will
report all sales of Option Shares to the Company in writing on a form
prescribed by the Company.

    2.4.3  No Stock Option shall be exercisable unless and until any
applicable registration or qualification requirements of federal and state
securities laws, and all other legal requirements, have been fully complied
with.  The Company will use reasonable efforts to maintain the effectiveness
of a Registration Statement under the Securities Act for the issuance of Stock
Options and shares acquired thereunder, but there may be times when no such
Registration Statement will be currently effective.  The exercise of
Stock Options may be temporarily suspended without liability to the Company
during times when no such Registration Statement is currently effective, or
during times when, in the reasonable opinion of the Committee, such suspension
is necessary to preclude violation of any requirements of applicable law
or regulatory bodies having jurisdiction over the Company.  If any Stock
Option would expire for any reason except the end of its term during such a
Suspension then if exercise of such Stock Option is duly tendered before its
expiration, such Stock Option shall be exercisable and exercised (unless the
attempted exercise is withdrawn) as of the first day after the end of such
suspension.

The Company shall have no obligation to file any Registration Statement
Covering resales of Option Shares.

     2.5  Continuous Employment.

      Except as provided in paragraph 2.7 below, an Employee may not
exercise a Stock Option unless from the date of grant to the date of exercise
such Employee remains continuously in the employ of the Company.  For
purposes of this paragraph 2.5, the period of continuous employment of an
Employee with the Company shall be deemed to include (without extending the term
of the Stock Option) any period during which such Employee is on leave of
absence with the consent of the Company, provided that such leave of absence
shall not exceed three (3) months and that such Employee returns to the employ
of the Company at the expiration of such leave of absence.  If such Employee
fails to return to the employ of the Company at the expiration of such leave of
absence, such Employee's employment with the Company shall be deemed terminated
as of the date such leave of absence commenced.  The continuous employment of
an Employee with the Company shall also be deemed to include any period during
which such Employee is a member of the Armed Forces of the United States,
provided that such Employee returns to the employ of the Company within ninety
(90) days (or such longer period as may be prescribed by law) from the date
such Employee first becomes entitled to discharge.  If an Employee does not
return to the employ of the Company within ninety (90) days (or such longer
period as may be prescribed by law) from the date such Employee first becomes
entitled to discharge, such Employee's employment with the Company shall be
deemed to have terminated as of the date such Employee's military service
ended.

     2.6  Restrictions on Transfer.

     Each Stock Option granted under this Plan shall be transferable
only by will or the laws of descent and distribution.  No interest of any
Employee under the Plan shall be subject to attachment, execution, garnishment,
sequestration, the laws of bankruptcy or any other legal or equitable process.
Each Stock Option granted under this Plan shall be exercisable during an
Employee's lifetime only by such Employee or by such Employee's legal
representative.

     2.7  Termination of Employment.

     2.7.1  Upon an Employee's Retirement, Disability (both terms being
defined below) or death, (a) all Stock Options to the extent then presently
exercisable shall remain in full force and effect and may be exercised pursuant
to the provisions thereof, including expiration at the end of the fixed term
thereof, and (b) unless otherwise provided by the Committee, all Stock Options
to the extent not then presently exercisable by such Employee shall terminate
as of the date of such termination of employment and shall not be exercisable
thereafter.

     2.7.2  Upon the termination of the employment of an Employee with
the Company for any reason other than the reasons set forth in paragraph
2.7.1 hereof, (a) all Stock Options to the extent then presently exercisable
by such Employee shall remain exercisable only for a period of ninety (90) days
after the date of such termination of employment (except that the ninety (90)
day period shall be extended to twelve (12) months if the Employee shall
die during such ninety (90) day period), and may be exercised pursuant to the
provisions thereof, including expiration at the end of the fixed term thereof,
and (b) unless otherwise provided by the Committee, all Stock Options to the
extent not then presently exercisable by such Employee shall terminate as of
the date of such termination of employment and shall not be exercisable
thereafter.

     2.7.3  For purposes of this Plan:

     (a)  "Retirement" shall mean an Employee's retirement from the
employ of the Company on or after the date on which such Employee attains the
age of sixty-five (65) years; and

     (b)  "Disability" shall mean total and permanent incapacity of an
Employee, due to physical impairment or legally established mental
incompetence, to perform the usual duties of such Employee's employment
with the Company, which disability shall be determined: (i) on medical
evidence by a licensed physician designated by the Committee, or (ii) on
evidence that the Employee has become entitled to receive primary benefits as
a disabled employee under the Social Security Act in effect on the date of such
disability.

     3.  PROVISIONS RELATING TO AWARDS

     3.1  Grant of Awards.

     Subject to the provisions of the Plan, the Committee shall have
full and complete authority, in its discretion, but subject to the express
provisions of this Plan, to (i) grant Awards pursuant to the Plan, (ii)
determine the number of shares of Common Stock subject to each Award ("Award
Shares"), (iii) determine the terms and conditions (which need not be
identical) of each Award, including the consideration (if any) to be paid by
the Employee for such Common Stock, which may, in the Committee's discretion,
consist of the delivery of the Employee's promissory note meeting the
requirements of paragraph 2.4.1, (iv) establish and modify performance criteria
for Awards, and (v) make all of the determinations necessary or advisable with
respect to Awards under the Plan.  Each award under the Plan shall consist of a
grant of shares of Common Stock subject to a restriction period (after which
the restrictions shall lapse), which shall be a period commencing on the date
the award is granted and ending on such date as the Committee shall determine
(the "Restriction Period").  The Committee may provide for the lapse of
restrictions in installments, for acceleration of the lapse of restrictions
upon the satisfaction of such performance or other criteria or upon the
occurrence of such events as the Committee shall determine, and for the early
expiration of the Restriction Period upon an Employee's death, Disability or
Retirement as defined in paragraph 2.7.3, or, following a Change of Control,
upon termination of an Employee's employment by the Company without "Cause" or
by the Employee for "Good Reason," as those terms are defined herein.  For
purposes of this Plan:

     "Change of Control" shall be deemed to occur (a) on the date the
Company first has actual knowledge that any person (as such term is used in
Sections 13(d) and 14(d) (2) of the Exchange Act) has become the beneficial
owner (as defined in Rule 13(d)-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing forty percent (40%) or
more of the combined voting power of the Company's then outstanding securities,
or (b) on the date the shareholders of the Company approve (i) a merger of the
Company with or into any other corporation in which the Company is not the
surviving corporation or in which the Company survives as a subsidiary of
another corporation, (ii) a consolidation of the Company with any other
corporation, or (iii) the sale or disposition of all or substantially all of
the Company's assets or a plan of complete liquidation.

     "Cause," when used with reference to termination of the employment
of an Employee by the Company for "Cause," shall mean:

     (a)  the Employee's continuing willful and material breach of his
or her duties to the Company after he or she receives a demand from the Chief
Executive of the Company specifying the manner in which he or she has
Willfully and materially breached such duties, other than any such failure
resulting from Disability of the Employee or his or her resignation for "Good
Reason," as defined herein; or

     (b)  the conviction of the Employee of a felony; or

     (c)  the Employee's commission of fraud in the course of his or
her employment with the Company, such as embezzlement or other material and
intentional violation of law against the Company; or

     (d)  the Employee's gross misconduct causing material harm to the
Company.

     "Good Reason" shall mean any one or more of the following,
occurring following or in connection with a Change of Control and within ninety
(90) days prior to the Employee's resignation, unless the Employee shall have
consented thereto in writing:

     (a)  the assignment to the Employee of duties inconsistent with
his or her executive status prior to the Change of Control or a substantive
change in the officer or officers to whom he or she reports from the officer or
officers to whom he or she reported immediately prior to the Change of Control;
or

     (b)  the elimination or reassignment of a majority of the duties
and responsibilities that were assigned to the Employee immediately prior
to the Change of Control; or

     (c)  a reduction by the Company in the Employee's annual base
salary as in effect immediately prior to the Change of Control; or

     (d)  the Company's requiring the Employee to be based anywhere
outside a 35-mile radius from his or her place of employment immediately prior
to the Change of Control, except for required travel on the Company's business
to an extent substantially consistent with the Employee's business travel
obligations immediately prior to the Change of Control; or

     (e)  the failure of the Company to grant the Employee a
performance bonus reasonably equivalent to the same percentage of salary the
Employee normally received prior to the Change of Control, given comparable
performance by the Company and the Employee; or

     (f)  the failure of the Company to obtain a satisfactory
Assumption Agreement (as defined in paragraph 4.12 of the Plan) from a
successor, or the failure of such successor to perform such Assumption
Agreement.

     3.2  Incentive Agreements.

     Each Award granted under the Plan shall be evidenced by a written
agreement (an "Incentive Agreement") in a form approved by the
Committee and executed by the Company and the Employee to whom the Award is
granted.  Each Incentive Agreement shall be subject to the terms and conditions
of the Plan and other such terms and conditions as the Committee may specify.

