Office Depot News
Woodbridge Determines Not to Nominate Candidates for Election to Office Depot Board
"As Office Depot shareholders, we hope that the board and management take the necessary steps to deliver value for all shareholders. Since we are withdrawing our nominees, we recommend all shareholders withhold their votes for the Office Depot directors in order to send the strongest message possible to this management team and board that Office Depot's performance, left unchanged, is unacceptable," continued Mr. Levan.
In making its determination not to proceed with the nominations,
"Rather than continue this costly battle we have decided not to propose our candidates for election at the meeting. However, we hope that Office Depot's board and management heed our call for action, as well as the calls for change delivered by the proxy advisory firms," continued Mr. Levan.
RiskMetrics Group's ISS Governance Services (\"ISS\"):(1) — \"The decline in the company's stock price is substantially greater than that witnessed by its peers. The rapid deterioration in the company's stock price has adversely impacted Total Shareholder Return (\"TSR\") despite approx. $2 billion in share repurchases from FY2005 to FY2007. We note that ODP underperformed all its peers in terms of 1-year, 3- year and 5-year total shareholder returns (TSR) for the period ending March 31, 2008....\" — \"While it is difficult to ascertain the exact impact of the Florida and California markets on the financials, we note that 24.8% of ODP and 19.0% of SPLS U.S. based stores are in California and Florida. Though both ODP and SPLS have relatively significant exposure to the two states, SPLS' SSS(2) and margins were not as significantly affected by the regional dynamics as ODP was.\" — \"We note that ODP's current strategic initiatives, announced in response to the deterioration in 2HFY2007 performance, seem to address similar issues that have affected the company since 2005. This, we believe, lends credibility to the dissidents' concern that some of the underlying issues facing the company have yet to be fully resolved.\" — \"Hence, a comparison of the issues facing the company in 2005 with those that it aims to resolve now indicates that the company has been affected by similar issues for a considerable time.\" — \" ... we believe the dissidents have met the burden of proof that change is warranted at the company, and Mr. Begelman and Mr. Hanaka have relevant industry experience ... we believe that the dissidents have made a valid case for greater management oversight....\" PROXY Governance:(3) — \"According to PROXY Governance's performance analysis, the company has underperformed peers over the past five years; the company ranks at the 40th percentile relative to the S&P 1500 compared to peers at the 46th percentile, and is declining relative to peers at a rate of 3 percentile points per year.\" — \"The average three-year compensation paid to the CEO is 243% above the median paid to CEOs at peer companies and the average three-year compensation paid to the other named executives is 3% below the median paid to executives at peer companies.\" — \"We have concerns regarding the company's CEO compensation, which is high compared to peers and given the company's financial performance relative to peers.\" — \"While we recognize that part of the award is directly related to strong 2006 performance and the remainder is structured as a retention package with a strong performance basis, we would not expect to see these levels of compensation going forward, particularly without correspondingly strong shareholder returns.\" — \"A 67% loss in share value over just nine months is undeniably striking. If Odland's execution on his retailing initiatives cannot claw back a meaningful portion of those losses, the board may well be required — as we believe both the board and the CEO are keenly aware — to take other actions or face a more substantial challenge at the next annual meeting.\" Glass Lewis & Co.(4) — \"We note that, since mid-2007, the Company's market value has declined by approximately 64.4%. Though the broader industry has been impacted by the same macro conditions effecting Office Depot, we note that its shares underperformed the S&P 500 Special Retail Index by more than 50.0% during the same period. For the period between July 2007 and April 2008, the S&P 500 Specialty Retail Index declined approximately 25.0% while the Company's shares fell approximately 60.0%\" — \"In light of the Company's performance troubles in the second half of 2007, we are concerned that the Company paid bonuses to Mr. Odland of $10.0 million in addition to $7.0 million in long term equity grants in 2007. Further, we are hard pressed to understand the compensation committee's rationale for its $5.0 million long term equity grant to Mr. Odland in 2008. We note that Office Depot received an F grade in the Glass Lewis' Pay-for-Performance model for 2007.\" — \"It is clear that Office Depot is struggling and, in our opinion, the Dissident has raised a number of valid concerns.\" — \"... the directors of Office Depot should consider themselves to have been put on notice. In the absence of the Woodbridge's contest, given the above mentioned audit and compensation committee issues with Office Depot, Glass Lewis would recommend that shareholders withhold support from a majority of the directors on the current board. ... Though the board may get an unearned passed here, time will tell whether its directors proactively address the Company's issues and effect positive change for shareholders. If that does not occur, investors should not be surprised to see further shareholder activism at the Company.\" (1) Permission to excerpt was neither sought nor obtained. (2) Same store sales. (3) Permission to excerpt was neither sought nor obtained. (4) Permission to excerpt was neither sought nor obtained.
"While
Under Office Depot's Bylaws, the election will no longer be a contested election and the directors should be elected by a majority voting standard in accordance with the terms of the Company's Bylaws.
IMPORTANT NOTICE
If you voted on a Gold proxy card or submitted a Gold voting instruction form to your bank or broker, your card will be voted in accordance with your instructions; provided, that your shares will not be voted for the election of
If you submitted a Gold proxy card or Gold voting instruction form you may change your vote by submitting the Company's White proxy card in accordance with the instructions in Office Depot's proxy statement or by submitting a White voting instruction form to your bank or broker. You may also vote by toll-free telephone or Internet in accordance with the instructions contained in Office Depot's proxy statement.
Woodbridge Equity Fund LLLP
Woodbridge Capital Corporation, a wholly-owned subsidiary of Levitt Corporation, is the general partner of, and Levitt Corporation is the limited partner of, Woodbridge Equity Fund LLLP. Woodbridge Equity Fund LLLP is a beneficial owner of Office Depot, Inc. (the "Company") securities and a participant in the proxy solicitation.
Levitt Corporation
Levitt Corporation, directly and through its wholly-owned subsidiaries, historically has been a real estate development company. Going forward, Levitt Corporation intends to pursue acquisitions and investments opportunistically within and outside the real estate industry.
Additional Information
Levitt Corporation and Woodbridge Equity Fund LLLP (together, "Woodbridge"), and
Investors and security holders of the Company are urged to read the proxy statement because it contains important information. Detailed information relating to the Proponents and
Contacts: Steve Lipin/Nina Devlin Brunswick Group 212.333.3810 Investors: Georgeson 877-651-8856
SOURCE Woodbridge Equity Fund LLLP
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