WE URGE SHAREHOLDERS TO REJECT
THE STARBOARD CONSENT PROPOSALS AND REVOKE ANY CONSENT PREVIOUSLY SUBMITTED.
DO NOT DELAY. IN ORDER TO HELP ENSURE
THAT THE CURRENT BOARD IS ABLE TO ACT IN YOUR BEST INTERESTS, PLEASE SIGN, DATE AND DELIVER THE ENCLOSED BLUE CONSENT REVOCATION CARD USING THE ENCLOSED PRE-PAID ENVELOPE AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU HAVE SIGNED THE WHITE CONSENT CARD
FROM THE STARBOARD GROUP.
BACKGROUND OF THE STARBOARD CONSENT SOLICITATION
Between June 2012 and September 2012, representatives of Starboard had conversations with the investor relations personnel of Office
Depot to discuss the Companys business fundamentals.
On September 5, 2012, representatives of Office Depot made a
presentation at the Goldman Sachs conference explaining the strategic initiatives to be undertaken by the Company to improve financial results.
On September 5, 2012, after Office Depots presentation at the Goldman Sachs conference, Mr. Austrian, and other members of Office Depots management team met privately with
representatives of Starboard to discuss the Companys business fundamentals and challenges and the guidance the Company had previously provided that the specific Company strategic initiatives would deliver between $150-$170 million of
improvement in profitability in 2012. The initiatives discussed included pricing, promotions, improved direct import and private brand penetration, improved store customer experience as well as G&A cost reductions. A focus on sales growth in
high margin services and products was also discussed. The Company also discussed a plan to more aggressively downsize retail stores with leases expiring in the next few years and the potential to double the capital allocated.
On September 17, 2012, Starboard disclosed a 13.3% interest in Office Depot and delivered a letter to Mr. Austrian and the
Board in which Starboard provided many of the same ideas to improve the Companys operating performance and increase EBITDA as Office Depot had presented at the Goldman Sachs conference including, among other things: (i) meaningfully
reducing general and administrative (G&A) expenses; (ii) increasing the mix of higher-margin services in its North American Retail Division; (iii) increasing private label direct sourced products; (iv) reducing the
number of SKUs carried in stores; (v) downsizing to smaller store formats to drive substantially higher operating margins; and (vi) increasing the mix of significantly higher-margin small-to medium-sized business customers in the
Companys North American Business Solutions Division. In addition, the Starboard letter further indicated Starboards estimate that Office Depot de Mexico, a highly profitable 50/50 joint venture (the JV Interest) between
the Company and Gigante S.A.B. de C.V. (Gigante), which is not consolidated in the Companys financial statements, could be worth more than 50% of Office Depots entire enterprise value. Once again, this point simply reflected
something the Company was already considering, as the Company had hired an investment banking firm in early 2012 to help it review strategic options with respect to recognizing the inherent value that the Company believed was represented by its
investment in Office Depot de Mexico. While the Company had not yet made any public disclosure, in early 2012 the Company had hired an investment baking firm to help it review strategic options to help it recognize the inherent value that the
Company believed was represented by its investment in Office Depot de Mexico, including further expansion into South America and a potential IPO of that business.
8
On October 2, 2012, Jeff Smith, CEO of Starboard Value, had a conversation with
Mr. Austrian, in the course of which Mr. Smith expressed Starboards desire to constructively work with the Company and help it unlock value for shareholders.
On October 12, 2012, in an amendment to its Schedule 13D, Starboard disclosed aggregate ownership of 42,100,000 shares of Common Stock, or 14.8% of the outstanding shares of Common Stock.
On October 30, 2012, the Company announced that effective October 24, 2012, the Board had adopted a shareholder rights plan, as
set forth in the Rights Agreement, dated as of October 24, 2012 between the Company and Computershare Shareowner Services LLC, as Rights Agent (the Rights Agreement), with a 15% ownership limitation.
On November 7, 2012, representatives of Starboard met with members of the management at the Companys executive headquarters in
Boca Raton, Florida. During the meeting, Starboard discussed with management what it believed were the challenges facing the Company and repeated its views on how to improve profitability and unlock value for shareholders.
On November 13, 2012, representatives of Starboard again met with members of management of the Company. At that meeting, Starboard
raised questions concerning the Companys advertising expenses, distribution channels, the JV Interest and the Companys adoption of a shareholders rights plan.
On November 16, 2012, Starboard delivered a letter to the independent members of the Board. In the letter, Starboard denounced the adoption by the Board of the Rights Agreement. Starboard
outlined in the letter its belief that the Rights Agreement is part of a scheme designed to preserve and entrench the Board by limiting the influence of shareholders over Board composition and other matters, while allowing the Board to maintain and
increase its effective voting control over the Company. Contrary to Starboards allegations, and as disclosed at the time of adoption of the Rights Plan, the Rights Plan was intended to help reduce the risk of two-tiered, front end loaded
or partial offers which may not offer fair value to all the Companys shareholders; protect against acquirers who through the open market, private purchases or otherwise may achieve or augment a position of substantial influence or control
without paying a fair price to the Companys shareholders; deter acquirers who were simply interested in putting the Company into play; preserve the Boards bargaining power and flexibility to deal with third-party acquirers
and to otherwise seek to maximize value for all shareholders; and afford the Board adequate time to evaluate potential offers and to consider alternatives.
On December 4, 2012, representatives of Starboard met with the Board at the Companys executive headquarters. During the meeting, the members of the Board and Starboard discussed the
challenges facing the Company and the Board sought Starboards views on how to improve profitability and unlock value for shareholders. Starboard indicated that it was not prepared to share its plan for the Company at that time. Starboard
again called for the replacement of our CEO. Starboard expressed its continued desire to work constructively with the Company for the benefit of all shareholders.
During the months of December 2012 through February 2013, Mr. Smith had several discussions with members of the Board in which he stated his views on how to unlock value for shareholders.
On January 24, 2013, the Company announced that following discussions with Starboard the Board had amended and restated the
Companys Bylaws to extend the deadline for shareholders to nominate candidates for election to the Board at the 2013 annual meeting to the close of business on February 25, 2013.
On February 20, 2013, Office Depot announced its entry, together with its wholly owned direct subsidiaries Dogwood Merger Sub Inc.
and Dogwood Merger Sub LLC, into an Agreement and Plan of Merger (the Merger Agreement) with OfficeMax and its subsidiaries, Mapleby Holdings Merger Corporation and Mapleby Merger Corporation, pursuant to which the companies would
combine in an all-stock merger of equals
9
transaction intended to qualify as a tax-free reorganization (the OfficeMax Merger). Under the Merger Agreement, each share of OfficeMax common stock would be converted into the
right to receive 2.69 shares of Office Depot Common Stock.
On February 22, 2013, Office Depot announced that on
February 15, 2013 the Board received an offer from the Companys joint venture partner Gigante to purchase its JV Interest, Office Depot de Mexico. Gigantes offer was initially set to expire on February 28, 2013.
Also on February 22, 2013, the Company announced that after further discussions with Starboard, the Board had amended and restated
the Companys Bylaws to amend the deadline for shareholder nominations of candidates for election to the Board at the 2013 annual meeting to no later than the tenth day following the day on which public announcement of the date of the 2013
annual meeting is made.
