Court says Woodbridge, Levitt can nominate directors for election to Office Depot board

By Lisa Kerner

Charlotte, N.C., April 15 - The Delaware Court of Chancery ruled that Office Depot, Inc. cannot prevent shareholders Woodbridge Equity Fund LLLP and Levitt Corp. from nominating directors for election to the company's board before the 2008 annual meeting, a Woodbridge news release said.

The court denied Office Depot's cross-motion for judgment seeking a contrary declaration.

Woodbridge and Levitt's release urged fellow shareholders to use their gold proxy cards to vote for nominees Mark Begelman and Martin Hanaka.

Begelman is former president and chief operating officer of Office Depot, and Hanaka is the former CEO of Sports Authority, Inc.

As previously reported, Office Depot said that both Begelman and Hanaka were considered and rejected for executive positions with the company.

On March 31, Office Depot asked its shareholders to vote for its nominees, current chairman and CEO Steve Odland and former CEO David Fuente, and to reject the "unqualified" dissident nominees proposed by Woodbridge.

Office Depot's annual meeting will be held on April 23.

According to Woodbridge, Office Depot tried to use a legal technicality to prevent shareholders from having the opportunity to vote for Woodbridge's nominees.

"Shareholders should be allowed to determine for themselves who represents them on Office Depot's board and we encourage all shareholders to have their voices heard with a vote for change," Woodbridge Capital Corp. president Alan B. Levan said in the release. Woodbridge Capital is the general partner of Woodbridge Equity Fund.

In a statement, Office Depot said it welcomed the court's conclusion that its advance notice bylaw applies to director nominations. However, the company was disappointed by the court's reading of Office Depot's notice of meeting to permit Levan's nominees to stand for election, the statement said.

"We note that Alan Levan was unable to comply with the terms of the bylaw, which is meant to protect the interests of all Office Depot stockholders, as he did not even own Office Depot shares at the time advance notice was required to be given," Office Depot stated.

Office Depot reiterated its belief that stockholders will be best served by rejecting Levan and his "unqualified" nominees who "would add nothing" to the board.

In asking shareholders to vote for all 12 of the board's nominees using the white proxy, Office Depot noted "Levan has no track record in our industry or as an activist investor, owns only one percent of our stock, and has a poor governance record and a dismal performance at the public companies he leads."

Woodbridge previously cited declining earnings, market share and free cash flow as evidence a change is needed at the Delray Beach, Fla., office products company.

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