UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 2, 2007
THE HOME DEPOT, INC.
(Exact Name of Registrant as Specified in Charter)
         
Delaware   1-8207   95-3261426
         
(State or Other Jurisdiction
of Incorporation) 		  (Commission File Number)   (IRS Employer Identification No.)
2455 Paces Ferry Road, N.W. Atlanta, Georgia 30339
(Address of Principal Executive Offices) (Zip Code)
( 770) 433-8211
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

TABLE OF CONTENTS
         
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
    3  
Item 9.01 Financial Statements and Exhibits.
    5  
Signature
    6  
Exhibit Index
    7  
EX-10.1 Employment Arrangement between Francis S. Blake and The Home Depot, Inc., dated January 23, 2007
       
EX-10.2 Employment Arrangement between Carol B. Tomé and The Home Depot, Inc., dated January 22, 2007
       
EX-10.3 Employment Arrangement between Joseph J. DeAngelo and The Home Depot, Inc., dated January 23, 2007
       

 

 

Item 5.02.   Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
     The Home Depot, Inc. (the “Company”) is filing this amendment to its Current Report on Form 8-K filed on January 4, 2007 which reported the appointment of Frank Blake as Chairman and Chief Executive Officer and member of the Board of Directors and Joe DeAngelo as Executive Vice President and Chief Operating Officer. At the time of such report, no determination had been made as to compensation for Messrs. Blake and DeAngelo with respect to their new positions. In addition, the Company recently appointed Carol Tomé to the position of Chief Financial Officer and Executive Vice President — Corporate Services. Prior to such appointment, Ms. Tomé served as the Company’s Executive Vice President and Chief Financial Officer.
Frank Blake
     On January 23, 2007, the Company and Mr. Blake agreed upon the terms of his compensation. The independent directors of the Board approved the new compensation terms.
     The approximate total value of Mr. Blake’s 2007 compensation arrangement is $8.9 million, 89 percent of which is at risk based on the performance of the Company. Set forth below is a summary of Mr. Blake’s compensation:
2007 Compensation Summary
     
Annual Base Salary:
  $975,000 
Annual MIP Target:
  200% of Base Salary
Annual LTIP:
  100% of Base Salary
Equity:
  $2.5 million grant date value in Performance Shares
 
  (Payout tied to relative total shareholder return)
 
  $2.5 million grant date value in Performance Vested Options
 
  (Payout tied to share price performance)
     The Management Incentive Plan (“MIP”) is the Company’s annual cash bonus program. The target payout of 70% of the annual bonus is based on achievement of pre-established financial goals and 30% on achievement of pre-established individual performance metrics. The Long Term Incentive Plan (“LTIP”) is the Company’s long term cash incentive plan, and payout under the plan depends on achievement of pre-established average diluted EPS growth over a three-year performance period. Average diluted EPS is determined by averaging the diluted percentage increase in EPS for each fiscal year in the three-year performance period. Awards are payable in cash at the end of the performance period. MIP and LTIP awards are pro-rated in the event of death, disability or retirement at age 60 with at least 5 years of continuous service, provided that no LTIP award is paid if the termination occurs before the final fiscal year of the three-year performance period.
     The performance shares and performance-vested options are tied solely to shareholder return. These awards are designed to incentivize Mr. Blake to drive sustainable returns and to remain with the Company as CEO for the long-term.
     Mr. Blake will receive the award of $2.5 million in performance shares at the Board’s next regularly scheduled meeting in February 2007. The performance share award will be paid out at the end of three years based on the Company’s relative total shareholder return (“TSR”) ranking compared to the TSR ranking of the individual companies included in the S&P 500. Mr. Blake will receive 25 percent of the award if the Company is at the 26 th percentile, 100 percent of the award if the Company is at the 50 th percentile, and 300 percent of the award if the Company is at the 100 th percentile of the TSR ranking of the S&P 500. Payout is interpolated for results between these percentile rankings and there is no payout for a ranking below the 26 th percentile. In the event of his death, disability or retirement at or after he attains age 60 in 2009, Mr. Blake or his estate will be entitled to receive any performance shares that otherwise would have been paid had his employment continued through the payment date. In the event of Mr. Blake’s death or disability before he becomes retirement eligible at age 60 with 5 years of continuous service, Mr. Blake or his estate will be entitled to receive a prorated portion of the performance shares that otherwise would have been paid had his employment continued through the payment date.
     Mr. Blake will also receive the award of $2.5 million in performance vested options at the Board’s next regularly scheduled meeting in February 2007. Mr. Blake’s stock options will vest only after the Company’s stock price has increased 25 percent over the grant date price for at least 30 consecutive trading days (the “Target Closing Stock Price”). There is also a minimum one-year vesting period from the grant date in order for these options to be become exercisable. The options will expire on the earlier of termination of Mr. Blake’s employment, or five years from the grant date if the Target Closing Stock Price has not been achieved, or ten years from the grant date. In the event of Mr. Blake’s death, disability or retirement at or after he attains age 60 in 2009 with at least five years of continuous service, the stock options will continue to vest and, if vested prior to the fifth anniversary of the grant date, may be exercised until the tenth anniversary of the grant date; provided, however, that in the event his employment ends due to death or disability before he attains age 60 with 5 years of continuous service, Mr. Blake’s options may only be exercised for one year following the later of the vesting date or the date of termination of his employment.