On February 27, 2013, Starboard delivered a letter to the Board (the February 27
Letter). In the letter, Starboard restated its belief that the significant value of the JV Interest was not fully reflected in the stock price of the Company. Starboard noted that since Gigantes offer to purchase the JV Interest for
$690.5 million was set to expire on February 28, 2013, Starboard believed the Board should promptly obtain consent from OfficeMax under the Merger Agreement to immediately explore a sale of the JV Interest to maximize value for shareholders.
Starboard stated in the letter it believed it was the Boards fiduciary duty to monetize the Companys interest in the joint venture given the clear benefit to both Office Depot and OfficeMax as a combined company and to Office Depot as a
stand-alone company. Starboard stated further that it recognized OfficeMax was potentially conflicted as a sale of the JV Interest, while beneficial to the combined company, would also be beneficial to Office Depot as a stand-alone business and,
therefore, may strengthen a competitor should the OfficeMax Merger not be completed. Starboard noted in the February 27 Letter that if OfficeMax did not consent to Office Depots negotiations with Gigante or any other potential buyer
regarding the sale of the JV Interest, Starboard would view this as both unreasonable and potentially anti-competitive.
On
March 6, 2013, representatives of Starboard met with members of the Board. During the meeting, Starboard discussed its continued desire to work constructively with the Company to improve the Board with directors that had significant
retail operating experience and could assist to unlock value for shareholders.
On March 11, 2013, Mr. Smith spoke
to a member of the Board to reiterate the importance of unlocking value for Office Depot shareholders by exploring alternatives for the JV Interest.
On March 12, 2013, Starboard delivered a letter to the Board reiterating its strong belief that it was incumbent upon the Board to immediately seek to monetize the JV Interest by exploring a sale of
the JV Interest to Gigante, whose offer was then set to expire on March 15, 2013. Starboard noted it expected the Board to send a formal written request to OfficeMax to seek consent to pursue such a sale and set forth the Boards view
that a sale of the JV Interest at a full and fair price was clearly in the best interest of Office Depot shareholders on a stand-alone basis as well as in the best interest of Office Depot / OfficeMax shareholders in a business combination and that
the Board expected OfficeMaxs consent to be given and not unreasonably withheld.
On March 18, 2013, Starboard
delivered a letter to the Board stating its belief that the Board must be significantly reconstituted immediately, whether Office Depot continued as a stand-alone company or as a merged company with OfficeMax. Starboard explained in the letter
that a new and, in Starboards opinion, improved Board was needed to: (1) act to immediately improve the current operating performance of the business on a stand-alone basis and to be in position to maximize the longer term synergies with
OfficeMax, if the OfficeMax Merger is approved, (2) select a committee of the Companys directors to work with a committee of OfficeMax directors to conduct a process to select a Chief Executive Officer of the combined company, and
(3) contribute the most highly-qualified directors possible to the combined companys board. In the letter, Starboard also urged the Company to schedule its 2013 annual meeting for a date prior to the potential consummation of the
OfficeMax Merger so that the Companys shareholders can choose who they want to represent them on the Board.
10
Also on March 18, 2013, Starboard V&O Fund delivered a letter to the Corporate
Secretary of the Company nominating what in Starboards opinion are six highly-qualified candidates for election to the Board. In the letter, Starboard indicated that waiting for a shareholder meeting to add these candidates on the Board was a
mistake and that the Board should immediately engage with Starboard to reconstitute the Board.
On April 9, 2013, Office
Depot and OfficeMax filed a joint proxy statement/prospectus in connection with, among other things, the holding of a special meeting of Office Depot shareholders at which the Office Depot shareholders will be asked to vote on certain matters
related to the OfficeMax Merger
On April 17, 2013, representatives of Starboard met with members of the Board at
Starboards offices. The purpose of the meeting was to discuss Board representation and related matters. The Board members and Starboard discussed the timing of the Companys annual shareholders meeting which would be held as soon as
practical after the special shareholders meeting to approve the merger with OfficeMax. With respect to Board representation, the members of the Board stated, among other things, that they would be willing to expand the Board from ten to twelve
members immediately. The newly created director positions would be based on the recommendation of the Corporate Governance and Nominating Committee of the Board, which considers numerous factors in making its recommendations, including relevant
experience in retailing businesses. The Board members offered that one of the two newly designated directors would be selected from the candidates recommended by Starboard, assuming such candidate was acceptable to the Corporate Governance and
Nominating Committee and met the various selection criteria. Mr. Smith proposed his appointment to the Board and the Board members responded that Mr. Smith would not be nominated since he lacked relevant retailing experience. Despite this
explanation, Mr. Smith rejected the Boards proposal and recommended that the Company expand the Board to fourteen members to allow room for four Starboard candidates to be appointed. He further recommended that at least one of the
BCs designated board members resign from the Board immediately. Mr. Smith also suggested that if he were appointed to the Board and the merger transaction with OfficeMax were to close, he would not expect to be a candidate to serve on the
Board of the combined company. After considerable discussion, the Board members stated that they had listened to his various suggestions and would respond at a later date.
On April 22, 2013, the Starboard Group filed a preliminary consent solicitation statement with respect to the Starboard Consent Proposals.
QUESTIONS AND ANSWERS ABOUT THIS CONSENT REVOCATION STATEMENT
Who is making this solicitation?
Your Board.
What are we asking you to do?
We are asking you to revoke any consent on Starboard Groups white consent card that you may have delivered in favor of the six
proposals described in the Starboard Consent Solicitation and, by doing so, preserve your current Board, which will continue to act in the best interests of the Company and its shareholders. Even if you have not submitted a white consent card, we
urge you to submit a
BLUE
Consent Revocation Card today.
11
What is a consent solicitation?
Under Delaware law and our certificate of incorporation, shareholders may act without a meeting, without prior notice and without a vote,
if consents in writing setting forth the action to be taken are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
What does the Board recommend?
Your Board strongly believes that the solicitation being undertaken by the Starboard Group is not in the best interests of the
Companys shareholders for the reasons described above. Your Board unanimously opposes the solicitation by the Starboard Group and urges shareholders to reject the solicitation and revoke any consent previously submitted.
If I have already delivered a consent, is it too late for me to change my mind?
No. Until the requisite number of duly executed, unrevoked consents are delivered to the Company in accordance with Delaware law and the
Companys organizational documents, the consents will not be effective. At any time prior to the consents becoming effective, you have the right to revoke your consent by delivering a
BLUE
Consent Revocation Card, as discussed in the
following question.
What is the effect of delivering a BLUE Consent Revocation Card?
By marking the YES, REVOKE MY CONSENT boxes on the enclosed BLUE Consent Revocation Card and signing, dating and mailing the
card in the postage-paid envelope provided, you will revoke any earlier dated consent that you may have delivered to the Starboard Group. Even if you have not submitted Starboards consent card, you may submit a BLUE Consent Revocation Card as
described above. Even if you have not submitted a white consent card, we urge you to submit a BLUE Consent Revocation Card, as it will help us keep track of the progress of the consent process.
What should I do to revoke my consent?
Mark the YES, REVOKE MY CONSENT boxes next to each proposal listed on the Consent Revocation Card. Then, sign and date the enclosed Consent Revocation Card and return it TODAY or as soon as
possible in the postage-paid envelope provided. It is important that you sign and date the Consent Revocation Card.
