ATLANTA, Dec. 18 /PRNewswire-FirstCall/ -- The Home Depot(R), the
world's largest home improvement retailer, announced that it has
received notice from Relational Investors, LLC, an investment firm,
that Relational intends to submit a proposal at the next annual
meeting of shareholders of The Home Depot. The proposal will
request that the board of directors of The Home Depot appoint a
special committee of independent directors to evaluate the
strategic direction of the Company, the performance of management
and strategic alternatives for the Company. Relational notified the
Company that this proposal is part of an "advocacy program" planned
by Relational with respect to the Company, that Relational plans to
solicit proxies to have its proposal adopted, and that Relational
may nominate one or more directors for election at the 2007 annual
meeting. In addition, Relational has requested a meeting with The
Home Depot's chief executive officer, Bob Nardelli, and members of
the Company's board of directors. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030502/HOMEDEPOTLOGO ) The
Company said that its board of directors recently completed a
strategic review and that it will oppose the resolution and proxy
solicitation that Relational intends to pursue. The Company also
said today that its board of directors unanimously supports the
management team and its plan to continue enhancing value for all
shareholders through the execution of its current strategy. During
the past six years, the Company has delivered strong financial
results. Sales at The Home Depot have nearly doubled, from $45.7
billion in 2000 to $81.5 billion in 2005, and earnings per share
have increased more than 140 percent in the same period. From 2001
to the present, the Company has invested more than $29 billion back
into the business, through capital and acquisition spending, while
also returning over $20 billion to shareholders in the form of
share repurchases and dividends, including two dividend increases
of 50 percent each this year. This includes, most recently, issuing
$5 billion in debt and announcing a $3 billion accelerated share
repurchase. Since 2002, when the Company's share repurchase program
began, The Home Depot has repurchased approximately 450 million
shares, or 19 percent of its outstanding shares. This demonstrates
the Company's balanced approach to capital allocation through
business investments and cash returned to its shareholders. The
Home Depot has advised Relational that it will arrange a meeting
shortly after the first of the year to discuss its concerns,
consistent with The Home Depot's policy of engaging in an open and
direct dialogue with shareholders. Relational indicated in its
notice that it has recently become a shareholder of The Home Depot.
Relational further indicated that its various affiliates own
approximately 12,966,338 shares of The Home Depot's common stock,
or roughly 0.6 percent of the common shares outstanding. The Home
Depot's correspondence with Relational is attached. About The Home
Depot The Home Depot(R) is the world's largest home improvement
specialty retailer, with 2,127 retail stores in all 50 states, the
District of Columbia, Puerto Rico, U.S. Virgin Islands, 10 Canadian
provinces, Mexico and China. Through its HD Supply(SM) businesses,
The Home Depot is also one of the largest diversified wholesale
distributors in the United States, with nearly 1,000 locations in
the United States and Canada offering products and services for
building, improving and maintaining homes, businesses and municipal
infrastructures. In fiscal 2005, The Home Depot had sales of $81.5
billion and earnings of $5.8 billion. The Company employs
approximately 355,000 associates and has been recognized by FORTUNE
magazine as the No. 1 Most Admired Specialty Retailer and the No.
13 Most Admired Corporation in America for 2006. The Home Depot's
stock is traded on the New York Stock Exchange (NYSE: HD) and is
included in the Dow Jones industrial average and Standard &
Poor's 500 index. HDG Certain statements contained herein may be
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. These statements are based on
currently available information as of their dates and are subject
to risks and uncertainties that may cause actual results to differ
materially from the statements and other information contained
herein, including risks and uncertainties associated with whether
Relational submits any proposal and/or nominates directors and if
submitted or nominated, whether such proposals will be approved or
persons elected and the outcome of any meeting between Relational
and The Home Depot. Additional information regarding risks and
uncertainties is contained in the Company's periodic filings with
the Securities and Exchange Commission, including the Company's
most recently filed Annual Report on Form 10-K. Forward-looking
statements speak only as of their respective dates, and the Company
specifically disclaims any obligation to update them except as may
be required under the federal securities laws. The Home Depot and
its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders
of The Home Depot in connection with the proposal described herein.
