Exhibit 10.2
SEPARATION
AGREEMENT & RELEASE
This is an
Agreement between The Home Depot, Inc. (the “
Company ”) and Robert
P. DeRodes (the “ Executive ”).
WHEREAS,
Company and Executive intend the terms and
conditions of this Agreement to govern all issues related to
Executive’s employment and termination from Company and its
subsidiaries and, except as otherwise expressly provided herein, is
intended to supersede and replace the provisions set forth in any
of his employment letters, including but not limited to the letter
agreement dated February 5, 2002; and
WHEREAS,
Executive acknowledges that he has been given a
reasonable period of time, up to and including twenty-one (21)
days, to consider the terms of this Agreement; and
WHEREAS,
Company advises Executive to consult with a
lawyer before signing this Agreement; and
WHEREAS,
Executive acknowledges that the consideration
provided him under this Agreement is sufficient to support the
releases provided by him under this Agreement; and
WHEREAS,
Executive represents that he has not filed any
charges, claims or lawsuits against Company involving any aspect of
his employment which have not been terminated as of the date of
this Agreement; and
WHEREAS,
Executive understands that Company regards the
representations by him as material and that Company is relying on
these representations in entering into this Agreement,
NOW, THEREFORE
,
Company and Executive agree as follows:
1.
Employment Status and
Termination Date. Executive will continue his employment
with Company through January 2, 2009. Executive will
maintain his current salary and benefits during this time.
Executive warrants that in performing his duties he shall use his
best efforts in a diligent manner and shall dedicate such time as
necessary to perform them on a timely basis. Executive’s last
day of employment (“ Termination Date ”) shall be
January 2, 2009, or Company’s earlier termination of
Executive’s employment, at Company’s sole discretion.
If Company determines that the Termination Date will precede
January 2, 2009, Executive shall receive payment at his
current salary rate for the period of time between the Termination
Date and January 2, 2009, subject to applicable tax
withholding. Payments are due on the first day of each month
following the Termination Date. Payment of all such monthly
payments shall be completed no later than January 31, 2009.
Each such monthly payment shall constitute a separate payment for
purpose of Section 409A of the Internal Revenue Code (the
“ Code ”).
Executive shall not accrue any vacation days or credit subsequent
to the Termination Date.
2.
Separation
Payments. Executive shall receive twelve (12)
monthly separation payments of $62,666.67 each, payable on the
first business day of each month following January 2, 2009.
All payments are subject to applicable tax withholding. Each
monthly payment shall constitute a separate payment for purposes of
Code Section 409A. It is intended that the exemption provided
by Treas. Reg. §1.409A-1(b)(9)(iii)(A)(2) shall apply to
that portion of the monthly payments not in excess of two times the
maximum amount that may be taken into account under a qualified
plan pursuant to Code Section 401(a)(17).
3.
Bonuses.
(a)
Fiscal 2008 MIP . Executive will participate in the
Management Incentive Plan (“ MIP ”) for Fiscal 2008, and will
receive a prorated payment of 91.67% of his MIP payout if
pre-established performance goals are achieved, as determined by
Company in its sole discretion. Any bonus payment earned will be
payable at the same time other officers receive their bonuses for
such year, but in no event later than April 15, 2009, subject
to applicable tax withholding.
(b)
Fiscal 2009 MIP . Executive will not be eligible to participate
in the MIP for Fiscal Year 2009 or beyond. Notwithstanding the
foregoing, Executive will
receive a guaranteed single sum payment of $752,000, less
applicable tax withholding, representing his target MIP bonus for
Fiscal 2009, payable to Executive at the same time other officers
receive their Fiscal 2009 bonuses for such year but in no event
later than April 30, 2010. This
Section 3(b) is carried forward from Executive’s
February 5, 2002 employment letter with the Company and it is
intended to be an unmodified grandfathered contract benefit under
Rev. Rul. 2008-13.
(c)
LTIP . Executive will not be eligible to participate
in any Long Term Incentive Program (“ LTIP ”) after the date of this
Agreement and forfeits all rights to payment under any outstanding
LTIP cycle.
(d)
Other Bonuses . Executive will not be eligible for bonus payments of any kind,
except as provided in this Section 3.
4.
Benefits.
Executive’s
benefits (including the Supplemental Executive Choice Program and
executive life insurance and leased car programs) shall end on the
Termination Date, pursuant to the terms of such plans and
applicable law. Executive shall receive a monthly payment
(subject to applicable tax withholding), due on the first day of
each month following the Termination Date, in an amount necessary
to continue his healthcare coverage through COBRA, less the
employee share of the premium for said coverage, through the
earlier of: (a) twelve (12) months from the Termination Date,
or (b) Executive’s acceptance of other employment with
comparable healthcare eligibility. Company will authorize
Executive’s eligibility for retiree healthcare coverage
through UnitedHealthcare (or current insurance provider at such
time) after expiration of his COBRA coverage and before he attains
age sixty (60), provided, however, that Executive’s coverage
under such plan is contingent upon the consent and agreement of
UnitedHealthcare (or current insurance provider at such time) to
provide said coverage to Executive. Executive shall not be entitled
to any other benefits except as expressly provided for in this
Agreement.
