UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant ☒                             Filed by a party other than the Registrant  ☐

Check the appropriate box:

OFFICE DEPOT, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

OFFICE DEPOT, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

* In light of on-going developments related to the coronavirus, or COVID-19, for the safety of all of our people, including our shareholders, and taking into account recent federal, state and local guidance that has been issued, we have determined that the 2020 Annual Meeting will be held in a virtual meeting format only, via a live webcast, with no physical in-person meeting. If you plan to participate in the virtual meeting, please see “General Information About the Annual Meeting” beginning on page 5. Shareholders will be able to attend, vote and submit questions during the Annual Meeting from any location via the Internet. A technical support phone number will be posted on the virtual meeting log-in page if you experience technical difficulties during the check-in process or during the webcast.

This Notice of Annual Meeting and Proxy Statement are first being distributed or made available, as the case may be, on or about March 26, 2020.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON MAY 11, 2020. Financial and other information concerning Office Depot is contained in our Annual Report. This Proxy Statement and our Annual Report are available free of charge at www.proxyvote.com, a site that does not have “cookies” that identify visitors to the site.

TABLE OF CONTENTS

Proxy Statement Summary

This summary highlights important information you will find in this Proxy Statement. This summary does not contain all of the information you should consider. We encourage you to read the entire Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 28, 2019 (“2019 Annual Report”) before voting.

Your vote is very important to us and our business. Please cast your vote immediately on all of the proposals to ensure your shares are represented.

Voting Matters and Board of Directors Recommendations

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Corporate Governance Highlights

Our Board of Directors is committed to strong corporate governance, which promotes the long-term interests of shareholders, provides for management accountability, and helps build public trust in the Company. The Corporate Governance section beginning on page 19 describes our governance framework in further detail, which includes the following highlights:

Information about the Board of Directors

The Board of Directors

The Board of Directors is currently comprised of ten (10) talented directors with diverse skill sets and professional backgrounds as reflected in their biographies beginning on page 12. On February 3, 2020, the Board of Directors, upon recommendation of the Corporate Governance and Nominating Committee, increased the size of the Board from eight to ten members and appointed, Quincy L. Allen and Shashank Samant, effective as of February 6, 2020, to fill the newly created vacancies for terms to expire at the Company’s Annual Meeting of Shareholders to be held on May 11, 2020 or any postponement or adjournment thereof (the “Annual Meeting”).

On February 14, 2020, Messrs. Marino and Travis notified the Company of their separate decisions not to stand for reelection to the Board of Directors at the Annual Meeting. Messrs. Marino and Travis will continue to serve as directors until the expiration of their terms at the Annual Meeting.

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The Board of Directors has the following standing committees and current committee composition:

C—Committee Chair

M—Member

*     Non-executive Chairman of the Board

(I)—Independent

Board Skills and Diversity

Our Board is comprised of directors who have a variety of skills and core competencies as noted in the chart below:

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Our Board is also diverse in gender, age, tenure and ethnicity, as reflected on the following illustrations:

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PROXY STATEMENT

FOR THE

2020 ANNUAL MEETING OF SHAREHOLDERS

OF

OFFICE DEPOT, INC.

6600 North Military Trail

Boca Raton, Florida 33496

General Information About the Annual Meeting

The Board of Directors (“Board of Directors” or “Board,” or individually, each a “Director”) of Office Depot, Inc. (“Office Depot” or the “Company” or “we” or “our”) is soliciting proxies to be voted at the 2020 Annual Meeting of Shareholders to be held on May 11, 2020 or any postponement or adjournment thereof (the “Annual Meeting”), at 9:00 a.m. Eastern Time. In light of the coronavirus, or COVID-19, our Annual Meeting will be held in a virtual meeting format only, via live webcast at www.virtualshareholdermeeting.com/ODP2020. We are making this Proxy Statement and other proxy materials available to each person who is registered as a holder of our shares in our official stock ownership records (such owners are referred to as “shareholders of record,” or “shareholder,” or “you,” or “your”) as of the close of business on March 17, 2020 (the “Record Date”) for the Annual Meeting beginning on March 26, 2020. Our shareholders of record are invited to attend the Annual Meeting via the live webcast and are requested to vote on the proposals described in this Proxy Statement.

Purpose of the Meeting. Important matters outlined in the Notice of Annual Meeting of Shareholders will be considered at our Annual Meeting. We have provided these proxy materials to you in connection with the solicitation of proxies by our Board of Directors. This Proxy Statement describes matters on which you, as a shareholder, are entitled to vote and provides you with information so that you can make an informed decision.

Voting Your Shares. You may vote your shares before the Annual Meeting via the Internet, by telephone, or by mail. You may vote your shares during the Annual Meeting by participating in the live webcast at www.virtualshareholdermeeting.com/ODP2020. If you vote by any of these methods, you do not need to mail in a proxy card. If you choose to use the Internet or telephone to vote, you must do so by 11:59 p.m. Eastern Daylight Time on May 10, 2020, the day before our Annual Meeting takes place.

INTERNET		TELEPHONE OR CELL PHONE		MAIL		VIA LIVE WEBCAST
Visit www.proxyvote.com. You will need the control number in your notice, proxy card or voting instruction form.		Dial toll-free (1-800-690-6903) or the telephone number on your voting instruction form. You will need the control number in your notice, proxy card or voting instruction form.		If you received a paper copy of your proxy materials, send your completed and signed proxy card or voting instruction form using the enclosed postage-paid envelope.		Participate in the Annual Meeting and vote your shares electronically by visiting www.virtualshareholdermeeting.com/ODP2020. Online access begins at 8:45 a.m. Eastern Time. You will need the control number in your notice, proxy card or voting instruction form.

Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares by completing and returning the proxy card or voting instruction form as promptly as possible, or by voting by telephone or via the Internet, prior to the Annual Meeting to ensure that your shares will be represented at the Annual Meeting if you are unable to attend. If your shares are held in “street name” with a broker or similar party, you have a right to direct that broker or similar party on how to vote the shares held in your account. You will need to contact your broker to determine whether you will be able to vote using one of these alternative methods.

Attending the Annual Meeting. This year’s Annual Meeting will be a completely virtual meeting of shareholders, which will be conducted via live webcast. You will be able to participate in the Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/ODP2020. You also will be able to vote your shares electronically at the Annual Meeting.

To participate in the Annual Meeting, you will need the 16-digit control number included on your notice, proxy card or voting instruction form. The webcast will begin promptly at 9:00 a.m. Eastern Time on May 11, 2020. Online access will begin at 8:45 a.m. Eastern Time, and we encourage you to access the webcast prior to the start time.

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Submitting questions at the Annual Meeting. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to submit questions during the meeting by visiting www.virtualshareholdermeeting.com/ODP2020. We will try to answer as many shareholder-submitted questions as time permits that comply with the meeting rules of conduct. However, we reserve the right to edit profanity or other inappropriate language, or to exclude questions that are not pertinent to meeting matters or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

Recording of the Annual Meeting. A recording of the Annual Meeting will be available online at http://investor.officedepot.com for approximately 12 months following the meeting date.

If you have technical difficulties or trouble accessing the live webcast of the Annual Meeting. We will have technicians ready to assist you with any technical difficulties you may have accessing the live webcast of the Annual Meeting. A technical support phone number will be posted on www.virtualshareholdermeeting.com/ODP2020 if you experience technical difficulties during the check-in process or during the webcast.

Board of Directors Vote Recommendations. If you are a shareholder of record who returns a signed proxy card that does not specify how you want to vote your shares on one or more proposals, the proxy holders will vote your shares for each proposal as to which you did not provide voting instructions and such shares will be voted in the following manner:

Shareholders Eligible to Vote at Our Annual Meeting. Shareholders as of the Record Date will be entitled to vote at our Annual Meeting. If your shares are registered directly in your name with our transfer agent, Computershare, you are a shareholder of record, and these proxy materials are being sent directly to you from the Company. As the shareholder of record, you have the right to grant your voting proxy directly to the Company or to vote electronically via the live webcast of the Annual Meeting. If your shares are held in “street name,” meaning your shares are held in a brokerage account or by a bank or other nominee, you are the beneficial owner of these shares and these proxy materials are being forwarded to you by your broker, bank or other nominee, who is considered the shareholder of record with respect to such shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote and you will receive instructions from your broker, bank or other nominee describing how to vote your shares. You may also vote your shares electronically via the live webcast of the Annual Meeting.

List of Shareholders Available. A list of shareholders entitled to vote at the meeting will be available ten days prior to the Annual Meeting between the hours of 9:00 a.m. and 5:00 p.m. Eastern Time at our corporate headquarters in Boca Raton, Florida. If, due to COVID-19, our corporate headquarters are closed during the ten days prior to the Annual Meeting, you may send a written request to the Corporate Secretary at our corporate headquarters, and we will arrange a way for you to inspect the list. The list of shareholders will also be available during the Annual Meeting at www.virtualshareholdermeeting.com/ODP2020. As of March 17, 2020, there were 529,088,226 shares of common stock outstanding and owned by shareholders (i.e., excluding shares held in treasury by Office Depot). Each share of common stock is entitled to one vote on each matter considered at our Annual Meeting.

Proxies. Our Board of Directors has appointed certain persons (“proxy holders”) to vote proxy shares in accordance with the instructions of our shareholders. If you authorize the proxy holders to vote your shares with respect to any matter to be acted upon, the shares will be voted in accordance with your instructions. If you are a shareholder of record and you authorize the proxy holders to vote your shares but do NOT specify how your shares should be voted on one or more matters, the proxy holders will vote your shares on those matters as our Board of Directors recommends. If any other matter properly comes before the Annual Meeting, the proxy holders will vote on that matter in their discretion.