Information regarding the special interests of these directors and
executive officers in the proposal described herein will be
included in any proxy statement filed by The Home Depot in
connection with the proposal. In addition, The Home Depot files
annual, quarterly and special reports, proxy and information
statements, and other information with the SEC. These documents are
available free of charge at the SEC's Web site at
http://www.sec.gov/ or from The Home Depot at
http://www.homedepot.com/. Investors should read any proxy
statement filed in connection with the proposal described herein
carefully when it becomes available before making any voting or
investment decision. VIA OVERNIGHT MAIL AND FACSIMILE December 13,
2006 Mr. Robert L. Nardelli Chairman, President and Chief Executive
Officer The Home Depot, Inc. 2455 Paces Ferry Road Atlanta, Georgia
30309-4024 Dear Mr. Nardelli: We have recently become a significant
shareholder of Home Depot Inc. (the "Company"). We believe the
Company's board of directors is presented with enormous
responsibility and opportunity to reverse the Company's chronic
inferior stock price performance experienced since 2000. We
attribute this performance to deficient strategy, operations,
capital allocation, and governance. We are planning an advocacy
program designed to spur positive action to address these
deficiencies. In that vain, under separate cover we have submitted
the attached Notice of Shareholder Proposal. This notice was timed
to satisfy the deadlines set forth in the Company's Bylaws. We
would like to meet with you and representatives of the Company's
board of directors at the earliest convenient time. At that
meeting, we would like to discuss this proposal and other steps we
are considering, which include nominating one or more directors for
election to the Company's board of directors of the Company's 2007
Annual Meeting of Shareholders. I look forward to hearing from you.
If you would like to reach me, you can call my office at (858)
704-3330. Sincerely, By: /s/ Ralph V. Whitworth Principal Enclosure
VIA OVERNIGHT MAIL AND FACSIMILE December 13, 2006 Mr. Frank
Fernandez Corporate Secretary The Home Depot, Inc. 2455 Paces Ferry
Road Atlanta, Georgia 30309 Re: Notice of Shareholder Proposal Dear
Mr. Fernandez: The undersigned, Relational Investors LLC, a
Delaware limited liability company ("Relational Investors") is a
stockholder of The Home Depot, Inc., a Delaware corporation (the
"Company"), and, as of the date hereof, is a holder of record of
100 shares of common stock, par value $.05 per share, of the
Company ("Common Stock"), and the beneficial owner of 12,966,438
shares of Common Stock (which amount includes the 100 shares of
Common Stock held of record). This letter serves as notice, in
accordance with Article I, Section 1 of the Bylaws of the Company,
as amended and restated as of August 24, 2006 (the "Bylaws"), that
Relational Investors is submitting the enclosed shareholder
proposal to be considered at the 2007 Annual Meeting. For clarity,
Relational Investors is not submitting this Proposal (as defined
below), and is therefore not requesting inclusion of the Proposal
in the Company's proxy statement, under the Securities and Exchange
Commission's Rule 14a-8. Relational Investors intends to conduct an
independent proxy solicitation program in support of the Proposal.
Set forth below is the information required to be furnished to the
Secretary of the Company pursuant to Article I, Section 1 of the
Bylaws in connection with Relational Investors' Proposal. (a) A
brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting
and any material interest in such business of such stockholder and
the beneficial owner, if any, on whose behalf the proposal is made.