Who is
entitled to consent, withhold consent or revoke a previously given consent with respect to the Starboard Consent Proposals?
In accordance with Delaware law and the Companys Bylaws, the Board has set the close of business on May 3, 2013 as the Record
Date for the determination of the Companys shareholders who are entitled to execute, withhold or revoke consents relating to the Starboard Consent Solicitation. Only shareholders of record as of the Record Date may execute, withhold or revoke
consents with respect to the Starboard Consent Proposals.
When should I return my Consent Revocation Card?
In order for the Starboard Consent Proposals to be adopted, the Company must receive valid, unrevoked consents executed by the holders of
a sufficient number of shares of the Companys Common Stock within 60 days of the date of the earliest consent delivered to the Company. Consequently, the Starboard Consent Proposals will become effective if valid, unrevoked consents signed by
the holders of a majority of the shares of the Common Stock outstanding as of the Record Date are delivered to the Company within the 60 day period after the delivery of the first consent.
12
Because the Starboard Consent Proposals could become effective before the expiration of the
60-day period, you should promptly return the Consent Revocation Card.
What happens if I do nothing?
If you do not execute and send in any white consent card that the Starboard Group sends you, you will effectively be voting AGAINST the
Starboard Consent Proposals.
If you have validly executed and delivered a white consent card, doing nothing further will mean
that you have consented to the Starboard Consent Proposals. If you have executed and delivered a white consent card that the Starboard Group sent you, the Board urges you to revoke any such consent previously submitted by executing and delivering
the
BLUE
Consent Revocation Card.
Who should I call if I have questions about the solicitation?
If you have any questions regarding this Consent Revocation Statement or about submitting your
BLUE
Consent Revocation Card, or
otherwise require assistance, please call Innisfree M&A Incorporated toll free at (877) 825-8621 (banks and brokers may call collect at (212) 750-5833.
13
THE CONSENT PROCEDURE
Voting Securities and Record Date
In accordance with Delaware law and the Companys Bylaws, the Board has set the close of business on May 3, 2013, as the Record Date for the determination of the Companys shareholders who
are entitled to execute, withhold or revoke consents relating to the Starboard Consent Solicitation. As of the Record Date, there were 288,737,708 shares of the Companys Common Stock outstanding. Each share of the Companys Common Stock
outstanding as of the Record Date will be entitled to one vote.
Only shareholders of record as of the Record Date are
eligible to execute, withhold or revoke consents in connection with the Starboard Consent Proposals. Persons beneficially owning shares of the Companys Common Stock (but not holders of record), such as persons whose ownership of Common Stock
is through a broker, bank, financial institution or other nominee holder, may wish to contact such broker, bank, financial institution or other nominee holder and instruct such person to execute the
BLUE
Consent Revocation Card on their
behalf. Any abstention, failure to vote or broker non-vote will have the same effect as withholding consent from the Starboard Consent Proposals. Broker non-votes occur when a broker, bank, financial institution or other nominee holder
has not received instructions with respect to a particular matter, such as the Starboard Consent Proposals, and does not have discretionary power to vote on that matter.
Effectiveness of Consents
Under Delaware law shareholders may act without
a meeting, without prior notice and without a vote, if consents in writing setting forth the action to be taken are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were present and voted. The Starboard Consent Proposals will become effective if valid, unrevoked consents signed by the holders of a majority of the shares of the
Companys Common Stock outstanding as of the Record Date are delivered to the Company within 60 days of the earliest dated consent delivered to the Company.
Because the Starboard Groups proposals could become effective before the expiration of the 60-day period discussed above, we urge you to promptly return the
BLUE
Consent Revocation Card
whether or not you signed the white consent card from the Starboard Group.
Effect of BLUE Consent Revocation Card
A shareholder may revoke any previously signed consent by signing, dating and returning to the Company a
BLUE
Consent
Revocation Card. A consent may also be revoked by delivery of a written revocation of your consent to the Starboard Group. Shareholders are urged, however, to deliver all consent revocations to the Company c/o Innisfree M&A Incorporated, 501
Madison Avenue, New York, NY 10022. The Company requests that if a revocation is instead delivered to the Starboard Group, a copy of the revocation also be delivered to the Company c/o Innisfree M&A Incorporated at the address set forth above,
so that the Company will be aware of all revocations.
Unless you specify otherwise, by signing and delivering the
BLUE
Consent Revocation Card, you will be deemed to have revoked any prior consent to all of the Starboard Consent Proposals.
Any
consent revocation may itself be revoked by marking, signing, dating and delivering a written revocation of your
BLUE
Consent Revocation Card to the Company or to the Starboard Group or by delivering to the Starboard Group a subsequently
dated white consent card that the Starboard Group sent to you.
If any shares of Common Stock that you owned on the Record
Date were held for you in an account with a stock brokerage firm, bank nominee or other similar street name holder, you are not entitled to vote such shares directly, but rather must give instructions to the stock brokerage firm, bank
nominee or other street
14
name holder to grant or revoke consent for the shares of Common Stock held in your name. Accordingly, you should either sign, date and mail the enclosed form of
BLUE
Consent
Revocation Card provided by your bank, broker firm, dealer, trust company or other nominee, or contact the person responsible for your account and direct him or her to execute the enclosed
BLUE
Consent Revocation Card on your behalf. If your
bank, broker firm, dealer, trust company or other nominee provides for consent instructions to be delivered to them by telephone or internet, instructions will be provided by such person.
YOU HAVE THE RIGHT TO REVOKE ANY CONSENT YOU MAY HAVE PREVIOUSLY GIVEN TO THE STARBOARD GROUP. TO DO SO, YOU NEED ONLY SIGN, DATE AND
RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE THE
BLUE
CONSENT REVOCATION CARD WHICH ACCOMPANIES THIS CONSENT REVOCATION STATEMENT. IF YOU DO NOT INDICATE A SPECIFIC VOTE ON THE
BLUE
CONSENT REVOCATION CARD WITH RESPECT TO ONE OR MORE
OF THE STARBOARD CONSENT PROPOSALS, THE CONSENT REVOCATION CARD WILL BE USED IN ACCORDANCE WITH THE BOARDS RECOMMENDATION TO REVOKE ANY CONSENT WITH RESPECT TO ALL SUCH PROPOSALS.
The Company has retained Innisfree M&A Incorporated to assist in communicating with shareholders in connection with the Starboard
Consent Solicitation and to assist in our efforts to obtain consent revocations. If you have any questions regarding this Consent Revocation Statement or about submitting your
BLUE
Consent Revocation Card, or otherwise require assistance,
please call Innisfree M&A Incorporated toll free at (877) 825-8621 (banks and brokers may call collect at (212) 750-5833).
You should carefully review this Consent Revocation Statement. YOUR TIMELY RESPONSE IS IMPORTANT. You are urged not to sign any white consent cards. Instead, you can reject the solicitation efforts of the
Starboard Group and/or revoke your consent by promptly completing, signing, dating and returning the enclosed
BLUE
Consent Revocation Card in the postage-paid envelope provided. Please be aware that if you sign a white consent card but do not
check any of the boxes on the card, you will be deemed to have consented to the Starboard Consent Proposals.
Results of
Consent Revocation Solicitation
The Company intends to retain an independent inspector of elections in connection with the
Starboard Consent Solicitation. The Company intends to notify shareholders of the results of the consent solicitation by issuing a press release, which it will also file with the SEC as an exhibit to a Current Report on Form 8-K.