If you are a beneficial owner of shares held in street name and do not provide your broker, bank or nominee instructions on how to vote your shares a “broker non-vote” occurs. Under the rules of The NASDAQ Stock Market (the “Nasdaq

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Rules”), the organization that holds your shares (i.e., your broker, bank or nominee) may generally vote on routine matters at its discretion but cannot vote on “non-routine” matters. If you are a beneficial owner of shares held in street name and the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares will inform the Inspector of Elections that it does not have the authority to vote on such matters with respect to your shares. Proposal No. 2 (ratification of appointment of the independent registered public accountant) is a matter that we believe will be designated as “routine.” A broker or nominee may generally vote on routine matters. Proposal No. 1 (election of Directors), Proposal No. 3 (advisory approval of the Company’s executive compensation), and Proposal No. 4 (authorization of amendment to the Certificate of Incorporation pursuant to the Certificate of Amendment to effect the Reverse Stock Split at the discretion of the Board of Directors) are matters that we believe will be considered “non-routine.” A broker or nominee cannot vote on non-routine matters without voting instructions. We strongly encourage you to provide voting instructions to your broker, bank or other nominee so that your vote will be counted on all matters.

Effect of Abstentions and Broker Non-Votes. Brokers who hold shares for the accounts of their clients may vote such shares either as directed by their clients or in their own discretion as discussed above under “Proxies.” When a broker votes a client’s shares on some but not all of the proposals at a meeting, the missing votes are also considered broker non-votes. Abstentions and broker non-votes will not be counted as votes cast “FOR” or “AGAINST” any matter. Broker non-votes will not be counted as shares entitled to vote.

Revocation of Proxies. You can change or revoke your proxy at any time prior to the voting at the Annual Meeting by the following methods:

Establishing a Quorum. In order for us to transact business at our Annual Meeting, the shareholders of record of a majority of the issued and outstanding voting securities must be present, either in person or represented by proxy. Virtual attendance at our Annual Meeting constitutes presence in person for purposes of quorum at the Annual Meeting. Shareholders choosing to abstain from voting and broker “non-votes” will be treated as present and entitled to vote for purposes of determining whether a quorum is present.

Counting the Vote. All votes will be tabulated by a representative from Broadridge Financial Solutions, Inc., the Inspector of Elections appointed by the Board of Directors to count the votes at the Annual Meeting, and each proposal will be counted separately.

Notice and Access. Pursuant to the rules of the U.S. Securities and Exchange Commission (the “SEC”), we are furnishing the proxy materials to our shareholders using the “Notice and Access” method via the Internet instead of mailing printed copies. This process allows us to expedite our shareholders’ receipt of proxy materials, lower the costs of printing and mailing the proxy materials and reduce the environmental impact of our Annual Meeting. Accordingly, on March 26, 2020, we began sending to our shareholders a Notice Regarding the Internet Availability of Proxy Materials (“Notice”). If you received a Notice, you will not receive a printed copy of the proxy materials unless you request one. The Notice provides instructions on how to access the proxy materials for the Annual Meeting via the Internet, how to request a printed set of proxy materials and how to vote your shares.

Solicitation of Proxies; Costs. In addition to soliciting proxies by mail, we may also solicit proxies in person, by telephone or over the Internet. We have engaged MacKenzie Partners, Inc. (“MacKenzie”) as the proxy solicitor for the Annual Meeting for an approximate fee of $10,000 plus fees for additional services, if needed. We have also agreed to reimburse MacKenzie for its reasonable out of pocket expenses. In addition, certain directors, officers or employees of the Company may solicit proxies by telephone, electronic communication or personal contact. Our directors, officers and employees do not receive additional compensation for their solicitation services. Certain banking institutions, brokerage firms, custodians, trustees, nominees and fiduciaries who hold shares for the benefit of another party (the “beneficial owner”)

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may also solicit proxies for us. If so, they will mail proxy information to, or otherwise communicate with, the beneficial owners of shares of our common stock held by them. We will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable expenses incurred in sending proxies and proxy materials to beneficial owners of our common stock in connection with this Annual Meeting.

Interests of Certain Persons in Matters to be Acted Upon. No Director or executive officer of the Company who has served at any time since the beginning of the 2019 fiscal year, and no nominee for election as a director of the Company, or any of their respective associates, has any substantial interest, direct or indirect, in any matter to be acted upon at the Annual Meeting other than (i) the interests held by such persons through their respective beneficial ownership of the shares of the Company’s capital stock set forth below in the section entitled “Security Ownership of Certain Beneficial Owners and Management,” and (ii) Proposal No. 1: Election of Directors.

Required Vote.

Election of Directors. In an uncontested election, each Director nominee must be elected by a majority of the votes cast. This means that the number of votes cast “FOR” a Director nominee must exceed the number of votes cast “AGAINST” such nominee. A properly executed proxy marked “ABSTAIN” with respect to the election of one or more Directors or shares held by a broker for which voting instructions have not been given will not be voted with respect to the Director or Directors indicated, although it will be counted for purposes of determining whether a quorum is present. In a contested election (an election in which the number of candidates exceeds the number of director positions to be filled), the number of Director nominees that equals the number of director positions to be filled receiving the greatest number of votes cast will be elected as Directors.

Ratification of Appointment of Independent Registered Public Accounting Firm. Pursuant to the Company’s Amended and Restated Bylaws (“Bylaws”), for the approval of the appointment of the Company’s independent public accountant, the vote required for approval shall be a majority of the votes cast on the matter. Accordingly, abstentions will NOT be counted as votes “AGAINST” the proposal.

Advisory Vote Approving the Company’s Executive Compensation. We will consider this proposal to be approved, on an advisory basis, if a majority of the shares present in person or represented by proxy (as counted for purposes of determining the existence of a quorum) and entitled to vote at the meeting cast votes “FOR” the proposal. Accordingly, abstentions will be counted as votes “AGAINST” the proposal. Broker non-votes will have no effect on the outcome of the proposal.

Authorization of Amendment to the Company’s Certificate of Incorporation pursuant to the Certificate of Amendment to Effect a Reverse Stock Split of Our Common Stock at the Discretion of the Board of Directors. In accordance with our Certificate of Incorporation and Delaware law, the approval of this proposal requires an affirmative vote of a majority of our shares of Common Stock issued and outstanding as of the Record Date. Accordingly, abstentions and broker non-votes will have the same effect as votes “AGAINST” the proposal.

Other Matters. Approval of any other proposal to be voted upon at the Annual Meeting requires a majority of the votes present in person or represented by proxy (as counted for purposes of determining the existence of a quorum) and entitled to vote at the Annual Meeting to be voted “FOR” the proposal. Accordingly, abstentions will be counted as votes “AGAINST” the proposal. Broker non-votes will have no effect on the outcome of the proposal.

Householding of Proxy Materials. The SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy materials and notices with respect to two or more shareholders sharing the same address by delivering a single proxy statement or a single notice addressed to those shareholders. This process, which is commonly referred to as “householding,” provides cost savings for companies and helps the environment by conserving natural resources. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of those documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can request prompt delivery of a copy of the proxy materials by writing to: Broadridge, Attention Householding Department, 51 Mercedes Way, Edgewood, NY 11717 or by calling (866) 540-7095.

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PROPOSAL No. 1: ELECTION OF DIRECTORS

The Role of the Board of Directors

The Board of Directors, elected annually by Office Depot’s shareholders, oversees the business and management of the Company. Members of the Board monitor and evaluate the Company’s business performance and advise on strategic direction through regular communication with the Chief Executive Officer (the “CEO”), other key members of management, and by participating in Board and Board committee meetings. Corporate review sessions are also provided to Directors to give them more detailed views of specific areas of our business, including targeted presentations, operational visits and facility tours. The Board is committed to sound and effective corporate governance policies and high ethical standards.

Under our Bylaws, the Board of Directors has the authority to determine its size and to fill any vacancies. On February 3, 2020, upon recommendation from the Corporate Governance and Nominating Committee, the Board increased its size from eight (8) to ten (10) members, and, in connection with its efforts to continually refresh itself, appointed Quincy L. Allen and Shashank Samant on that same date effective as of February 6, 2020. Messrs. Allen and Samant were initially recommended to the Board of Directors by a third party search firm retained by the Corporate Governance and Nominating Committee to assist it in identifying director candidates for consideration. There are no vacancies on the Board.

On February 14, 2020, Messrs. Marino and Travis notified the Company of their separate decisions not to stand for reelection to the Board of Directors at the Annual Meeting. Messrs. Marino and Travis will continue to serve as directors until the expiration of their terms at the Annual Meeting. Consequently, the Board will be reduced to eight (8) members on the date of the Annual Meeting.

Director Nomination Process

Pursuant to the Corporate Governance Guidelines, the Corporate Governance and Nominating Committee seeks to create a board of directors that represents diversity as to skills, experiences, age, race, gender and ethnicity. While the Board of Directors does not have a formal diversity policy, the Board is committed to a diversified membership. The Corporate Governance and Nominating Committee considers the Board’s overall composition when seeking a potential new candidate, including whether the Board has an appropriate combination of professional experience, skills, knowledge and variety of viewpoints and backgrounds in light of the Company’s current and future business needs. The Corporate Governance and Nominating Committee also considers, among others, the character, expertise, sound judgement, ability to make independent analytical inquires, business experiences, understanding of the Company’s business environment, ability to make time commitments to the Company, demonstrated teamwork, and the ability to bring unique and diverse perspectives and understandings to the Board.

The CEO and any independent Directors who serve as the chief executive officer of a publicly traded company may not serve on more than two public company boards in addition to our Board, and other independent Directors should not sit on more than four public company boards in addition to our Board. In identifying prospective Director candidates, the Corporate Governance and Nominating Committee may seek advice and recommendations from other Board members, management, shareholders or outside advisors. In addition, the Corporate Governance and Nominating Committee may, but need not, retain a search firm in order to assist it in identifying candidates to serve as Directors of the Company.