     3.3  Waiver of Restrictions.

     The Committee may modify or amend any Award under the Plan or
waive any restrictions or conditions applicable to such Awards; provided,
however, that the Committee may not undertake any such modifications,
amendments or waivers if the effect thereof materially increases the benefits
to any Employee, or adversely affects the rights of any Employee without his or
her consent.

     3.4  Terms and Conditions of Awards.

     3.4.1  Upon receipt of an Award of shares of Common Stock under
the Plan, even during the Restriction Period, an Employee shall be the holder
of record of the shares and shall have all the rights of a shareholder with
respect to such shares, subject to the terms and conditions of the Plan and the
Award.

     3.4.2  Except as otherwise provided in this paragraph 3.4, no
shares of Common Stock received pursuant to the Plan shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period applicable to such shares.  Any purported
disposition of such Common Stock in violation of this paragraph 3.4.2 shall be
null and void.

    3.4.3  If an Employee's employment with the Company terminates
prior to the expiration of the Restriction Period for an Award, subject to any
provisions of the Award with respect to the Employee's death, Disability or
Retirement, or Change of Control, all shares of Common Stock subject to the
Award shall be immediately forfeited by the Employee and reacquired by the
Company, and the Employee shall have no further rights with respect to the
Award.  In the discretion of the Committee, an Incentive Agreement may provide
that, upon the forfeiture by an Employee of Award Shares, the Company shall
repay to the Employee the consideration (if any) which the Employee paid for
the Award Shares on the grant of the Award.  In the discretion of the Committee
an Incentive Agreement may also provide that such repayment shall include
an interest factor on such consideration from the date of the grant of the
Award to the date of such repayment.

     3.4.4  The Committee may require under such terms and conditions
as it deems appropriate or desirable that (i) the certificates for Common
Stock delivered under the Plan are to be held in custody by the Company or a
Person or institution designated by the Company until the Restriction Period
expires, (ii) such certificates shall bear a legend referring to the
restrictions on the Common Stock pursuant to the Plan, and (iii) the Employee
shall have delivered to the Company a stock power endorsed in blank relating to
the Common Stock.

     4.  MISCELLANEOUS PROVISIONS

     4.1  Adjustments Upon Change in Capitalization.

    4.1.1  The number and class of shares subject to each outstanding
Stock Option, the Exercise Price thereof (but not the total price), the
maximum number of Stock Options that may be granted under the Plan, the minimum
number of shares as to which a Stock Option may be exercised at any one time,
and the number and class of shares subject to each outstanding Award, shall
be proportionately adjusted in the event of any increase or decrease in
the number of the issued shares of Common Stock which results from a split-
up or consolidation of shares, payment of a stock dividend or dividends
exceeding a total of five percent (5%) for which the record dates occur in any
one fiscal year, a recapitalization (other than the conversion of convertible
securities according to their terms), a combination of shares or other like
capital adjustment, so that (i) upon exercise of the Stock Option, the Employee
shall receive the number and class of shares such Employee would have
received had such Employee been the holder of the number of shares of Common
Stock for which the Stock Option is being exercised upon the date of such
change  or increase or decrease in the number of issued shares of the Company,
and (ii) upon the lapse of restrictions of the Award Shares, the Employee shall
receive the number and class of shares such Employee would have received if the
restrictions on the Award Shares had lapsed on the date of such change or
increase or decrease in the number of issued shares of the Company.

     4.1.2  Upon a reorganization, merger or consolidation of the
Company with one or more corporations as a result of which Largo Vista is not
the surviving corporation or in which Largo Vista survives as a wholly-owned
subsidiary of another corporation, or upon a sale of all or substantially all
of the property of the Company to another corporation, or any dividend or
distribution to shareholders of more than ten percent (10%) of the Company's
assets, adequate adjustment or other provisions shall be made by the Company or
other party to such transaction so that there shall remain and/or be
substituted for the Option Shares and Award Shares provided for herein, the
shares, securities or assets which would have been issuable or payable in
respect of or in exchange for such Option Shares and Award Shares then
remaining, as if the Employee had been the owner of such shares as of the
applicable date.  Any securities so substituted shall be subject to similar
successive adjustments.

     4.2  Withholding Taxes.

     The Company shall have the right at the time of exercise of any
Stock Option, the grant of an Award, or the lapse of restrictions on Award
Shares, to make adequate provision for any federal, state, local or foreign
taxes which it believes are or may be required by law to be withheld with
respect to such exercise ("Tax Liability"), to ensure the payment of any such
Tax Liability.  The Company may provide for the payment of any Tax Liability by
any of the following means or a combination of such means, as determined by the
Committee in its sole and absolute discretion in the particular case:  (i) by
requiring the Employee to tender a cash payment to the Company, (ii) by
withholding from the Employee's salary, (iii) by withholding from the Option
Shares which would otherwise be issuable upon exercise of the Stock Option, or
from the Award

Shares on their grant or date of lapse of restrictions, that number of
Option Shares or Award Shares having an aggregate fair market value
(determined in the manner prescribed by paragraph 2.2) as of the date the
withholding tax obligation arises in an amount which is equal to the Employee's
Tax Liability or (iv) by any other method deemed appropriate by the Committee.
Satisfaction of the Tax Liability of a Section 16 Reporting Person may be made
by the method of payment specified in clause (iii) above only if the following
two conditions are satisfied:

    (a)  the withholding of Option Shares or Award Shares and the
exercise of the related Stock Option occur at least six months and one day
following the date of grant of such Stock Option or Award; and

    (b)  the withholding of Option Shares or Award Shares is made
either (i) pursuant to an irrevocable election ("Withholding Election") made
by such Employee at least six months in advance of the withholding of Options
Shares or Award Shares, or (ii) on a day within a ten-day "window period"
beginning on the third business day following the date of release of the
Company's quarterly or annual summary statement of sales and earnings.

Anything herein to the contrary notwithstanding, a Withholding Election
may be disapproved by the Committee at any time.

     4.3  Relationship to Other Employee Benefit Plans.

     Stock Options and Awards granted hereunder shall not be deemed to
be salary or other compensation to any Employee for purposes of any
pension, thrift, profit-sharing, stock purchase or any other employee benefit
plan now maintained or hereafter adopted by the Company.

     4.4  Amendments and Termination.

     The Board of Directors may at any time suspend, amend or terminate
this Plan.  No amendment, except as provided in paragraph 2.8, or
modification of this Plan may be adopted, except subject to stockholder
approval, which would:  (a) materially increase the benefits accruing to
Employees under this Plan, (b)materially increase the number of securities
which may be issued under this Plan (except for adjustments pursuant to
paragraph 4.1 hereof), or (c) materially modify the requirements as to
eligibility for participation in the Plan.

     4.5  Successors in Interest.

     The provisions of this Plan and the actions of the Committee shall
be binding upon all heirs, successors and assigns of the Company and of
Employees.

     4.6  Other Documents.

     All documents prepared, executed or delivered in connection with
this Plan (including, without limitation, Option Agreements and Incentive
Agreements) shall be, in substance and form, as established and modified by the
Committee; provided, however, that all such documents shall be subject in every
respect to the provisions of this Plan, and in the event of any conflict
between the terms of any such document and this Plan, the provisions of this
Plan shall prevail.

     4.7  No Obligation to Continue Employment.

     This Plan and grants hereunder shall not impose any obligation on
the Company to continue to employ any Employee.  Moreover, no provision of
this Plan or any document executed or delivered pursuant to this Plan shall
be deemed modified in any way by any employment contract between an
Employee (or other employee) and the Company.

     4.8  Misconduct of an Employee.

     Notwithstanding any other provision of this Plan, if an Employee
commits fraud or dishonesty toward the Company or wrongfully uses or discloses
any trade secret, confidential data or other information proprietary to the
Company, or intentionally takes any other action materially inimical to
the best interests of the Company, as determined by the Committee, in its
sole and absolute discretion, such Employee shall forfeit all rights and
benefits under this Plan.

     4.9  Term of Plan.

     This Plan was adopted by the Board effective November 1, 2001.  No
Stock Options or Awards may be granted under this Plan after October 31,
2011.

     4.10  Governing Law.

     This Plan shall be construed in accordance with, and governed by,
the laws of the State of Nevada.

     4.11  Approval.

     No Stock Option shall be exercisable, or Award granted, unless and
until the Directors of the Company have approved this Plan and all other
legal requirements have been fully complied with.