5.
Stock
Options/Restricted Stock.
(a)
All of Executive’s
options to purchase Company’s common stock (“
Options ”) that vest
before the Termination Date will be cancelled and forfeited unless
exercised by April 2, 2010. Executive’s 40,461
outstanding, unvested Options that are originally scheduled to vest
after January 2, 2009 but before January 3, 2010
(comprised of 12,500 Options granted on March 17, 2004 that
were originally scheduled to vest on March 17, 2009; 15,000
Options granted on March 23, 2005 that were originally
scheduled on March 23, 2009; and 12,961 Options that were
granted on March 21, 2007 that were originally scheduled to
vest on March 21, 2009) are hereby amended to vest on the
Termination Date. These 40,461 Options may not be exercised
until the following dates: 20,230 Options may be exercised as of
the Termination Date; 5,231 Options may be exercised as of
March 21, 2009; and 15,000 Options may be exercised as of
March 23, 2009. Any portion of the 40,461 Options not
exercised by April 2, 2010 will be cancelled and
forfeited. All 40,461 Options are subject to forfeiture
for
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any
earlier breach as provided in Paragraph 10. All other unvested
Options shall be forfeited on the Termination Date.
(b)
The restrictions on
Executive’s 176,896 outstanding shares of restricted shares
of Company’s common stock (“ Restricted Shares ”), originally
scheduled to lapse after January 2, 2009 (comprised of 10,000
Restricted Shares granted on August 21, 2003 and originally
scheduled to vest on August 21, 2009; 22,000 Restricted Shares
granted on March 17, 2004 and originally scheduled to vest on
March 17, 2009; 22,000 Restricted Shares granted on
March 23, 2005 and originally scheduled to vest on
March 23, 2010; 49,000 Restricted Shares granted on
March 20, 2006 and originally scheduled to vest on
March 20, 2011; 12,500 Restricted Shares granted on
March 20, 2006 and originally scheduled to vest on
March 20, 2009; 8,131 Restricted Shares granted on
March 20, 2006 and originally scheduled to vest on
March 20, 2009; 28,265 Restricted Shares granted on
March 21, 2007 and originally scheduled to vest on
March 21, 2012; and 25,000 Restricted Shares granted on
March 20, 2006 and originally scheduled to vest on
September 5, 2010), are hereby amended to lapse instead on the
Termination Date. All other shares of Executive’s Restricted
Shares shall be forfeited on the Termination Date. The
176,896 Restricted Shares may not be transferred until the
following dates: 88,448 Restricted Shares may be transferred as of
the Termination Date; and the remaining 88,448 Restricted Shares
may be transferred as of January 3, 2011. Executive and
Company agree that Company shall not be required to issue any share
to Executive before the date the share may be transferred, as set
forth in this Paragraph 5(b), except to accommodate the sales of
shares for tax purposes as set forth in Paragraph 5(c), below. All
176,896 Restricted Shares are subject to forfeiture for any earlier
breach as provided in Paragraph 10. If Company determines
that the Termination Date will precede January 2, 2009, the
restrictions on Executive’s 27,500 outstanding shares of
restricted shares of Company’s common stock (“
Restricted Shares ”),
comprised of 12,500 Restricted Shares granted on August 18,
2005 and originally scheduled to vest on August 18, 2008; and
15,000 Restricted Shares granted on August 26, 2002 and
originally scheduled to vest on August 26, 2008, are hereby
amended to lapse instead on the Termination Date. The 27,500
Restricted Shares may not be transferred until the following dates:
12,500 Restricted Shares may be transferred as of August 18,
2008; and 15,000 Restricted Shares may be transferred as of
August 26, 2008.
(c)
Executive and Company
acknowledge that the shares referenced in Paragraph 5(b) shall
constitute taxable income to Executive at the time of vesting on
the Termination Date; and that the vested stock options referenced
in Paragraph 5(a) shall be taxable to Executive when such
options are exercised. Accordingly, Executive acknowledges his
obligations to pay all related applicable federal, state and local
income and employment taxes, and that Company is required to
withhold applicable taxes with respect to these shares and vested
options. Accordingly, Executive hereby authorizes Company to
withhold and surrender to Company a sufficient number of shares
necessary to satisfy said withholding obligations.
(d)
Executive shall not be
eligible to receive any other equity-based awards.
