Office Depot Urges Shareholders to Protect the Best Interests of the Company after Starboard Refuses Good-Faith Compromise

  Office Depot Urges Shareholders to Protect the Best Interests of the Company
  after Starboard Refuses Good-Faith Compromise

After Listening to Shareholders, Office Depot Offered Starboard Three Seats on
 its Existing Board, One Seat on the CEO Selection Committee and Two Seats on
      the Post-Merger Company's Board in an Effort to Reach a Compromise

Business Wire

BOCA RATON, Fla. -- August 20, 2013

Office Depot, Inc. (NYSE: ODP), a leading global provider of office supplies
and services, today announced that negotiations it initiated to reach a
good-faith compromise with its largest shareholder, Starboard Value LP
(together with its affiliates, "Starboard"), ahead of the Company’s Annual
Meeting of Shareholders on August 21, have not resulted in an agreement.

Office Depot initiated the negotiations late last week after hearing from its
shareholders that they were supportive of adding new perspectives to the
Company's Board. After negotiating through the weekend and through late last
night, Office Depot proposed a settlement agreement whereby two of the current
Office Depot directors would have resigned, and the three Starboard nominees
recommended by ISS and Glass Lewis - Cynthia Jamison, Jeffrey Smith and Joseph
Vassalluzzo - would have been added to the Company's Board.

As part of the settlement offer, the Company also offered to invite Mr.
Vassalluzzo to join the CEO Selection Committee in the search process for the
CEO of the combined company, replacing one of the current directors, and to
have both Mr. Smith and Mr. Vassalluzzo serve as two of Office Depot’s five
continuing directors should the merger with OfficeMax be completed. Office
Depot further proposed that any decision on the remaining three Company
directors to be added to the post-merger Board would only be made after the
Starboard nominees were on the Board and with the full Board’s participation.
Notwithstanding all of these terms offered to Starboard, Starboard refused to
settle.

Accordingly, Office Depot is urging all shareholders to protect the future of
their investment by voting the WHITE proxy card FOR the Company's ten Board
nominees.

“Today's extremely disappointing outcome should serve as a warning call for
all investors,” said Neil Austrian, Chairman and CEO of Office Depot. “After
listening to our shareholders, we put forward what we viewed as an attractive
offer that was not only responsive to them, but to Starboard's demands for a
voice in the Boardroom and participation in the merger integration process.
Yet, despite all of its proclamations about wanting to ensure the merger is
completed successfully and overseen by the best possible directors, Starboard
continued to make demands that ultimately ran contrary to that goal.

"For the past few years, the Office Depot Board has worked extremely hard to
set a new strategic course for the Company, which led to the agreement earlier
this year for our planned merger with OfficeMax. This Board has remained
steadfastly dedicated to protecting shareholders’ investments and seeing the
merger completed and integrated in the right way - right down to the offer we
made to Starboard this weekend. In the timing and substance of its response to
our offer, we believe that Starboard has put its own interests ahead of Office
Depot’s shareholders and clearly demonstrated that it is not seriously
interested in a settlement. We urge all Office Depot shareholders to vote the
WHITE proxy card today.”

Consistent with its previous announcement and in response to shareholder
preference, Office Depot confirmed that if Thomas Colligan, an essential
member of the current CEO Selection Committee, is re-elected at the annual
meeting, Office Depot will commit to adding to the Board the three Starboard
nominees recommended by ISS and Glass Lewis. Office Depot also would invite
Mr. Vassalluzzo to join the CEO Selection Committee and commit to adding at
least one Starboard nominee to the go forward board of the newly combined
company if the merger with OfficeMax closes. Office Depot urges all
shareholders to vote the WHITE proxy card today.

Shareholders who need assistance in voting or who have questions about the
annual meeting may call the Company’s proxy solicitor toll-free at (877)
825-8621.