     4.12  Assumption Agreements.

     The Company will require each successor, (direct or indirect,
whether by purchase, merger, consolidation or otherwise), to all or
substantially all of the business or assets of the Company, prior to the
consummation of each such transaction, to assume and agree to perform the terms
and provisions remaining to be performed by the Company under each Incentive
Agreement and Stock Option and to preserve the benefits to the Employees
thereunder.  Such assumption and agreement shall be set forth in a written
agreement in form and substance satisfactory to the Committee (an "Assumption
Agreement"), and shall include such adjustments, if any, in the application of
the provisions of the Incentive Agreements and Stock Options and such
additional provisions, if any, as the Committee shall require and approve, in
order to preserve such benefits to the Employees.  Without limiting the
generality of the foregoing, the Committee may require an Assumption Agreement
to include satisfactory undertakings by a successor:

     (a)  to provide liquidity to the Employees at the end of the
Restriction Period applicable to Common Stock awarded to them under the Plan,
or on the exercise of Stock Options;

     (b)  if the succession occurs before the expiration of any period
specified in the Incentive Agreements for satisfaction of performance
criteria applicable to the Common Stock awarded thereunder, to refrain from
interfering with the Company's ability to satisfy such performance criteria or
to agree to modify such performance criteria and/or waive any criteria that
cannot be satisfied as a result of the succession;

     (c)  to require any future successor to enter into an Assumption
Agreement; and

     (d)  to take or refrain from taking such other actions as the
Committee may require and approve, in its discretion.

The Committee referred to in this paragraph 4.12 is the Committee
appointed by a Board of Directors in office prior to the succession then under
consideration.

     4.13  Compliance With Rule 16b-3.

     Transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3.  To the extent that any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.

     IN WITNESS WHEREOF, this Plan has been executed effective as of
the 9th day of November 2001.

Largo Vista Group, Ltd.

By: /s/  Daniel J. Mendez
Daniel J. Mendez, PresidentPrepared by MERRILL CORPORATION

 

 

 

 

 

 

EMPLOYMENT

AGREEMENT

 

BETWEEN

 

ROBERT L. NARDELLI

 

AND

 

THE HOME DEPOT, INC.

 

 

 

 

 

 

 

 

EMPLOYMENT AGREEMENT

BETWEEN

ROBERT L. NARDELLI

AND

THE HOME DEPOT, INC.

 

Table of

Contents

 

 

	

  1.

  	

  Employment

  	

   

  
	

  2.

  	

  Period of Employment

  	

   

  
	

  3.

  	

  Duties During the Period of Employment

  	

   

  
	

   

  	

  3.1

  	

  Duties.

  	

   

  
	

   

  	

  3.2

  	

  Scope.

  	

   

  
	

  4.

  	

  Compensation and Other Payments

  	

   

  
	

   

  	

  4.1

  	

  Salary.

  	

   

  
	

   

  	

  4.2

  	

  Make Whole Payment.

  	

   

  
	

   

  	

  4.3

  	

  Annual Bonus.

  	

   

  
	

   

  	

  4.4

  	

  Annual Stock Option Grants.

  	

   

  
	

   

  	

  4.5

  	

  Deferred Stock Units.

  	

   

  
	

   

  	

  4.6

  	

  Payment of Professional Fees.

  	

   

  
	

  5.

  	

  Other Executive Benefits

  	

   

  
	

   

  	

  5.1

  	

  Deferred Compensation

  	

   

  
	

   

  	

  5.2

  	

  Regular Reimbursed Business Expenses

  	

   

  
	

   

  	

  5.3

  	

  Benefit Plans

  	

   

  
	

   

  	

  5.4

  	

  Relocation

  	

   

  
	

   

  	

  5.5

  	

  Perquisites

  	

   

  
	

  6.

  	

  Termination

  	

   

  
	

   

  	

  6.1

  	

  Death or Disability

  	

   

  
	

   

  	

  6.2

  	

  By the Company for Cause

  	

   

  
	

   

  	

  6.3

  	

  By Executive for Good Reason

  	

   

  
	

   

  	

  6.4

  	

  Other than for Cause or Good Reason

  	

   

  
	

   

  	

  6.5

  	

  Notice of Termination

  	

   

  
	

   

  	

  6.6

  	

  Date of Termination

  	

   

  
	

  7.

  	

  Obligations of the Company Upon Termination

  	

   

  
	

   

  	

  7.1

  	

  Termination by the Company for Cause or

  Resignation without Good Reason

  	

   

  
	

   

  	

  7.2

  	

  Resignation with Good Reason; Change in

  Control; Termination without Cause; Death; Disability

  	

   

  
	

   

  	

  7.3

  	

  Retirement after Age Sixty-Two

  	

   

  
	

   

  	

  7.4

  	

  COBRA Rights

  	

   

  
	

  8.

  	

  Change in Control

  	

   

  
	

  9.

  	

  Mitigation

  	

   

  
	

  10.

  	

  Indemnification

  	

   

  
	

  11.

  	

  Confidential Information

  	

   

  
	

  12.

  	

  Remedy for Violation of Section 11

  	

   

  
	

  13.

  	

  Withholding

  	

   

  
	

  14.

  	

  Arbitration

  	

   

  
	

  15.

  	

  Reimbursement of Legal Expenses

  	

   

  
	

  16.

  	

  Taxes

  	

   

  
	

  17.

  	

  Successors

  	

   

  
	

  18.

  	

  Representations

  	

   

  
	

  19.

  	

  Miscellaneous

  	

   

  

 

 

EMPLOYMENT AGREEMENT

 

                THIS AGREEMENT (“Agreement”), by

and between The Home Depot, Inc., a Delaware corporation (“Company”), and

Robert L. Nardelli (“Executive”) is effective as of December 4, 2000

(the “Effective Date”).  In

consideration of the mutual covenants set forth herein, the Company and the

Executive hereby agree as follows:

 

                1.             Employment. The Company hereby agrees to employ the

Executive, and the Executive agrees to serve the Company, in the capacities

described herein during the Period of Employment (as defined in Section 2

of this Agreement), in accordance with the terms and conditions of this

Agreement.

 

                2.             Period of

Employment.  The term

“Period of Employment” shall mean the period which commences on the Effective

Date and, unless earlier terminated pursuant to Section 6, ends on

December 31, 2005; provided, however, that the Period of Employment shall

automatically be extended on a day by day basis effective on and after

January 1, 2003 (so that the remaining term shall always be three (3)

years) until such date as either the Company or the Executive shall have

terminated such automatic extension provision by giving written notice to the

other.

 

                3.             Duties

During the Period of Employment.

 

                                3.1           Duties.  During the Period of Employment, the

Executive shall be employed as the President and Chief Executive Officer of the

Company with overall charge and responsibility for the business and affairs of

the Company.  The Executive shall report

directly to the Company’s Board of Directors (the “Board”) and shall perform

such duties as the Executive shall reasonably be directed to perform by the

Board.  The Company shall cause the

Executive to be elected as follows: (i) to the Board, as of the Effective

Date, (ii) to the Executive Committee of the Board, as of the first

regularly scheduled Board meeting following the Effective Date, and

(iii) as sole Chairman of the Board, on or before December 31, 2001

or as of such date as Executive shall designate upon not less than

thirty (30) days’ notice to the Company as provided under

Section 19.2 of this Agreement.

 

                                3.2           Scope.  During the Period of Employment, and

excluding any periods of vacation and sick leave to which the Executive is

entitled, the Executive shall devote substantially all of his business time and

attention to the business and affairs of the Company.  It shall not be a violation of this Agreement for the Executive

to (i) serve on corporate, civic or charitable boards or committees,

(ii) deliver lectures, fulfill speaking engagements or teach occasional

courses or seminars at educational institutions, or (iii) manage personal

investments, so long as such activities under clauses (i), (ii) and (iii)

do not interfere, in any substantial respect, with the Executive’s

responsibilities hereunder.

                4.             Compensation and Other

Payments.

 

                                4.1           Salary.  During the Period of Employment, the Company

shall pay the Executive an annualized base salary of not less than one million

five hundred thousand dollars ($1,500,000) per year (the “Base Salary”).  The Executive’s Base Salary shall be paid in

accordance with the Company’s executive payroll policy.  The Base Salary shall be reviewed by the

Compensation Committee of the Board of the Company (the “Committee”) as soon as

practicable after the end of each fiscal year during the Period of Employment,

beginning with the fiscal year ending on February 3, 2002.  Based upon such reviews, the Committee may

increase, but shall not decrease, the Base Salary.  Any increase in Base Salary shall not serve to limit or reduce

any other obligation to the Executive under this Agreement.

 

                                4.2           Make Whole Payment.  As of the

Effective Date, the Company shall grant the Executive:

 

                4.2.1        A stock option grant with respect to two million five hundred

thousand (2,500,000) shares of the Company’s stock, which shall vest and become

exercisable in equal five hundred thousand (500,000) share increments on the

Effective Date and each of the next four anniversaries of the Effective Date,

provided that each tranche shall vest only if the Executive is employed by the

Company on that tranche’s vesting date, except as provided in this

Agreement.  Each tranche will have a

10-year exercise period beginning at its vesting date.  The exercise price for this option shall be

forty dollars and seventy-five cents ($40.75) per share, which is the closing

price of the Company’s stock on the New York Stock Exchange (as reported in The Wall Street Journal) on the Effective

Date.

 

                4.2.2        A fully vested and exercisable 10-year stock option grant

under the Company’s 1997 Omnibus Stock Incentive Plan with respect to one

million (1,000,000) shares of Company stock, with an exercise price equal to

forty dollars and seventy-five cents ($40.75), which is the closing price of

the Company’s stock on the New York Stock Exchange (as reported in The Wall Street Journal) on the Effective

Date.

