Starboard Pleased with Delaware Court Order Prohibiting Office Depot from Further Unnecessary Delay or Postponement of Its 2013 Annual Meeting
Sets Record Straight as to Events and Circumstances Surrounding Delaware Action
Office Depot Required to Hold Annual Meeting on August 21, 2013
Starboard Withdraws Consent Solicitation and Announces Intention to Seek the Election of Four Highly-Qualified Director Nominees at Upcoming Annual Meeting
Continues to be in Favor of OfficeMax Merger But Strongly Believes Office Depot Board Should be Reconstituted Now with Starboard's Highly-Qualified Director Nominees
NEW YORK, June 26, 2013 /PRNewswire/ -- Starboard Value LP (together with its affiliates, "Starboard"), the largest common shareholder of Office Depot, Inc. (NYSE: ODP) ("Office Depot" or the "Company"), with a 14.8% ownership stake, announced today that it is pleased that the Delaware Chancery Court (the "Delaware Court") has ordered Office Depot to hold its 2013 Annual Meeting on August 21, 2013 absent certain, limited circumstances. Starboard filed a complaint on June 12, 2013 requesting the Delaware Court compel Office Depot to promptly hold its 2013 Annual Meeting for the election of directors in accordance with Delaware law since it had been more than 13 months since Office Depot's last such meeting. Starboard had been pressing Office Depot for several months to schedule its 2013 Annual Meeting and commenced a consent solicitation to remove several existing directors in favor of Starboard's nominees when it became apparent the Company would continue to indefinitely delay holding its annual election of directors. On June 17, 2013, in clear reaction to Starboard's lawsuit, Office Depot finally announced it will hold its 2013 Annual Meeting on August 21, 2013.
Contrary to a statement by Neil Austrian, Chairman and Chief Executive Officer of Office Depot, in the Company's press release issued yesterday, Office Depot refused to advise Starboard of its intention to schedule the 2013 Annual Meeting, thereby forcing Starboard to commence proceedings to compel an annual meeting under Delaware law. Only after commencement of the Delaware action did Office Depot suddenly announce the scheduled date for its 2013 Annual Meeting. Starboard attempted to obtain Office Depot's voluntary agreement to a stipulation that would prevent Office Depot from unilaterally delaying or postponing the 2013 Annual Meeting any further. After Office Depot refused to agree to such a stipulation, Starboard proceeded to file a motion seeking a court order to such effect since it could not trust the Board to adhere to the August 21, 2013 date.
As a result of the court order obtained by Starboard, the Company cannot unilaterally postpone or delay the Annual Meeting any further, and shareholders will finally have the opportunity to elect directors on August 21, 2013, close to four months after Office Depot has historically held its annual meeting.
Based upon the court order, Starboard also announced today it has decided to forego its consent solicitation and instead seek the election of four of its highly-qualified candidates, Cynthia T. Jamison, Robert L. Nardelli, Jeffrey C. Smith and Joseph S. Vassalluzzo, at the upcoming 2013 Annual Meeting. Starboard intends to file its proxy materials with the Securities & Exchange Commission in the coming days.
While Starboard is in favor of the OfficeMax Merger, it continues to strongly believe that the Office Depot Board must be significantly enhanced now with new, highly-qualified directors to (i) 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, and (ii) contribute the most highly qualified directors to the combined Company's Board if and when the Office Max Merger is consummated.
Starboard is extremely disappointed and frustrated by the Board's failure to work constructively with Starboard to reconstitute the Board in a manner consistent with the best interests of the Company's shareholders.
Starboard's Director Nominees for the 2013 Annual Meeting:
Cynthia T. Jamison serves on the board of directors of Tractor Supply Company, where she is currently lead director and has served as the chair of several committees since joining the board in 2002. Ms. Jamison has also served as a director of B&G Foods, Inc., since 2004. Previously, Ms. Jamison served on the boards of directors of Cellu Tissue Holdings, Inc. and Horizon Organic Holding Corp. before both companies were sold at high premiums to their market prices. As part of her role as a partner with Tatum LLC ("Tatum"), an executive services firm, Ms. Jamison has been the Chief Financial Officer or Chief Operating Officer of several publicly and privately held companies, including AquaSpy, Inc., eMac, Inc, a joint venture between McDonald's Corporation and KKR & Co. L.P., and Cosi, Inc. Prior to joining Tatum, Ms. Jamison served as Chief Financial Officer of Chart House Enterprises and held various positions at Allied Domecq Retailing USA, Kraft General Foods, and Arthur Andersen LLP. Ms. Jamison's experience in handling financial and technical turnaround challenges together with her high level, strategic insight at the governance level, make her an excellent candidate for the Board.