Relationship Investors is submitting a proposal to recommend and
request that the Board of Directors form a committee comprised
exclusively of independent directors to evaluate the strategic
direction of the Company and the performance of management, with
duties to include, among other things, studying strategic
alternatives for the Company, including a major operational
restructuring and/or recapitalization, a partial or complete sale
or buyout of the Company, and/or a major recomposition of the
executive team (the "Proposal"), as more specifically described in
the Shareholder Proposal to Form an Independent Board Committee
enclosed with this notice. Relational Investors is submitting the
Proposal because it believes there is opportunity for substantial
appreciation in the value of the Common Stock through changes in
the Company's strategic direction, restructuring and
recapitalization, a partial or complete sale or buyout of the
Company and/or a major recomposition of the execution team.
Relational Investors believes the Company's owners should have an
opportunity to express their wishes in respect of these matters for
consideration by the Board of Directors. Except in respect of its
ownership of Common Stock, Relational Investors and the beneficial
owners set forth below have no material interest in the Proposal.
(b) whether either such stockholder or beneficial owner, alone, or
as part of a group, intends to solicit or participate in the
solicitation of proxies from the stockholders of the Company.
Relational Investors and/or the beneficial owners set forth below
intend to solicit or participate in the solicitation or proxies
from the stockholders of the Company. (c) the name and address of
such stockholder, as they appear on the Company's books, and of
such beneficial owners and (ii) the class and number of shares of
the Company that are owned beneficially and held of record by such
stockholder and such beneficial owner. Stockholder: Relational
Investors LLC 12400 High Bluff Drive, Suite 600 San Diego, CA 92130
Beneficial Owner: Relational Investors LLC The address of the above
beneficial owner is: c/o Relational Investors LLC 12400 High Bluff
Drive, Suite 600 San Diego, California 92130 Relational Investors,
in its capacity as an investment manager with discretionary
purchase, sale, and voting authority over shares held in certain
client accounts may be deemed to beneficially own in the aggregate
1,793,758 shares of the Company's Common Stock. Also in its
capacity as the general partner of certain partnerships, Relational
Investors may also be deemed to be beneficially own in the
aggregate 11,172,580 shares of the Company's Common Stock. Such
partnerships beneficially own the Company's Common Stock as
described below. In each case, the address of the beneficial owner
is 12400 High Bluff Drive, Suite 600, San Diego, California 92130.
Relational Investors is the sole general partner of: -- Relational
Investors, L.P., which beneficially owns 2,011,996 shares of Common
Stock; -- Relational Partners, L.P., which beneficially owns 48,007
shares of Common Stock; -- Relational Fund Partners, L.P., which
beneficially owns 51,987 shares of Common Stock; -- Relational
Coast Partners, L.P., which beneficially owns 119,437 shares of
Common Stock; -- RH Fund 1, L.P., which beneficially owns 1,450,905
shares of Common Stock; -- RH Fund 2, L.P., which beneficially owns
1,044,637 shares of Common Stock; -- RH Fund 4, L.P., which
beneficially owns 366,915 shares of Common Stock; -- RH Fund 6,
L.P., which beneficially owns 275,478 shares of Common Stock; -- RH
Fund 7, L.P., which beneficially owns 129,376 shares of Common
Stock; -- Relational Investors VIII, L.P., which beneficially owns
1,952,392 shares of Common Stock; -- Relational Investors IX, L.P.,
which beneficially owns 798,631 shares of Common Stock; --
Relational Investors XI, L.P., which beneficially owns 836,641
shares of Common Stock; -- Relational Investors XV, L.P., which
beneficially owns 281,447 shares of Common Stock; -- Relational
Investors XVI, L.P., which beneficially owns 235,362 shares of
Common Stock; Relational Investors also serves as the sole managing
member of both Relational Asset Management LLC, which serves as the
general partner to Relational Investors III, L.P. (which
beneficially owns 92,803 shares of Common Stock), and Relational
Investors X GP LLC, which serve as the general partner to
Relational Investors X, L.P. (which beneficially owns 1,476,566
shares of Common Stock). By virtue of the foregoing relationships
and capacities, Relational Investors and its managing members,
Ralph V. Whitworth and David H. Batchelder, may be deemed to
indirectly beneficially own in the aggregate 12,966,338 shares of
the Company's Common Stock held by such respective entities. Also,
Relational Investors is the holder of record of 100 shares of the
Company's Common Stock. We may also place in nomination one or more
candidates for election as a director at the 2007 Annual Meeting.