SOLICITATION OF CONSENT REVOCATIONS
Cost and Method
The cost of the solicitation of revocations of consent
will be borne by the Company. The Company estimates that the total expenditures relating to the Companys consent revocation solicitation (other than salaries and wages of officers and employees), but excluding costs (if any) of litigation
related to the solicitation, will be approximately $ , of which approximately $ has been incurred as of
the date hereof. In addition, Starboard has indicated its intent to seek reimbursement from the Company of its costs incurred in connection with this solicitation, and has estimated such costs to be
. The Company may, from time to time, request that certain of its employees perform certain tasks in connection with the solicitation as part of his or her duties in the normal
course of his or her employment without any additional compensation for the solicitation. In addition to solicitation by mail, directors, officers and other employees of the Company may, without additional compensation, solicit revocations by mail,
in person or by telephone. The Company will also include copies of all written soliciting material provided to shareholders at .
The Company has retained Innisfree M&A Incorporated as proxy solicitors, at an estimated fee of
$[ ], plus reasonable out-of-pocket expenses incurred on the Companys behalf, to assist in the solicitation
15
of revocations. The Company will reimburse brokerage houses, banks, custodians and other nominees and fiduciaries for out-of-pocket expenses incurred in forwarding the Companys consent
revocation materials to, and obtaining instructions relating to such materials from, beneficial owners of the Companys Common Stock.
Innisfree M&A Incorporated has advised the Company that approximately of its employees will be involved in the solicitation of
consent revocations on behalf of the Company. In addition, Innisfree M&A Incorporated and certain related persons will be indemnified against certain liabilities arising out of or in connection with the engagement.
Participants in the Solicitation
Under applicable regulations of the SEC, each of our directors and certain of our executive officers and other employees may be deemed to be participants in this consent revocation
solicitation. Please refer to the section entitled Security Ownership of Certain Beneficial Owners and Management and to Annex A hereto for information about our directors and certain of our executive officers and other employees who may
be deemed to be participants in the solicitation. Except as described in this Consent Revocation Statement, there are no agreements or understandings between the Company and any such participants relating to employment with the Company or any future
transactions.
Other than the persons described above, no general class of employee of the Company will be employed to solicit
shareholders in connection with this consent revocation solicitation. However, in the course of their regular duties, employees may be asked to perform clerical or ministerial tasks in furtherance of this solicitation.
16
CURRENT DIRECTORS OF THE COMPANY
The names of the members of our Board of Directors and certain information concerning each of them as of May 3,2013, are set forth
below.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
|
Position
|
Neil R. Austrian
|
|
|
73
|
|
|
Chairman and Chief Executive Officer
|
Justin Bateman
|
|
|
39
|
|
|
Director
|
Thomas J. Colligan
|
|
|
68
|
|
|
Director
|
Marsha J. Evans
|
|
|
65
|
|
|
Director
|
Eugene V. Fife
|
|
|
72
|
|
|
Director
|
Brenda J. Gaines
|
|
|
63
|
|
|
Director
|
W. Scott Hedrick
|
|
|
67
|
|
|
Director
|
Kathleen Mason
|
|
|
63
|
|
|
Director
|
Raymond Svider
|
|
|
50
|
|
|
Director
|
Nigel Travis
|
|
|
63
|
|
|
Director
|
Neil R. Austrian
. Mr. Austrian has served as a Director on our Board since 1998.
Mr. Austrian has served as Chairman and Chief Executive Officer (Chair and CEO) of the Company since May 2011, prior to which he was Interim Chair and CEO since November 2010. He also served in the Interim role of Chair and CEO from
October 2004 through March 2005. Mr. Austrian previously served as President and Chief Operating Officer of the National Football League from April 1991 until December 1999, as Managing Director at Dillon Reed & Co. Inc. from October
1987 until March 1991, as the Chief Executive Officer (1976 to 1984), and the Chief Financial Officer (1974 to 1978), of Doyle Berbach Advertising, a public advertising agency, and as the Chief Executive Officer of Showtime/The Movie Channel (1984
to 1987). In addition, Mr. Austrian previously served as a director of Viking Office Products from 1988 until August 1998, when it merged with Office Depot. He also serves as a director of DirecTV, and is the chair of the Nominating and
Corporate Governance Committee and a member of the Compensation Committee of DirecTVs board.
Justin Bateman
.
Mr. Bateman has served as a Director on our Board since June 2009. He is a Senior Partner with BC Partners, the U.S. investment arm of which he co-established in early 2008, and is based in the firms New York office. Mr. Bateman
initially joined BC Partners London office in 2000 from PricewaterhouseCoopers, where he spent three years in Transaction Services. Mr. Bateman has participated in or been a board member of General Healthcare Group, Baxi Holdings, Ltd.
and Regency Entertainment. He is currently a director and member of the Audit Committee of Intelsat S.A., the leading international provider of fixed satellite services, a director of Multiplan, Inc., one of the largest providers of healthcare cost
management solutions in the U.S., and a director of Cequel Communications Holdings LLC, a cable broadband company. Mr. Bateman was appointed as a Director of the Company pursuant to the terms of the Investor Rights Agreement in connection with
the Companys private equity investment transaction with BC Partners. Mr. Bateman serves as a non-voting observer on the Audit Committee and his experience as a chartered accountant and understanding of accounting issues is helpful in
fulfilling the Audit Committees oversight responsibilities.
Thomas J. Colligan
. Mr. Colligan has served as
a Director on our Board since January 2010. He served as Vice Dean of The Wharton Schools Aresty Institute of Executive Education from 2007 to June 2010, as managing director at Duke Corporate Education, a corporation that provides custom
executive education and is affiliated with Duke Universitys Fuqua School of Business from 2004 to 2007. Prior to joining Duke Corporate Education, Mr. Colligan was Vice Chairman of PricewaterhouseCoopers from 2001 to 2004, and served
there in other capacities from 1969 to 2004, including as a partner. Mr. Colligan is currently a director of ADT Corporation, an electronic security and monitoring services company, and serves as a director and member of the Audit Committee of
CNH Global, N.V., an agricultural and construction equipment business, and Targus Group International, Inc., a leading global supplier of notebook carrying cases and accessories. He previously served as a director of Schering-Plough Corporation,
Anesiva, Inc. and Educational Management Corporation.
17
Marsha J. Evans
. Ms. Evans has served as a Director on our Board since 2006.
Ms. Evans was acting Commissioner of the Ladies Professional Golf Association from July 2009 to January 2010, President and Chief Executive Officer of the American Red Cross from 2002 to 2005, and National Executive Director (CEO) of Girl
Scouts of the USA from 1998 to 2002. Ms. Evans retired from the U.S. Navy in 1998 with the rank of Rear Admiral. From 1995 to 1998 Ms. Evans served as superintendent (president) of the Naval Postgraduate School in Monterey, California, and
from 1993 to 1995, she led the Navys worldwide recruitment organization, during which time she developed extensive human resources experience. Ms. Evans has served on the boards of six public companies. Currently, she is a director and
member of the Audit Committee of Weight Watchers International, and a director and chair of the Nominating and Governance Committee of the North Highland Company.