About Office Depot

Office Depot provides core office supplies, the latest technology, school
essentials, copy & print services, cleaning & breakroom products, and
furniture to consumers, teachers and businesses of all sizes through 1,614
worldwideretail stores,global e-commerce operations, a dedicated sales
force, an inside sales organization, and top-rated catalogs. The Company has
annual sales of approximately $10.7 billion, employs about 38,000 associates,
and serves customers in 60 countries around the world.

Office Depot’s common stock is listed on the New York Stock Exchange under the
symbol ODP. Additional press information can be found
at:http://news.officedepot.com.

IMPORTANT INFORMATION HAS BEEN AND WILL BE FILED WITH THE SEC

In connection with the solicitation of proxies for Office Depot’s Annual
Meeting of Shareholders (the “2013 Annual Meeting”), Office Depot has filed
with the Securities and Exchange Commission (the “SEC”) a definitive proxy
statement concerning the proposals to be presented at the 2013 Annual Meeting.
The proxy statement contains important information about Office Depot and the
2013 Annual Meeting. Office Depot and its directors, executive officers and
certain employees may be deemed to be participants in the solicitation of
proxies from Office Depot’s shareholders in connection with the election of
directors and other matters to be proposed at the 2013 Annual Meeting.
Information regarding the interests, if any, of these directors, executive
officers and specified employees is included in the definitive proxy statement
and other proxy materials (the “Proxy Materials”) filed by Office Depot with
the SEC on July 19, 2013. On July 22, 2013, Office Depot mailed the Proxy
Materials to shareholders of record as of July 11, 2013. Investors and
shareholders are able to obtain free copies of the Proxy Materials and other
documents filed with the SEC by Office Depot through the website maintained by
the SEC at www.sec.gov. In addition, investors and shareholders are able to
obtain free copies of the Proxy Materials and other documents filed by Office
Depot with the SEC by contacting Office Depot Investor Relations at 6600 North
Military Trail, Boca Raton, FL 33496, or by calling 561-438-7878.

OFFICE DEPOT SAFE HARBOR STATEMENT

This communication may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 concerning Office
Depot, the merger and other transactions contemplated by the merger agreement,
and the outcome of the 2013 Annual Meeting. These statements or disclosures
may discuss goals, intentions and expectations as to future trends, plans,
events, results of operations or financial condition, or state other
information relating to Office Depot, based on current beliefs of management
as well as assumptions made by, and information currently available to,
management. Forward-looking statements generally will be accompanied by words
such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,”
“forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,”
“project” or other similar words, phrases or expressions. These
forward-looking statements are subject to various risks and uncertainties,
many of which are outside of Office Depot’s control. Therefore, investors and
shareholders should not place undue reliance on such statements. Factors that
could cause actual results to differ materially from those in the
forward-looking statements include adverse regulatory decisions; failure to
satisfy other closing conditions with respect to the merger; the risks that
the new businesses will not be integrated successfully or that Office Depot
will not realize estimated cost savings and synergies; Office Depot’s ability
to maintain its current long-term credit rating; unanticipated changes in the
markets for its business segments; unanticipated downturns in business
relationships with customers or their purchases from Office Depot; competitive
pressures on Office Depot’s sales and pricing; increases in the cost of
material, energy and other production costs, or unexpected costs that cannot
be recouped in product pricing; the introduction of competing technologies;
unexpected technical or marketing difficulties; unexpected claims, charges,
litigation or dispute resolutions; new laws and governmental regulations. The
foregoing list of factors is not exhaustive. Investors and shareholders should
carefully consider the foregoing factors and the other risks and uncertainties
that affect Office Depot’s business described in its Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other
documents filed from time to time with the SEC. Office Depot does not assume
any obligation to update these forward-looking statements.

Contact:

Office Depot, Inc.
Investor Relations:
Richard Leland, 561-438-3796
richard.leland@officedepot.com
or
Public Relations:
Brian Levine, 561-438-2895
brian.levine@officedepot.com
 
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