 

                4.2.3        A lump-sum cash payment of fifty

thousand four hundred dollars ($50,400).

 

                4.2.4        A ten million dollar ($10,000,000) loan at the interest rate

of five and eighty–seven hundredths percent (5.87%) per annum,

compounded annually, to be disbursed within three business days of the

Effective Date (the “Executive Loan”). 

This loan, and the Executive’s obligation to repay principal and the

associated accrued interest thereunder, (the term “Loan” covering both

principal and accrued interest) shall be forgiven as

follows:  (a) on each of the first five (5) anniversaries of

the Effective Date, two million dollars ($2,000,000) of principal and all

interest accrued to date shall be forgiven, provided that the Executive is

employed by the Company on any such anniversary, or (b) the entire

outstanding balance of principal and accrued interest shall be forgiven on the

date of a Change in Control of the Company (as defined in Section 7.2.12),

if the Executive is employed by the Company on such date, or (c) the entire

outstanding balance of principal and accrued interest shall be forgiven upon the

date of the termination of the Executive’s employment with the Company prior to

December 4, 2005 if such termination is by the Company without Cause

(as defined in subsection 6.2), by the Executive for Good Reason (as

defined in subsection 6.3) or by reason of the Executive’s death or

Disability (as defined in subsection 6.1).  In addition, if the Loan, or any part of the Loan, is forgiven

pursuant to the preceding sentence, the Company shall pay the Executive, on or

prior to such date as the Executive shall be required to pay federal, state or

local taxes with respect to the forgiveness of the Loan or any part of the

Loan, an additional payment (the “Gross-Up Payment”) in an amount sufficient to

fully reimburse the Executive with respect to all federal, state and local

taxes with respect to the forgiveness of the Loan or any part of the Loan and

with respect to receipt of the Gross-Up Payment.  If, prior to the fifth anniversary of the Effective Date, the

Executive’s employment with the Company is terminated by the Company for Cause

or by the Executive other than for Good Reason, then the remaining principal

balance (not including accrued interest) of the Executive Loan shall be repaid

by the Executive in annual two million dollar ($2,000,000)  installments, which shall be made on the

next anniversary or anniversaries, as the case may be, of the Effective Date.

                                4.3           Annual Bonus.  Beginning

with the Company’s fiscal year ending on the last Sunday in January 2002,

as soon as practicable after the end of each fiscal year, the Committee shall

review the Executive’s performance under this Agreement as part of Executive’s

participation under the appropriate bonus plan of the Company as in effect from

time to time.  The Executive’s annual

bonus shall be at a target of no less than three million dollars ($3,000,000)

(the “Target Amount”) and a maximum of no less than four million dollars

($4,000,000) (the “Maximum Amount”). 

Nothing contained herein shall prevent the Committee from paying an

annual bonus in excess of the Maximum Amount. 

The Executive shall be paid his annual bonus no later than other senior

executives of the Company are paid their annual bonuses.  For each year during the Period of

Employment, and for any period during the Period of Employment which is less

than one year due to termination of the Executive’s employment for any reason

other than Cause, the Executive will receive an annual bonus of no less than

the full Target Amount.

 

                                4.4           Annual Stock

Option Grants.  The

Committee shall in 2002 and subsequent calendar years grant to the Executive

ten-year options with respect to shares of Company stock, with such grants to

be made at the same time during the calendar year as grants are generally made

to senior executives of the Company. 

Such annual grants shall be consistent with competitive pay practices

generally and appropriate relative to awards made to other senior executives of

the Company; provided, however, that each such annual grant shall be to

purchase no less than four hundred fifty thousand (450,000) shares of Company

Stock, with such number to be adjusted appropriately in the event of any change

in the outstanding shares of Company Stock by reason of a stock dividend or

split, recapitalization, merger, consolidation or other similar corporate

change or distribution of stock or property by the Company. These option grants

shall vest in four equal increments, with one tranche vesting on the second

anniversary of the grant date and one tranche vesting on each of the next three

anniversaries of the grant date (the “Vesting Scheme”); provided, however that

an annual option grant shall instead vest pursuant to normal Company practice

at the time of grant, so long as such then-current practice is no slower than

the Vesting Scheme.  Any annual option

grant may vest subject to a different vesting schedule, so long as such  vesting schedule is no slower than the

faster of the Vesting Scheme or the then-current normal Company practice at the

time of such stock option grant.

                                4.5           Deferred Stock Units.  As of the

Effective Date, the Company shall grant the Executive an award of deferred

stock units corresponding to seven hundred fifty thousand (750,000) shares of

Company stock.  Such award shall vest in

equal one hundred fifty thousand (150,000) share increments on the Effective

Date and each of the first four anniversaries of the Effective Date; provided

that each tranche shall vest only if the Executive is employed by the Company

on that tranche’s vesting date, except as provided in this Agreement.  On the January 1 following the second

anniversary of each vesting date (as illustrated in the schedule on

Appendix A hereto) one share of stock for each unit shall be distributed

to the Executive, unless such distribution is further deferred by the Executive

by the second December 31 following the vesting date (as illustrated in

the schedule on Appendix A hereto). 

The Executive shall receive a dividend equivalent cash payment on all

vested deferred stock units when dividends are paid to shareholders. Unless

otherwise agreed to by the Executive and the Company, the Company shall, within

ten (10) days after termination of the Executive’s employment for any

reason, deliver to the Executive one share of Company stock for each vested

deferred stock unit for which stock has not yet been distributed to the

Executive.

 

                                4.6           Payment of Professional

Fees.  The Company shall pay on the 

Executive’s behalf all statements rendered to the Executive by the

Executive’s attorneys, accountants and other advisors for reasonable fees and

expenses in connection with the negotiation and preparation of this Agreement.

The Company shall pay the Executive, on or prior to such date as the Executive

shall be required to pay federal, state or local taxes with respect to the

Company’s payment of such professional fees, an additional payment (the

“Gross-Up Payment”) in an amount sufficient to fully reimburse the Executive

with respect to all federal, state and local taxes with respect to the

Company’s payment of such professional fees and with respect to receipt of the

Gross-Up Payment.

 

                5.             Other

Executive Benefits.

 

                                5.1           Deferred

Compensation.

 

                5.1.1        Upon termination of the Executive’s

employment, the Executive shall be entitled to a cash benefit  (the “Deferred Compensation”) in the form of

a single life annuity for the life of Executive, commencing on the later of his

62nd birthday or termination of employment, in an annual amount equal to 50% of

the Executive’s Final Earnings.  Final

Earnings shall equal the sum of the Executive’s (i) then-current Base

Salary as of the date of termination and (ii) most recent annual bonus (or

then-current Target Amount, if greater) as of the date of termination;

provided, however, that Final Earnings shall not be less than four million five

hundred thousand dollars ($4,500,000) (the sum of the original Base Salary and

original Target Amount under this Agreement). 

The Deferred Compensation shall be subject to offset for all

employer-funded qualified and non-qualified defined benefit pension benefits paid

or payable to the Executive from the Company or the Executive’s prior

employers.  In the event any amount

taken into account as an offset is not paid (other than as a result of the

death of the Executive, or of any action by Executive), and a final determination

is made that such amount will not be paid to Executive, then the Executive

shall be entitled to receive an additional amount from the Company equivalent

to such unpaid amount.  The Executive

and the Company shall cooperate with each other in connection with any

proceeding or claim against a prior employer relating to the payment of such an

amount to Executive, and all expenses incurred by the Executive in connection

therewith shall be paid by the Company promptly upon notice from Executive.

 

                5.1.2        In the event the Executive’s employment

is terminated either (i) by the Company for Cause or (ii) by the

Executive without Good Reason, and such termination occurs prior to the

Executive’s 62nd birthday, the Deferred Compensation amount at age 62 shall be

reduced by 3% for each full year during the period between such termination and

the Executive’s 62nd birthday.

 

                5.1.3        In the event the Executive’s employment

is terminated either (i) by the Company for Cause or (ii) by the

Executive without Good Reason, and such termination occurs prior to the fifth

anniversary of the Effective Date, the Deferred Compensation amount at age 62

(after any applicable reduction under subsection 5.1.2) shall be reduced

by 20% for each full year during the period between such termination and the

fifth anniversary of the Effective Date.

 

                5.1.4        Termination of the Executive’s

employment for any reason other than (i) by the Company for Cause or

(ii) by the Executive without Good Reason shall not cause a reduction in

the Deferred Compensation under subsection 5.1.2 or 5.1.3.  In the event of the Executive’s death prior

to commencement of the payment of the Deferred Compensation, the Executive’s

surviving spouse (or, if there is no surviving spouse, Executive’s estate),

shall be entitled to receive a lump sum 

payment equal to the lump sum payment to which Executive would have been

entitled if his Deferred Compensation was payable (without reduction under

subsection 5.1.2 or 5.1.3) as of the date immediately preceding his death and

he had elected to receive such amount in a lump sum on that date.