Eugene V. Fife
. Mr. Fife has served as a Director on our Board since July 2012. Mr. Fife has served as the Founder and Managing Principal of Vawter Capital LLC, a private investment firm,
since December 1999. He served as the Interim Chief Executive Officer and President of Eclipsys Corporation, a provider of healthcare information services from April to November of 2005. In May 1997, Mr. Fife joined the board of directors of
Eclipsys and served as the non-executive Chairman of Eclipsys board of directors from 2003 until 2010, when Eclipsys merged with Allscripts Healthcare Solutions, Inc. Mr. Fife served as a member of the board of directors of Allscripts
from August 2010 to April 2012. Mr. Fife was formerly a Partner at Goldman Sachs where he served as a member of the Management Committee and as the chairman of Goldman Sachs International, playing a pivotal role in establishing the firm in
Europe, Eastern Europe and the Middle East. He retired from Goldman Sachs in 1995, but continues to serve as a Senior Director. Additionally, Mr. Fife served as the Presiding Director of Caterpillar, Inc., a heavy equipment and engine
manufacturer, and was chair of its Governance Committee.
Brenda J. Gaines.
Ms. Gaines has been a Director on our
Board since 2002. Ms. Gaines retired in 2004 from her position as President and Chief Executive Officer of Diners Club North America, a Division of Citigroup, a position she held since 2002. She served as President of Diners Club North America
from 1999 until 2002, and from 1994 until 1999, she served as Executive Vice President, Corporate Card Sales. From 1988 through 1994, Ms. Gaines served in various positions of increasing responsibility within Citigroup or its predecessor
corporations. From 1985 until 1987, Ms. Gaines was Deputy Chief of Staff for the Mayor of the City of Chicago. She is currently a director and a member of the Audit Committee of AGL Resources and the Federal National Mortgage Association
(Fannie Mae), and serves as a director of Tenet Healthcare Corporation. Ms. Gaines serves on the Compensation Committee of Fannie Mae and Tenet Healthcare. Ms. Gaines also is on the National Board of the Smithsonian Institution.
Ms. Gaines also served as a director of CNA Financial Corp. from 2004 to 2007 and NICOR, Inc. from 2006 to 2011 and has served as a board member of the non-profit organization March of Dimes.
W. Scott Hedrick
. Mr. Hedrick has been a Director on our Board since 1991, and served as Lead Director since February 2011.
From November 1986 until April 1991, he was a Director of The Office Club, Inc., which was acquired by Office Depot in 1991. He was a founder and has been a general partner of InterWest Partners, a venture capital fund, since 1979. Mr. Hedrick
is also a director and Compensation Committee member of Hot Topic, Inc., and a director and Audit Committee member of a number of mutual funds managed by Capital Research and Management Company.
Kathleen Mason
. Ms. Mason has served as a Director on our Board since 2006. She served as President and Chief Executive
Officer of Tuesday Morning Corporation, a closeout retailer, from July 2000 to June 2012. From July 1999 to November 1999, Ms. Mason served as President of Filenes Basement, a department store chain. From January 1997 to June 1999,
Ms. Mason was President of HomeGoods, an off-price home fashion store and a subsidiary of TJX Companies. Ms. Mason was Chair and Chief Executive Officer of Cherry & Webb, a womens specialty store, from February 1987 to
December 1996. Prior to those dates, she held management positions at Kaufmanns Division of the May Company, Mervyns Division of Target, Inc. and the Limited. She is currently a director and Compensation Committee member of Genesco, Inc.
and previously served as a director of The Mens Warehouse, Inc., and of Hot Topic, Inc.
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Raymond Svider
. Mr. Svider has served as a Director on our Board since June
2009. He has been co-Chairman of BC Partners since December 2008 and has been a Managing Partner of the firm since 2003. Mr. Svider joined BC Partners in 1992 in Paris before moving to London in 2000 to lead its investments in the technology
and telecoms industries. Over the years, Mr. Svider has participated in or led a variety of investments including Tubesca, Nutreco, UTL, Neopost, Polyconcept, Neuf Telecom, Unity Media/Tele Columbus, and Intelsat S.A. He is currently Chairman
of the board, the Audit and Compensation Committees of Intelsat S.A., and a member of the board of ATI Enterprises, a private post-secondary education company, a member of the board and Compensation Committee of Cequel Corporation and a member of
the board of MultiPlan, Inc. and Silver II Acquisition Sarl. Prior to joining BC Partners, Mr. Svider worked in investment banking at Wasserstein Perella in New York and Paris, and at the Boston Consulting Group in Chicago. Mr. Svider was
appointed as a Director on our Board pursuant to the terms of the Investor Rights Agreement in connection with the Companys private equity investment transaction with BC Partners.
Nigel R. Travis
. Mr. Travis has served as a Director on our Board since March 2012. He has been Chief Executive Officer of
Dunkin Brands Group Inc. since January 2009 and has served as President of Dunkin Donuts since October 2009. From 2005 through 2008, Mr. Travis served as President and Chief Executive Officer of Papa Johns International, Inc.
From 1994 to 2005, he had executive roles in Europe, International and Retail divisions of Blockbuster, Inc., culminating with the role of President and Chief Operating Officer from 2001 to 2005. Mr. Travis also held human resources and
international roles for Burger King Holdings, Inc. from 1989 to 1994, prior to which he worked for Grand Metropolitan PLC since 1985. Mr. Travis currently serves on the Board of Dunkin Brands Group. Previous board service includes
Lorillard, Inc. from 2008 to 2012, Papa Johns International, Inc. from 2005 to 2008, Bombay Company from 2000 to 2007, and Limelight Group from 1996 to 2000.
CORPORATE GOVERNANCE
Board Structure
Our Board of Directors currently consists of ten directors. The Companys shareholders elect our directors each year and as such the
terms of each of our directors will expire at the annual meeting of shareholders to be held in 2013. Pursuant to the Companys Bylaws, in any non-contested election of directors, an incumbent director who does not receive a greater number of
votes for such election as compared to votes of withheld, against or no must immediately tender his or her resignation to the Board of Directors, which resignation is irrevocable. The Companys
Board then has the authority to decide, through a process managed by the Corporate Governance and Nominating Committee, whether or not to accept such resignation within 90 days of such resignation. Each of your incumbent directors received more
for votes than withheld, against or no votes at the Companys 2012 annual meeting. As the Companys shareholders will have the opportunity to make this decision at this years annual
meeting, the Consent Solicitation being undertaken by Starboard is a needless distraction at such an integral time when the Company and its Board should be concentrating on consummating the OfficeMax Merger and its other strategic initiatives.
Messrs. Raymond Svider, Eugene Fife and Justin Bateman were appointed as Directors pursuant to the terms of the Investor
Rights Agreement, dated as of June 23, 2009 (the Investor Rights Agreement), among the Company, BC Partners, Inc. and certain funds advised by BC Partners, Inc. (the Investors), whereby the Investors were entitled to
nominate three Directors to the Board and the Company agreed to use all reasonable efforts to cause the persons nominated by the Investors pursuant to the terms of the Investor Rights Agreement to be elected to the Board. In addition, pursuant to
the terms of the Investor Rights Agreement, Mr. Svider was appointed to the Finance Committee (the Finance Committee) and the Compensation Committee, Mr. Bateman was appointed to both the Finance Committee and is a non-voting
observer of the Audit Committee, and Mr. Fife was appointed to the Corporate Governance and Nominating Committee. In connection with the transactions contemplated by the Merger Agreement, the Company and BC Partners entered into a Termination
Agreement pursuant to which, among other things, the Investor Rights Agreement will terminate upon the closing of the OfficeMax Merger. For more information regarding the Investor Rights Agreement, please refer to our Form 8-K filed with the SEC on
June 23, 2009.
