The ODP Corporation (ODP) Earnings Call Transcript & Summary

Good day and welcome to the 2020 Annual Meeting of Shareholders of Office Depot, Inc. I would now like to turn the conference over to Joseph Vassalluzzo, Chairman of the Board of Directors of Office Depot. Please go ahead.

Good morning, and welcome to the 2020 Annual Meeting of Shareholders of Office Depot, Inc. As previously stated, I am Joe Vassalluzzo, Chairman of the Board of Directors of Office Depot, and I will be presiding at this meeting. I want to begin by expressing our gratitude and thanking all those individuals working on their front lines to keep all of us safe and healthy. Thank you to all of our associates who have worked together to provide essential products and services necessary to help our customers and serve our communities during this global pandemic and uncertain time. To conduct an orderly meeting, we ask our participants abide by the rules of conduct that can be found on the web portal. We will conduct the business of our meeting in the order of the agenda and answer questions at the end of the meeting. Only validated shareholders may ask questions in a designated field on the web portal. Though we may not be able to answer every question, we will do our best to provide a response to as many as possible, and we'll address any unanswered questions on our Investor Relations page shortly after the meeting. As stated in the rules of conduct, we ask that you limit your questions to the items of the agenda that is before us. Thank you for your cooperation with these rules. Please note that this meeting is being recorded. However, no one attending via webcast or telephone is permitted to use any audio recording device. And keeping with the digital approach to this year's annual meeting, it is now shortly after 9:00 a.m. Eastern Time on May 11, and this meeting is now officially called to order. In addition to myself, in attendance at today's meeting are the following directors: Gerry Smith, our CEO; Quincy Allen; Kristin Campbell; Cynthia Jamison, Francesca Ruiz de Luzuriaga; Shashank Samant; and David Szymanski. Messrs. Allen and Samant joined our Board in February 2020, and both bring over 30 years of leadership experience in the technology services industry and product development. David Bleisch, our Executive Vice President, Chief Legal and Administrative Officer and Corporate Secretary, will act as Secretary of this meeting. We are also joined today by representatives from Deloitte & Touche LLP, our independent auditors. To begin the business of our Annual Meeting, I will first ask David Bleisch, whether we have a quorum.

Thank you, Mr. Chairman. The Board of Directors fixed March 17, 2020, as the record date for determining shareholders entitled to vote at this meeting. An affidavit has been delivered to the company attesting to the fact that either: one, a notice of Internet availability of the Notice of Annual Meeting, the proxy statement and the 2019 annual report on Form 10-K were made available to the company's proxy voting website; or two, the documents themselves were mailed on or about March 26, 2020, to all shareholders as of the record date and will be incorporated into the minutes of this meeting. The shareholder list which list has been certified by Computershare, our transfer agent, shows that as of the close of business on the record date of March 17, 2020, there were 529,088,226 shares of common stock outstanding and entitled to vote at this meeting. A copy of the shareholders list has been on file with the company for the last 10 days and is available for inspection by any shareholder of record at any time during regular business hours. The list is also available for examination during today's meeting on the web portal as required by law. [ Mike Barbera ], representative for Broadridge Financial Solutions, Inc. is serving as our independent inspector of elections, and earlier today took the oath of inspector of elections. Mr. Barbera has informed that there are represented in-person or by proxy shares of common stock representing 492,375,234 votes or approximately 93.06% of the voting power on the record date. Since this represents more than a majority of the voting power of all issued and outstanding stock entitled to vote on the record date, a quorum is present for purposes of transacting business.

Thank you, David. Because holders of a majority of the shares entitled to vote at this meeting are present in person or by proxy, a quorum is present. And I declare this meeting to be duly convened for the purpose of transacting such business as may properly come before it. Before we proceed with the proposals, in addition to Gerry Smith, our CEO, and David Bleisch, I would like to also introduce several members of our executive management team who are in attendance at today's meeting: David Centrella, Senior Vice President of Financial Planning and Analysis and interim finance leader; and Tim Perrott, our Vice President of Investor Relations, the company's primary contact with our investors, analysts and shareholders. The business of this meeting is limited to the proposals that are included in the Notice of Annual Meeting of shareholders and described in the proxy statement. You will have an opportunity to pose questions after the presentation of all proposals being submitted to shareholders for vote. Please hold your questions until that time. The first proposal before the shareholders of the company is the election of directors. May I have a motion?