Candidates Recommended by Shareholders

The Corporate Governance and Nominating Committee will consider Director candidates recommended by shareholders using proxy access. Proxy access permits a shareholder, or group of up to 20 shareholders, owning at least 3% of the Company’s outstanding common stock continuously for at least three years as of both the date of nomination to nominate and include in the proxy statement director nominees and the record date for determining shareholders eligible to vote at the applicable annual meeting and through the date of the annual meeting, constituting up to the greater of two individuals and 20% of the number of directors then serving. The shareholder(s) and the nominee(s) must satisfy the requirements specified in our Bylaws, including that notice of a nomination be provided to the Corporate Secretary at the

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address below not less than 120 days nor more than 150 days prior to the first anniversary of the date on which the Company’s definitive proxy statement was released to shareholders in connection with the prior year’s annual meeting.

A non-proxy access director nomination must notify the Corporate Secretary in writing not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. Any nomination submitted to the Corporate Secretary should be in writing, satisfy the requirements contained in our Bylaws, and include any necessary supporting material in support of the nomination, but must include information that would be required under the rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected.

The address to submit a nomination is: Corporate Secretary, Office Depot, Inc., 6600 North Military Trail, Boca Raton, Florida 33496. All nominations received by the Corporate Secretary that satisfy our Bylaw requirements relating to director nominations will be presented to the Corporate Governance and Nominating Committee for consideration. Shareholders also must satisfy the notification, timeliness, consent and information requirements set forth above and in our Bylaws. These requirements also are described under the caption “2021 Shareholder Proposals.” The Corporate Governance and Nominating Committee’s evaluation of shareholder-proposed director candidates will be the same as for any other proposed candidates.

Director Qualifications

We believe that a director should possess the highest professional ethics, integrity and values, and be committed to representing the long-term interests of our shareholders. He or she should have an inquisitive and objective perspective, practical wisdom and mature judgment. We endeavor to have a board representing a range of experiences in business and in areas that are relevant to our business operations. We believe that directors with significant leadership experience, especially those serving in CEO positions, provide Office Depot with special insights.

As such, in identifying Director nominees, we seek individuals with:

Election Process

Each Director nominee must be elected by a majority of the votes cast in an uncontested election. This means that the number of votes cast “FOR” a Director nominee must exceed the number of votes cast “AGAINST” the Director nominee. If a nominee who currently serves as a Director is not re-elected, Delaware law provides that the Director would continue to serve on the Board as a “holdover director.” Under our Bylaws, if a nominee for Director who is an incumbent Director is not re-elected and no successor has been elected at such meeting, the Director is required to promptly tender his or her resignation to the Board of Directors. In that situation, the Corporate Governance and Nominating Committee would make a recommendation to the Board of Directors about whether to accept or reject the resignation, or whether to take other action. Within ninety (90) days from the date that the Director submitted his or her resignation, the Board of Directors would act on the Corporate Governance and Nominating Committee’s recommendation and publicly disclose its decision and the rationale behind it. If the Board of Directors determines that there is a compelling reason for such

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incumbent Director to remain on the Board and does not accept the resignation, the Director will continue to serve until the next annual meeting or until his or her successor is duly elected, or his or her earlier resignation or removal. If a Director’s resignation is accepted by the Board of Directors, then the Board, in its sole discretion, may fill any resulting vacancy.

2020 Nominees for Director

The Board of Directors has nominated the eight (8) individuals listed below for election as Directors to one-year terms of office that would expire at the 2021 Annual Meeting of Shareholders, or until their successors have been elected and qualified, or until their resignation or removal. At the Annual Meeting, proxies cannot be voted for a greater number of individuals than the eight nominees named in this Proxy Statement. Each of the nominees is an incumbent Director of Office Depot recommended for re-election by the Corporate Governance and Nominating Committee. Biographical information regarding each of the Director nominees is set forth below.

The Board of Directors has determined that seven (7) Director nominees satisfy the definition of independent director under the Nasdaq Rules. In making these nominations, the Board reviewed the backgrounds, qualifications, attributes, experiences and contributions to the Board of the Director nominees and determined to nominate each of the current Directors for re-election.

Pursuant to our Bylaws, should any of the Director nominees be unavailable or unable to serve at the time of the Annual Meeting, the Corporate Governance and Nominating Committee may propose a substitute nominee. If a substitute nominee is named, all proxies voting FOR the Director nominee who is unable to serve will be voted for the substitute nominee so named. If a substitute nominee is not named, all proxies will be voted for the election of the remaining Director nominees (or as directed on your proxy). Each person nominated for election has agreed to serve if elected and the Board has no reason to believe that any Director nominee would be unavailable or unable to serve.

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DIRECTOR COMPENSATION

The Compensation Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), reviews our non-management directors’ compensation program periodically to determine its competitiveness against the compensation of the boards of directors of our peer group (as defined in the CD&A). In May 2019, FW Cook presented its review to the Compensation Committee and after consideration the Compensation Committee did not recommend any changes to the compensation of our non-management Directors at that time.

Compensation for our non-management Directors consists of an annual retainer fee in the amount of $210,000 per year, of which $75,000 is payable in cash in equal installments on a quarterly basis during which the Director served. No deferrals of cash payments are permitted by the Directors. The remaining $135,000 of the annual retainer fee is granted as stock unless the Director elects to defer his/her stock in the form of Restricted Stock Units (“RSUs”) to be distributed in shares following termination of service on the Board, with such election made by the end of the prior tax year for existing Directors and prior to appointment to the Board for new Directors. The equity portion is typically granted in a lump sum as soon as administratively practicable following the release of election results from the annual shareholders’ meeting.

For fiscal year 2019, the following compensation for services as a chair or as a member of the Board committees was paid in cash on a pro-rated, quarterly basis to the incumbent Directors:

Director Stock Ownership Guidelines

Non-management Directors are required to own five times the directors’ cash portion of the annual retainer fee (equal to $375,000) in shares of our common stock. Directors must also retain 100% of net shares awarded until termination of their service on the Board.

The Compensation Committee reviews these ownership guidelines, on an annual basis, with the assistance from its independent compensation consultant, to ensure that such guidelines align with best market practices, including the practices of a majority of our peer group, and with management’s ownership guidelines. In addition, the Compensation Committee annually reviews each Director’s progress toward meeting the ownership guidelines.

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DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2019

(1)        Since February 2017, Mr. Vassalluzzo has served as the independent non-executive Chairman of the Board to lead the Board of Directors. Effective May 4, 2018, the Board of Directors, in conjunction with the recommendation of the Compensation Committee, increased the annual cash retainer for the non-executive Chairman to $200,000. The Directors, excluding Mr. Vassalluzzo, receive annual compensation of: (a) $75,000 in cash, prorated for time in position, and (b) fees paid in cash for both serving as the Chair of a Committee and as the member of a Committee prorated for time in position.

(2)        The dollar amounts in column (c) reflect the aggregate grant date fair value of equity awards granted within the fiscal year in accordance with the FASB Accounting Standards Codification Topic 718 for stock-based compensation. These amounts reflect the total grant date fair value for these awards, and do not correspond to the actual cash value that will be recognized by each of the Directors when received. See Notes 1 and 14 of the consolidated financial statements in our 2019 Annual Report regarding the underlying assumptions used in the valuation of equity awards.

(3)        The “Equity Compensation Paid to Directors for Fiscal Year 2019” table that follows represents the aggregate grant date fair value of stock or RSUs granted to our Directors under the Company’s 2017 Long-Term Incentive Plan (the “2017 Plan”). Annual awards are calculated by a dollar value that is then translated into stock or RSUs based on the closing stock price of our common stock on the date of grant.

(4)        As of December 28, 2019, the aggregate number of RSUs convertible into shares of our common stock, outstanding for our Directors are set forth as follows: Kristin Campbell 175,252, Francesca Ruiz de Luzuriaga 436,398, Cynthia Jamison 216,667, James Marino 219,920, David Szymanski 432,852, Nigel Travis 143,548, and Joseph Vassalluzzo 230,855. All RSUs are fully vested as of December 28, 2019, but distribution is deferred until either the Director’s separation date or six months following the Director’s separation date, as applicable. Please see the “Equity Compensation Paid to Directors for Fiscal Year 2019” table that follows for all equity awards granted in fiscal year 2019.

(5)        As of December 28, 2019, the aggregate number of option awards outstanding for our Directors are set forth as follows: Francesca de Luzuriaga 12,164. All options are fully vested. There were no options granted to Directors in fiscal year 2019.

(6)        On February 14, 2020, Messrs. Marino and Travis notified the Company of their separate decisions not to stand for reelection to the Board of Directors at the Annual Meeting. Messrs. Marino and Travis will continue to serve as directors until the expiration of their terms at the Annual Meeting.

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EQUITY COMPENSATION PAID TO DIRECTORS FOR FISCAL YEAR 2019

(1)        Amounts are determined using the closing stock price of our common stock on the grant date. See footnote 2 in the previous “Director Compensation Table for Fiscal Year 2019” for additional information.

(2)        On February 14, 2020, Messrs. Marino and Travis notified the Company of their separate decisions not to stand for reelection to the Board of Directors at the Annual Meeting. Messrs. Marino and Travis will continue to serve as directors until the expiration of their terms at the Annual Meeting.

Indemnification Agreements

The Company has entered into indemnification agreements with its Directors and certain of its officers. The indemnification agreements require the Company to indemnify these Directors and officers to the full extent permitted by Delaware law against any and all expenses (including advances of expenses), judgments, fines, penalties, and amounts paid in settlement incurred in connection with any claim against the indemnified person arising out of services as a director, officer, employee, trustee, agent, or fiduciary of the Company or for another entity at the request of the Company, and maintain directors and officers liability insurance coverage.