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Our Bylaws also provide that the authorized number of directors that shall constitute the
whole Board of Directors may be changed by a vote of a majority of the entire Board of Directors. Vacancies and newly created directorships may be filled by the affirmative vote of a majority of directors then in office, even if such number is less
than a quorum, or by a sole remaining director.
Leadership Structure
As permitted by the Companys Bylaws, Mr. Austrian currently serves as both Chairman and Chief Executive Officer of the Company.
The Board of Directors believes this is the most appropriate leadership structure for the Company at this time.
Mr. Austrians service as the Boards Chairman and CEO provides an effective balance for the management of the Company, as
Mr. Austrians in depth knowledge of the Office Depot business and his ability to formulate and lead strategic initiatives allows the Board to act efficiently and effectively to best serve the interests of the Companys shareholders
and the Company as a whole. As CEO, Mr. Austrian is involved in the day-to-day operations of the Company and is aware of the issues of critical business importance that need to be elevated to the Board of Directors. The Board believes that by
holding both of these roles, Mr. Austrian is able to serve as an effective bridge between the Board and management, providing the Board with a thorough understanding of the Company and its business and fostering an open dialogue between the
Board and senior management.
The Board follows sound corporate governance practices to ensure its independence and effective
functioning, as described in detail below. Most importantly, the Board has determined that, except for Mr. Austrian due to his CEO position, the Board is composed entirely of independent directors. In addition, each of the Boards Audit
Committee, Compensation Committee and Corporate Governance and Nominating Committee, have been determined by our Board to be composed entirely of independent directors, which means that oversight of critical issues such as the integrity of the
Companys financial statements, Chief Executive Officer and senior management compensation, and Board evaluation and selection of directors is entrusted to independent directors.
Risk Oversight
The Board of Directors is generally responsible for
overseeing management of the various operational, financial, accounting, legal and human resources-related risks faced by the Company. The Board fulfills this responsibility by requesting and reviewing reports and presentations from management
regarding such risks, including risks in four primary areas: financial risk, legal/compliance risk, operational/strategic risk and compensation risk.
Director Qualifications
The Corporate Governance and Nominating Committee
has the responsibility under its charter to recommend nominees for election to the Board of Directors. The Corporate Governance and Nominating Committee endeavors to have a Board representing a range of experiences in business and in areas that are
relevant to the Companys business and operations, considers the entirety of each candidates credentials, including relevant skills and experience, corporate governance background, independence under applicable SEC and NYSE standards,
business judgment, service on the boards of directors of other companies, personal and professional integrity, openness and ability to work as part of a team, willingness to commit the required time to serve as a Board member, and familiarity with
the Company and its industry.
The Board believes that each of its directors understands fully the responsibilities of service
as a director and the governance requirements applicable to public companies.
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In identifying, nominating and approving of director candidates, the Corporate Governance
and Nominating Committee and the Board also believe the Board, as a whole, should have:
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significant senior management experience; and
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experience overseeing public company financial management matters, including expertise in financial reporting and internal controls, which experience
and expertise are essential to the Companys ability to comply with its many and complex financial reporting responsibilities.
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The Corporate Governance and Nominating Committee, in recommending director candidates, considers diversity as to skills, experiences, age, race, gender and ethnicity and, while the Company does not have
a formal diversity policy, the Corporate Governance and Nominating Committee seeks diverse Board candidates. The members of the Board are diverse and come from a number of different backgrounds and experiences, including senior leadership positions
and directorships with major retailers, large financial institutions, educational institutions, the military and public sector appointments.
As a result of the experiences of its individual members detailed in their biographies, the Corporate Governance and Nominating Committee and the Board believe that the members of the Board have the
following valued qualifications and experience:
Mr. Austrians
experience as the Chief Operating Officer of
the National Football League, as well as his experience as the Chief Financial Officer of Doyle Advertising and as Chief Executive Officer of Showtime/The Movie Channel provides him with the leadership qualities needed as Chairman of the Board of
Directors of a public company, including the financial acumen needed in such role. In addition, Mr. Austrians knowledge of all aspects of the direct sales business gained while serving as a director of Viking Office Products from 1988
until August 1998, when it merged with Office Depot, further strengthens his knowledge of our industry. Mr. Austrian also serves as a director of DirecTV, and is the chair of the Nominating and Corporate Governance Committee and a member of the
Compensation Committee of DirecTVs board which also highlights his experience as a seasoned board member.
Mr. Batemans
experience as a chartered accountant and his understanding of complex accounting issues is instrumental in
fulfilling the oversight responsibilities of the Audit Committee and the Board of Directors. Mr. Batemans analysis of and participation in the oversight of BC Partners portfolio companies provides him with the skills he needs to assist
the Company with its strategic planning process. Mr. Batemans education and experience in business and finance allows him to provide the Board significant managerial, strategic, financial and compliance-based expertise.
Mr. Colligans
former position as Vice Dean of The Wharton Schools Aresty Institute of Executive Education and his
previous position as Managing Director at Duke Corporate Education have provided him with a broad based understanding of new and developing business strategies that are helpful to our Board. In addition, Mr. Colligans former position as
Vice Chairman of PricewaterhouseCoopers in addition to being a partner at PricewaterhouseCoopers allowed Mr. Colligan significant exposure to complex financial reporting, accounting and risk management matters. As a former public accountant,
the Board has determined that Mr. Colligan is well-positioned to be the Chair of our Audit Committee, assisting the Audit Committee in fulfilling its responsibility of overseeing our independent auditors.
Ms. Evans
brings significant leadership experience to our Board of Directors based on her service in the Navy, her positions
as CEO of the American Red Cross, as the National Director of the Girl Scouts of the USA and as the acting Commissioner of the Ladies Professional Golf Association. The Board relies on her perspectives on human resources and governance issues as the
chair of our Compensation Committee resulting from her position as Superintendent (President) of the Naval Postgraduate School where she led the Navys worldwide recruitment organizations. Furthermore, the Board believes that
Ms. Evans past and present service on eight public company boards qualify her as a skilled board member for service on our Board of Directors.
21
Mr. Fifes
investment banking experience as both the Founder and Managing
Principal of Vawter Capital LLC, a former partner at Goldman Sachs, and the former chairman of Goldman Sachs International bolsters the expertise of the Board and adds important insights for the Companys growth strategy. Additionally, his
experiences as a chief executive officer and director of large, publicly-traded multinational corporations enable him to provide meaningful input and guidance to the Board and the Company.
Ms. Gaines
has held a number of executive and board leadership positions in a number of public companies and non-for-profit
organizations, including serving as the former President and CEO of Diners Club North America and as Deputy Chief of Staff for the Mayor of the City of Chicago. Ms. Gaines service on other public company boards allows her to provide the
Board of Directors with a variety of perspectives on corporate governance issues.