 

 

     In addition to benefits available to all salaried associates of the Company, Mr. Blake will continue to participate in the Company’s executive officer programs, including but not limited to: (i) death benefit only insurance policy program; (ii) executive life insurance program; (iii) Supplemental Executive Choice Program (providing for the purchase of additional insurance or the reimbursement of financial services or healthcare expenses); and (iv) leased car program.
     The Company has requested that Mr. Blake travel by Company aircraft for security purposes. However, to the extent Mr. Blake or his family use Company aircraft for personal reasons, the Company will not provide a tax gross-up for any imputed compensation as a result of such accommodation unless the Company requests that Mr. Blake’s family attend a Company event.
     Upon termination of his employment, Mr. Blake will be subject to confidentiality restrictions. Mr. Blake’s compensation arrangement does not provide for payment of severance upon termination.
     Mr. Blake’s new compensation arrangement, as set forth in the attached letter agreement dated January 23, 2007, encompasses the entire understanding between the parties and supersedes all prior arrangements.
Carol Tomé
     On January 22, 2007, the Company and Ms. Tomé agreed upon the terms of her compensation in her new position as Chief Financial Officer and Executive Vice President — Corporate Services. The Leadership Development and Compensation Committee, which is comprised solely of independent directors, approved the new terms.
     Ms. Tomé’s annual base salary will be $875,000, and, beginning in fiscal 2007, her annual bonus target under the Company’s MIP will be 125% of her base salary, payout of which is based on achieving established goals. Specifically, target payout of 70% of the annual bonus is based on achievement of certain pre-established financial goals and 30% on achievement of pre-established individual performance metrics.
     Ms. Tomé will also be eligible to continue to participate in the Company’s LTIP, which provides an incentive target of 75% of her base salary. Payout of the LTIP depends on achievement of pre-established average diluted EPS growth over a three-year performance period. Average diluted EPS is determined by averaging the diluted percentage increase in EPS for each fiscal year in the three-year performance period. Awards are payable in cash at the end of the performance period.
     In addition to benefits available to all salaried associates of the Company, Ms. Tomé will continue to participate in the Company’s executive officer programs, including but not limited to: (i) death benefit only insurance policy program; (ii) executive life insurance program; (iii) Supplemental Executive Choice Program (providing for the purchase of additional insurance or the reimbursement of financial services or healthcare expenses); and (iv) leased car program.
     Upon termination of Ms. Tomé’s employment, Ms. Tomé will be subject to confidentiality restrictions. In addition, Ms. Tomé will be subject to 24-month non-compete and 36-month non-solicitation provisions following the termination of her employment with the Company.
     As provided under her existing arrangements with the Company, if Ms. Tomé’s employment is involuntarily terminated by the Company without cause, or by Ms. Tomé for good reason, the Company will continue to pay Ms. Tomé’s base salary for 24 months in accordance with Company normal payroll practices, including any delay necessary to comply with the requirements of Section 409A of the Internal Revenue Code. Also, the vesting of outstanding restricted stock and stock option awards that would have otherwise vested during such period will be accelerated.
     This new arrangement, as set forth in the attached letter agreement dated January 22, 2007, encompasses the entire understanding between the parties and supersedes all prior arrangements.
Joe DeAngelo
     On January 23, 2007, the Company and Mr. DeAngelo agreed upon the terms of his compensation in his new position as Chief Operating Officer. The Leadership Development and Compensation Committee approved the new terms.
     Mr. DeAngelo’s annual base salary will be $875,000, and beginning in fiscal 2007, his annual bonus target under the Company’s MIP is 125% of his base salary, payout of which is based on achieving established goals. Specifically, target payout of 70% of the annual bonus is based on achievement of certain pre-established financial goals and 30% on achievement of pre-established individual performance metrics.
     Mr. DeAngelo will also be eligible to continue to participate in the Company’s LTIP, which provides an incentive target of 75% of his base salary. Payout of the LTIP depends on achievement of pre-established average