 

                5.1.5        In the event the Executive commences

receipt of (or in the event of his death, was deemed to have elected to

receive) his Deferred Compensation prior to age 62, the Deferred Compensation

amount (after any applicable reduction(s) under subsections 5.1.2 and/or

5.1.3) shall be subject to a discount of 4% for each full year between the date

the Executive receives or begins to receive (or is deemed to have received) the

Deferred Compensation and the date of the Executive’s 62nd birthday.  In the event of a Change in Control of the

Company, this subsection shall be revised by substituting “age 55” for “age 62”

in the immediately preceding sentence.

                5.1.6        With the consent of the Company, or by

written election delivered to the Company by the Executive at least twelve

(12) months prior to the termination of the Executive’s employment with

the Company, the Executive may elect, in lieu of a single life annuity, to

receive the Deferred Compensation in a lump sum or deferred lump sum or

installment payments, or a life and term certain or joint and survivor annuity,

or such other optional form as Executive may elect.  The amount of such lump sum benefit shall be the actuarially

equivalent present value of the Deferred Compensation that would otherwise have

been payable, commencing immediately as of the date such lump sum payment is

made.  Any optional form of payment

shall have an actuarially equivalent present value equal to the amount of such

lump sum.  For purposes of this

Agreement, any actuarially equivalent present value shall not be less than the

present value determined on the basis of the applicable mortality table and

applicable interest rate prescribed in Internal Revenue Code Section 417(e)(3)(A)(ii),

in each case as would be applicable to a distribution made during the second

calendar month immediately preceding the calendar month in which such lump sum

distribution is made or optional form of payment is commenced.

 

                                5.2           Regular Reimbursed Business

Expenses.  The Company shall promptly reimburse the

Executive for all expenses and disbursements reasonably incurred by the

Executive in the performance of his duties hereunder during the Period of

Employment.

 

                                5.3           Benefit Plans.  The

Executive and his eligible family members shall be entitled to participate

immediately (except for the Company’s 401(k) plan, in which the Executive shall

be entitled to participate after satisfying the one-year waiting period), on

terms no less favorable to the Executive than the terms offered to other senior

executives of the Company who perform or have performed in the same capacity as

the Executive, in any group and/or executive life, hospitalization or

disability insurance plan, health program, vacation policy, pension, profit

sharing, ESOP, 401(k) and similar benefit plans (qualified, non-qualified and

supplemental) or other fringe benefits (it being understood that items such as

stock options are not fringe benefits) of the Company (collectively referred to

as the “Benefits”); provided, however, that such Benefits shall be no less, in

both scope of coverage and value of coverage, than the benefits provided to the

Executive by the Executive’s immediately preceding employer.  The benefit adjustments necessary to meet

the requirements of this paragraph are described in the letter from the Company

to the Executive of even date herewith. 

In the event that any health programs or insurance policies applicable

to the Benefits provided hereunder contain a preexisting conditions clause, the

Company shall reimburse the Executive for any COBRA  premiums on a tax grossed-up basis.  Anything contained herein to the contrary notwithstanding, the

Benefits described herein shall not duplicate benefits made available to the

Executive pursuant to any other provision of this Agreement.

 

                                5.4           Relocation.  The Company shall pay all costs of

relocation of the Executive and his family to the Atlanta metropolitan area in

accordance with the Company’s relocation policy supplemented as follows:

 

                5.4.1        The Company shall reimburse the

Executive for reasonable temporary living expenses (including reasonable travel

expenses between the Executive’s primary residence as of the Effective Date and

the Atlanta metropolitan area) for the Executive and his family in the Atlanta

metropolitan area for a period not to exceed one year from the Effective Date;

 

                5.4.2        The Company will make available to the

Executive the opportunity to sell his present primary residence at appraised

value through a relocation firm mutually acceptable to the Executive and the

Company; and

 

                5.4.3        All relocation payments and benefits

will be fully grossed-up for any applicable taxes.

                                5.5           Perquisites.  The Company

shall provide the Executive such perquisites of employment as are commonly

provided to other senior executives of the Company.

 

                6.             Termination.

 

                                6.1           Death or

Disability.  This

Agreement and the Period of Employment shall terminate automatically upon the

Executive’s death.  If the Company

determines in good faith that the Disability of the Executive has occurred

(pursuant to the definition of “Disability” set forth below), it may give to

the Executive written notice of its intention to terminate the Executive’s

employment.  In such event, the Executive’s

employment with the Company shall terminate effective on the thirtieth day

after receipt by the Executive of such notice given at any time after a period

of one hundred twenty (120) consecutive days of Disability or a period of

one hundred eighty (180) days of Disability within any twelve (12)

consecutive months, and, in either case, while such Disability is continuing

(“Disability Effective Date”); provided that, within the thirty (30) days

after such receipt, the Executive shall not have returned to full-time

performance of the Executive’s duties. 

For purposes of this Agreement, “Disability” means the Executive’s

inability to substantially perform his duties hereunder, with reasonable

accommodation, as evidenced by a certificate signed either by a physician

mutually acceptable to the Company and the Executive or, if the Company and the

Executive cannot agree upon a physician, by a physician selected by agreement

of a physician designated by the Company and a physician designated by the

Executive; provided, however, that if such physicians cannot agree upon a third

physician within thirty (30) days, such third physician shall be

designated by the American Arbitration Association.  Until the Disability Effective Date, the Executive shall be

entitled to all compensation provided for under Section 4 hereof.  It is understood that nothing in this

Section 6.1 shall serve to limit the Company’s obligations under

Section 7.2 hereof.

 

                                6.2           By the Company for Cause.  During the Period of Employment after the Effective Date, the

Company may terminate the Executive’s employment immediately for “Cause.”  For purposes of this Agreement, “Cause”

shall mean that (i) the Executive has been convicted of a felony involving

theft or moral turpitude, or (ii) engaged in conduct that constitutes

willful gross neglect or willful gross misconduct with respect to employment

duties which results in material economic harm to the Company; provided,

however, that for the purposes of determining whether conduct constitutes

willful gross misconduct, no act on Executive’s part shall be considered

“willful” unless it is done by the Executive in bad faith and without

reasonable belief that the Executive’s action was in the best interests of the

Company.  Notwithstanding the foregoing,

the Company  may not terminate the

Executive’s employment for Cause unless (i) a determination that Cause

exists is made and approved by a majority of the Company’s Board of Directors,

(ii) the Executive is given at least thirty (30) days written notice

of the Board meeting called to make such determination, and (iii) the

Executive and his legal counsel are given the opportunity to address such

meeting.

                                6.3           By Executive for Good

Reason.  During the Period of Employment, the Executive’s employment

hereunder may be terminated by the Executive for Good Reason upon

fifteen (15) days’ written notice. 

For purposes of this Agreement, “Good Reason” shall mean, without the

Executive’s consent:

 

                6.3.1        Assignment to the Executive of any

duties inconsistent in any material respect with the Executive’s position

(including status, offices, titles and reporting relationships), authority,

duties or responsibilities as contemplated by Section 3 of this Agreement,

or any other action by the Company which results in a significant diminution in

such position, authority, duties or responsibilities, excluding any isolated

and inadvertent action not taken in bad faith and which is remedied by the

Company within ten (10) days after receipt of notice thereof given by the

Executive;

 

                6.3.2        Any failure by the Company to comply

with any of the provisions of Section 4 or 5 of this Agreement other than

an isolated and inadvertent failure not committed in bad faith and which is

remedied by the Company within ten (10) days after receipt of notice

thereof given by the Executive;

 

                6.3.3        The Executive being required to relocate

to a principal place of employment more than twenty-five (25) miles from

his principal place of employment with the Company in Atlanta, Georgia as of

the Effective Date;

 

                6.3.4        Delivery by the Company of a notice

discontinuing the automatic extension provision of Section 2 of this

Agreement;

 

                6.3.5        Failure by the Company to elect the

Executive to the position of sole Chairman of the Board of Directors, in

compliance with the terms of Section 3.1; or

 

                6.3.6        Any purported termination by the Company

of the Executive’s employment otherwise than as expressly permitted by this

Agreement.

 

                                6.4           Other

than for Cause or Good Reason. 

The Executive or the Company may terminate this Agreement for any reason

other than for Good Reason or Cause, respectively, upon thirty (30) days

written notice to the Company or Executive, as the case may be.  If the Executive terminates the Agreement for

any reason, he shall have no liability to the Company or its subsidiaries or

affiliates as a result thereof.  If the

Company terminates the Agreement, or if the Agreement terminates because of the

death of the Executive, the obligations of the Company shall be as set forth in

Section 7 hereof.

 

                                6.5           Notice of

Termination.  Any

termination by the Company or by the Executive shall be communicated by a

Notice of Termination to the other party hereto given in accordance with

Section 19.2 of this Agreement. 