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CORPORATE GOVERNANCE

Board Leadership Structure

The Corporate Governance Guidelines specify that the Corporate Governance and Nominating Committee review the Board’s leadership structure periodically, considering the Company’s circumstances from time to time. After such review and evaluation, the Corporate Governance and Nominating Committee will make its recommendation to the full Board which will approve the leadership structure of the Board.

The Board of Directors annually elects one of its own members to serve as the Chairman of the Board of Directors. Our Bylaws provide that the Chairman of the Board may also serve as the CEO. The Board of Directors believes that there is a wide array of leadership structures that could apply to many different business models and, therefore, the Board should have the flexibility to consider the appropriate leadership structure for the Company, which leadership structure may change over time.

The Corporate Governance Guidelines provide that in the event that the offices of the CEO and the Chair of the Board of Directors are not separate, or the Chair of the Board has been determined by the non-management Directors to no longer satisfy the independence qualifications under the Nasdaq Rules, the non-management Directors shall select a Director to serve as the “Lead Director” of the Board. The Lead Director must be a non-management Director. If applicable, upon recommendation by the Corporate Governance and Nominating Committee, the Board of Directors annually elects the Lead Director.

The roles of Chairman and CEO have been separated since 2017, enabling the Chairman to focus on leading the Board of Directors in its responsibilities and helping the Board ensure that management is acting in the best interests of the Company and its shareholders, and the CEO to focus on the Company’s day-to-day business operations. In February 2020, the Board of Directors determined that the designation of Mr. Vassalluzzo as an independent, non-executive Chairman is the current optimal leadership structure for the Company because it provides the Board of Directors with independent leadership and meaningful coordination between management and the non-management Directors. This leadership structure has no impact on the Board of Directors’ oversight of risk.

Board and Committee Responsibilities

The Board of Directors has established three (3) standing committees — (i) Audit, (ii) Compensation and (iii) Corporate Governance and Nominating. The Board of Directors delegates various responsibilities and authority to its Board committees. The Board committees regularly report on their activities and actions to the full Board.

The Board of Directors held six (6) meetings during fiscal year 2019. The non-management Directors met insix (6) executive sessions during fiscal year 2019. In fiscal year 2019, each of the current Directors attended at least 75% of the total number of meetings of the Board and its standing committees on which each member served. Pursuant to the Corporate Governance Guidelines, each Director is expected to attend the Annual Meeting. All incumbent Directors who are up for re-election attended the 2019 Annual Meeting of Shareholders, as well as Messrs. Allen and Samant who were appointed to the Board of Directors on February 3, 2020, effective as of February 6, 2020.

Each of the Board committees operates under a written charter and annually reviews such charter in light of new developments in applicable regulations and may make additional recommendations to the Board to reflect evolving best practices. Each Board committee can engage outside experts, advisors and counsel to assist the Committee in its work. Each charter of the Board committees is posted to our website at http://investor.officedepot.com under the heading “Corporate Governance/Committee Charters.” We will also provide a printed copy of the Board committee charters to shareholders upon written request to our Corporate Secretary at Office Depot, Inc., 6600 North Military Trail, Boca Raton, Florida 33496.

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The following describes the responsibilities and current membership of the standing committees of the Board and the number of times each committee met in regular and executive sessions in fiscal year 2019.

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Delegation of Authority; Subcommittees

Beginning in December 2011 and from time to time, the Compensation Committee has delegated certain of its responsibilities to the Company’s internal compensation and benefits committee (the “CBC”) and employee benefits committee (the “EBC,” and together with CBC, the “subcommittees”). The subcommittees are comprised of certain senior executives of the Company. The Compensation Committee provides oversight for the establishment and termination, amendment, participating employers, administration, claims review and service provider functions of the qualified retirement, non-qualified deferred compensation and health and welfare benefit plans sponsored by the Company or its subsidiaries for eligible employees of the Company or its subsidiaries who work in North America, with the exception of all such plans sponsored separately by entities acquired by the Company or its subsidiaries other than such plans sponsored by CompuCom Systems, Inc. During fiscal year 2019, the Compensation Committee delegated authority to the CBC to make certain amendments to and carry out certain administrative responsibilities regarding the tax-qualified retirement plans, health and welfare benefit plans and nonqualified deferred compensation plans sponsored by the Company or its subsidiaries. Day-to-day administration and the authority to make certain other amendments to such plans were further delegated to the EBC.

Board Oversight of Risk

Risk is an inherent part of Office Depot’s business activities and risk management is critical to the Company’s innovation and success. The Board of Directors has an active role in overseeing the management of Office Depot’s risks, directly and through its committees, and is responsible for evaluating the Company’s major risks, for determining that appropriate risk management and control procedures are in place ensuring that senior executives take the appropriate steps to manage all major risks. The Board oversees a formal enterprise-wide approach to risk management, designed to support the achievement of organizational and strategic objectives, to improve long-term performance and enhance shareholder value. A fundamental part of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for Office Depot. The involvement of the Board of Directors in setting Office Depot’s business strategy is a key part of its assessment of management’s appetite for risk and determination of what constitutes an appropriate level of risk for Office Depot.

The Company conducts an annual enterprise risk management assessment, led by the Company’s senior internal audit executive, where risk is assessed periodically by a steering committee, comprised of members of management representing the Company’s business units and corporate staff. The steering committee identifies and evaluates company-wide risks in three categories: strategic risk, preventable risk, and external risk. The results of this company-wide risk portfolio is first presented to, and evaluated by, the Company’s’ executive officers, and then presented to the Board of Directors. In addition to this annual presentation made to the full Board, the Audit Committee receives periodic updates on certain risk areas the Board has identified for focus, and the independent Directors periodically discuss risk management during executive sessions without management present.

Oversight of certain specific risks is delegated to the following committees of the Board of Directors. The Audit Committee oversees risk relating to the Company’s major financial risk exposures, including cybersecurity, legal, regulatory and compliance, internal controls, financial statements and financial reporting and controls, and the steps taken by management to monitor and control such exposures. The Audit Committee also receives an annual risk assessment report from the Company’s internal audit team.

As part of overseeing risks arising from the Company’s compensation policies and programs for all employees, including annual executive compensation review and compensation of the non-management Directors, the Compensation Committee reviews management recommendations of executive compensation and retention risks and strives to create incentives that encourage a level of risk-taking behavior consistent with Office Depot’s business strategy. The Audit and Compensation Committees annually have a joint meeting to review the Company’s incentive compensation plans for a risk assessment conducted by the Company’s internal audit team and the Compensation Committee’s independent compensation consultant. See “Compensation Programs Risk Assessment” on page 49.

The Corporate Governance and Nominating Committee oversees risks related to the Company’s governance structure and potential risks arising from related person transactions.

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Risk Assessment of Compensation Programs

In February 2020, the Compensation Committee, in a joint meeting with the Audit Committee, assessed our 2019 compensation programs and practices and concluded that such programs and practices do not create risks that are reasonably likely to have a material adverse effect on us. The Compensation Committee’s independent compensation consultant also reviews and assesses the risk in our compensation programs.

We conducted a risk assessment that included a detailed qualitative and quantitative analysis of our compensation programs to which employees at all levels of the organization may participate, including the NEOs. The Compensation Committee also considers how the design of our compensation programs compares to compensation programs maintained by our peer companies. Based on our risk assessment, and the reviews done by the independent compensation consultant and the Compensation and Audit Committees jointly, the Compensation Committee believes that our 2019 compensation programs have been appropriately designed to attract and retain talent and properly incentivize employees to act in the best interests of Office Depot.

We have programs and features that are designed to ensure that our employees, including the NEOs, are not encouraged to take unnecessary risks in managing our business, including:

We periodically monitor our incentive programs throughout the year to ensure that such programs do not encourage undue risk taking and appropriately balance risk and reward consistent with our enterprise risk management efforts.

Director Independence and Independence Determinations

The Corporate Governance Guidelines require that a majority of the Board of Directors must be “independent” under the Nasdaq Rules, and all Directors who are members of the Company’s Audit, Compensation and Corporate Governance and Nominating Committees, must also be independent. To maintain its objective oversight of management, the Board of Directors consists, currently, of all independent Directors, with the exception of Mr. Smith, the current CEO of the Company.

The Board of Directors evaluates the independence of each Director nominee in accordance with the Corporate Governance Guidelines, which incorporate the Nasdaq Rules and the SEC rules. The Board considered transactions and relationships between the Company and its subsidiaries and affiliates on the one hand and, on the other hand, Directors, immediate family members of Directors, or entities of which a Director or an immediate family member is an executive officer, general partner or significant equity holder. The Board also considered whether there were any transactions or relationships between any of these persons or entities and any members of the Company’s senior management or their affiliates.

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Based on an annual evaluation performed, and recommendations made, by the Corporate Governance and Nominating Committee, the Board of Directors affirmatively determined that each of the following Directors who served in fiscal year 2019 were, or is a current Director nominee are, independent of the Company and its management under the standards set forth in the Corporate Governance Guidelines.

The only member of the Board of Directors who is not independent is Gerry P. Smith. Mr. Smith, as CEO of the Company, is the only employee member of the Board.

The Board of Directors also affirmatively determined that, none of its members has a material relationship with the Company that would impair independence from management, and that all members serving on the Audit, Compensation and Corporate Governance and Nominating Committees have been determined by the Board to be comprised of independent Directors. The Board of Directors’ evaluation included consideration that a relative by marriage of Ms. Campbell is a managing director of Deloitte Consulting LLP, which is a separate legal entity from the Company’s independent registered public accounting firm Deloitte & Touche LLP, and such relative does not personally perform any audit or other services for the Company while working at Deloitte Consulting LLP. In addition, none of the Directors serve as an executive officer of a charitable organization to which the Company made contributions during fiscal year 2019.