 

 

diluted EPS growth over a three-year performance period. Average diluted EPS is determined by averaging the diluted percentage increase in EPS for each fiscal year in the three-year performance period. Awards are payable in cash at the end of the performance period.
     Mr. DeAngelo will receive an award of restricted stock, having a value of $1,000,000, at the Board’s next regularly scheduled meeting. The award will fully vest on the fifth anniversary of the grant date, provided he is employed with the Company on such date.
     In addition to benefits available to all salaried associates of the Company, Mr. DeAngelo will continue to participate in the Company’s executive officer programs, including but not limited to: (i) death benefit only insurance policy program; (ii) executive life insurance program; (iii) Supplemental Executive Choice Program (providing for the purchase of additional insurance or the reimbursement of financial services or healthcare expenses); and (iv) leased car program.
     Upon termination of Mr. DeAngelo’s employment, Mr. DeAngelo will be subject to confidentiality restrictions. In addition, Mr. DeAngelo will be subject to 24-month non-compete and 36-month non-solicitation provisions following the termination of his employment with the Company.
     If Mr. DeAngelo’s employment is involuntarily terminated by the Company without cause, or by Mr. DeAngelo for good reason, the Company will continue to pay Mr. DeAngelo’s base salary for 24 months in accordance with Company normal payroll practices, including any delay necessary to comply with the requirements of Section 409A of the Internal Revenue Code. Also, the vesting of outstanding restricted stock and stock option awards that would have otherwise vested during such period will be accelerated.
     This new compensation arrangement, as set forth in the attached letter agreement dated January 23, 2007, encompasses the entire understanding between the parties and supersedes all prior arrangements.
Item 9.01.   Financial Statements and Exhibits.
         
Exhibit   Description
       
 
10.1    
Employment Arrangement between Francis S. Blake and The Home Depot, Inc., dated January 23, 2007
10.2    
Employment Arrangement between Carol B. Tomé and The Home Depot, Inc., dated January 22, 2007
10.3    
Employment Arrangement between Joseph J. DeAngelo and The Home Depot, Inc., dated January 23, 2007

 

 

SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  THE HOME DEPOT, INC.
  		 
  By:   /s/ Frank L. Fernandez    
    Name:   Frank L. Fernandez   
    Title:   Executive Vice President, Secretary and
General Counsel  		 
 
Date: January 23, 2007

 

 

EXHIBIT INDEX
         
Exhibit   Description
       
 
10.1    
Employment Arrangement between Francis S. Blake and The Home Depot, Inc., dated January 23, 2007
10.2    
Employment Arrangement between Carol B. Tomé and The Home Depot, Inc., dated January 22, 2007
10.3    
Employment Arrangement between Joseph J. DeAngelo and The Home Depot, Inc., dated January 23, 2007

 

 