It is our understanding that under Article Sixth, Section 3 of the
Company's Amended and Restated Certificate of Incorporation a
written request for such nomination(s) must be received by the
Company "not less than 30 days prior to the date fixed for the
meeting." Based on a review of the Bylaws and the Company's other
charters, policies and procedures, we are not aware of any other
advance notice requirement in respect of shareholder nominations.
If you believe that this notice does not satisfy the Bylaw
requirements for a shareholder proposal to be considered at the
2007 Annual Meeting, if you disagree with our reading of the
Company's deadline for shareholder nominations, or if you have any
questions or require further information, please contact the
undersigned immediately at (858) 704-3330. Very truly yours,
RELATIONAL INVESTORS, LLC, a Delaware limited liability company By:
/s/ Ralph V. Whitworth Its: Principal Enclosures cc: Mr. Robert
Nardelli, Chief Executive Officer The Home Depot, Inc. Shareholder
Proposal to Form an Independent Board Committee Resolved, that the
shareholders recommend and request that: 1. the Board of Directors
of The Home Depot, Inc. (the "Company") promptly appoint a
committee (the "Shareholder Value Committee") comprised exclusively
of independent directors to evaluate the strategic direction of the
Company and the performance of management in light of the Company's
inferior performance during the tenure of the current Chief
Executive Officer; 2. the Shareholder Value Committee, among its
duties, shall study strategic alternatives for the Company,
including a major operational restructuring and/or
recapitalization, a sale or buyout of the Company in part or whole,
and/or a major recomposition of the executive team; 3. the
Shareholder Value Committee shall publicly report its findings to
the shareholders no later than 90 days after the Company's 2007
Annual Meeting of Shareholders. 4. in carrying out its evaluation,
the Shareholder Value Committee shall avail itself of independent
legal, investment banking and such other third party advisers, each
with no connection to current management, as the Shareholder Value
Committee shall determine in its sole discretion; and 5. at least
one member of the Shareholder Value Committee shall be a director
(if any) who was newly elected at the Company's 2007 Annual Meeting
of Shareholders. December 18, 2006 VIA OVERNIGHT MAIL AND FACSIMILE
Mr. Ralph V. Whitworth Principal Relational Investors, LLC 12400
High Bluff Ave Suite 600 San Diego, California 92130 Dear Mr.
Whitworth: This letter confirms receipt of your letter of December
13,2006, a copy of which has been provided to our board of
directors. The board has asked me to inform you that it recently
completed a strategic review and does not believe that the
committee you seek to form is necessary or useful, and it will
oppose any solicitation of proxies in that regard. The board has
also asked me to inform you that your request for a meeting will be
accommodated, and that we will be in touch with you shortly after
the first of the year to arrange a mutually convenient meeting date
and other details. Finally, with respect to your request that we
confirm that your notice complies with our Bylaw requirements, we
are unable to do so at this time. In this connection, to enable us
to comply with your request, we would appreciate your advising us
as to why, in light of the amount of your ownership of Home Depot
shares, you have not complied with the notification requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Very
truly yours, Frank L. Fernandez EVP, Secretary & General
Counsel http://www.newscom.com/cgi-bin/prnh/20030502/HOMEDEPOTLOGO
http://photoarchive.ap.org/ DATASOURCE: The Home Depot CONTACT:
Financial Community: Diane Dayhoff, Sr. Vice President of Investor
Relations, +1-770-384-2666, , News Media: Jerry Shields, Sr. Public
Relations Manager, +1-770-384-2741, , or Ron DeFeo, Sr. Public
Relations Manager, +1-770-384-3179, , all of The Home Depot Web
site: http://www.homedepot.com/
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