EXECUTIVE OFFICER SEVERANCE PAY POLICY (Replacing Policy of January 1, 2005)

Contract Categories: Human Resources - Severance Agreements
EX-10.3 4 a06-5172_1ex10d3.htm EXECUTIVE OFFICER SEVERANCE PAY POLICY

Exhibit 10.3

 

EXECUTIVE OFFICER SEVERANCE PAY POLICY

(Replacing Policy of January 1, 2005)

 

Eligibility

 

This Policy applies to any officer holding the title of vice president or above as of his/her date of termination of employment. Any such officer who is terminated involuntarily for any reason other than a Disciplinary Reason (“Eligible Officer”) shall be eligible for benefits under this Policy.

 

The Company will have no obligation to provide any benefits under this Policy unless and until the Eligible Officer executes and delivers to the Company a General Waiver and Release of Claims in a form satisfactory to the Company. Nothing in this Policy alters the at-will employment relationship between any Eligible Officer and the Company.

 

The Company shall have the authority and discretion to interpret and construe these eligibility provisions, and the Company’s determinations as to eligibility shall be made in its sole and absolute discretion.

 

This Policy shall constitute an “employee welfare benefit plan” within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This Policy shall constitute a “top hat” plan that only covers a select group of management or highly compensated employees.

 

Severance Pay

 

Subject to the eligibility requirements of this Policy, an Eligible Officer will be entitled to receive severance pay equal to one year’s base salary at their current base salary in effect as of their date of termination.

 

The Company, at its sole discretion, may elect to make the severance payment in equal payments over a 12-month period or in a lump sum. The Company may also, at its sole discretion, continue health/vision/dental group insurance coverages at the associate rate during the COBRA period on behalf of the terminated executive officer for up to 12 months following his/her date of termination.

 

Any payments required to meet the Worker Adjustment Retraining and Notification Act (WARN) and/or any state legal notification requirements may be subtracted from the severance pay which would otherwise be due under this Policy.

 

Exclusions

 

Notwithstanding anything in this policy to the contrary, an officer is not eligible for benefits under this Policy under the following circumstances:

 

•                                          If the officer resigns for any reason.

 

•                                          If the officer’s employment is terminated for a Disciplinary Reason.

 


 

•                                          If the officer’s employment is not terminated involuntarily by the Company. A transfer or other relocation of an officer’s place of work is not a termination under this Policy if the officer continues employment with OfficeMax or, if not, the transfer or relocation offered is to a site within a reasonable distance of the officer’s immediately prior work site.

 

•                                          Mandatory retirement pursuant to the Company’s Executive Officer Mandatory Retirement Policy will not be deemed an involuntary termination of employment for purposes of benefits under this Policy.

 

By their acceptance of severance benefits under this Policy, an Eligible Officer thereby waives his/her right to receive any other severance pay or salary continuation severance benefits under any other Company plan or program or arrangement with the Company.

 

Any obligation of the Company to provide severance pay and/or other benefits pursuant to this Policy shall immediately terminate if it is determined by the Company that the Eligible Officer has breached any obligation under their General Waiver and Release of claims and/or any obligation to the Company, including but not limited to obligations under a Nondisclosure and Non-Competition Agreement or Sign-on Award Agreement, or if the Eligible Officer is offered another position with OfficeMax that is reasonably consistent with his/her education, training, prior compensation and previous experience and is located within a reasonable distance from his/her prior worksite.

 

Definition of Disciplinary Reason

 

For the purpose of this Policy, “Disciplinary Reason” includes misconduct, including but not limited to refusal to obey instructions which are issued by a superior in the normal course of business; gross negligence; willful failure to perform the job in a satisfactory manner; reckless disregard for or knowing violation of any Company policy, work rules, or procedures causing injury to the Company; theft of Company or another associate’s property; an act of embezzlement, fraud, or like violation of law; wrongful engagement in any activity that would breach the duty of loyalty to the Company; wrongful disclosure of confidential information of the Company; or a violation of the Company’s Code of Ethics.

 

Plan Administration and Interpretation

 

The senior-most Human Resources Executive Officer of the Company is the Plan Administrator for purposes of Section 3(16) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan Administrator shall have the sole authority in the exercise of his/her discretion to interpret, apply, and administer the terms of the Plan and to determine eligibility for benefits of the Plan and the amount of any benefits under the Plan, and his/her determination of any such matters shall be final and binding. Benefits under the Plan will be paid only if the Plan Administrator determines in his/her discretion that a participant or beneficiary is entitled to them. The Plan Administrator may designate one or more individuals to carry out his/her functions as Plan Administrator.

 


 

Claims Procedure

 

Severance benefits will be provided to each participant as provided in the Plan. If a participant believes that he or she has not been provided with the severance benefits to which he or she is entitled under the Plan, then the participant may file a request for review within 90 days after the date he or she should have received such benefits under the Plan. The request for review must be submitted to the Plan Administrator. The Plan Administrator will respond to the request for review within 90 days after it is received setting forth, in writing, the reasons for its determination. If the participant’s request for review is denied, the participant may, within 60 days after receiving written notice of such denial, file an appeal to the General Counsel of the Company, setting forth the reason why the participant disagrees with the initial determination. The General Counsel shall respond to this request for reconsideration within 60 days after it is received setting forth, in writing, the reasons for its determination. If the participant subsequently wishes to file a claim against the Plan, any legal action must be filed within 90 days after the General Counsel’s final decision. No action at law or in equity shall be brought to recover benefits under this Plan until the claims procedure rights herein provided have been exercised and the Plan benefits requested in such claims process have been finally denied in whole or in part.

 

Plan Termination and Amendment

 

The Company reserves the right to amend, modify, or terminate the Plan at any time, in its sole discretion, without prior notice to participants. Any such amendment or termination shall be made by the Board of Directors of the Company or by action of a person or persons duly authorized by such Board. All participants shall receive any benefits to which they have become entitled under the Plan on or before the date the Plan terminates.