Document:

Form of Performance Share Award

 

Exhibit 10.3

FORM OF PERFORMANCE SHARE AWARD

	 	 	 
	Name: «First» «MI» «Last»

	 	Date
	 
	 	 
	Employee ID Number: «EmplID»
	 	 

I am pleased to advise you that the Compensation Committee of the Company’s
Board of Directors has granted you a target performance share award as provided
below, pursuant to the Office Depot, Inc. Long-term Equity Incentive Plan (“the
Plan”).

1. Performance Award

Your target award level is XXXX shares of Office Depot stock. The number of
shares actually earned can range from 0% to 150% of your target award depending
on overall Company performance.

This Performance Share award is a stock award with a 3-year performance cycle.
At the end of the 3-year period, which began on January 1, XXXX, the Company’s
performance as measured against a peer group of companies (see attached list),
will determine the actual number of shares earned — which may be more or fewer
shares than the target. If performance falls short of the plan by a sufficient
amount, no shares will be awarded.

The measure for determining final payout has been recommended to shareholders
to be cumulative Total Shareholder Return, or TSR, relative to an industry peer
group. Actual awards would be made based on the Company’s percentile ranking
within the peer group’s performance.

Below first quartile, performance will result in zero shares earned. Above 25%
performance achievement, target shares will begin to be earned. For each
percentile of performance increase above this level, earned shares will
increase 3% such that a maximum of 150% of target shares will be earned at 75th
percentile performance (see attached graph).

2. Effect on award in case of:

	a.	 	Employment termination — if your employment with the Company
terminates before the receipt of payout of the award, regardless of
the reason, the performance share award shall be forfeited.

 

 

	b.	 	Death during employment — your estate or any person who
acquired such award by bequest or inheritance, will at the time of
the normal date of calculation of the award, be paid a pro-rata
portion of the award for the period of time worked.

	3.	 	Conformity with Plan — Your award is intended to conform in all other
respects with, and is subject to, all applicable provisions of the Plan
which is incorporated herein by reference. Inconsistencies between this
letter and the Plan shall be resolved in accordance with the terms of the
Plan.
	 
	 	 	You may obtain a copy of the Plan by going to the Intranet, selecting
Human Resources then Compensation. You may also obtain a list of the
peer group companies at the same location.
	 
	 	 	All definitions stated in the Plan shall apply to this letter.
	 
	 	 	Please acknowledge your award by signing the Acknowledgment Form in the
space provided and returning the same to the Stock Option Administrator
of the Company.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	OFFICE DEPOT, INC.
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	

	

	 	 	 	Neil Austrian
	

	 	 	 	Chairman and Chief Executive Officer

Attachments:
   Acknowledgment
Form
   Peer
List
   Payout
GraphForm of Stock Option Award

 

Exhibit 10.4

FORM OF STOCK OPTION AWARD

Date

Name

Address

Address

Re: INCENTIVE / NON-QUALIFIED STOCK OPTION

Dear First Name:

     We are pleased to advise you that the Compensation Committee of the
Company’s Board of Directors has granted you a stock option as provided below,
pursuant to the Office Depot, Inc. Long-term Equity Incentive Plan (“the
Plan”).

1. Option

     Your option is to purchase up to XXXX shares of the Company’s common stock
(“Option Shares”), at an option price per share of $XX.XXX payable upon
exercise. Your option will expire at the close of business on X/X/XXXX (the
“Expiration Date”), subject to earlier expiration upon the termination of your
employment as provided below. Your option is (not) intended to be an
“incentive stock option” within meaning of Section 422 of the Internal Revenue
Code.

     The option price of $XX.XXX per share reflects the fair market value of
the Company’s common stock on the date of grant.

2. Exercise

	a.	 	Normal Exercise — Except as otherwise set forth herein, your
Option may be exercised in installments as follows: on each of the
first, second and third anniversaries of the date of this letter,
one-third of your option shares will be exercisable only if you are
continuously employed by the Company or any subsidiary from the date
of this letter until such anniversary date.
	 
	b.	 	Effect on Exercise in Case of Employment Termination -
Notwithstanding paragraph 2(a) above, the following special exercise
rules will apply if your employment with the Company terminates
before you have exercised your option for all of your Option Shares:

 

 

INCENTIVE / NON-QUALIFIED STOCK OPTION

Page Two

	i)	 	Death. If you die while an employee
of the Company or any subsidiary, your option will be
exercisable with respect to 100% of your Option Shares
by your estate or any person who acquired such option by
bequest or inheritance, at any time until the earlier of
24 months after your death, or the Expiration date set
forth in paragraph 1 above.
	 
	ii)	 	Retirement or Termination of
Employment. Except as provided otherwise in paragraph
3(b) below due to termination for cause, if you retire
from or terminate employment with the Company or any
subsidiary, your option will be exercisable (with
respect to only those Option Shares which are
exercisable on the date of your retirement or
termination of employment pursuant to paragraph 2(a)
above) at any time prior to the earlier of the date
which is 90 days after your retirement or termination of
employment or the Expiration Date set forth in paragraph
1 above.
	 
	iii)	 	Death after Retirement or Termination
of Employment. If you die after retirement or
termination of employment, your option will be
exercisable by your estate or any person who acquired
such option by bequest or inheritance within the time
frame and subject to the conditions in (ii) above.

	c.	 	Options shall be exercisable in full from and after the date
of any “change in control” of the Company, as such term is defined
in the Plan or as it may be otherwise defined by the Committee from
time to time.