Related Person Transactions Policy

The Office Depot Related Person Transactions Policy sets forth the policies and procedures governing the review and approval or ratification by the Corporate Governance and Nominating Committee of transactions between Office Depot, on the one hand, and (i) an executive officer; (ii) Director; (iii) an immediate family member of an executive officer or Director; (iv) any security holder who is known by Office Depot to own of record or beneficially more than five percent of any class of Office Depot’s voting securities at the time of the transaction; or (v) an immediate family member of such five percent security holder, on the other hand. Persons in the categories described above are collectively referred to as “related persons.”

This Policy applies to all related person transactions, and under the Policy a “related person transaction” is any transaction:

No related person transaction shall be approved or ratified if such transaction is contrary to the best interests of the Company and its stakeholders. Unless different terms are specifically approved or ratified by the Corporate Governance and Nominating Committee, any approved or ratified transaction must be on terms that are no less favorable to Office Depot than would be obtained in a similar transaction with an unaffiliated third party under the same or similar circumstances. All related person transactions or series of similar transactions must be presented to the Corporate Governance and Nominating Committee for review and pre-approval or ratification. A copy of the Policy is available for review on our website at http://investor.officedepot.com under the headings “Corporate Governance/Governance Documents.”

On an annual basis, each Director and executive officer of the Company is required to complete a questionnaire which requires disclosure of any related person transaction. The Company’s Chief Legal Officer is responsible for determining whether any related person transaction is required to be disclosed in the Company’s applicable SEC filings and will ensure that such transaction or any series of similar transactions required to be disclosed will be presented to the Corporate Governance and Nominating Committee for pre-approval or ratification if required under the Policy. During fiscal year

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2019, all transactions that were potentially subject to the Policy were reviewed and approved or ratified by the Corporate Governance and Nominating Committee and, there were no related person transactions that were required to be disclosed pursuant to Item 404(a) of Regulation S-K or affected our Directors’ independence.

Executive Sessions

The non-management Directors of the Company meet in executive sessions without management on a regular basis. The non-executive Chairman of the Board presides at such executive sessions. In the absence of the non-executive Chairman of the Board, the non-management Directors will designate another Director to preside over such executive sessions.

Board and Committee Evaluations

The Board of Directors and its committees are evaluated annually to assess the effectiveness of the Board and each committee. The evaluations focus on the Board’s and each committee’s and their respective members’ performances and contributions to the Company as well as provide constructive feedback. The Corporate Governance and Nominating Committee is responsible for overseeing a formal evaluation process to assess the composition and performance of the Board and each committee on an annual basis. The assessment is conducted to identify opportunities for improvement and skill set needs, as well as to ensure that the Board, committees, and individual members have the appropriate blend of diverse experiences and backgrounds, and are effective and productive. As part of the process, each Director completes an evaluation form, or participates in an interview or other method the Corporate Governance and Nominating Committee utilizes to seek feedback. While results are aggregated and summarized for discussion purposes, individual responses are not attributed to any individual and are kept confidential to ensure honest and candid feedback is received. The Corporate Governance and Nominating Committee discusses opportunities and makes recommendations for improvement as appropriate to the full Board, which implements agreed upon improvements. A Director will not be nominated for reelection unless it is affirmatively determined that he or she is substantially contributing to the overall effectiveness of the Board.

Director Education

In accordance with the Corporate Governance Guidelines, the Corporate Governance and Nominating Committee will arrange an orientation program for newly elected Directors and, together with the CEO, determine the content of such orientation. It is important for Directors to stay abreast and informed on developments in corporate governance best practices in order to effectively discharge their duties. Our Directors are provided updates on corporate governance developments at regularly scheduled Board meetings, and Directors are encouraged to participate in programs that specialize in director education on a regular basis but at least one session every two (2) years. The Company pays for attendance fees to participate in such programs and reimburses the Directors for their reasonable costs associated with attending these programs.

Corporate Governance Guidelines

Strong corporate governance principles and practices are a long-standing priority at Office Depot. The Board of Directors has adopted Corporate Governance Guidelines, which set forth a framework within which the Board, assisted by its three standing committees, direct the affairs and business of Office Depot and engage in meaningful discussions with management to ensure long-term growth for the benefit of the shareholders and other stakeholders, be informed of the Company’s operating plans and strategic objectives, promote public trust in the Company, and strengthen management accountability. The Corporate Governance and Nominating Committee reviews the Corporate Governance Guidelines annually to reflect evolving corporate governance standards identified by shareholders and other stakeholders, and any changes are recommended to the Board of Directors for review and approval.

The Corporate Governance Guidelines addresses, among other things, the composition and functions of the Board of Directors, Director independence, stock ownership by and compensation of Directors, management succession and review, Board leadership, Board committees, Board membership criteria, and selection of new Director candidates.

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Code of Business Conduct (Code of Ethical Behavior)

The Board of Directors has adopted a Code of Ethical Behavior which is applicable to all Company employees, including the principal executive officer, the principal finance officer, the principal accounting officer, and the Board of Directors. If the Board amends or waives the Code of Ethical Behavior with respect to the executive officers of the Company, the Company will post the amendment or waiver on its website at http://investor.officedepot.com, under the headings “Corporate Governance/Governance Documents.”

The Company has established a confidential hotline to assist its employees in complying with their ethical and legal obligations and to report suspected violations of applicable laws or Company policies or procedures. The hotline enables employees, vendors and the public to express their concerns about possible violations of law or Company policies by the Company and/or management without fear of retribution or retaliation of any kind. It is Office Depot’s express policy that no retaliatory action be taken against any employee for using the hotline procedure. The hotline is operated by an independent third party, not by Company personnel. The hotline can be accessed by either calling the following toll-free number or visiting the following website:

1-866-634-6854

www.odhotline.com

The Corporate Governance Guidelines and the Code of Ethical Behavior are available on the Company’s website at http://investor.officedepot.com, under the heading “Corporate Governance/Governance Documents.” In addition, a printed copy of such documents will be provided to any shareholder upon written request to the Corporate Secretary at Office Depot, Inc., 6600 North Military Trail, Boca Raton, Florida 33496.

Shareholder Engagement and Investor Outreach

Management and the Board of Directors are committed to a proactive shareholder engagement program. We believe that strong corporate governance should include meaningful dialogue with our shareholders and key stakeholders to understand their perspectives on corporate governance, executive compensation, sustainability and other issues that are important to them. Engagement with shareholders builds mutual understanding and a basis for progress, and the feedback we receive from them impacts our corporate governance practices. Senior management from Legal and Investor Relations, and subject matter experts from the Company communicate with institutional investors throughout the year to gain their perspectives on current issues and address any questions or concerns. We also respond to individual shareholders and other stakeholders who provide feedback about our business. Our Vice President of Investor Relations and/or our Chief Financial Officer provide feedback from the investor and analyst meetings formally to the Board and its committees, where applicable, on a quarterly basis.

During fiscal year 2019, we sought feedback from our top 20 shareholders representing approximately 70% of the Company’s outstanding common stock to discuss risk management, governance practices, executive compensation, board composition, environmental and social issues, and other matters that the shareholders wished to discuss.

We will continue our shareholder engagement and investor outreach during fiscal year 2020, including our regular participation at analyst meetings and industry conferences and communication of the Company’s strategy to continue to roll out its B2B integrated distribution platform providing high value products and services. We remain committed to these ongoing discussions and welcome feedback from all shareholders, who may reach our Investor Relations team by calling (561) 438-4629 or visiting http://investor.officedepot.com or can contact our Directors or executive officers as described below.

Communicating with our Board of Directors

As stated in the Corporate Governance Guidelines, shareholders and other interested parties who wish to communicate with the Board of Directors may contact any member (or all members) of the Board of Directors, or the non-management Directors as a group, any committee of the Board or any chair of any such committee by mail. The Corporate Secretary reviews all communications sent to the Board related to the duties and responsibilities of the Board and its committees

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and provides these communications to the non-executive Chairman of the Board, the applicable committee chair or the full Board as necessary.

In addition, any person who desires to communicate a confidential specific matter to the Audit Committee may do so by addressing a letter to the Chair of the Audit Committee, c/o Corporate Secretary, at the corporate headquarters address below. Mark “Confidential” on the outside of the envelope. Any confidential communications submitted anonymously will not be opened for any purpose other than for appropriate security inspections. Such communications will be reviewed by the Chair of the Audit Committee with follow-up action as he or she deems appropriate.

Correspondence should be sent “c/o Corporate Secretary,” Office Depot, Inc., 6600 North Military Trail, Boca Raton, Florida 33496.

Environmental and Social Matters

The Company, including its major subsidiaries Grand & Toy Limited and CompuCom Systems, Inc., provide relevant business solutions aligned around the shared purpose of being exceptional corporate citizens. The Company is committed to building strong communities, fostering inclusion and diversity, and being good stewards of the environment and helping its customers do the same.

Company’s Sustainability Strategy

The Corporate Governance and Nominating Committee oversees the Company’s sustainability strategy. The Company believes that sustainability plays an essential role in the success of our Company, our industry and our communities, and is committed to operating in a socially responsible manner. The Company’s sustainability strategy focuses on conducting its business to ensure that it preserves the environment for future generations and provide a safe and healthy working environment for all its employees. The Company’s Sustainability Governance Council (the “Council”) consists of 27 Company-wide leaders representing 18 key departments across the organization. The key objective of the Council is to implement and support Office Depot’s sustainability vision and mission. In 2019, the Council developed public facing goals around energy reduction, reduction in emissions and increasing local community investment. These goals are included in our sustainability landing page on our website and were developed by incorporating Sustainable Development Goals (SDGs) and creating metrics around these material topics. The Council helps to prepare an annual sustainability report and in 2018 conducted an in-depth materiality assessment based on stakeholder interviews and surveys. Findings and recommendations provided from this assessment has set the course for 2020 and beyond. A copy of our current sustainability report and our landing page are available for review on our website at http://investor.officedepot.com under the heading “Corporate Sustainability.”

