* Slate includes Starboard's Smith, Robert Nardelli
* New board needed to improve performance, pick new CEO: Starboard
* Top investor wants Office Depot to act with urgency
* Office Depot, OfficeMax shares up
By Dhanya Skariachan
March 18 (Reuters) - Top Office Depot shareholder Starboard Value LP nominated six candidates for the retailer's board on Monday, saying it must be "significantly reconstituted now" whether or not the office supply chain merges with rival OfficeMax.
Starboard's slate includes Robert Nardelli, the former Home Depot and Chrysler chief, as well a number of other retail chief executives and directors.
The New York-based investment adviser said Office Depot should either engage with it immediately, or alternatively, schedule its annual shareholder meeting for a date prior to the potential closing of the OfficeMax deal.
"Some of Starboard's candidates would represent an upgrade from current board members," KeyBanc Capital Markets analyst Brad Thomas said, adding that Starboard's sense of urgency was justified.
The news highlights Starboard's disappointment with the lack of retail experience on the current Office Depot board and the tough task facing the merged company in appeasing the investor.
Office Depot said last month it planned to buy smaller rival OfficeMax in an all-stock deal worth $937.2 million as of Friday's market close. The two companies have not yet decided on the combined entity's name, headquarters or CEO.
Starboard nominees include its co-founder and CEO Jeffrey Smith as well as Nardelli; David Siegel, CEO of Frontier Airlines; James Fogarty, CEO of Orchard Brands; Cynthia Jamison, a director of Tractor Supply Co and Joseph Vassalluzzo, a board member of a number of public companies.
Shares of Office Depot were up 2.2 percent at $4.10 in afternoon trading, while OfficeMax gained 2.2 percent to $12.03.
Office supply retailers face heightened competition from Amazon.com Inc and Wal-Mart Stores Inc in selling items from pens and notebooks to furniture as they vie for customers, including government, businesses and consumers.
The office supply industry has seen six consecutive years of same-store sales declines and traditional players like Office Depot and OfficeMax are increasingly losing share to online retail powerhouse Amazon, KeyBanc's Thomas said.
"Office Depot cannot afford to wait to improve its operating performance," Starboard said in a letter on Monday. It is the company's largest shareholder, with a 14.8 percent stake.
Office Depot needs a new board to improve its operating performance on a stand-alone basis, oversee integration with OfficeMax if the deal is approved and select a chief executive officer for the combined entity, Starboard said.
Someone with Nardelli's experience "would add a tremendous amount of value in a merger of this scale" with a need to improve operations, Thomas said.
"No matter who is running it, they will need to round out the bench with supply chain and IT experts," the analyst said.