For purposes of this Agreement, a “Notice of Termination” means a

written notice which (i) indicates the specific termination provision in

this Agreement relied upon, (ii) sets forth in reasonable detail, if

necessary, the facts and circumstances claimed to provide a basis for

termination of the Executive’s employment under the provision so indicated, and

(iii) if the Date of Termination (as defined below) is other than the date

of receipt of such notice, specifies the termination date.  The failure by the Executive or Company to

set forth in the Notice of Termination any fact or circumstance which

contributes to a showing of the basis for termination shall not waive any right

of such party hereunder or preclude such party from asserting such fact or

circumstance in enforcing his or its rights hereunder.

 

                                6.6           Date of

Termination.  “Date of

Termination” means the date specified in the Notice of Termination; provided,

however, that if the Executive’s employment is terminated by reason of death or

Disability, the Date of Termination shall be the date of death of the Executive

or the Disability Effective Date, as the case may be.

 

                7.             Obligations

of the Company Upon Termination.  The following provisions describe the obligations of the Company

to the Executive under this Agreement upon termination of his employment.  However, except as explicitly provided in

this Agreement, nothing in this Agreement shall limit or otherwise adversely

affect any rights which the Executive may have under applicable law, under any

other agreement with the Company, or under any compensation or benefit plan,

program, policy or practice of the Company.

 

                                7.1           Termination by the Company

for Cause or Resignation without Good Reason.  In the event this Agreement terminates by

reason of the termination of the Executive’s Employment by the Company for

Cause or by reason of the resignation of the Executive other than for Good

Reason, the Company shall pay to the Executive all Accrued Obligations (as

defined below) in a lump sum in cash within thirty (30) days after the

Date of Termination.  “Accrued

Obligations” shall mean, as of the Date of Termination, the sum of (A) the

Executive’s Base Salary through the Date of Termination to the extent not

theretofore paid, (B) except as otherwise previously requested by the

Executive, the amount of any bonus, incentive compensation, deferred

compensation (not including the amounts described in subsection 5.1 of

this Agreement, which will be governed by subsection 5.1) and other cash

compensation accrued by the Executive as of the Date of Termination to the

extent not theretofore paid and (C) any vacation pay, expense reimbursements

and other cash entitlements accrued by the Executive as of the Date of

Termination to the extent not theretofore paid.

 

                                7.2           Resignation with Good

Reason; Change in Control; Termination without Cause; Death; Disability.  If (i) the Company shall terminate the

Executive’s employment other than for Cause, (ii) the Executive shall

terminate his employment at any time for Good Reason or for any reason within

twelve (12) months after a Change in Control or (iii) the Executive’s

employment shall terminate due to death or Disability, the Executive shall

receive in addition to the Accrued Obligations, the following:

 

                7.2.1        Twenty million dollars ($20,000,000),

within thirty (30) days after the Date of Termination;

 

                7.2.2        Immediate full vesting in (i.e., full

exercisability for) any options previously granted and not yet vested as of the

Date of Termination, including but not limited to any such options granted

under subsection 4.2.1 or subsection 4.4;

 

                7.2.3        Continued exercisability, through the

end of their respective full original terms, for all vested options, whether

previously vested or vesting under this subsection 7.2;

                7.2.4        Delivery of one share of Company stock

for each deferred stock unit vested to the Executive for which stock has not

yet been distributed to the Executive, as provided under subsection 4.5;

 

                7.2.5        Immediate vesting of any deferred stock

units described in subsection 4.5 which have not yet vested to the

Executive, and delivery of one share of Company stock for each deferred stock

unit subject to accelerated vesting pursuant to this subsection 7.2.5;

 

                7.2.6        For each year prior to 2006 for which

the annual option award required by subsection 4.4 has not yet been

granted, immediate grant of a ten-year stock option award having an exercise

price equal to the fair market value of a share of Company stock on the Date of

Termination and otherwise complying with the requirements of

subsection 4.4, with each such award being fully vested immediately upon

such grant and remaining exercisable for the full ten-year term;

 

                7.2.7        Immediate full vesting in all other

otherwise unvested shares of restricted stock of the Company, deferred stock

units or other equity-based awards (if any) previously awarded to the

Executive, with immediate termination of all restrictions on such awards;

 

                7.2.8        Immediate full vesting in the Deferred

Compensation described in Section 5.1 (i.e., no reductions pursuant to

subsection 5.1.2 or 5.1.3);

 

                7.2.9        Immediate full forgiveness of any

outstanding balance of principal and accrued interest on the Executive Loan,

and payment of the Gross-Up Payment, as provided under subsection 4.2.4;

 

                7.2.10      Receipt of any other compensation and

Benefits accrued or earned and vested (if applicable) by the Executive as of

the Date of Termination (but not duplicative of the Accrued Obligations); and

 

                7.2.11      For the remainder of the Period of

Employment (determined without regard to the termination thereof pursuant to

Section 6) or for three (3) years (whichever is longer), the Company shall

continue health, prescription drug, dental, disability and life insurance

benefits to the Executive and/or the Executive’s eligible family members at

least equal to those which would have been provided to them in accordance with

Section 5.3 of this Agreement if the Executive’s employment had not been

terminated.

                7.2.12      For purposes of this Agreement, a “Change

in Control” shall be deemed to have occurred if:

 

                7.2.12.1   Any “person” (as defined in

Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended

(the “Exchange Act”)), excluding for this purpose, (i) the Company or any

subsidiary of the Company, or (ii) any employee benefit plan of the

Company or any subsidiary of the Company, or any person or entity organized,

appointed or established by the Company for or pursuant to the terms of any

such plan which acquires beneficial ownership of voting securities of the

Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3

under the Exchange Act), directly or indirectly of securities of the Company

representing more than 20% of the combined voting power of the Company’s then

outstanding securities; provided, however, that no Change in Control will be

deemed to have occurred as a result of a change in ownership percentage

resulting solely from an acquisition of securities by the Company; or

 

                7.2.12.2   During any two (2) consecutive years

(not including any period beginning prior to December 3, 2000),

individuals who at the beginning of such two (2) year period constitute

the Board of Directors of the Company and any new director (except for a

director designated by a person who has entered into an agreement with the

Company to effect a transaction described elsewhere in this definition of

Change in Control) whose election by the Board or nomination for election by

the Company’s stockholders was approved by a vote of at least two-thirds of the

directors then still in office who either were directors at the beginning of

the period or whose election or nomination for election was previously so

approved (such individuals and any such new director being referred to as the

“Incumbent Board”) cease for any reason to constitute at least a majority of

the Board; or

 

                7.2.12.3   Consummation of a reorganization, merger or

consolidation or sale or other disposition of all or substantially all of the

assets of the Company (a “Business Combination”), in each case, unless,

following such Business Combination, (i) all or substantially all of the

individuals and entities who were the beneficial owners of outstanding voting

securities of the Company immediately prior to such Business Combination

beneficially own, directly or indirectly, more than 50% of the combined voting

power of the then outstanding voting securities entitled to vote generally in

the election of directors, as the case may be, of the company resulting from

such Business Combination (including, without limitation, a company which, as a

result of such transaction, owns the Company or all or substantially all of the

Company’s assets either directly or through one or more subsidiaries) in

substantially the same proportions as their ownership, immediately prior to

such Business Combination, of the outstanding voting securities of the Company;

or

 

                7.2.12.4   Approval by the stockholders of the Company

of a complete liquidation or dissolution of the Company.

 

                7.2.13      Any other provision of this

Section 7.2 notwithstanding, termination of the Executive’s employment due

to involuntary retirement on or after the Executive reaching age seventy-two

(72) will not be a termination of employment covered by this Section 7.2.

                                7.3           Retirement after Age

Sixty-Two.  If the Executive’s employment with the Company terminates due to

his retirement from the Company after he attains age sixty-two (62), all

equity-based awards made to the Executive shall become fully vested and, if

applicable, shall remain exercisable through the end of their original term.

 

                                7.4           COBRA Rights.  It is understood that the Executive’s rights

under this Section 7 are in lieu of all other rights which the Executive

may otherwise have had upon termination of employment under this Agreement;

provided, however, that no provision of this Agreement is intended to adversely

affect the Executive’s rights under the Consolidated Omnibus Budget

Reconciliation Act of 1985.

 

                8.             Change in Control.  In the

event of a Change in Control of the Company: 

(i) all prior grants to the Executive of stock options, restricted

stock, deferred stock units or other equity-based awards (including but not

limited to grants under subsections 4.2.1, 4.4 and 4.5) shall become fully

vested (and, if applicable, shall remain exercisable through the end of their

respective full original terms); and (ii) the Executive shall be entitled

to receive any other Change-in-Control protection applicable to other senior

executives of the Company, except to the extent that the application thereof

would reduce the Executive’s rights or benefits under this Agreement.

 

                9.             Mitigation.  In no event shall the Executive be obligated

to seek other employment or take any other action by way of mitigation of the

amounts payable to the Executive under any of the provisions of this Agreement.  Any severance benefits payable to the

Executive shall not be subject to reduction for any compensation received from

other employment.