	3.	 	Expiration of Option

	a.	 	Normal Expiration. In no event shall any part of your option
be exercisable after the Expiration Date set forth in the paragraph
1 above.

	b.	 	Early Expiration Upon Termination of Employment for Cause.
If your employment is terminated for cause or you resign or cease to
provide services to the Company in connection with or as a result of
an act or omission for which the Company or any subsidiary could
have terminated your employment for cause, or you have committed
such act or omission (regardless of whether your employment is
terminated), your option will expire on the day such event occurs.

 

 

INCENTIVE / NON-QUALIFIED STOCK OPTION

Page Three

4. Procedure for Exercise

     You may exercise all or any portion of your option, to the extent it has
become exercisable and is outstanding, at any time and from time to time prior
to its expiration, by delivering written notice to the Company and your written
acknowledgment that you have read, and have been afforded an opportunity to ask
questions of management of the Company regarding all financial and other
information provided to you regarding the Company, together with payment of the
option price pursuant to Section 10(b) of the Plan. As a condition to any
exercise of your option, you will permit the Company to deliver to you all
financial and other information regarding the Company it believes necessary to
enable you to make an informed investment decision.

5. Securities Laws Restrictions and Other Restrictions on Transfer of Option
Shares

     You represent that when you exercise your option you will be purchasing
Option Shares for your own account and not on behalf of others. You understand
and acknowledge that federal and state securities laws govern and restrict your
right to offer, sell or otherwise dispose of any Option Shares unless your
offer, sale or other disposition thereof is registered under the Securities Act
of 1933 (the “1933 Act”) and state securities laws, or in the opinion of the
Company’s counsel, such offer, sale or other disposition is exempt from the
registration thereunder. Section 18 of the Plan also describes other
restrictions on the transfer of Option Shares. You agree that you will not
offer, sell or otherwise dispose of any Option Shares in any manner which
would: (i) require the Company to file any registration statement (or similar
filing under state law) with the Securities and Exchange Commission or to amend
or supplement any such filing, (ii) violate or cause the Company to violate the
1933 Act, the rules and regulations promulgated thereunder or any other state
or federal law, or (iii) violate the restrictions contained in Section 18 of
the Plan. You further understand that the certificates for any Option Shares
you purchase will bear such legends as the Company deems necessary or desirable
in connection with the 1933 Act or other rules, regulations or laws.

6. Non-Transferability of Option

     Your option is personal to you and is not transferable by you other than
by will or the laws of descent and distribution. During your lifetime only you
(or your guardian or legal representative) can exercise your option.

7. Conformity with Plan

     Your option is intended to conform in all respects with, and is subject
to, all applicable provisions of the Plan which is incorporated herein by
reference. Inconsistencies between this letter and the Plan shall be resolved
in accordance with the terms of the Plan. By executing and

 

 

INCENTIVE / NON-QUALIFIED STOCK OPTION

Page Four

returning the enclosed grant acknowledgment form, you agree to be bound by all
of the terms of the Plan, including non-compete, confidentiality,
non-solicitation, and no-hire provisions, and acknowledge availability and
accessibility of the Plan document on the Company’s Intranet and/or the ability
to obtain a copy by e-mailing or calling the Compensation department at Office
Depot (XXX-XXX-XXXX). All definitions stated in the Plan shall apply to this
letter.

8. Employment and Successors

     Nothing herein confers any right or obligation on you to continue in the
employ of the Company or any subsidiary or shall affect in any way your right
or the right of the Company or any subsidiary, as the case may be, to terminate
your employment at any time. The agreements contained in this letter shall be
binding upon and inure to the benefit of any successor of the Company.

9. Entire Agreement

     The agreements contained in this letter constitute the entire
understanding between you and the Company, and supersede all other agreements,
whether written or oral, with respect to the acquisition by you of common stock
of the Company upon exercise of the option granted hereunder.

Please execute the Stock Option Grant Acknowledgment Form and return it to the
Stock Option Administrator at the corporate offices to confirm your
understanding and acceptance of the agreements contained in this letter.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	OFFICE DEPOT, INC.
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	

	

	 	 	 	Neil Austrian
	

	 	 	 	Chairman and Chief Executive Officer

enclosures: 1. Stock Option Grant Acknowledgment Form

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