Exhibit 10.1
January 23, 2007
Mr. Francis S. Blake
2455 Paces Ferry Road
Atlanta, Georgia 30339
Dear Frank:
I am pleased to confirm The Home Depot, Inc.’s (the “Company”) offer and your acceptance of your appointment to Chairman & Chief Executive Officer, effective January 2, 2007, reporting directly to the Company’s Board of Directors. Your new base annual salary will be $975,000, payable in equal biweekly installments, commencing January 29, 2007.
In addition to your base salary, you will continue to participate in the Management Incentive Program (“MIP”) in accordance with its terms. Beginning in fiscal year 2007, your annual incentive target will be equal to 200% of your base salary, based upon achieving established goals. You will also continue to participate in the Company’s Long-Term Incentive Plan (“LTIP”) in accordance with its terms. Beginning with the fiscal year 2007—2009 plan, your LTIP target will be equal to 100% of your base salary as of the beginning of the plan. To be eligible for payment of any MIP or LTIP incentive, you must be employed on the day on which the incentive is paid (unless your termination of employment is due to death, disability or Retirement as provided by the terms of the MIP and LTIP plan documents).
Following your acceptance of this agreement, at the next regularly scheduled meeting of the Company’s Board of Directors in February 2007, you will receive a grant of Performance Shares under the 2005 Omnibus Stock Incentive Plan equal to the greatest number of whole shares of the Company’s common stock resulting from dividing $2,500,000 by the closing stock price on the grant date. The payout of the Performance Share award will depend on the Company’s total shareholder return (“TSR”) percentile ranking, compared to the TSR ranking of individual companies included in the S&P 500 Index, at the end of the three year performance period commencing with Fiscal 2007. The target award payout is 100% at the 50th percentile ranking, 300% at the 100th percentile ranking and 25% at the 26th percentile ranking. Payout is interpolated for results between these percentile rankings. There is no payout for rankings below the 26th percentile. Earned shares will be issued to you as soon as administratively practical after the end of the performance period, free and clear of restrictions, subject to the standard provisions of the plan and award document. To be eligible for payment of the Performance Shares, you must be employed at the time the shares are paid; provided, however, that in the event of your employment termination due to death, disability or retirement, in each case at or

 

 

after age 60 with at least 5 years of continuous service with the Company, you will be eligible to receive any Performance Shares that otherwise would have been paid to you had your employment continued through the payment date. In the event your employment ends due to death or disability during the 3-year performance period and before you are retirement eligible at age 60 with 5 years of continuous service, you or your estate will be eligible for a prorated portion of the Performance Shares that otherwise would have been paid to you had your employment continued through the payment date.
Following your acceptance of this agreement, at the next regularly scheduled meeting of the Company’s Board of Directors in February 2007, you will receive a grant of nonqualified stock options under the 2005 Omnibus Stock Incentive Plan equal to the greatest number of whole shares of the Company’s common stock resulting from dividing $2,500,000 by the product of the closing stock price on the grant date and 27.25%, with an exercise price equal to the closing stock price on the grant date. The options will vest and become fully exercisable on the later of the first anniversary of the grant date and the date the closing stock price has been 25% greater than the exercise price of the options for thirty consecutive trading days (the “Target Closing Stock Price”). The options will expire on the earlier of (i) employment termination for any reason other than death, disability or Retirement, (ii) five years from the grant date if the Target Closing Stock Price is not achieved by such date or, otherwise, (iii) ten years from the grant date. You will have 3 months after employment termination, and before expiration of the option, to exercise any vested portion of the award. However, in the event of your retirement at or after age 60 with at least 5 years of continuous service, or your death or disability at any time, your options will continue to vest pursuant to the foregoing vesting schedule and, if vested before the fifth anniversary of the grant date, may be exercised until the tenth anniversary of the grant date as noted above; provided, however, in the event that your employment ends due to death or disability before you are retirement eligible at age 60 with 5 years of continuous service, your options may only be exercised for one year following the later of the vesting date or the date of termination of your employment.
The above equity awards are in lieu of any equity awards that you would have received at the time of the Company’s broad-based annual equity awards in March 2007.
In addition to the standard benefits package for salaried associates, as an executive officer of the Company, you will continue to be eligible to participate in the benefits provided to our executive officers, including but not limited to a death benefit only insurance policy, the Company’s executive life insurance program, and our lease car program. You are also eligible to continue participation in the Supplemental Executive Choice Program, which provides you with an annual supplemental benefit allowance. You can use this annual allowance to purchase additional disability or life insurance benefits, personal excess liability insurance, or you can use it to reimburse yourself for financial services or health care expenses not covered under our standard health plans.
The Company requests that, where practicable, you travel by use of Company aircraft or charter aircraft, for security purposes. However, you may elect to travel by commercial aircraft when you deem appropriate. Also, to accommodate your travel schedule, your family shall be allowed to travel aboard the Company’s aircraft, provided however, such personal use of the Company’s aircraft will require the inclusion in your taxable income of an amount equal to the related benefit of such accommodation. Such inclusion shall be made as required under the Internal

 

 