 

                10.           Indemnification.  The Company shall maintain, for the benefit

of the Executive, director and officer liability insurance in form at least as

comprehensive as, and in an amount that is at least equal to, that maintained

by the Company on the Effective Date. 

In addition, the Executive shall be indemnified by the Company against

liability as an officer and director of the Company and any subsidiary or

affiliate of the Company to the maximum extent permitted by applicable

law.  The Executive’s rights under this

Section 10 shall continue so long as he may be subject to such liability,

whether or not this Agreement may have terminated prior thereto.

 

                11.           Confidential Information.  The Executive shall hold in a fiduciary capacity for the benefit

of the Company all secret or confidential information, knowledge or data

relating to the Company, or any of its subsidiaries, affiliates and businesses,

which shall have been obtained by the Executive pursuant to his employment by

the Company or any of its subsidiaries and affiliates and which shall not have

become public knowledge (other than by acts by the Executive or his

representatives in violation of this Agreement).  After termination of the Executive’s employment with the Company,

the Executive shall not, without the prior written consent of the Company,

communicate or divulge any such information, knowledge or data to anyone other

than the Company and those designated by it. 

In no event shall an asserted violation of the provisions of this

Section 11 constitute a basis for deferring or withholding any amounts

otherwise payable to the Executive under this Agreement.

                12.           Remedy for Violation of Section 11.  The Executive acknowledges that the Company

has no adequate remedy at law and will be irreparably harmed if the Executive

breaches or threatens to breach the provisions of Section 11 of this

Agreement, and, therefore, agrees that the Company shall be entitled to

injunctive relief to prevent any breach or threatened breach of such

Section and that the Company shall be entitled to specific performance of

the terms of such Section in addition to any other legal or equitable

remedy it may have.  Nothing in this

Agreement shall be construed as prohibiting the Company from pursuing any other

remedies at law or in equity that it may have or any other rights that it may

have under any other agreement.

 

                13.           Withholding.  Anything in this Agreement to the contrary

notwithstanding, all payments required to be made by the Company hereunder to

the Executive shall be subject to withholding, at the time payments are

actually made to the Executive and received by him, of such amounts relating to

taxes as the Company may reasonably determine it should withhold pursuant to

any applicable law or regulation.  In

lieu of withholding such amounts, in whole or in part, the Company may, in its

sole discretion, accept other provision for payment of taxes as required by law,

provided that it is satisfied that all requirements of law as to its

responsibilities to withhold such taxes have been satisfied.

 

                14.           Arbitration.  Any dispute or controversy between the

Company and the Executive, whether arising out of or relating to this

Agreement, the breach of this Agreement, or otherwise, shall be settled by

arbitration administered by the American Arbitration Association (“AAA”) in

accordance with its Commercial Arbitration Rules 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 the 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.  However,

either party may, without inconsistency with this arbitration provision, apply

to any court 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, 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 the Executive. 

The Company and the 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 Atlanta, Georgia or

such other location to which the parties may agree.  The Company shall pay the costs of any arbitrator appointed

hereunder.

                15.           Reimbursement of Legal

Expenses.  In the event that the Executive is

successful, whether in mediation, arbitration or litigation, in pursuing any

claim or dispute involving the Executive’s employment with the Company,

including any claim or dispute relating to (a) this Agreement,

(b) termination of the Executive’s employment with the Company or (c) the

failure or refusal of the Company to perform fully in accordance with the terms

hereof, the Company shall promptly reimburse the Executive for all costs and

expenses (including, without limitation, attorneys’ fees) relating solely, or

allocable, to such successful claim.  In

any other case, the Executive and the Company shall each bear all their own

respective costs and attorneys’ fees.

 

                16.           Taxes.  In the event that the aggregate of all

payments or benefits made or provided to, or that may be made or provided to,

the Executive under this Agreement and under all other plans, programs and

arrangements of the Company (the “Aggregate Payment”) is determined to

constitute a “parachute payment,” as such term is defined in

Section 280G(b)(2) of the Internal Revenue Code, the Company shall pay to

the Executive, prior to the time any excise tax imposed by Section 4999 of

the Internal Revenue Code (“Excise Tax”) is payable with respect to such

Aggregate Payment, an additional amount which, after the imposition of all income

and excise taxes thereon, is equal to the Excise Tax on the Aggregate

Payment.  The determination of whether

the Aggregate Payment constitutes a parachute payment and, if so, the amount to

be paid to the Executive and the time of payment pursuant to this Section 16

shall be made by an independent auditor (the “Auditor”) jointly selected by the

Company and the Executive and paid by the Company.  The Auditor shall be a nationally recognized United States public

accounting firm which has not, during the two (2) years preceding the date

of its selection, acted in any way on behalf of the Company or any affiliate

thereof.  If the Executive and the

Company cannot agree on the firm to serve as the Auditor, then the Executive

and the Company shall each select one accounting firm and those two firms shall

jointly select the accounting firm to serve as the Auditor.  Notwithstanding the foregoing, in the event

that the amount of the Executive’s Excise Tax liability is subsequently determined

to be greater than the Excise Tax liability with respect to which an initial

payment to the Executive under this Section 16 has been made, the Company

shall pay to the Executive an additional amount with respect to such additional

Excise Tax (and any interest and penalties thereon) at the time and in the

amount determined by the Auditor so as to make the Executive whole, on an

after-tax basis, with respect to such Excise Tax (and any interest and

penalties thereon) and such additional amount paid by the Company.  In the event the amount of the Executive’s

Excise Tax liability is subsequently determined to be less than the Excise Tax

liability with respect to which an initial payment to the Executive has been

made, the Executive shall, as soon as practical after the determination is

made, pay to the Company the amount of the overpayment by the Company, reduced

by the amount of any relevant taxes already paid by the Executive and not

refundable, all as determined by the Auditor. 

The Executive and the Company shall cooperate with each other in

connection with any proceeding or claim relating to the existence or amount of

liability for Excise Tax, and all expenses incurred by the Executive in

connection therewith shall be paid by the Company promptly upon notice of

demand from the Executive.

 

                17.           Successors.

 

                                17.1         This

Agreement is personal to the Executive and without the prior written consent of

the Company shall not be assignable by the Executive otherwise than by will or

the laws of descent and distribution. 

This Agreement shall inure to the benefit of and be enforceable by the

Executive’s heirs and legal representatives.

                                17.2         This Agreement shall inure to the

benefit of and be binding upon the Company and its successors and assigns.

 

                                17.3         The

Company shall require any successor (whether direct or indirect, by purchase,

merger, reorganization, consolidation, acquisition of property or stock,

liquidation, or otherwise) to all or a substantial portion of its assets, by

agreement in form and substance reasonably satisfactory to the Executive,

expressly to assume and agree to perform this Agreement in the same manner and

to the same extent that the Company would be required to perform this Agreement

if no such succession had taken place. 

Regardless of whether such an agreement is executed, this Agreement

shall be binding upon any successor of the Company in accordance with the

operation of law, and such successor shall be deemed the “Company” for purposes

of this Agreement.

 

                                17.4         As

used in this Agreement, the term “Company” shall include any successor to the

Company’s business and/or assets as aforesaid which assumes and agrees to

perform this Agreement by operation of law, or otherwise.

 

                18.           Representations.

 

                                18.1         The

Company represents and warrants that (i) the execution of this Agreement

has been duly authorized by the Company, including action of the Board and

Committee, (ii) the execution, delivery and performance of this Agreement

by the Company does not and will not violate any law, regulation, order,

judgment or decree or any agreement, plan or corporate governance document of

the Company and (iii) upon the execution and delivery of this Agreement by

the Executive, this Agreement shall be the valid and binding obligation of the

Company, enforceable in accordance with its terms, except to the extent

enforceability may be limited by applicable bankruptcy, insolvency or similar

laws affecting the enforcement of creditors’ rights generally and by the effect

of general principles of equity (regardless of whether enforceability is considered

in a proceeding in equity or at law).

 

                                18.2         The

Executive represents and warrants to the Company that (i) the execution,

delivery and performance of this Agreement by the Executive does not and will

not violate any law, regulation, order, judgment or decree or any agreement to

which the Executive is a party or by which he is bound, (ii) although the

Executive is bound by certain noncompetition, nonsolicitation and

confidentiality covenants in an agreement with his immediately preceding

employer, the Executive is not a party to or bound by any employment agreement,

noncompetition agreement or confidentiality agreement with any person or entity

that would interfere materially with this Agreement or his performance of

services hereunder, and (iii) upon the execution and delivery of this

Agreement by the Company, this Agreement shall be the valid and binding

obligation of the Executive, enforceable in accordance with its terms, except

to the extent enforceability may be limited by applicable bankruptcy, insolvency

or similar laws affecting the enforcement of creditors’ rights generally and by

the effect of general principles of equity (regardless of whether

enforceability is considered in a proceeding in equity or at law).