Mr. Hedrick
, as one of our
longest-serving non-executive Directors, brings important institutional knowledge to our Board. His work with InterWest provides him with a solid basis for his analysis of our financial strategies while his service on the board of Hot Topic, Inc.
gives him insight regarding the issues affecting retailers, which is useful to our Board of Directors.
Ms. Masons
broad exposure to numerous retailers and her extensive retail knowledge gives her an insight into a number of issues facing Office Depot. With her experience as the former Chief Executive Officer of the public retail company, Tuesday Morning
Corporation, and her past leadership positions with HomeGoods and Cherry & Webb, Ms. Mason is able to offer our Board of Directors sound business and financial strategies. Furthermore, her current and past service on retail company
boards provides our Board with knowledge of the appropriate oversight and diligence required of a Board member.
Mr. Svider, a
Managing Partner of BC Partners since 2003, has demonstrated significant leadership abilities and extensive knowledge of complex financial and operational issues facing large organizations. He brings an expertise in international operations and
financial strategy to our Board of Directors and as a member of the Finance Committee of the Board. In addition, through his oversight of BC Partners portfolio companies, Mr. Svider has significant experience in developing various strategies to
motivate and compensate executives, which skills and qualifications are valuable for his service on our Compensation Committee.
Mr. Travis brings significant international, retail, human resources and operations experience to our Board as a result of his
current position as Chief Executive Officer of Dunkin Brands Group, and his previous positions as President and CEO of Papa Johns International, Inc., President and COO of Blockbuster, Inc. and executive roles with Burger King Holdings.
In addition, his past and present service on public company boards, along with his executive leadership experience, provide him with unique perspectives on leadership and strategy which make him a valuable member of the Board and the Compensation
Committee.
Director Independence
The Board of Directors has determined that other than Neil Austrian, none of the Companys directors have material relationships with the Company other than as directors and shareholders of the
Company that would impair independence from management and are independent for purposes of the NYSE listing standards. This determination was based upon an individual evaluation of each of our Directors, his or her employment or Board of
Directors affiliations, and a determination that the Independent Director has no business relationship with our Company other than his or her service on our Board of Directors. The Board determined that Messrs. Bateman, Fife and Svider are
affiliates of the Company due to BC Partners stock ownership of the Company. The Board of Directors concluded that a relationship with a shareholder of the Company in and of itself does not impair Messrs. Bateman, Fife and Sviders
independent judgment in connection with their duties and responsibilities as Directors of the Company. The Board also determined that Mr. Colligan, who serves as a Director of an entity that sells products to the Company, is independent. The
Board of Directors additionally has determined that all Audit Committee members meet the independence requirements for audit committee members set forth in Rule 10A-3 under the Exchange Act.
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Director Attendance at Meetings of the Board of Directors and Shareholder Meetings
Regular attendance at Board meetings and the annual meeting is required of each Director. The Board of Directors held eleven meetings
during 2012, and each of the directors attended at least 75% of the meetings.
Our independent directors, met in seven
executive sessions in 2012.
All of our directors attended the 2011 annual meeting of shareholders and 80% of our directors
attended the 2012 annual meetings of the shareholders.
Committees of the Board of Directors
The Board of Directors has an Audit Committee, a Corporate Governance and Nominating Committee, a Compensation Committee, and a Finance
Committee. Members of each committee are elected by the Board of Directors and serve until their successors are elected and qualified. Each of the committees of the Board of Directors has adopted a charter consistent with the rules of the NYSE, as
applicable, all of which can be found in the corporate governance section of our website at
http://www.officedepot.com
.
Audit Committee
. The Audit Committee, which consists of Mr. Colligan, Ms. Gaines and Ms. Mason, and
Mr. Bateman serving as an observer, oversees and reports to the Board of Directors on various auditing and accounting-related matters, including the selection, appointment, replacement and oversight of the Companys registered public
accountant; monitoring the Companys systems of internal controls, the integrity of our financial statements, and our reporting process and reports; monitoring the performance of the Companys internal audit function; assessing and
mitigating our business and financial risks and overseeing our risk management policies and procedures; and overseeing the Companys compliance with legal and regulatory requirements, including our disclosure controls and procedures.
Mr. Colligan serves as chairman of this committee and has been determined by our Board of Directors to be an audit committee financial expert as defined under the rules of the SEC. Each member of the Audit Committee is financially
knowledgeable. The Audit Committee met seven times during 2012, and each member of the committee attended at least 75% of all of the meetings held during this period, except for Brenda Gaines who attended 71% of the Audit Committee meetings held
during the period.
Corporate Governance and Nominating Committee.
The Corporate Governance and Nominating
Committee, which consists of Mr. Fife, Ms. Gaines and Mr. Hedrick, advises the Board of Directors and makes recommendations regarding the size and composition of the Board, the corporate governance policies and practices of the Board;
and reviews and approves any related party transactions. Mr. Hedrick serves as the chairman of this committee. The Corporate Governance and Nominating Committee met five times during 2012, and each member of the committee attended at least 75%
of all of the meetings held during this period.
The Corporate Governance and Nominating Committee also has the responsibility
under its charter to identify and recommend nominees for election to the Board of Directors. In considering candidates for the Board of Directors, the Corporate Governance and Nominating Committee considers the qualifications described in the
section entitled Corporate GovernanceDirector Qualifications above. The Corporate Governance and Nominating Committee identifies nominees for the Board of Directors in a number of ways, including from, sitting members of the Board,
through personal awareness of persons who are successful in business, the non-profit sector or a profession, through search firms engaged by the committee or from shareholders, provided the procedures set forth below are followed by shareholders who
want to make recommendations to the committee.
With respect to the nomination of directors at an annual meeting, the
Corporate Governance and Nominating Committee will consider shareholder recommendations that are submitted to the committee by mail addressed to our Corporate Secretary at our corporate headquarters located at 6600 North Military Trail, Boca Raton,
Florida 33496.
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In making recommendations, shareholders should be mindful of the minimum qualifications for
Board membership which include that the person possesses the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of our shareholders, should possess strong collaboration skills,
have the potential to influence management, have the ability to dedicate significant time to service on our Board, and be committed first and foremost to the interests of all our shareholders. As such, persons who represent a particular special
interest, ideology, narrow perspective or point of view would not, therefore, generally be considered good candidates for election to our Board. A shareholder recommendation should set forth (i) the name and address of and number of shares of
Common Stock owned by the recommending shareholder, (ii) information relating to the recommended candidate that would be required to be disclosed in a solicitation of proxies for the election of the candidate pursuant to Regulation 14A under
the Exchange Act, (iii) a description of all agreements related to the nomination among the recommending shareholder, recommended candidate or other persons, and (iv) any other information the recommending shareholder believes would be
useful in informing the committees decision making.
In addition to making recommendations of director nominees to the
Corporate Governance and Nominating Committee, shareholders may make director nominations or proposals at any annual meeting of the shareholders, provided they comply with the requirements set forth in our Bylaws and, for their nominations and
proposals to be included in a proxy statement delivered by us, with Regulation 14A of the Exchange Act. See Shareholder Proposals and Nominations below.
Compensation Committee.
The Compensation Committee, which currently consists of Ms. Evans, Mr. Hedrick, Mr. Svider and Mr. Travis, establishes and monitors the
effectiveness of the Companys compensation philosophy and compensation programs, including approving all compensation for our executive officers, except for our CEO, and reviewing and making recommendations with respect to our incentive
compensation and benefit plans. Ms. Evans serves as chairman of the committee. The Compensation Committee met twenty-one times during 2012, and each member of the committee at that time attended at least 75% of all of the meetings held during
that period.
