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Office Depot Faces Potential Board Upset

Delray Beach, Fla. — A shareholder group will attempt to breach Office Depot’s board of directors at the office supply chain’s upcoming stockholder meeting.

Office Depot is advising stockholders to reject the attempt by the Florida-based real estate development company Levitt Corp. and its wholly owned subsidiary Woodbridge Equity Fund (together the Woodbridge Group) to nominate two new directors to the Office Depot board at this year’s annual stockholders meeting, scheduled for April 23.

The Woodbridge Group announced yesterday they are planning on nominating Mark Begelman, former president and COO of Office Depot, and Martin E. Hanaka, former president and COO of Staples, as candidates to serve on the board in place of Steve Odland, the company’s current chairman and CEO, and David I. Fuente, the company’s former chairman and CEO.

“As Office Depot shareholders, we believe Office Depot needs new representation on its board to revitalize the company and store experience and return Office Depot to a high-performance organization again. Under the current board and management team, Office Depot has lost its vision, its competitive position in the office supply retailing space and its drive for leadership,” said Alan B. Levan, the chairman of the board and CEO of Levitt Corporation and Woodbridge Capital Corporation, in a release.

He added, “Our highly qualified nominees bring strong, relevant operating experience to the board. They are committed to providing meaningful leadership to Office Depot and to taking immediate and aggressive action to turn around Office Depot’s business and redefine its position in the marketplace. Specifically, we believe Office Depot needs to strengthen its management team to include leaders with significant retail experience and reassess its approach to merchandising and product development. Further, we believe Office Depot must make commitments to customers through enhanced leadership in key product classifications and development of new areas of differentiation.

“We also see significant opportunities to strengthen the powerful Office Depot brand and invigorate the store experience and marketing strategy to drive new customers into the stores. Most importantly, we want to ensure that Office Depot delivers stronger operational performance and greater value for all shareholders by defining, measuring, and improving all key performance indicators.”

In a release today, Office Depot said it “believes that removing two of the most experienced retailing executives from the Office Depot Board would be highly disruptive, and could destabilize the Company and damage prospects for a successful turnaround. The board has a strong long-range plan that is in the process of being implemented under difficult macroeconomic conditions.”

Office Depot said it is urging its stockholders to sign and return only the white Office Depot proxy card solicited by Office Depot’s Board of Directors. It is asking that stockholders disregard any proxy card they may receive from the Woodbridge Group.

In its own release, the Woodbridge Group urged shareholders not to vote for the incumbent directors on Office Depot’s proxy card, but instead asked them to await receipt of the Woodbridge proxy statement and gold proxy card before voting.

This news follows last week’s disappointing financial results, which included news that Office Depot’s total company net earnings for the fourth quarter , ended Dec. 29, were $19 million compared with earrings of $127 million in the same period in 2006.