Office Depot 2007 Annual Report Download - page 42

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Item 9B. Other Information.
Effective February 25, 2008, Office Depot, Inc. (the “Company”) entered into a Change in Control Agreement with
Daisy Vanderlinde, the Company’s Executive Vice President of Human Resources (the “Agreement”). With the
exception of Ms. Vanderlinde and Ms. McKay, each of the Company’s other executive officers had change in
control protections in agreements with the Company. The Compensation Committee of the Company’s Board of
Directors determined that it was therefore necessary to enter into the Agreement with Ms. Vanderlinde in order to
provide consistency in the treatment of the Company’s executive officers.
The Agreement provides that the Company will employ the executive for a period of one year from the date on
which a Change in Control (as defined below) has occurred (the “Employment Period”). During the Employment
Period, the executive shall receive a base salary, calculated by multiplying twelve times the highest monthly base
salary earned by the executive during her employment, and car allowance paid or payable to the executive in an
amount equal to the allowance paid during the twelve-month period immediately preceding the month in which the
Change in Control occurs. The executive will also be awarded an annual bonus equal to no less than the executive’s
highest bonus earned during her employment. During the Employment Period, the executive shall also be eligible to
participate in the Company’s incentive plans, savings plans and welfare benefit plans.
The following conditions constitute a “Change in Control” under the Agreement:
•the acquisition by an individual, entity or group of 20% or more of either (i) the Company’s then-outstanding
common stock or (ii) the combined voting power of the Company’s then-outstanding voting securities; or
•the directors as of the date of the agreement, cease to constitute at least a majority of the Board; or
•consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially
all of the assets of the Company (the “Business Combination”). However, a change in control is not triggered
if following the Business Combination (i) the Company’s then-existing shareholders continue to hold more
than 80% of the common stock and of the combined voting power of the new corporation, (ii) no one directly
or indirectly owns 20% or more of the then-outstanding common stock or of the combined voting power of
the new corporation except to the extent that such ownership existed prior to the business combination, and
(iii) at least a majority of the new corporation’s directors were members of the Board at the time of the
execution of the initial agreement providing for such business combination; or
•complete liquidation or dissolution of the Company as approved by the Company’s shareholders.
The Agreement provides for payments to the executive in the event the executive is terminated during the
Employment Period for “cause” (as defined in the Agreement) or in the event of death, disability or resignation for
“good reason” (as defined in the Agreement). In the event that the executive is terminated other than for cause, the
executive is entitled to receive her base salary through the date of termination and a pro-rata portion of the greater of
(i) the annual bonus paid or payable for the most recently completed fiscal year during the Employment Period or
(ii) the highest annual bonus earned for the last three full fiscal years prior to the Change in Control (the greater
amount of (i) and (ii) being referred to as the “Highest Annual Bonus”). In addition, the executive will also receive a
lump sum payment equal to two times the sum of (i) their annual base salary and (ii) the Highest Annual Bonus. The
executive will receive the same payments in the event of the executive’s death or disability during the Employment
Period. The Agreement further provides that if, during the Employment Period, the Company terminates the
executive’s employment for cause or, if the executive exercises their right to terminate their employment without
good reason, then the executive is entitled to receive their base salary through the date of termination.
On February 25, 2008 the Company amended the definition of a “change in control” in the Employment Agreement
of the Company’s Chief Executive Officer and in the Change in Control Agreements of the Company’s President,
North American Retail Division and President, International Division (collectively the “Amended Agreements”).
The definition of change in control in the Amended Agreements was amended to make the definition of change in
control consistent in all agreements.