Mr. Chairman, on behalf of the Board's independent corporate governance and Nominating Committee, I nominate the following 8 individuals as named and for the term described in the proxy statement as directors to serve until the Annual Meeting of Shareholders in 2021 and until their successors have been duly elected and qualified. Quincy L. Allen, Kristin A. Campbell, Cynthia L. Jamison (sic) [ Cynthia T. Jamison ] , Francesca Ruiz de Luzuriaga, Shashank Samant, Gerry P. Smith, David M. Szymanski and Joseph S. Vassalluzzo. All nominees currently serve as directors. Election of each nominee requires a majority of the votes cast.

Is there a second?

Mr. Chairman, I second the motion.

If there's no further discussion, the meeting will now proceed to the second proposal on the agenda regarding the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year 2020. The Audit Committee of the Board of Directors appointed Deloitte & Touche LLP. Mr. Bleisch, would you present the resolution?

Mr. Chairman, I move the adoption of the following resolution. Resolved that the appointment of Deloitte & Touche LLP as independent registered public accounting firm for Office Depot, Inc., for fiscal year 2020 is hereby ratified. Approval of this proposal requires a majority of the votes cast on the matter.

Is there a second?

Mr. Chairman, I second the motion.

The meeting will now proceed to the third proposal on the agenda concerning the nonbinding advisory vote on the compensation of the company's named executive officers. May I have a motion?

Mr. Chairman, I move the adoption of the following resolution. Resolved that the compensation paid to Office Depot's named executive officers as disclosed pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, compensation tables and related narrative discussion is hereby approved. Approval of this proposal requires the affirmative vote of holders of a majority of the shares of Office Depot common stock present in person or represented by proxy and entitled to vote at this meeting.

Is there a second?

Mr. Chairman, I second the motion.

The meeting will now proceed to the fourth proposal on the agenda concerning the authorization of an amendment to the company's Certificate of Incorporation. Pursuant to the certificate of amendment to effect a reverse stock split and to correspondingly decrease the number of authorized shares of common stock. At the discretion of the Board of Directors, may I have a motion?

Mr. Chairman, I move the adoption of the following resolution. Resolved that an amendment to Office Depot's Restated Certificate of Incorporation and amended to effect a reverse stock split of Office Depot's common stock par value of $0.01 per share, at a ratio of not less than 1-for-5 not greater than 1-for-10 and to correspondingly decrease the number of authorized shares of common stock with the exact ratio and effective time of the reverse stock split determined by the Board of Directors is hereby approved.

Approval of this proposal requires the affirmative vote of holders of a majority of the shares of Office Depot common stock issued and outstanding as of the record date. Is there a second?

Yes, Mr. Chairman, I second the motion.

As a reminder, our Board recommends a vote for all proposals. If any shareholder would like to make a comment regarding any proposals, please submit your comments through the web portal. There being no further questions, we will now open the polls for voting. Time is 9:12 a.m. Eastern Time on May 11, 2020. Any shareholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions. If you previously voted by telephone or Internet, or sent in your proxy and do not want to change your vote, you do not need to take any further action. [Voting]

Now that everyone has had the opportunity to vote, I now declare the polls closed as of 9:13 a.m. Eastern Time on May 11, 2020. The next item on the agenda is the preliminary report of the inspector of elections. Any votes provided through the web portal before the polls closed but not reflected in the preliminary report will be reflected in the final report of the inspector of elections. I call upon Mr. Barbera to present the preliminary report.

Mr. Chairman, I have determined that each of the 8 nominees -- each of the directors nominated by the Board of Directors for the election received in excess of 88% of the votes cast for election of directors. I have determined that in excess of the majority of shares present in person or represented by proxy and entitled to vote were cast in favor of the ratification of the appointment of Deloitte & Touche LLP. I have determined that the votes cast in favor of the nonbinding advisory vote on the compensation of the named executive officers to exceed the votes cast against it. I have determined that the affirmative votes of a majority of the issued and outstanding common stock were cast in favor of the authorization of amendment to the company's Certificate of Incorporation pursuant to the certificate of amendment to effect a reverse stock split and to correspondingly decrease the number of authorized shares of common stock at the discretion of the Board of Directors.

Thank you, Mr. Barbera. We will be reporting the final vote results in a Form 8-K to be filed with the SEC within 4 business days from today. Thank you for attending today's meeting. There being no further business to come before the meeting, the meeting is now adjourned.

The conference has ended. You may now disconnect your line.