From: DR. SYDNEY KAY [mailto:dr.s.kay@sbcglobal.net] Sent: Monday, May 31, 2004 6:37 PM To: GlassmanC@sec.gov Subject: Shareholders nominate Directors Sydney K. Kay, Ph.D. 5718 Harvest Hill Dallas, TX 75230-1253 972 458-2545 e-mail: dr.s.kay@sbcglobal.net I’m a Home Depot shareholder and attended its Annual Meeting in Dallas on Thursday, May 27th at the Westin Galleria. On sign-in, I was given an Agenda and a Procedures for the Conduct of the Meeting, which was to begin at 10:00 and end at 11. The proponent of a stockholder proposal was limited to a reading of the proposal or a 3-MINUTE comment. A shareholder speaking pro or con was limited to 1 MINUTE! Giving our names and where we were from, gave us 50 SECONDS to address the Proposals! Both were totally unreasonable, especially in light of Mr. Nardelli’s opening remarks in which he “...was here to be accessible to shareholders”. At my first opportunity to speak, Item 1, Election of Directors, I prefaced my remarks by saying, “ I’m Dr. Sydney Kay, a retired educator. Get rid of timer, Mr. Nardelli. It’s insulting. It’s degrading. It’s the arrogant symbol of the absolute power of an Imperial Chairman/CEO. It doesn’t belong at Annual Meetings. We are not employees, we’re shareholders. Collectively, we own Home Depot and you are a salaried employee....or have you forgotten? In a sense, we are your bosses. Your Board of puppet, flunky, rubber-stamping Directors is as responsible for the timer as you are. They allow it. This is the only time when shareholders can speak of our concerns directly to you and your Board. Treat us with respect. We want to be heard. We expect to be heard. We deserve to be heard. You and your Board should want to listen to us. So, get rid of the timer, Mr. Nardelli. Listening to us is more important than adjourning by 11:00 so you can get your puppet Board of Directors to lunch on time.” Before I had finished, two burly men behind me, one wearing a Home Depot apron and the other a dark business suit, told me my ONE MINUTE was over and I needed to sit down. I believe I was the ONLY shareholder to speak to Item 1...and I still hadn’t....so I spoke to it, “I think that Mr. Nardelli, as a salaried employee, should not be elected to the Board. Employees on the Board corrupt what is supposed to be a totally independent executive governance Board.” I spoke, again, on Item 5: Restricted and Deferred Stoak Awards, and said, “I don’t think anyone in this room has ever heard of Sir Dalberg, but I’ll bet all of you know the one sentence he is known for, “Power tends to corrupt, and absolute power corrupts absolutely.” John Kenneth Galbraith, the renown economist, said “Senior executives in the great corporations of this country set their own salaries.......and stock options....with the approval of the Board of Directors they have appointed. Not surprisingly, the Directors go along.” Mr. Nardelli, Chairman, CEO and President of Home Depot, has virtually absolute power, and, with the Directors he has probably appointed and reappointed, he can give himself whatever he wants. I call such Directors “puppets.” Richard Cohen, of The Washington Post, calls them “flunkies”. Steve Hamm, of BusinessWeek, calls them “rubber stampers”. Arthur Levitt, former Chairman of the SEC calls them “absolute lambs”. With that power, over the past four years, Mr. Nardelli has given himself Restricted Stock Awards worth $58 million. That is OUTRAGEOUS. It is not based on any qualitative data. It is based SOLELY on GLUTTONY. On INSATIABLE GREED. Over the past four years he has given himself 5,815,000 stock option shares. Close to 6 MILLION stock option shares! At $30 a share, they are worth more than $174 million. Stock options, too, are based SOLELY on INSATIABLE GREED. Over the past four years his total compensation package comes to almost $270 million! Over a quarter of a BILLION DOLLARS. It’s OUTRAGEOUS! That’s “LEGAL FINANCIAL RAPE”. LEGAL FINANCIAL THIEVERY. And who pays for it? We shareholders do through dividends we will never get. What’s the solution? Restricted and Deferred stock awards must be abolished. They serve no purpose other than to make rich men much, much richer, at the expense of the shareholders who get robbed of their dividends. (I think I was talking into a dead microphone more than half the time.) After the formal business was concluded, about 11:30, shareholders were permitted to ask one question, “which must be asked within one minute” , and “statements are not allowed.” I said , “I think you are a “Legal Financial Thief”. I think that, over the past four years, with the approval of your puppet, flunky, rubber stamping Board of Directors, you’ve legally stolen $95 million in exorbitant, excessive salaries, bonuses, “other compensation” and Restricted Stock Awards. In the same 4 years, you gave yourself almost 6 MILLION stock option shares, which, at $30 a share are valued at almost 175 MILLION DOLLARS. Your TOTAL 4-year compensation was around $270 MILLION. 270 MILLION DOLLARS IN JUST THE PAST 4 YEARS! (At this time one of the two burly Home Depot men behind me said that I was not to make a statement; that I had to ask a question.) So I said,”The two men behind me said that I must ask a question, so my question is, “If $270 million in just the past 4 years isn’t GLUTTONY, what is it? If $270 million in just the past four years isn’t INSATIABLE GREED, what is it? If $270 million in just the past four years isn’t “Legal Financial Thievery”, what is it?” I didn’t get an answer. THE PROBLEM AND THE SOLUTION Almost all the major corporations of this country are run by Chairmen/CEOs with the power to appoint and reappoint their own slate of puppet, flunky, rubber stamping Directors year after year after year. Their appointees are their peers: current or retired Chairmen/CEOs/Presidents who have or had their own Boards of puppet, flunky, rubber stamping Directors. They feel NO fiduciary responsibility to the shareholders they supposedly represent. How can they, when the only shares they probably own are those given to them as part of their compensation as Directors? Take the Home Depot Board: 6 of the 10 Directors own 10,000 to 40,000 shares for a combined total of 144,000 shares. That’s not enough for a game of Monopoly let alone feel a fiduciary responsibility to hundreds of thousands of shareholders many of whom may own more shares than they do. Of the other four, two of them have been appointed and reappointed to the Board for 26 YEARS and own a combined total of about 6,645,000 shares as the sole Director or Chairman of their own private management, investment companies. Of the last two, Mr. Nardelli has been with Home Depot 4 years during which he has probably given himself around 3,500,000 shares, with the approval of his puppet, flunky, rubber stamping Board. Last, Mr. Langone undoubtedly acquired his 17,500,000 shares as a co-founder of Home Depot. On the other hand, if shareholders wish to nominate a Director, they must find a person holding or controlling at least 5% of the company’s outstanding shares....almost 113,000,000 shares! Doesn’t that seem a bit lopsided? A Chairman/CEO has the power to nominate a Director who may own a few hundred, or a few thousand, shares or none at all! A shareholder needs to find a person holding or controlling at least 113 MILLION shares! SOMETHING IS VERY WRONG HERE! ===== ,KLO-MK,O9-