Atlanta, GA, January 3, 2007--Home Depot's board of directors and Bob Nardelli said today that they have mutually agreed that Nardelli would leave his position as Home Depot's chairman, president & CEO and as a director effective January 2, 2007.
Frank Blake, the company's current vice chairman of the board of directors and executive vice president succeeds Nardelli, effective immediately.
The board said, "We are very grateful to Bob for his strong leadership of The Home Depot over the past six years. Under Bob's tenure, the company made significant and necessary investments that greatly improved the company's infrastructure and operations, expanded our markets to include wholesale distribution and new geographies, and undertook key strategic initiatives to strengthen the company's foundation for the future. The Home Depot has delivered strong and consistent growth and gained market share under Bob's leadership, and we believe that the company is well positioned to continue to do so. We thank Bob for his contributions, hard work and dedication and wish him all the best in his future endeavors."
Frank Blake was elected chairman and CEO of The Home Depot and a full voting member of the board of directors.
"The entire board is pleased to name Frank as Home Depot's chairman and chief executive officer. We are fortunate to have someone of Frank's caliber within our organization and believe he is the ideal candidate to succeed Bob," continued the board of directors. "While industry conditions remain challenging, we are confident that Frank will effectively execute on the company's strategy, build upon our legacy of growth, innovation and superior customer service, and deliver value for our shareholders."
Since joining Home Depot in 2002, Blake has served as vice chairman of the board of directors and executive vice president. His responsibilities have included strategic business development, growth initiatives, real estate, store construction, credit services, and the home services business. Prior to joining The Home Depot, Blake served as deputy secretary for the U.S. Department of Energy (DOE). Prior to that, he served in a variety of executive roles at General Electric, including senior vice president, corporate business development.
Frank Blake said "The board and I are committed to continuing on our current strategic path and remain focused on enhancing performance and delivering value for customers, shareholders and associates."
The board also announced that Carol Tome, the company's current executive vice president and CFO, and Joe DeAngelo, the company's executive vice president, HD Supply, will be assuming additional responsibilities. Tome will be assuming responsibility for mergers and acquisitions, credit services and additional strategic responsibilities. DeAngelo was appointed to the newly created position of chief operating officer. In this position, DeAngelo will continue to oversee HD Supply and will assume additional responsibilities for the retail business.
With the appointments of Blake, DeAngelo and Tome, the board of directors expressed its confidence in the company's current business model, long-term strategy and future growth potential.
Nardelli and the company have agreed in principle to the terms of a separation agreement which would provide for payment of the amounts he is entitled to receive under his pre-existing employment contract entered into in 2000.
Under this agreement, Nardelli will receive consideration currently valued at approximately $210 million (including amounts which have previously been earned or vested). This consideration will include a cash severance payment of $20 million, the acceleration of unvested deferred stock awards currently valued at approximately $77 million and unvested options with an intrinsic value of approximately $7 million, the payment of earned bonuses and long-term incentive awards of approximately $9 million, the payment of account balances under the company's 401(k) plan and other benefit programs currently valued at approximately $2 million, the payment of previously earned and vested deferred shares with an approximate value of $44 million, the payment of the present value of retirement benefits currently valued at approximately $32 million and the payment of $18 million for other entitlements under his contract which will be paid over a four year period and will be forfeited if he does not honor his contractual obligations.
Nardelli has also agreed not to compete with the company for one year, not to solicit employees or customers of the company for four years and other restrictive covenants.
In conjunction with the management changes, the board also announced that it had waived the retirement age of 72 and has asked John L. Clendenin, Claudio X. Gonzales and Milledge A. Hart III to stand for re- election at the 2007 annual shareholders meeting. This action was taken to retain these directors' experience, and deep knowledge of the company's business and key personnel to help ensure a smooth management transition. This action is temporary and effective for one year.