Diversity and Inclusion Initiatives

Creating a diverse and inclusive workplace culture is an important value that is incorporated into the Company’s daily work culture and long-term strategies. We actively monitor diversity on a company-wide basis, and provide our employees with access to resources like our Associate Resource Groups (ARGs), which include our Diversity Council, Somos (Latino/Hispanic associates and allies), Women of Color, Young Professionals, LGBTQA+, Veterans and Women in Technology. ARGs work to foster a welcoming and inclusive work environment, drive awareness, and facilitate engagement, development and support within affinity groups. The Company has been recognized in our local communities and on a national level for our inclusion efforts. Office Depot is committed to an inclusive work environment that values and respects the talents and contributions of every associate. The Company creates a diverse and inclusive workplace culture when it attracts and hires associates of all abilities and backgrounds. The Company’s commitment to equal opportunity is driven by Office Depot’s values, which include teamwork and respect. Diversity is intrinsic to the Company’s values and contributes to the Company’s success in the markets it serves. In addition to the Company’s values, Office Depot also lives by the following diversity values:

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To help achieve the Company’s inclusion and diversity goals, Office Depot engages a broad range of community stakeholders and reaches entire communities through its corporate citizenship efforts.

Office Depot also recognizes that disability inclusion is a fundamental value that is incorporated into the Company’s daily work culture and long-term strategies. In 2018, the LaunchAbility Academy Training program and Office Depot partnered with the Texas Department of Assistive and Rehabilitative Services to offer an eight-week program for disabled individuals to help them gain professional experience. Four local high school students successfully completed the program and officially became a part of the Office Depot Supply Chain team. In the spring of 2020, Office Depot will be celebrating the five year anniversary of the LaunchAbility program. In addition, Office Depot is an active participant and sponsor of Disability:In and has participated in Disability:In’s Disability Equality Index survey.

Office Depot continues to devote resources and efforts into these disability training and hiring initiatives and works closely with local communities to maximize the benefits of these programs. Furthermore, Office Depot is proud to have received a 100% score on the Human Rights Campaign (HRC) Foundation’s Corporate Quality Index for the eighth consecutive year. Office Depot has always been, and will continue to be, committed to maintaining — and continuously enhancing — robust policies and programs designed to ensure that disability inclusion is a fundamental value tightly interwoven into the Company’s everyday function and long-term goals.

CEO and Executive Management Succession Planning

The Corporate Governance and Nominating Committee oversees CEO succession planning, which is formally reviewed at least annually, in executive session with only non-management Directors present. During these executive sessions, the non-management Directors evaluates the requirements for the CEO position and regularly reviews potential permanent and interim candidates for the CEO role.

The Compensation Committee annually evaluates the succession planning process for the executive management team (other than the CEO), including the professional development of senior and midlevel management employees identified as potential successors to the executive management team to ensure that plans are in place for orderly succession of executive management, whether arising from natural career growth and development, voluntary turnover, retirements, or other reasons.

The Board of Directors also established steps to address emergency CEO succession planning in extraordinary circumstances. Our emergency CEO succession planning is intended to enable the Company to respond in the event of our CEO’s termination of employment with the Company for any reason (including death or disability) or other sudden departure, to ensure the stability and accountability of the Company during periods of transition and minimizing potential disruption or loss of continuity to the Company’s business and operations. The Board of Directors meets at least annually to review and discuss this emergency plan.

Anti-Hedging and Anti-Pledging Policies

The Company maintains anti-pledging and anti-hedging policies. See Compensation Discussion and Analysis under subheading “Important Corporate Governance Policies” for further information about these policies.

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AUDIT COMMITTEE REPORT

The Audit Committee assists the Board of Directors in its oversight of the Company’s financial reporting process. The Audit Committee operates pursuant to a written charter which is reviewed annually by the Audit Committee and approved by the Board of Directors. A brief description of the primary responsibilities of the Audit Committee is included in this Proxy Statement under the heading “Corporate Governance — Board and Committee Responsibilities.” Under the Audit Committee charter, management is responsible for the preparation, presentation and integrity of the Company’s financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America.

To perform its oversight function, the Audit Committee has:

Based on the foregoing reviews and discussions, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 28, 2019 filed with the SEC.

Submitted by the Audit Committee of the Board of Directors:

Cynthia T. Jamison (Chair)

V. James Marino

David M. Szymanski

Nigel Travis

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PROPOSAL No. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed Deloitte & Touche LLP (“D&T”) to serve as the Company’s independent registered public accounting firm to audit Office Depot’s consolidated financial statements and internal control over financial reporting for the fiscal year ending December 26, 2020. D&T has served as the Company’s independent auditors each year since 1990. Although ratification is not required by our Bylaws or otherwise, the Board of Directors is submitting the appointment of D&T to our shareholders for ratification because we value our shareholders’ views on the Company’s independent auditors. In the event the shareholders do not ratify the appointment of D&T as the independent auditors to audit our financial statements for fiscal year 2020, the Audit Committee, in its discretion, will consider the voting results and evaluate whether to select a different independent auditor. Representatives of D&T will attend the Annual Meeting and will be available to respond to appropriate questions. Although D&T has indicated that no statement will be made, an opportunity for a statement will be provided.

Audit and Non-Audit Fees

In connection with the audit of fiscal year 2019 consolidated financial statements and internal control over financial reporting, the Company entered into an agreement with D&T which sets forth the terms by which D&T will perform audit services for the Company.

The following table sets forth the aggregate fees for professional services rendered by D&T for the audit of the Company’s consolidated financial statements for fiscal years 2019 and 2018 and fees billed for other services rendered by D&T for those periods.

(1)        Audit Fees — These amounts represent fees of D&T for professional services rendered in connection with: (i) the audits of our annual consolidated financial statements and the effectiveness of our internal controls over financial reporting for the fiscal years ended December 28, 2019 and December 29, 2018; (ii) the review of the consolidated financial statements included in each of our Quarterly Reports on Form 10-Q during those fiscal years; (iii) consultations on accounting matters; (iv) statutory audit filings; and (v) SEC registration statements.

(2)        Audit Related Fees — Audit-Related Fees in 2018 consist of fees primarily for the evaluation of internal control procedures for new accounting standards, procedures related to the issuance of a compliance letter for the new term loan, and for the review of pro forma financial statements related to the Company’s acquisition of CompuCom Systems, Inc.

(3)        Tax Fees — Tax Fees consist of fees billed for professional services performed by D&T with respect to tax compliance and advisory services.

(4)        All Other Fees — All Other Fees consist of permitted services other than those that meet the criteria above and are primarily fees for advisory services.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has established policies and procedures under which all audit and non-audit services performed by the Company’s independent registered public accounting firm must be separately approved in advance by the Audit Committee. The policy also provides that the Audit Committee has delegated pre-approval authority to the Chair of the

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Audit Committee for non-audit services provided that the pre-approval of each service permitted by the Chair is limited to a pre-established threshold of up to $250,000 and reported to the full Audit Committee at its next meeting. All audit and non-audit services provided in fiscal years 2018 and 2019 were pre-approved by the Audit Committee in accordance with these policies and procedures.

THE AUDIT COMMITTEE AND THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2020.

EQUITY COMPENSATION PLAN INFORMATION

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COMPENSATION DISCUSSION AND ANALYSIS

This compensation discussion and analysis (the “CD&A”) describes our executive compensation programs and explains how the Compensation Committee made its compensation decisions for our named executive officers (also referred to in this CD&A as “NEOs”) for fiscal year 2019.

The NEOs for fiscal year 2019 are:

Mr. Lower, our former Executive Vice President and Chief Financial Officer, left the Company on January 10, 2020. A search is currently underway for a replacement.

Ms. DeVard, our former Executive Vice President and Chief Customer Officer, left the Company on March 16, 2020.

EXECUTIVE SUMMARY

Strategic Initiatives

Fiscal year 2019 marked the third year of the Company’s transformation to a more powerful B2B integrated distribution company that delivers business services and supplies, products and technology solutions through our fully integrated B2B platform.

Throughout the year, we have taken several actions to enhance our B2B platform and capabilities including expanding our distribution presence, implementing new technology and improving our operations.

Through our Business Acceleration Program implemented in May 2019, we streamlined our operating structure and improved business effectiveness across the entire enterprise, creating significant cost savings and allowing for additional investment in our B2B platform for future growth. Strong execution of this effort resulted in our surpassing stated efficiency goals of $40 million in cost savings in 2019 and we are well positioned for further cost savings in the coming year providing additional fuel for growth investments.

Under strong new leadership put in place during the year in our B2B businesses, which include our Business Solutions Division (BSD) and CompuCom Division, we have taken several actions to improve and prepare our platform to drive sustained sales growth and greater profitability. In our BSD division, these actions focus on enhancing our sales efficiency, eliminating unprofitable sales activities, repositioning our value proposition, using data analytics to drive sales, and expanding adjacency categories to diversify our offerings. As expected, some of these actions had a near-term negative impact to revenue growth during the year, but resulted in significant increase in profitability and improved our platform for sustained profitable growth in the future. Under CompuCom’s new leadership, the division refocused its strategy to capitalize on its competitive strengths, resulting in a significant recovery in performance throughout the year. In our Retail division, we took actions to optimize our store footprint, closing 53 unprofitable stores to improve profitability and reduce long-term lease obligations and improve capital returns. Together with stronger operating performance in our BSD and retail operations, we drove significant increases in our consolidated operating performance for the year.