(e)
Executive is solely
responsible for ensuring that his equity awards are properly
credited, exercised and handled as provided by the terms of the
awards as modified by this Agreement. Executive acknowledges
that he may not rely on the Merrill Lynch website in determining
the exercise or expiration dates of his equity awards. Executive
should direct any inquiries to the Atlanta Branch of Merrill Lynch
at 404-264-7274; however, Company is not responsible for any
incorrect information Executive might receive from Merrill
Lynch.
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6.
Release of
Claims. Executive and his heirs, assigns, and agents
release, waive and discharge Company, its past and present parents,
subsidiaries, affiliates and related entities, and their respective
past and present predecessors, successors, assigns,
representatives, directors, officers, employees, and agents from
each and every claim, action or right of any sort, known or
unknown, arising on or before the Effective Date.
(a)
The foregoing release
includes, but is not limited to, any claim of discrimination on the
basis of race, sex, religion, sexual orientation, national origin,
disability, age, or citizenship status; any other claim based on
any local, state, or federal prohibition, including but not limited
to claims under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act of 1967, as
amended, or the Americans With
Disabilities Act ; any claim arising out of or related to
any alleged express or implied employment contract, any other
alleged contract affecting terms and conditions of employment, or
an alleged covenant of good faith and fair dealing; or any claim for severance pay, bonus,
salary, sick leave, stocks, attorneys’ fees, holiday pay,
vacation pay, life insurance, health or medical insurance or any
other employee or fringe benefit, workers’ compensation or
disability.
(b)
Executive represents that
he understands the foregoing release, that rights and claims under
the Age Discrimination in Employment Act of 1967, as amended, are
among the rights and claims against Company he is releasing, and
that he understands that he is not presently releasing any future
rights or claims that might arise after the Effective
Date.
(c)
Executive further agrees
never to sue Company or its past and present directors, officers,
employees, parents, subsidiaries, affiliates, related entities, and
agents or cause Company or its past and present directors,
officers, employees, parents, subsidiaries, affiliates, related
entities, and agents to be sued regarding any matter within the
scope of the above release. If Executive violates this Paragraph 6,
Company may recover all damages as allowed by law, including all
costs and expenses, including reasonable attorneys’ fees,
incurred in defending against the suit.
(d)
Nothing herein is intended
to or shall in any manner release, diminish or impair
Executive’s rights under this Agreement, and rights, if any,
that Executive may have to: (i) indemnification or advancement
of expenses under Company’s certificate of incorporation or
bylaws, or Delaware law, and (ii) coverage under
directors’ and officers’ liability insurance maintained
by Company or its affiliates.
7.
Additional Release of
Claims.
Notwithstanding any other provision of this Agreement, Executive
shall not be entitled to any payment or benefit pursuant to
Paragraphs 3, 4 or 5 unless Executive has delivered to Company a
second release of claims, in the form shown on Exhibit A , that is signed by
Executive at least twenty-one (21) days after the Termination Date
and is not revoked by Executive, as permitted by the express terms
in Exhibit A
.
8.
Confidential
Information and Trade Secrets.
(a)
Executive acknowledges
that through his employment with Company he has acquired and had
access to Confidential Information of Company, its parents, subsidiaries, affiliates
or related entities .
Executive further acknowledges that he has not published, disclosed
or used any of this Confidential Information except in accordance
with his duties for Company. Executive agrees that, for a
period of three years after the Effective Date, he will hold in
confidence all Confidential Information of Company, its
parents, subsidiaries, affiliates or related entities and will not disclose, publish or make use
of such Confidential Information, unless compelled by law and then
only after written notice to Company’s Executive Vice
President, Human Resources .
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Executive further agrees
to return all documents, disks, or any other item or source
containing Confidential Information, or any other property of
Company, its
parents, subsidiaries, affiliates or related entities , to Company on or before the Effective
Date. If Executive has any question regarding what
data or information would be considered by Company to be
Confidential Information, Executive agrees to contact the Executive
Vice President, Human Resources for written clarification.
“ Confidential Information ” shall
include any data or information, other than trade secrets, that is
valuable to Company, its parents, subsidiaries, affiliates
or related entities and not
generally known to competitors or outsiders, regardless of whether
the confidential information is in printed, written, or electronic
form, retained in Executive’s memory, or has been compiled or
created by Executive. This includes, but is not limited to:
information technology, computer systems, marketing, advertising,
technical, financial, personnel, staffing, payroll, merchandising,
strategic planning, product, vendor, supplier, customer or store
planning data, construction, trade secrets, or other information
similar to the foregoing.
(b)
Executive also
acknowledges that through his employment with Company he has
acquired and had access to Company’s Trade Secrets,
its parents, subsidiaries,
affiliates or related entities . Executive further acknowledges
that Company, its parents, subsidiaries, affiliates or
related entities have made
reasonable efforts under the circumstances to maintain the secrecy
of
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