Revenue Code and related regulations. The Company will provide a tax gross-up for your family’s personal use of the aircraft only when the Company requests their attendance at a business meeting or other Company event.
Also, for security purposes, you will be provided with personal and home security by the Company’s Corporate Security Department, as considered necessary by such department.
You agree that you shall not, without the prior express written consent of the Executive Vice President, Human Resources of the Company, engage in or have any financial or other interests in, or render any service in any capacity to any competitor or supplier of the Company or its parents, subsidiaries, affiliates, or related entities during the course of your employment with the Company. Notwithstanding the foregoing, you shall not be restricted from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers, provided that such investment does not exceed 1% of the market value of the outstanding securities of such corporation.
In the event your employment with the Company is terminated for any reason, you agree not to disclose any Company proprietary or confidential information to any future employer or third party or to take any such information, regardless of whether the information is in printed, written, or electronic form.
All payments described in this letter will be subject to applicable payroll and income tax withholding and other applicable deductions.
This letter should not be construed, nor is it intended to be a contract of employment for a specified period of time, and the Company reserves the right to terminate this agreement with or without cause at any time. The Company will provide, and you agree to provide the Company, with 30 days’ prior written notice of any termination of your employment hereunder. This letter supersedes and replaces your previous employment letters, including but not limited to the letter dated February 5, 2002.
In the event that any provisions of this letter shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of this letter shall not in any way be affected or impaired thereby.

 

 

We are excited about the opportunities that your leadership will bring to this role. Enclosed are duplicate originals of this letter. Please countersign one original and return it to us. The other original is for you.
     
 
  Sincerely,
 
   
 
  THE HOME DEPOT, INC.
 
   
 
   /s/ Bonnie G. Hill
 
  Bonnie G. Hill, Chair
 
  Leadership Development & Compensation
 
  Committee
     
pc:
  Dennis Donovan
 
  Frank Fernandez
 
  Tim Crow
I accept this appointment to Chairman & Chief Executive Officer:
/s/ Francis S. Blake
Francis S. Blake
Date Signed:   January 23, 2007
 

 

 

Exhibit 10.2
January 20, 2007
Ms. Carol B. Tomé
2455 Paces Ferry Road
Atlanta, GA 30339
Dear Carol:
I am pleased to confirm The Home Depot, Inc.’s (“Home Depot” or the “Company”) offer and your acceptance of your appointment to Executive Vice President — Corporate Services & Chief Financial Officer, effective immediately, reporting directly to me. Your new base annual salary will be $875,000, payable in equal bi-weekly installments, commencing January 29, 2007. Your next salary review will occur in February 2008.
In addition to your base salary, you will continue to participate in the Management Incentive Program (MIP) in accordance with its terms. Beginning in fiscal year 2007, your annual incentive target will be equal to 125% of your base salary, based upon achieving established goals. You will also continue to participate in the Company’s Long-Term Incentive Plan (LTIP) in accordance with its terms, which provides an incentive target of 75% of your base salary as of the beginning of the plan. To be eligible for payment of any MIP or LTIP incentive, you must be employed on the day on which the incentive is paid.
In addition to the standard benefits package for salaried associates, as an officer of the Company, you will continue to receive a death benefit only insurance policy and will continue participation in the Company’s executive life insurance and leased car programs. You are also eligible to continue participation in the Supplemental Executive Choice Program, which provides you with an annual supplemental benefit allowance. You can use this annual allowance to purchase additional disability or life insurance benefits, personal excess liability insurance, or you can use it to reimburse yourself for financial services or health care expenses not covered under our standard health plans.
You agree that you shall not, without the prior express written consent of the Executive Vice President, Human Resources of the Company, engage in or have any financial or other interests in, or render any service in any capacity to any competitor or supplier of the Company or its parents, subsidiaries, affiliates, or related entities during the course of your employment with the Company. Notwithstanding the foregoing, you shall not be restricted from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers, provided that such investment does not exceed 1% of the market value of the outstanding securities of such corporation.