We continue to enhance our foundation for future growth, expand our distribution presence and supply chain capabilities. The Company continues to pursue our strategy of selectively acquiring high-quality regional companies in geographies

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where we have little presence. These small acquisitions are a cost-effective means to grow our distribution network and business customer base. In 2019, we acquired 5 of these strategically located and diversified companies. We continue to invest in additional supply chain capabilities which increase efficiency and lower costs. We grew our private fleet of delivery vehicles and continue to implement new technology gaining additional visibility throughout our supply chain and deploying new robotic technology to automate many tasks.

We continue to improve our balance sheet, pay down debt and generate cash. We returned $95 million to shareholders in the form of share repurchases and dividends. Additionally, we have proposed a holding company reorganization plan that, if approved, we expect to implement in 2020, providing additional efficiency and flexibility.

2019 Financial Highlights

For the 2019 fiscal year, we made tremendous progress on our plans to transform our Company and extend our leadership position as a leading B2B provider of business products and services. For the year, we streamlined our operations and built a more efficient business model, improved our B2B platform for profitable growth, generated strong operating and cash flow results, and improved our balance sheet and returned capital to shareholders. Some of the specific highlights from 2019 were as follows:

These results provide tangible evidence that we are well on our way to enhancing our position as a leading integrated B2B distribution platform providing business services and supplies, products and technology solutions.

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  Key 2019 Compensation Actions

The primary elements of our total direct compensation program for the NEOs and a summary of the actions taken by the Compensation Committee during fiscal year 2019 are set forth below.

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What were the results of our advisory vote to approve executive compensation?

At our May 2019 annual shareholder meeting, our shareholders were given the opportunity to cast an advisory vote “for” or “against” the compensation of our NEOs in fiscal year 2018. On the advisory “say-on-pay” vote, our shareholders approved the compensation of our NEOs with approximately 87.2% of the votes cast voted “for” our executive compensation. The Compensation Committee considers this approval level as reflective of continued shareholder support of our pay-for-performance compensation philosophy and program.

Throughout fiscal year 2019, we continued our proactive shareholder engagement and investor outreach program, which includes meetings with the investment community, particularly our top 20 investors who collectively represent approximately 70% of our outstanding common stock, to obtain feedback on our progress and strategy as well as executive compensation design, board composition, risk management and other environmental, social, and corporate governance issues. Management also holds conference calls and participates in in-person meetings with investors following our quarterly earnings release as another way to seek feedback and respond to questions from investors about specific matters of importance such as executive compensation design.

Based on feedback received from our largest shareholders:

Compensation Philosophy

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What are the elements of our NEO compensation packages?

The various elements of compensation we pay to our NEOs intend to reflect our compensation philosophy and: (i) provide an appropriate level of financial certainty through fixed compensation, (ii) ensure that at least 60% of equity compensation is performance-based, and (iii) create a balance of short-term and long-term incentives.

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Important Corporate Governance Policies

Our 2019 executive compensation program was based on a compensation philosophy adopted by our Compensation Committee and reflected the advice of the Compensation Committee’s independent compensation consultant, FW Cook. The Compensation Committee considered the independence of FW Cook under applicable SEC and the Nasdaq Rules, and concluded there was no conflict of interest. The Compensation Committee is guided by the following key principles in determining the compensation structure for our executives:

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How does our compensation program support pay-for-performance?

The Compensation Committee annually reviews the total mix of compensation for our NEOs, which includes a significant portion of variable performance-based incentives that are linked to the attainment of critical performance targets and changes in shareholder value. The Compensation Committee believes that each of these elements provides a meaningful reward opportunity to the NEOs, focuses our leadership team on the key drivers of success for the near- and long-term, and therefore supports our short-term and long-term strategic objectives and links realized pay directly to performance.

With respect to our CEO’s compensation, 89% of Mr. Smith’s target compensation was “at risk” in 2019 based on operating performance, relative TSR, and/or changes in stock price while target compensation for our other NEOs in 2019 was 72% “at risk.” The illustration below excludes sign-on bonuses and any one-time equity grants.

What was the total direct compensation for our NEOs during fiscal year 2019?

Base Salaries

The Compensation Committee (members listed on page 21) performed its annual review of executive compensation considering external market data, as well as scope of role, individual performance, and internal equity and approved the following salaries:

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Messrs. Lower and Bleisch’s salary increase were due to the increased scope, scale, and complexity of their respective roles. As Executive Vice President and Chief Financial Officer of the Company, Mr. Lower was responsible for overseeing all financial aspects of the Company, including financial planning and analysis, accounting and financial reporting, as well as managing the tax, internal audit, treasury and investor relations functions. As Executive Vice President, Chief Legal & Administrative Officer, and Corporate Secretary, Mr. Bleisch leads the strategic direction of the legal organization and operations, as well as manages the regulatory and compliance matters for the Company. Additionally, he is responsible for Human Resources, Loss Prevention, Real Estate, Construction, and Aviation.

2019 Annual Bonus Plan

The Compensation Committee reviewed our 2019 Annual Operating Plan approved by our Board and the key performance measures for our business and in conjunction with shareholder feedback decided to modify one of the bonus metrics from 2018 when designing our 2019 bonus plan. In 2018 the Corporate Incentive Plan (the “Annual Bonus Plan”) focused on AOI and Net Sales. For 2019 we placed a greater emphasis on Adjusted EBITDA as it is a cash-profit focused metric and aligns well with the metrics used to internally run the business. Since Adjusted EBITDA is a better measurement of the relation of profit to cash, for 2019, the AOI metric was replaced with Adjusted EBITDA in the Annual Bonus Plan. The Compensation Committee believes that the metrics selected for 2019 are critical to the continued stability of the organization. Additionally, the 2019 bonus performance metrics were designed to allow for payouts to be determined within the range of threshold and maximum, with maximum targets reflecting stretch goals that aligned with our 2019 Annual Operating Plan. The Annual Bonus Plan payout was capped at 200% of target (increased from the 150% cap in 2018) as the Compensation Committee believed this cap was market competitive for short-term incentives and was reasonable given the stretch nature of the maximum targets. Actual payouts were to be based on the level of achievement of the performance metrics subject to the Compensation Committee’s ability to exercise “negative discretion” to decrease payouts if necessary or desirable to give effect to the intent of the plan, reflect quality of results and/or the best interests of the Company. Further details on each of these components of the Annual Bonus Plan are described below.

When designing the Annual Bonus Plan and when considering whether we have reached the target performance metric for a payout under the Annual Bonus Plan, the Compensation Committee determined the categories of significant, unplanned and unusual items that would be excluded from Adjusted EBITDA and Net Sales, whether the resulting impact was positive or negative, because they distort our operating performance. This practice ensures that our executives will not be unduly influenced in their day-to-day decision-making because they would neither benefit, nor be penalized, as a result of certain unexpected and uncontrollable events or strategic initiatives that may positively or negatively affect the performance metric in the short-term. For 2019, the categories of excludable items included: merger-related expenses; impacts of unplanned acquisitions and divestitures; impacts of change in classification from discontinued operations to continuing operations (and vice versa); restructuring charges; impairment charges related to goodwill, other intangible assets, and long-lived assets (non-cash); unplanned legal expenses related to attorney fees, judgements and settlements; and unplanned costs and benefits related to real estate strategy, including, but not limited to lease terminations or facility closure obligations; and other unplanned and unusual adjustments approved by the Compensation Committee.

Our Net Sales goal for fiscal year 2019 was set at a target of $11.127 billion, an increase of $112 million (or 1%) over our 2018 reported total Company net sales of $11.015 billion. The increase was primarily driven by expected growth in the BSD division more than offsetting a forecasted decrease in sales within the Retail division associated with secular trends and a fewer number of retail stores.

The total Company Adjusted EBITDA target goal for fiscal year 2019 was set at $574 million, reflecting a consistent ratio of Adjusted EBITDA as a percentage of sales year-over-year and a 4% increase over prior year Adjusted EBITDA. This was expected to be achieved by margin improvements in the BSD and CompuCom divisions offsetting anticipated margin declines in the Retail division.

The maximum total Company Adjusted EBITDA goal of $631 million and total Company Net Sales goal of $12.240 billion were intended to be stretch goals and considered to be very challenging to achieve.

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The following table summarizes the thresholds, targets, and maximum parameters and actual 2019 performance for each of the applicable metrics selected under the Annual Bonus Plan:

For purposes of determining the level of achievement for each of the bonus metrics under the Annual Bonus Plan, the Compensation Committee reviewed the applicable financial metrics, as derived from our 2019 audited financial statements approved by the Audit Committee. For fiscal year 2019, the Compensation Committee certified achievement of the Adjusted EBITDA and Net Sales performance results as reflected in the table above.

In reviewing the Adjusted EBITDA and Net Sales performance results for purposes of determining final payouts for 2019, the Compensation Committee authorized bonuses to our NEOs under the 2019 Annual Bonus Plan to be paid at 87% of target.

The threshold, target and maximum payout for each NEO are disclosed in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” column of the Grants of Plan-Based Awards table below. The actual dollar amounts earned by our NEOs in fiscal year 2019, pursuant to the Annual Bonus Plan, are disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below.

2019 Long-Term Incentive Program

Our 2019 Long-Term Incentive Program (“2019 LTIP”) is similar to our 2018 LTIP and provides that 60% of the long-term incentive awards to our NEOs are performance-based. The performance is measured on absolute FCF and TSR relative to our executive compensation peer group over a 3-year performance period through the end of fiscal 2021. FCF is calculated by subtracting capital expenditures from net cash provided by (used in) operating activities. FCF is integral to our investment in the ongoing transformation of the business and our commitment to continue to strengthen our core business. FCF generation also provides financial flexibility for future debt repayments and capital returns to shareholders. Relative TSR remained as the other key metric under the 2019 LTIP to align earned compensation with shareholder experience.

