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 Company’s 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
Depot’s presentation at the Goldman Sachs conference, Mr. Austrian, and other members of Office Depot’s management team met privately with representatives of Starboard to discuss the Company’s 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
Company’s 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 Company’s North American Business Solutions
9
Division. In addition, the Starboard letter further indicated Starboard’s 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 Company’s financial statements, could be worth more than 50% of Office Depot’s 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 banking 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.
On October 2, 2012, Jeff Smith, CEO of Starboard Value, had a conversation with Mr. Austrian, in the course of which Mr. Smith expressed Starboard’s 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 Company’s 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 Company’s advertising expenses,
distribution channels, the JV Interest and the Company’s 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
Starboard’s 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
Company’s 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 Company’s shareholders;
deter acquirers who were simply interested in putting the Company into “play”; preserve the Board’s 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 Company’s executive headquarters. During the meeting, the members of the Board and Starboard discussed the challenges facing the Company and the Board sought Starboard’s 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.
10
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 Company’s 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 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 Company’s joint venture partner Gigante to purchase its JV Interest, Office Depot
de Mexico. Gigante’s 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 Company’s 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 Gigante’s 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 Board’s fiduciary duty to monetize the Company’s 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 Depot’s 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 Board’s 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 OfficeMax’s consent to be given and not unreasonably withheld.
11
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 Starboard’s 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 Company’s 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 company’s 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 Company’s shareholders can
choose who they want to represent them on the Board.
Also on March 18, 2013, Starboard V&O Fund delivered a letter
to the Corporate Secretary of the Company nominating what in Starboard’s 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 Starboard’s offices. The purpose of the meeting was to discuss Board representation and related matters. The Board members and Starboard discussed the timing of the Company’s 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 Board’s 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 BC’s 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.
12
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 Group’s 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.
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
Company’s 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
Company’s 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 Starboard’s 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.
13
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 Company’s Bylaws, the Board has
set the close of business on May 3, 2013 as the Record Date for the determination of the Company’s 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 Company’s 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.
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).
14
THE CONSENT PROCEDURE
Voting Securities and Record Date
In accordance with Delaware law and the Company’s Bylaws, the Board has set the close of business on May 3, 2013, as the Record Date for the determination of the Company’s 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 Company’s Common Stock outstanding. Each share of the Company’s 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 Company’s 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
Company’s 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 Group’s 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
15
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 BOARD’S 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
The solicitation of consent revocations is made by the Board. Consent Revocations may be solicited by mail, facsimile, telephone, telegraph, internet, in person and by advertisements.
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 Company’s 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. The Company will also include copies of all written soliciting material provided to shareholders at the
Company’s website at http://investor.officedepot.com.
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 Company’s behalf, to assist in the solicitation
16
of revocations. The Company will reimburse brokerage houses, banks, custodians and other nominees and fiduciaries for out-of-pocket expenses incurred in forwarding the Company’s consent
revocation materials to, and obtaining instructions relating to such materials from, beneficial owners of the Company’s 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 will 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.
17
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
|
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Justin Bateman
|
|
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39
|
|
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Director
|
|
Thomas J. Colligan
|
|
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68
|
|
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Director
|
|
Marsha J. Evans
|
|
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65
|
|
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Director
|
|
Eugene V. Fife
|
|
|
72
|
|
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Director
|
|
Brenda J. Gaines
|
|
|
63
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|
|
Director
|
|
W. Scott Hedrick
|
|
|
67
|
|
|
Director
|
|
Kathleen Mason
|
|
|
63
|
|
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Director
|
|
Raymond Svider
|
|
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50
|
|
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Director
|
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Nigel Travis
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|
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63
|
|
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Director
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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. Prior to his position as Interim Chairman and CEO of the
Company, between 2007-2010 Mr. Austrian was a private investor and also a member of the board of DirecTV. 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, Dane, Bernbach, 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 DirecTV’s
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 firm’s 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 Company’s 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 Committee’s 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 School’s 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 University’s Fuqua School
of Business from 2004 to 2007. After his service at Wharton School’s Aresty Institute of Executive Education, his primary occupation was his engagement in his board memberships. 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
18
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.
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. Since her
acceptance of her position on the Board in 2006, other than her time with the Ladies Professional Golf Association, Ms. Evans has been principally engaged by her board memberships. 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 Navy’s 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. Since her retirement from Diners Club North America Ms. Gaines has been principally engaged by her Board memberships. 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.
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After her separation from Tuesday Morning Corporation, Ms. Mason has been principally engaged by her board memberships. From July 1999 to November 1999, Ms. Mason served as President of
Filene’s 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 women’s specialty store, from February 1987 to December 1996. Prior to those dates, she held management positions at Kaufmann’s Division of the May Company, Mervyn’s 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 Men’s Warehouse, Inc., and of Hot Topic, Inc.
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 Company’s 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 John’s 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 John’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 2012 annual meeting. As the
Company’s shareholders will have the opportunity to make this decision at this year’s 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
20
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.
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 Company’s 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. Austrian’s service as the Board’s Chairman and CEO
provides an effective balance for the management of the Company, as Mr. Austrian’s 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 Company’s 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 Board’s 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 Company’s 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
21
relevant to the Company’s business and operations, considers the entirety of each candidate’s 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.
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 Company’s 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. Austrian’s
experience as the Chief Operating Officer of
the National Football League, as well as his experience as the Chief Executive Officer and Chief Financial Officer of Doyle, Dane, Bernbach 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. Austrian’s 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 has served on the Board of Directors of Alex Brown Inc. and The Bankers Trust Company.
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 DirecTV’s board which also highlights his experience as a seasoned board
member.
Mr. Bateman’s
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. Bateman’s 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. Bateman’s education and experience in business and finance allows him to provide the Board significant managerial, strategic, financial and compliance-based
expertise.
Mr. Colligan’s
former position as Vice Dean of The Wharton School’s 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. Colligan’s 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.
22
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 Navy’s worldwide recruitment organizations.
Furthermore, the Board believes that Ms. Evan’s past and present service on eight public company boards qualify her as a skilled board member for service on our Board of Directors.
Mr. Fife’s
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 Company’s 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. Mason’s
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 John’s 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 Company’s 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
23
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 Svider’s 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.
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 Company’s registered public
accountant; monitoring the Company’s systems of internal controls, the integrity of our financial statements, and our reporting process and reports; monitoring the performance of the Company’s internal audit function; assessing and
mitigating our business and financial risks and overseeing our risk management policies and procedures; and overseeing the Company’s 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 Governance–Director Qualifications” above. The Corporate Governance and
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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.
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 committee’s 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 Company’s 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 Company’s 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 Company’s 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
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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 Company’s 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.
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 person’s 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 Victoria’s Secret Direct from February, 2001 to September, 2005. Prior to Victoria’s 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.
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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 Domino’s Pizza, Inc. from April 2000. Prior to joining Domino’s 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 Denny’s restaurants), leaving as the Director of Field Finance. She is a licensed CPA and graduated from the University of North Carolina-Chapel Hill.
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. Moore’s 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.
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