OfficeMax 2005 Annual Report Download - page 95

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liquidation preference of $45 per share. This preferred stock, a portion of which was redeemed in
2004 with proceeds from the Sale, was originally issued to the trustee of the Company’s ESOP for
salaried employees in 1989, and was allocated to eligible participants through 2005. All shares
outstanding have been allocated to participants in the plan. Each ESOP preferred share is entitled
to one vote, bears an annual cumulative dividend of $3.31875 and is convertible at any time by the
trustee to 0.80357 share of common stock. The ESOP preferred shares may not be redeemed for
less than the liquidation preference.
During 2004, the Company announced plans to return between $800 million and $1 billion of
the Sale proceeds to shareholders via common or preferred stock buybacks, cash dividends or a
combination of these alternatives. As part of this commitment to return cash to equity-holders, the
Company redeemed $110 million of its Series D preferred stock on November 1, 2004, and paid
related accrued dividends of $3 million. In May 2005, the Company repurchased 23.5 million shares
of its common stock and the associated common stock purchase rights through a modified Dutch
auction tender offer at a purchase price of $775.5 million, or $33.00 per share, plus transaction
costs.
Common Stock
The Company is authorized to issue 200,000,000 shares of common stock, of which 70,804,612
shares were issued and outstanding at December 31, 2005. Of these, 13,680 shares were restricted
stock which is discussed below. Of the unissued shares, 12,286,914 shares were reserved for the
following purposes:
Conversion or redemption of Series D ESOP preferred stock .................... 977,410
Issuance under OfficeMax Incentive and Performance Plan ..................... 5,726,239
Issuance under Key Executive Stock Option Plan ............................ 5,248,612
Issuance under Director Stock Compensation Plan ........................... 42,678
Issuance under Director Stock Option Plan ................................. 108,500
Issuance under Key Executive Deferred Compensation Plan ..................... 110,429
Issuance under 2003 Director Stock Compensation Plan ....................... 73,046
The Company has a shareholder rights plan that was adopted in December 1988. The current
rights plan, as amended and restated, took effect in December 1998 and expires in
December 2008. On January 18, 2006, the Company announced that the board of directors voted
not to seek an extension of the shareholder rights plan when it expires in 2008.
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