 

 

Ms. Carol B. Tomé
January 20, 2007
Page 2
 
In the event your employment with Home Depot is terminated for any reason, you agree not to disclose any Home Depot proprietary or confidential information to any future employer or third party or to take any such information, regardless of whether the information is in printed, written, or electronic form.
By accepting this offer you acknowledge that you will be exposed to Company materials which are proprietary and confidential in nature and/or which constitute trade secrets, and, further, that you will receive training in the Company’s various merchandising, operations, financial, and/or other business processes. You further acknowledge that such proprietary and confidential information, including trade secrets and other business processes, are utilized by the Company throughout the entire United States and in other locations in which it conducts business. Consequently, you agree that you will not, for a period of twenty-four (24) months subsequent to your termination from the Company, regardless of the reason for the termination, enter into or maintain an employment or contractual relationship, either directly or indirectly, to provide executive or managerial services in the same or similar manner as you did for the Company to any company or entity engaged in any way in a business that competes with Home Depot, its parents, subsidiaries, affiliates or related entities (collectively referred to as the “Company”), in the United States, Canada, Puerto Rico, Mexico, China, or any other location in which the Company conducts business prior to your termination date, without the prior written consent of the Executive Vice President, Human Resources of the Company. Businesses that compete with the Company specifically include, but are not limited to, the following entities and each of their subsidiaries, affiliates, assigns, or successors in interest: Lowe’s Companies, Inc. (including, but not limited to, Eagle Hardware and Garden); Sears Holding Corp. (including, but not limited to, Orchard Supply and Hardware Company); RONA Inc.; B&Q; OBI; Homemart; Orient Home; Grainger; Ferguson; ServiceMaster; Menard, Inc.; Ace Hardware; True Value Company; and Wal-Mart.
You agree that you will not, for a period of thirty-six (36) months subsequent to your termination from Home Depot, regardless of the reason for the termination, directly or indirectly solicit or encourage any person who is an employee of the Company to terminate his or her relationship with the Company, or refer any such employee to anyone, without prior written approval from the Executive Vice President, Human Resources of the Company.
If the Company notifies you of its intention to terminate your employment involuntarily and without cause, you will be eligible to receive, in exchange for your execution of an agreement and general release in a form acceptable to the Company’s legal counsel, and provided that you are not in breach of the non-competition, non-solicitation, confidentiality or other provisions of this letter, the equivalent of twenty-four (24) months of base salary continuation. Said payments will be payable in equal installments over the Company’s normal payroll period cycle, provided, that the Company shall delay any payment provided for by this letter or take any other action it deems necessary to comply with the requirements of Section 409A of the Internal Revenue Code. In addition, vesting of outstanding restricted stock and stock option awards that would have otherwise vested during the twenty-four month period following your termination date shall be accelerated.
You will not be entitled to receive these payments and benefits, or any other type of payment or benefit, if you voluntarily resign from the Company other than for good reason as defined below, regardless of when or why you have resigned from your employment. You are also not entitled to receive these payments or benefits if you are terminated from the Company “for cause.” For purposes of this agreement, termination “for cause” shall mean:

 

 

Ms. Carol B. Tomé
January 20, 2007
Page 3
 
  •   Conviction of any felony involving theft or moral turpitude
 
  •   Conduct that constitutes willful gross neglect or willful gross misconduct with respect to your employment duties which results in material economic harm to the Company
 
  •   Willful conduct that constitutes a material violation of the Company’s mutual attraction policy, substance abuse policy, or compliance policies applicable to you which may be in effect at the time of the occurrence
If you terminate your employment with the Company for “good reason,” you will be entitled to the same benefits that you would be entitled to if you were involuntarily terminated by the Company without cause. “Good reason” shall mean, without your consent:
  •   An assignment of your principal office outside the Atlanta Metropolitan area
 
  •   A decrease in base salary or failure to pay the compensation provided for in this letter
 
  •   An assignment to a position that does not report to the CEO
You must give at least 30 days written notice if you wish to terminate your employment for good reason and the Company shall have the right during the notice period to cure any purported good reason termination.
All payments described in this letter will be subject to applicable payroll and income tax withholding and other applicable deductions.
This letter should not be construed, nor is it intended to be a contract of employment for a specified period of time, and the Company reserves the right to terminate this agreement with or without cause at any time. This letter supersedes any prior employment agreement or understandings, written or oral between you and the Company and contains the entire understanding of the Company and you with respect to the subject matter hereof.
This letter shall be construed, interpreted and applied in accordance with the law of the State of Delaware, without giving effect to the choice of law provisions thereof. You agree to irrevocably submit any dispute arising out of or relating to this letter to the exclusive concurrent jurisdiction of the state and federal courts located in Delaware. You also irrevocably waive, to the fullest extent permitted by applicable law, any objection you may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute, and you agree to accept service of legal process from the courts of Delaware.
Furthermore, in the event that you breach any of the covenants described above, the Company shall be entitled to cease making any payments provided under this letter.

