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ODP > SEC Filings for ODP > Form 8-K on 30-Oct-2012All Recent SEC Filings

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Form 8-K for OFFICE DEPOT INC


30-Oct-2012

Entry into a Material Definitive Agreement, Creation of a Direct Financial Oblig


ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

The Company's Adoption of a Rights Agreement

Effective October 24, 2012, the Board of Directors of Office Depot, Inc. (the "Company") adopted a stockholder rights plan, as set forth in the Rights Agreement dated as of October 24, 2012 (the "Rights Agreement"), between the Company and Computershare Shareowner Services LLC, as Rights Agent. The Company intends to seek stockholder approval of the Rights Agreement. The Company had planned to announce the adoption of the Rights Agreement as part of its earnings announcement, which has been delayed due to Hurricane Sandy and the expected effects of the storm. U.S. Securities and Exchange Commission rules require that the Rights Agreement be announced within 4 business days from adoption.

Pursuant to the Rights Agreement, the Board of Directors declared a dividend distribution of one preferred stock purchase right (a "Right") for each outstanding share of Company common stock, par value $0.01 per share (the "Common Stock") to stockholders of record at the close of business on November 9, 2012, (the "Record Date") and for each share of common stock issued (including shares distributed from Treasury) by the Company thereafter and prior to the Distribution Date (as described below and defined in the Rights Agreement). Although the Record Date is November 9, 2012, the Rights are triggered by actions from the effective date of the Rights Agreement (October 24, 2012) forward.

Each Right entitles the registered holder, subject to the terms of the Rights Agreement, to purchase from the Company one five-thousandth (1/5,000th) of a share of Series C Junior Participating Preferred Stock, $0.01 par value per share (the "Preferred Stock"), at a price of $11.50 per one five-thousandth (1/5,000th) of a share of Preferred Stock, subject to adjustment (the "Purchase Price").

The description and terms of the Rights are set forth in the Rights Agreement adopted by the Board of Directors. This summary description of the Rights and of the Preferred Stock does not purport to be complete and is qualified in its entirety by reference to all of the provisions of the Rights Agreement and the Certificate of Designation for the Preferred Stock, attached to this Current Report on Form 8-K as Exhibit 4.1, including the definitions therein of certain terms, which Rights Agreement and Certificate of Designation are incorporated herein by reference. The capitalized terms used in this Current Report on Form 8-K shall have the same respective meanings as those defined in the Rights Plan, unless otherwise defined in this Form 8-K.

The Rights Agreement

Initially, no separate Rights Certificates will be distributed and instead the Rights will attach to all certificates representing shares of outstanding Common Stock, or, with respect to Common Stock in book entry form, to the outstanding shares of Common Stock evidenced by the balances indicated in the book entry account system of the transfer agent for the Common Stock. The Rights will separate from the Common Stock on the distribution date (the "Distribution Date"), which will occur on the earlier of (i) ten business days following a public announcement that a person or group of affiliated or associated persons has become an Acquiring Person, or (ii) ten business days (or such later date as may be determined by the Board of Directors prior to such time as any person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer that would result in a person or group of affiliated and associated persons beneficially owning 15% or more of the shares of Common Stock then outstanding.


As used in the Rights Agreement, an "Acquiring Person" means a person or group of affiliated or associated persons that has acquired, obtained the right to acquire, or otherwise obtained beneficial ownership of 15% or more of the shares of Common Stock then outstanding. The following, however, are not Acquiring Persons: the Company, its subsidiaries, any employee benefit plan of the Company or any of its subsidiaries, or any entity holding shares of Common Stock pursuant to the terms of any such plan. Moreover, no person or affiliated persons will be deemed to be an Acquiring Person as a result of the following:
(i) an acquisition of Common Stock by the Company, which, by reducing the number of shares of Common Stock outstanding, increases the percentage of the shares of Common Stock that such person, or group of affiliated or associated persons, beneficially owns to 15% or more of the shares of Common Stock then outstanding,
(ii) any unilateral grant of any security by the Company to such person,
(iii) through the exercise of any options, warrants, rights or similar interests (including restricted stock) granted by the Company to its directors, officers and employees or (iv) being the beneficial owner of 15% or more of the shares of Common Stock then outstanding as of the date of the Rights Agreement or prior to the first public announcement of the adoption of the Rights Agreement.