                19.           Miscellaneous.

 

                                19.1         This

Agreement shall be governed by and construed in accordance with the laws of the

State of Georgia, without reference to principles of conflicts of laws.  The captions of this Agreement are not part

of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or

modified otherwise than by a written agreement executed by the parties hereto

or their respective successors and legal representatives.

 

                                19.2         All

notices and other communications hereunder shall be in writing and shall be

given by hand delivery to the other party, by overnight courier, or by

registered or certified mail, return receipt requested, postage prepaid,

addressed as follows:

 

If to the Executive:

 

Robert L. Nardelli

1 Cobble Court

Loudonville, NY  12211

 

with a copy to:

 

Robert J. Stucker, Esq.

Vedder, Price, Kaufman & Kammholz

222 N. LaSalle Street

26th Floor

Chicago, IL  60601

 

If to the Company:

 

The Home Depot, Inc.

2455 Paces Ferry Road

Atlanta, GA  30339

Attn:  General Counsel

 

or

to such other address as either of the parties shall have furnished to the

other in writing in accordance herewith. 

Notice and communications shall be effective when actually received by

the addressee.

 

                                19.3         None

of the provisions of this Agreement shall be deemed to impose a penalty.

 

                                19.4         The

invalidity or unenforceability of any provision of this Agreement shall not

affect the validity or enforceability of any other provision of this Agreement.

 

                                19.5         Any

party’s failure to insist upon strict compliance with any provision hereof

shall not be deemed to be a waiver of such provision or any other provision

hereof.

                                19.6         This Agreement supersedes any prior

employment agreement or understandings, written or oral between the Company and

the Executive and contains the entire understanding of the Company and the

Executive with respect to the subject matter hereof.

 

                                19.7         This

Agreement may be executed simultaneously in two or more counterparts, each of

which shall be deemed an original, but all of which together shall constitute

one and the same instrument.

 

                IN WITNESS WHEREOF, the parties

have executed this Agreement as of the dates written below.

 

	

   

  	

  THE

  HOME DEPOT, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  Bernard Marcus

  
	

   

  	

   

  	

  Bernard

  Marcus

  
	

   

  	

   

  	

  Co-Chairman

  of the Board

  
	

   

  	

   

  	

   

  
	

   

  	

  Date:

  	

    8/27/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  John. L. Clendenin

  
	

   

  	

   

  	

  John

  L. Clendenin

  
	

   

  	

   

  	

  Chairman

  of the Compensation Committee of the Board

  
	

   

  	

   

  	

   

  
	

   

  	

  Date:

  	

    8/17/01

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  ROBERT

  L. NARDELLI

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  /s/  Robert L. Nardelli

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Date:

  	

    8/14/01

  

 

APPENDIX A 

 

 

SCHEDULE FOR DEFERRED STOCK UNITS

 

	

   

  	

   

  	

  Vesting Date

  	

   

  	

  Deferral Election Date

  	

   

  	

  Distribution Date

  
	

  1.

  	

   

  	

  December 4, 2000

  	

   

  	

  December 31, 2001

  	

   

  	

  January 1, 2003

  
	

  2.

  	

   

  	

  December 4, 2001

  	

   

  	

  December 31, 2002

  	

   

  	

  January 1, 2004

  
	

  3.

  	

   

  	

  December 4, 2002

  	

   

  	

  December 31, 2003

  	

   

  	

  January 1, 2005

  
	

  4.

  	

   

  	

  December 4, 2003

  	

   

  	

  December 31, 2004

  	

   

  	

  January 1, 2006

  
	

  5.

  	

   

  	

  December 4, 2004

  	

   

  	

  December 31, 2005

  	

   

  	

  January 1, 2007

  

 

 

[Home Depot Letterhead]

 

 

 

 

 

 

January 19, 2001

 

Mr.

Robert L. Nardelli

1

Cobble Court

Loudonville,

New York  12211

 

Dear

Bob:

 

                This letter is delivered to you

as a supplement to your Employment Agreement (the “Agreement”) with The Home

Depot, Inc. (the “Company”) of even date herewith, as provided for in

Paragraph 5.3 of the Agreement.

 

                During your Period of Employment

with the Company and subject to the terms of the Agreement, the Company will

provide you with the following benefits, which shall satisfy the Company’s

obligation to provide you with benefits no less than, in both scope and value

of coverage, the benefits provided you by General Electric Company:

 

                1.  Life

Insurance.  The Company will assume from General

Electric Company, its obligations under the following three insurance policies:

 

(1)  GE Executive Life Policy

number 918490013U;

(2)  Executive Life Policy

number 955190365UE; and

(3)  Leadership Life Policy

number 945192518UE.  

 

Alternatively, at your option, the Company shall provide you with term

life insurance with a death benefit of $25 million, with a guaranteed

minimum term of fifteen (15) years. 

 

The Company will pay you, on or prior to such date as you are required

to pay federal, state or local taxes with respect to the provision of the life

insurance described in this item 1, an additional payment in an amount

sufficient to fully reimburse you with respect to all federal, state and local

taxes with respect to this life insurance and with respect to receipt of the

additional payment.  

 

                2.  Basic Life

Insurance.  In addition to the life insurance described

in paragraph 1, the Company will provide you with the life insurance benefits

generally provided to executives of the Company, subject the usual terms under

which such life insurance is normally offered from time to time.  

 

                3.  Health

Insurance.  The Company shall provide you and your

eligible family members with full health care insurance under its Cigna

Preferred Provider Access plan (or similar plan), in accordance with its terms

as in effect from time to time.  

                4.  Prescription

Drug Program.  You and your family will be entitled to

participate in the Company’s prescription drug program, in accordance with its

terms as in effect from time to time.

 

                5.  Dental

Insurance.  You and your family will be able to

participate in the Company’s dental insurance program, in accordance with its

terms as in effect from time to time.

 

                6.  Salary

Continuation and Disability Insurance.  You will be

covered by the Company’s salary continuation and long-term disability insurance

programs, in accordance with their terms as in effect from time to time.  

 

                7.  Automobile.  The Company

shall provide you with the use of an automobile, to be selected by you, such

automobile to be similar in class to that of the current Mercedes Benz

S600.  It is anticipated that the

automobile will be leased by the Company for a period up to three years.  The Company will provide you with a new

leased or purchased vehicle every three years. 

In addition, the Company shall pay for all maintenance, repairs,

insurance and similar cost related to the automobile.  

 

The Company will pay you, on or prior to such date as you are required

to pay federal, state or local taxes with respect to the provision of the

automobile benefit described in this item 7, an additional payment in an amount

sufficient to fully reimburse you with respect to all federal, state and local

taxes with respect to this automobile benefit and with respect to receipt of

the additional payment.  

 

                8.  Aircraft.  The Company

will make available a private aircraft for use by you and your family.  The Company requires, where practicable,

that you travel by use of such aircraft, for security purposes.  Your family’s personal use of such aircraft

will require the inclusion in your taxable income, an amount equal to the

related benefit of such accommodations. 

Such inclusion shall be made as required under the Internal Revenue Code

and related regulations.  

 

The Company will pay you, on or prior to such date as you are required

to pay federal, state or local taxes with respect to the provision of the

aircraft benefit described in this item 8, an additional payment in an amount

sufficient to fully reimburse you with respect to all federal, state and local

taxes with respect to this aircraft benefit and with respect to receipt of the

additional payment.  

 

                9.  Professional

Services.  The Company shall, in addition to the benefits provided to you

under Paragraph 4.6 of the Agreement, reimburse you for financial planning

and tax consultation and services up to $150,000 per three-year

period.  

 

The Company will pay you, on or prior to such date as you are required

to pay federal, state or local taxes with respect to the provision of the

professional services benefit described in this item 9, an additional payment

in an amount sufficient to fully reimburse you with respect to all federal, state

and local taxes with respect to this professional services benefit and with

respect to receipt of the additional payment. 

 

                10.  Retirement

and 401(k) Plans.  You will be entitled to participate in the

Company’s retirement and 401(k) plans, in accordance with the terms of

such plans in effect from time to time. 

                11.  Employee

Stock Purchase Plan.  You will be entitled to participate in the

Company’s voluntary stock contribution plan, in accordance with its terms as in

effect from time to time.

 

                12.  Cafeteria

Plan.  You will be entitled to participate in the Company’s Cafeteria

plan, in accordance with its terms as in effect from time to time.  

 

                13.  Vacation.  You will be

entitled to six weeks of paid vacation, to be taken at your discretion.

 

                14.  Other

Benefit Plans.  You and your family will be entitled to

participate in any and all of the Company’s other benefits plans applicable to

senior executives, in accordance with their respective terms as in effect from

time to time.  

 

	

   

  	

  Very

  truly yours,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  Bernard Marcus

  
	

   

  	

   

  	

  Bernard

  Marcus

  
	

   

  	

   

  	

  Co-Chairman

  of the Board

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  John L. Clendenin

  
	

   

  	

   

  	

  John

  L. Clendenin

  
	

   

  	

   

  	

  Chairman

  of the Compensation Committee of the Board

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00032-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00032-of-00352.parquet"}]]