 

 

Ms. Carol B. Tomé
January 20, 2007
Page 4
 
We are excited about the opportunities that your leadership will bring to this role. Enclosed are duplicate originals of this letter. Please countersign one original and return it to us. The other original is for you.
         
  Sincerely,


THE HOME DEPOT, INC.
  		 
  /s/ Frank Blake  
  Frank Blake   
  Chairman & Chief Executive Officer   
 
pc:   Dennis Donovan
Frank Fernandez
Tim Crow
I accept this appointment to Executive Vice President — Corporate Services & Chief Financial Officer.
/s/ Carol B. Tomé
Carol B. Tomé
Date Signed:   January 22, 2007
 

 

 

Exhibit 10.3
January 23, 2007
Mr. Joseph J. DeAngelo
2455 Paces Ferry Road
Atlanta, GA 30339
Dear Joe:
I am pleased to confirm The Home Depot, Inc.’s (“Home Depot” or the “Company”) offer and your acceptance of your appointment to Executive Vice President & Chief Operating Officer, effective immediately, reporting directly to me. Your new base annual salary will be $875,000, payable in equal bi-weekly installments, commencing January 29, 2007. Your next salary review will occur in February 2008.
In addition to your base salary, you will continue to participate in the Management Incentive Program (MIP) in accordance with its terms. Beginning in fiscal year 2007, your annual incentive target will be equal to 125% of your base salary, based upon achieving established goals. You will also continue to participate in the Company’s Long-Term Incentive Plan (LTIP) in accordance with its terms, which provides an incentive target of 75% of your base salary as of the beginning of the plan. To be eligible for payment of any MIP or LTIP incentive, you must be employed on the day on which the incentive is paid.
Upon your acceptance of this agreement, at the next regularly scheduled meeting of the Company’s Board of Directors in February 2007, you will receive a grant under the 2005 Omnibus Stock Incentive Plan of the greatest number of whole shares of restricted Home Depot common stock resulting from dividing $1,000,000 by the closing stock price on the grant date. The restrictions on 100% of these shares will lapse on the fifth anniversary of the grant date. Once these restrictions lapse, the shares will be yours, free and clear of restrictions, subject to the applicable provisions of the plan and award document.
In addition to the standard benefits package for salaried associates, as an officer of the Company, you will continue to receive a death benefit only insurance policy and will continue participation in the Company’s executive life insurance and leased car programs. You are also eligible to continue participation in the Supplemental Executive Choice Program, which provides you with an annual supplemental benefit allowance. You can use this annual allowance to purchase additional disability or life insurance benefits, personal excess liability insurance, or you can use it to reimburse yourself for financial services or health care expenses not covered under our standard health plans.

 

 

Mr. Joseph J. DeAngelo
January 23, 2007
Page 2
 
You agree that you shall not, without the prior express written consent of the Executive Vice President, Human Resources of the Company, engage in or have any financial or other interests in, or render any service in any capacity to any competitor or supplier of the Company or its parents, subsidiaries, affiliates, or related entities during the course of your employment with the Company. Notwithstanding the foregoing, you shall not be restricted from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers, provided that such investment does not exceed 1% of the market value of the outstanding securities of such corporation.
In the event your employment with Home Depot is terminated for any reason, you agree not to disclose any Home Depot proprietary or confidential information to any future employer or third party or to take any such information, regardless of whether the information is in printed, written, or electronic form.
By accepting this offer you acknowledge that you will be exposed to Company materials which are proprietary and confidential in nature and/or which constitute trade secrets, and, further, that you will receive training in the Company’s various merchandising, operations, financial, and/or other business processes. You further acknowledge that such proprietary and confidential information, including trade secrets and other business processes, are utilized by the Company throughout the entire United States and in other locations in which it conducts business. Consequently, you agree that you will not, for a period of twenty-four (24) months subsequent to your termination from the Company, regardless of the reason for the termination, enter into or maintain an employment or contractual relationship, either directly or indirectly, to provide executive or managerial services in the same or similar manner as you did for the Company to any company or entity engaged in any way in a business that competes with Home Depot, its parents, subsidiaries, affiliates or related entities (collectively referred to as the “Company”), in the United States, Canada, Puerto Rico, Mexico, China, or any other location in which the Company conducts business prior to your termination date, without the prior written consent of the Executive Vice President, Human Resources of the Company. Businesses that compete with the Company specifically include, but are not limited to, the following entities and each of their subsidiaries, affiliates, assigns, or successors in interest: Lowe’s Companies, Inc. (including, but not limited to, Eagle Hardware and Garden); Sears Holding Corp. (including, but not limited to, Orchard Supply and Hardware Company); RONA Inc.; B&Q; OBI; Homemart; Orient Home; Grainger; Ferguson; ServiceMaster; Menard, Inc.; Ace Hardware; True Value Company; and Wal-Mart.
You agree that you will not, for a period of thirty-six (36) months subsequent to your termination from Home Depot, regardless of the reason for the termination, directly or indirectly solicit or encourage any person who is an employee of the Company to terminate his or her relationship with the Company, or refer any such employee to anyone, without prior written approval from the Executive Vice President, Human Resources of the Company.
If the Company notifies you of its intention to terminate your employment involuntarily and without cause, you will be eligible to receive, in exchange for your execution of an agreement and general release in a form acceptable to the Company’s legal counsel, and provided that you are not in breach of the non-competition, non-solicitation, confidentiality or other provisions of this letter, the equivalent of twenty-four (24) months of base salary continuation. Said payments will be payable in equal installments over the Company’s normal payroll period cycle, provided, that the Company shall delay any payment provided for by this letter or take any other action it deems necessary to comply with the requirements of Section 409A of the Internal Revenue Code. In addition, vesting of outstanding restricted stock and stock option awards that would have otherwise vested during the twenty-four month period following your termination date shall be accelerated.