BC Partners Holdings, Ltd. and its Affiliates (an "Exempted Person" under the Rights Agreement), who would be considered an Acquiring Person but for the exception in (iv) of the previous paragraph, will nonetheless be considered an Acquiring Person if such Exempted Person becomes the beneficial owner of an additional 2% or more of the outstanding Common Stock in excess of the amount beneficially owned as of the date of the Rights Agreement, subject to certain exceptions contained in the Rights Agreement, including the receipt of any securities paid to the Exempted Person by the Company in the form of a dividend on the Company's outstanding preferred stock. Moreover, if the Board of Directors of the Company determines that a person, or group of affiliated or associated persons, who would otherwise be an Acquiring Person, has become so inadvertently (either because such person, or group of persons, was unaware that it beneficially owned the requisite percentage of outstanding Common Stock or because it had no actual knowledge of the consequences of such beneficial ownership under the Rights Agreement), and such person, or group of affiliated or associated persons, promptly divests a sufficient number of shares of Common Stock so that it would no longer be an Acquiring Person, then such person or group of affiliated or associated persons shall not be deemed to be or to have become an Acquiring Person for any purposes of the Rights Agreement.

Until the Distribution Date, (i) the Rights will be evidenced by the balances indicated in the book entry account system of the transfer agent for the Common Stock registered in the names of the holders thereof or, in the case of certificated shares, by Common Stock certificates, and will be transferred with and only with such underlying shares of Common Stock, (ii) confirmation and account statements sent to holders of Common Stock in book entry form or, in the case of certificated shares, certificates, representing such shares of Common Stock, issued after the Record Date (including shares distributed from Treasury) will contain a notation incorporating the Rights Agreement by reference, and
(iii) the transfer of any shares of outstanding Common Stock will also constitute the transfer of the Rights associated with such shares of Common Stock.

The Rights are not exercisable until the Distribution Date and will expire at the close of business on October 23, 2013 unless earlier redeemed or exchanged by the Company as described below.


As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights.

In the event that a person or group of affiliated or associated persons becomes an Acquiring Person, then each holder of a Right will thereafter have the right to receive, upon exercise, shares of Common Stock (or, in certain circumstances, shares of Preferred Stock, other securities, cash, property, or a combination thereof) having a value equal to two times the exercise price of the Right. The exercise price is the Purchase Price multiplied by the number of one five-thousandth (1/5,000th) of a share of Preferred Stock issuable upon exercise of a Right prior to the events described in this paragraph.

Notwithstanding any of the foregoing, following the time any person or group becomes an Acquiring Person, all Rights that are, or under certain circumstances specified in the Rights Agreement were, beneficially owned by any Acquiring Person or its Affiliates or Associates will be null and void.

In the event that, at any time after a person or group becomes an Acquiring Person, (i) the Company is acquired in a merger or other business combination with another company and the Company is not the surviving corporation,
(ii) another company consolidates or merges with the Company and all or part of the Common Stock is converted or exchanged for other securities, cash, or property, or (iii) 50% or more of the consolidated assets or earning power of . . .



ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

On October 29, 2012, Office Depot BS ("OD BS"), a French subsidiary of the Company, activated its factoring arrangement with ABN AMRO Commercial Finance ("ABN AMRO") pursuant to the terms of that certain Financing Agreement by and between ABN AMRO and OD BS (the "Agreement"), dated February 24, 2012, as amended. Under the Agreement, ABN AMRO shall provide to OD BS financing in an amount up to 60,000,000 (sixty million euros) for a period of two years from the date of the Agreement. Under the terms of the Agreement, financing is pursuant to a factoring arrangement whereby eligible commercial receivables are transferred from OD BS to ABN AMRO. The Company previously announced its entry into the two-year factoring arrangements allowing it to sell certain foreign trade receivables; however prior to activation of the Agreement, no trade receivables had been sold under the arrangements.

The transfers of receivables pursuant to the Agreement are subject to a guarantee from OD BS in the amount of 20% of the receivables, intended to cover the amount of dilutions and bad debts on the receivables. This guarantee will be automatically increased to the extent dilutions and bad debts are greater than anticipated by the parties. All excess amounts shall be returned to OD BS. ABN AMRO will receive a factoring fee of 0.17% of the amount of transferred receivables and a financing fee at an annual rate of one-month Euribor plus 2.40% on the average daily amount of unpaid transferred receivables. The Agreement provides the Company with approximately $50 million of additional cash liquidity.




ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

Exhibit 4.1 Rights Agreement, dated October 24, 2012, by and between Office Depot, Inc. and Computershare Shareowner Services LLC, including, among other exhibits, the Certificate of Designation for Series C Junior Participating Preferred Stock.

Exhibit 99.1 Press release of Office Depot, Inc. issued on October 30, 2012.


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