Robert L. Nardelli is the founder and Chief Executive Officer of XLR-8, LLC, Investment & Advisory Co., an investment and consulting company, he established in 2012. Commencing in 2007, Mr. Nardelli has served in several capacities at Cerberus Capital Management, L.P. ("Cerberus"), a private investment firm, including as an Interim CEO of several of its portfolio companies and as the CEO of Cerberus Operations & Advisory Company, LLC, and is currently the Senior Advisor to Steve Feinberg, Cerberus' founder. In 2007, Cerberus named Mr. Nardelli to the role of Chairman and CEO of Chrysler LLC ("Chrysler"), the automaker, which he held until 2009, at which time he returned to Cerberus. While at Chrysler, Mr. Nardelli implemented several strategic moves that analysts say helped the firm emerge from restructuring. Mr. Nardelli was also the CEO and Chairman of The Home Depot, Inc. ("Home Depot"), the home improvement retailer, from 2000 through 2006, where he also served as a director. During Mr. Nardelli's tenure, Home Depot's revenues and net earnings doubled, 1,000 new stores were opened and 135,000 new jobs were added. From 2002 until 2005, Mr. Nardelli served on the Board of Directors of The Coca-Cola Company. He also held several senior executive posts at General Electric Company during the period from 1971 to 2000, except from 1988 – 1992, when he took leave of GE to become Senior Vice President and General Manager of the Case Construction Equipment global company. While at GE, Mr. Nardelli was the Chief Executive Officer of two of its major companies, GE Power Systems and GE Transportation Systems. He earned an MBA from the University of Louisville in 1975 and a Bachelor of Science degree in business from Western Illinois University in 1971. His 40-plus years of global operating experience, financial expertise, consistent performance and an impressive track record serving on the boards of directors of public companies, will make him a valuable addition to the Board.
Jeffrey C. Smith is co-Founder, Chief Executive Officer and Chief Investment Officer of Starboard Value LP, a New York-based investment firm that is the largest shareholder of Office Depot. Mr. Smith has extensive public company board experience. Currently, he serves on the board of directors of Regis Corporation and Quantum Corporation. Previously, he was the Chairman of the Board of Phoenix Technologies Ltd. until its sale to Marlin Equity Partners, and served on the boards of directors of Zoran Corporation until its sale to CSR plc, Actel Corporation until its sale to Microsemi Corporation, S1 Corporation, Kensey Nash Corp. and SurModics Inc. Mr. Smith also served as a member of the Management Committee for Register.com. In addition to extensive public board experience, Mr. Smith has significant experience evaluating companies from a financial, operational, and strategic perspective to identify inefficiencies and the resulting opportunities for value creation. Mr. Smith's extensive public board experience and experience in a variety of industries together with his management experience in a variety of roles will enable him to provide invaluable oversight to the Company's Board.
Joseph S. Vassalluzzo currently serves as a director on a number of public company boards, including Federal Realty Investment Trust, where he is Non- Executive Chairman of the Board, and Life Time Fitness, where he is Lead Director and Chairman of the Compensation Committee. Mr. Vassalluzzo also operates a retail consulting business and served as a director and Chairman of the Nominating Committee of iParty Corp until its sale to Party City Holdings Inc. in May 2013. Previously, among other roles, Mr. Vassalluzzo was employed by Staples, Inc. ("Staples"), from 1989 until 2005, most recently as Vice Chairman, where he had world-wide responsibility for all of Staples' real estate activities, including, but not limited to: the development and management of all retail stores; distribution; office and warehouse centers; all engineering, construction and design activities; and facilities management. In addition, Mr. Vassalluzzo was responsible for the legal department's activities and negotiated the majority of Staples M&A transactions. Mr. Vassalluzzo's managerial and industry knowledge, as well as his extensive service on public company boards, make him an excellent candidate for the Board.
About Starboard Value LP
Starboard Value LP is a New York-based investment adviser with a focused and differentiated fundamental approach to investing in publicly traded U.S. small cap companies. Starboard invests in deeply undervalued small cap companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders.
Peter Feld, (212) 201-4878
Gavin Molinelli, (212) 201-4828
SOURCE Starboard Value LP