 

 

Mr. Joseph J. DeAngelo
January 23, 2007
Page 3
 
You will not be entitled to receive these payments and benefits, or any other type of payment or benefit, if you voluntarily resign from the Company other than for good reason as defined below, regardless of when or why you have resigned from your employment. You are also not entitled to receive these payments or benefits if you are terminated from the Company “for cause.” For purposes of this agreement, termination “for cause” shall mean:
  •   Conviction of any felony involving theft or moral turpitude
 
  •   Conduct that constitutes willful gross neglect or willful gross misconduct with respect to your employment duties which results in material economic harm to the Company
 
  •   Willful conduct that constitutes a material violation of the Company’s mutual attraction policy, substance abuse policy, or compliance policies applicable to you which may be in effect at the time of the occurrence
If you terminate your employment with the Company for “good reason,” you will be entitled to the same benefits that you would be entitled to if you were involuntarily terminated by the Company without cause. “Good reason” shall mean, without your consent:
  •   An assignment of your principal office outside the Atlanta Metropolitan area
 
  •   A decrease in base salary or failure to pay the compensation provided for in this letter
 
  •   An assignment to a position that does not report to the CEO
You must give at least 30 days written notice if you wish to terminate your employment for good reason and the Company shall have the right during the notice period to cure any purported good reason termination.
All payments described in this letter will be subject to applicable payroll and income tax withholding and other applicable deductions.
This letter should not be construed, nor is it intended to be a contract of employment for a specified period of time, and the Company reserves the right to terminate this agreement with or without cause at any time. This letter supersedes any prior employment agreement or understandings, written or oral between you and the Company and contains the entire understanding of the Company and you with respect to the subject matter hereof.
This letter shall be construed, interpreted and applied in accordance with the law of the State of Delaware, without giving effect to the choice of law provisions thereof. You agree to irrevocably submit any dispute arising out of or relating to this letter to the exclusive concurrent jurisdiction of the state and federal courts located in Delaware. You also irrevocably waive, to the fullest extent permitted by applicable law, any objection you may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute, and you agree to accept service of legal process from the courts of Delaware.
Furthermore, in the event that you breach any of the covenants described above, the Company shall be entitled to cease making any payments provided under this letter.

 

 

Mr. Joseph J. DeAngelo
January 23, 2007
Page 4
 
We are excited about the opportunities that your leadership will bring to this role. Enclosed are duplicate originals of this letter. Please countersign one original and return it to us. The other original is for you.
         
  Sincerely,


THE HOME DEPOT, INC.
  		 
  /s/ Frank Blake  
  Frank Blake   
  Chairman & Chief Executive Officer   
 
pc:   Dennis Donovan
Frank Fernandez
Tim Crow
I accept this appointment to Executive Vice President & Chief Operating Officer.
/s/ Joseph J. DeAngelo
Joseph J. DeAngelo
Date Signed:   January 23, 2007