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January 3, 2007

The Home Depot's Bob Nardelli has resigned from his posts as president, CEO and chairman of the board as of Jan. 2, 2007. Frank Blake, the company's executive vice president, succeeds him.

The move comes amid criticism from investors over Nardelli's pay and slow stock gains during his reign.

The board also announced that CFO Carol Tome and head of the wholesale division, Joe DeAngelo, 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.

Since joining The 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.

Separation Agreement
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.

Related Links:
HD to Reject Proposal to Evaluate "Strategic Alternatives"
Reports: Home Depot May Be Target of Private Equity Firms
HD Supply 3Q Sales Grow 159%
HD Supply Expands Waterworks Division
Home Depot Supply Acquires Burrus Contractors Supply

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