OfficeMax 2015 Annual Report Download - page 22

Table of Contents

The U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their
intermediaries from making improper payments for the purpose of obtaining or retaining business. Recent years have seen a substantial increase in anti-
bribery law enforcement activity with more frequent and aggressive investigations and enforcement proceedings by both the Department of Justice and the
U.S. Securities and Exchange Commission, increased enforcement activity by non-U.S. regulators and increases in criminal and civil proceedings brought
against companies and individuals. Our policies mandate compliance with all anti-bribery laws. However, we operate in certain countries that are recognized
as having governmental and commercial corruption. Our internal control policies and procedures may not always protect us from reckless or criminal acts
committed by our employees or third-party intermediaries. Violations of these anti-bribery laws may result in criminal or civil sanctions, which could have a
material adverse effect on our business and results of operations.

The Company’s expenses relating to employee health benefits are significant. Healthcare costs have risen significantly in recent years, and recent legislative
and private sector initiatives regarding healthcare reform have resulted and could continue to result in significant changes to the U.S. healthcare system.
Unfavorable changes in the cost of such benefits could have a material adverse effect on the Company’s financial results and cash flow.

Our operations are heavily concentrated in the Southern and Midwestern U.S. (including Illinois, Ohio, Florida and the Gulf Coast). Because of our
concentration in the Southern U.S., we may be more susceptible than some of our competitors to the effects of tropical weather disturbances, such as
tornadoes and hurricanes. In addition, winter storm conditions in areas that have a large concentration of our business activities could also result in reduced
demand for our products, lost retail sales, supply chain constraints or other business disruptions. We believe that we have taken reasonable precautions to
prepare for weather-related events, but our precautions may not be adequate to mitigate the adverse effect of such events in the future.

We have a large employee base and while our management believes that our employee relations are good, we cannot be assured that we will not experience
organization efforts from labor unions. The potential for unionization could increase if federal legislation is passed that would facilitate labor organization.
Significant union representation would require us to negotiate wages, salaries, benefits and other terms with many of our employees collectively and could
adversely affect our results of operations by significantly increasing our labor costs or otherwise restricting our ability to maximize the efficiency of our
operations.

We assume no obligation (and specifically disclaim any such obligation) to update these Risk Factors or any other forward-looking statements contained in
this Annual Report to reflect actual results, changes in assumptions or other factors affecting such forward-looking statements.

None.
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