In 2012, the Compensation Committee directly engaged Hay Group, a human resources and compensation consulting
firm, as its independent advisor to provide the Compensation Committee with compensation data and to review and advise the Compensation Committee on executive compensation matters. Hay Group has developed the Companys compensation philosophy
and reviews such philosophy on an annual basis.
Finance Committee
. The Finance Committee, which currently consists of
Mr. Svider, Mr. Bateman and Ms. Mason, advises the board regarding the Companys financial policies and plans, capital structure, and strategic plan. Mr. Svider serves as chairman of the committee. The Finance Committee met
five times during 2012, and each member of the committee attended at least 75% of the meetings held during the period.
Corporate
Governance Guidelines and Communications with Directors
Our Board of Directors has adopted corporate governance guidelines
that define those governance practices of the Board that are not included in our Bylaws. Our Board of Directors has also adopted a Code of Ethical Behavior, which contains general guidelines for conducting our business and applies to all of our
officers, directors and employees, and has established a hotline to assist employees in complying with their ethical and legal obligations and for reporting suspected violations of applicable laws or the Companys procedures and policies.
Any shareholder or other interested party who desires to communicate with any member (or all members) of the Board of
Directors, or committees of the Board of Directors may do so at any time by submitting his or her comments, questions or concerns, in writing by mail addressed to our Corporate Secretary to our corporate headquarters at 6600 North military Trail,
Boca Raton, FL 33496. A shareholder or other interested party should clearly indicate on the envelope the director or directors who are the intended recipients of the communication.
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In addition, any person who desires to communicate any matter specifically and
confidentially to our Audit Committee may contact the Audit Committee by addressing a letter to the Chair of the Audit Committee, c/o Corporate Secretary, at our corporate headquarters address. Mark on the outside of the envelope that the
communication inside is Confidential. Such communications to our Audit Committee may be submitted anonymously to the Audit Committee Chair, in which event the envelope will not be opened for any purpose, other than
appropriate security inspections. Such mailing will be directed to the Chair of our Audit Committee for his or her review and follow-up action as he or she deems appropriate.
All such communications received by the Corporate Secretary will be forwarded to the director designated on the envelope. The Corporate Secretary will not filter out any such communications except for
communications related to solicitation for products or services and items of a personal nature that are not relevant to a persons status as a shareholder. All communications designated for the Board of Directors will be forwarded to the
Chairman of the Board of Directors. All communications designated for a particular committee of the Board of Directors will be forwarded to the chairman of that committee.
EXECUTIVE OFFICERS
Set forth below is information regarding each of our executive officers
as of May 3, 2013:
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Name
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Age
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Position
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Neil Austrian
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73
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Chairman and Chief Executive Officer
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Michael Allison
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55
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Executive Vice President Human Resources
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Elisa D. Garcia C.
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55
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Executive Vice President, General Counsel & Corporate Secretary
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Kim Moehler
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44
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Senior Vice President, Controller
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Michael Newman
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56
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Executive Vice President and Chief Financial Officer
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Robert Moore
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56
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Executive Vice President Marketing and Merchandising
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Steven M. Schmidt
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58
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President International
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Neil Austrian
. Mr. Austrian has served as our Chairman and Chief Executive Officer since
May 23, 2011. Biographical information about Mr. Austrian can be found above under the heading Current Directors of the Company.
Michael Allison
. Mr. Allison was appointed Executive Vice President, Human Resources for Office Depot in July 2011. Mr. Allison joined Office Depot in September 2006 as Vice President,
Human Resources. Prior to joining Office Depot, Mr. Allison served as Executive Vice President of Human Resources for Victorias Secret Direct from February, 2001 to September, 2005. Prior to Victorias Secret, he was Senior Vice
President of Human Resources for Bank One and Senior Vice President and Director of Human Resources for National City Bank.
Elisa D. Garcia
. Ms. Garcia was appointed Executive Vice President, General Counsel and Corporate Secretary in July 2007 with
overall responsibility for global legal and compliance matters and governmental relations. Prior to joining Office Depot, Ms. Garcia served as Executive Vice President, General Counsel and Corporate Secretary of Dominos Pizza, Inc. from
April 2000. Prior to joining Dominos Pizza, Ms. Garcia served as Latin American Regional Counsel for Philip Morris International, and Corporate Counsel for GAF Corporation.
Kim Moehler.
Ms. Moehler was appointed Senior Vice President and Controller in March 2012. Ms. Moehler previously served
as Senior Vice President, Finance- North American Retail and North America Financial Planning & Analysis since February 2012, and as Senior Vice President, Finance North American Retail from September 2006 until February 2012. From May 2000
through September 2006, Ms. Moehler served in director and vice president finance positions at the Company. Ms. Moehler joined the Company in February 1999 as Senior Manager, Budget & Finance Reporting. Before Office Depot,
Ms. Moehler was with Advantica Corporation (owner of Dennys restaurants), leaving as the Director of Field Finance. She is a licensed CPA and graduated from the University of North Carolina-Chapel Hill.
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Michael Newman
. Mr. Newman was appointed Executive Vice President, Chief
Financial Officer in August 2008. Prior to joining Office Depot, Mr. Newman served as Chief Financial Officer of Platinum Research Organization, Inc. from April 2007 through February 2008. Prior to joining Platinum Research Organization,
Mr. Newman was employed as an independent consultant since 2005. Mr. Newman also served as Chief Financial Officer of Blackstone Crystal Holdings Capital Partners from 2004 to 2005 and Chief Financial Officer of Radio Shack Corp. from 2001
to 2004. Mr. Newman also held Chief Financial Officer roles at Intimate Brands and Hussmann International (which was acquired by Ingersoll-Rand in 2000). He also spent 17 years at General Electric in a variety of management roles both in the
United States and Europe.
Robert Moore
. Mr. Moore is our Executive Vice President, Marketing and Merchandising.
He was appointed Executive Vice President and Chief Marketing Officer for Office Depot in July of 2011 and assumed responsibility for our Merchandising Operations in August 2012. Mr. Moore joined the Company as Interim Head of Marketing in
April 2011. Prior to joining Office Depot, he ran his own marketing consulting practice from January 2009 to April 2011, and before that served as President of the U.S. Vision Care business from July 2007 to July 2008 and various senior executive
positions since 2002. Mr. Moores experience also includes Executive Vice President of Marketing for Staples from 1999 to 2001 and Global VP Marketing and Product Design for Ray Ban Sunglass Group from 1996 to 1999.
Steven M. Schmidt
. Mr. Schmidt was appointed President, International in November 2011 after serving as Executive Vice
President, Corporate Strategy and New Business Development since July 2011, and as President, North American Business Solutions since July 2007. Prior to joining Office Depot, Mr. Schmidt spent 11 years with the ACNielsen Corporation, most
recently serving as President and Chief Executive Officer. Prior to joining ACNielsen, Mr. Schmidt spent eight years at the Pillsbury Food Company, serving as President of its Canadian and Southeast Asian operations. He has also held management
positions at PepsiCo and Procter & Gamble.
STOCK OWNERSHIP INFORMATION