The purpose of our long-term incentive program is to further align the long-term interests of management with those of our shareholders and help retain our key talent. These objectives must be balanced such that successful, high-achieving employees remain motivated and committed even in periods of temporary market downturns or volatility in our performance as well as the periods where we have strategic transactions that create uncertainty. In support of these objectives, the 2019 LTIP award includes both time and performance-based components to promote long-term retention and achievement of key operating objectives, as set forth below:

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The annual equity grants for 2019 were approved by the Compensation Committee in March 2019 after our earnings were released for the 2018 fiscal year end. The Committee granted equity under the shareholder approved 2017 Long-Term Equity Incentive Plan in accordance with its practice of making grants at least 5 days, but not more than 30 days, following the release of fiscal year end earnings. New hire grants made to officers during the year are granted on the later of the first business day of employment or on the business day following the grant approval by the Compensation Committee. The Committee approved the following awards to be granted to the NEOs under the 2019 LTIP:

The 2019 LTIP performance metrics are designed to allow for payouts to be determined within the range of threshold and maximum. The 2019 LTIP payout is capped at 200% of target payout for both the TSR and FCF metrics as the Compensation Committee believes these caps are market competitive for long-term incentives. No more than 100% of the target PSUs may be earned, however, if our absolute TSR over the performance period is negative. Actual payout on the FCF metric is also subject to the Compensation Committee’s ability to exercise negative discretion to decrease such payout if such incentive is not, in the Compensation Committee’s opinion, appropriately earned or should not be paid.

When considering the attainment level reached for payout of the FCF awards under the 2019 LTIP, the Compensation Committee, when designing the 2019 LTIP, determined the categories of significant, unplanned and unusual items that would be excluded from FCF, whether the resulting impact was positive or negative, because they distort our operating performance. This practice ensures that our executives will not be unduly influenced in their day-to-day decision-making because they would neither benefit, nor be penalized, as a result of certain unexpected and uncontrollable events or strategic initiatives that may positively or negatively affect the performance metric in the long-term. For fiscal year 2019, the categories of excludable items are the same categories used for adjusting EBITDA under the 2019 Annual Bonus Plan, as described above.

The Compensation Committee set the following thresholds, targets, and maximum parameters for each of the applicable metrics selected under the 2019 LTIP:

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2018 LTIP

The 2018 LTIP awards include awards based on the total FCF for the three cumulative fiscal years beginning on December 31, 2017 and ending on December 26, 2020, and awards based on TSR for the Company relative to the peer group for the performance period beginning on March 5, 2018 and ending on March 5, 2021. These performance periods are not yet complete, so no results are available with respect to these 2018 LTIP awards. Further information on the 2018 LTIP design and awards is included in our Proxy Statement filed with the SEC on March 20, 2019.

2017 LTIP Results

The following tables show the results for the three-year performance period which was completed on December 28, 2019 for the performance shares issued for fiscal year 2017 under the 2017 LTIP. The performance measures, each 50% weighted, were AOI and TSR. The Compensation Committee determined that the threshold achievement of $418 million was not met resulting in 0% achievement for 2018 AOI under the 2017 LTIP. The Compensation Committee set the 2019 AOI target at $358 million based on the pre-established goal of 3% above 2018 actual results.

For the 2017 LTIP awards tied to TSR, the Compensation Committee received external certification from AON for TSR results compared to the predetermined peer group which showed a TSR of -44.15% resulting in a ranking at the 35th percentile. In February 2020, the Compensation Committee certified the relative payout at 63.24% as reflected in the table that follows. Further information on the 2017 LTIP design is included in our Proxy Statement filed with the SEC on March 19, 2018.

Retention Payment to Mr. Lower

On November 19, 2019, Joseph T. Lower, Executive Vice President, Chief Financial Officer (“CFO”) of Office Depot informed Office Depot that he would be leaving Office Depot to assume the role of chief financial officer at another company. On November 21, 2019, Mr. Lower and Office Depot entered into a Retention Agreement in order to retain Mr. Lower to assist with the close out of Office Depot’s 2019 fiscal year. Under the terms of the Retention Agreement, Mr. Lower was eligible to earn a retention payment of $292,716, which represented 50% of his 2019 Annual Bonus Plan target payout (the “Retention Payment”), if he remained employed with Office Depot until January 10, 2020 (the “Retention Period”). Mr. Lower left the Company on January 10, 2020 and received the Retention Payment in a single lump sum payment on January 27, 2020. If, prior to the end of the Retention Period, Mr. Lower’s employment had terminated due to his own fault or voluntarily by Mr. Lower, the Retention Payment would have been forfeited. The Retention Payment was conditioned upon Mr. Lower’s execution of a customary release agreement. No severance or termination benefits were provided upon Mr. Lower’s separation.

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Executive Compensation Process and Governance

What is the role of the independent compensation consultant?

Since 2013, the Compensation Committee has engaged FW Cook, a compensation consulting firm, as its independent advisor with respect to executive compensation. At the request of the Compensation Committee, FW Cook periodically works with management to develop an understanding of Office Depot’s pay policies and practices and to facilitate the development of Office Depot’s executive compensation strategies and determination of appropriate compensation levels. In fiscal year 2019, FW Cook provided the following services to the Compensation Committee:

The Compensation Committee believes that even the best advice of a compensation consultant or other outside advisors must be combined with the input from management and the Compensation Committee’s own individual experiences and judgment to arrive at the proper alignment of compensation philosophy, programs, and practices. The CEO, CFO, Executive Vice President, Chief Legal & Administrative Officer, and Corporate Secretary work with the Compensation Committee to provide perspectives on reward strategies and how to align those strategies with Office Depot’s business and management retention goals. They provided feedback and insights into the effectiveness of Office Depot’s compensation programs and practices. The Compensation Committee looked to the legal and human resources departments for advice in the design and implementation of compensation plans, programs, and practices. In addition, the CEO, the Executive Vice President, Chief Legal & Administrative Officer, and Corporate Secretary, and certain other members of the human resources and legal departments often attended portions of Compensation Committee meetings to participate in the presentation of materials and to discuss management’s point of view regarding compensation issues.

What was the process used to determine executive compensation in fiscal year 2019?

The Compensation Committee generally kept executive compensation in fiscal year 2019 consistent with executive compensation in fiscal year 2018 with a few adjustments described above. The Compensation Committee continued to engage FW Cook as its independent compensation consultant to assist the Compensation Committee with its annual review of executive compensation matters.

Members of management, including the CEO, provided input to the Compensation Committee regarding executive compensation for the NEOs generally (but did not provide input regarding their own individual compensation). Management provided input for the Compensation Committee’s consideration regarding the performance metrics for our 2019 Annual Bonus Plan and 2019 LTIP.

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How is peer group data used by the Compensation Committee?

The Compensation Committee believes benchmarking is a useful method to gauge both the compensation level and compensation mix for executives within competitive job markets that are relevant to the Company. The Compensation Committee generally reviews data gathered from the proxy statements of our peer group (as defined below) as well as industry surveys for benchmarking purposes in its review and analysis of base salaries, bonuses, long-term incentives, and benefits/perquisites to establish our executive compensation program.

The peer group was developed based on the following criteria:

Companies selected for the peer group were required to have a significant number of the characteristics described above, but not necessarily all of them. Judgment was used to ensure that the median revenue of the group remained reasonable and to create a balanced mix of retailers, distributors, and service companies.

Peer group data is generally reviewed annually to determine if modifications to the peer group or the criteria used to determine the peer group are necessary. At its meeting on July 25, 2019, the Compensation Committee reviewed FW Cook’s recommendation to make certain changes to the peer group. Following discussion regarding the balance of representative companies in the peer group, it was agreed that FW Cook would conduct additional analysis and update the Committee following this analysis. FW Cook completed its additional analysis and, on August 1, 2019, presented its recommendation to remove two retailers (Barnes & Noble, Inc and Casey’s General Stores, Inc and one B2B distributor (Essendant, Inc.) from the peer group and to add one B2B distributor (WESCO International, Inc.) and one B2B service company (Conduent Inc.) to the peer group. The Compensation Committee approved the revised peer group and recommended the peer group to the Board, which also approved it. The revised peer group is comprised of 19 companies with representation from eight retailers, nine B2B distributors and two B2B services company. As of December 31, 2019, the Company ranked at the 42^nd percentile in terms of revenue, the 12^th percentile by operating margin, and the 16^th percentile by market capitalization.

The companies listed below represent the revised peer group:

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Performance awards that use relative TSR as a performance criterion will continue to use the peer group that was approved at the time of the grant of the awards, with adjustments to the peer group only as specified in the applicable award agreement.

In addition to the benchmarking results, the Compensation Committee generally considers the following in making executive compensation decisions:

When making compensation decisions, the Compensation Committee not only considers each element of compensation individually (i.e. base salary, short-term incentives, and long-term incentives), but also considers the target total direct compensation and mix of compensation paid to the NEOs. The Compensation Committee also considers strategic business decisions when developing and approving the compensation program.

Does the Compensation Committee take tax and accounting consequences into account when designing executive compensation?

Code Section 162(m) generally does not allow a tax deduction to public companies for compensation in excess of $1 million paid to the CEO or other NEOs (and certain former NEOs). Prior to 2018, certain compensation was specifically exempt from the deduction limit to the extent that it was “performance-based” as previously defined in Code Section 162(m), and the Compensation Committee historically strove to structure awards to fit within the performance-based compensation exemption. With the recent changes to Code Section 162(m) and the elimination of the performance-based compensation exemption, more NEO compensation is likely to exceed the Code Section 162(m) limit. The Compensation Committee believes that tax deductibility is but one factor to consider in developing an appropriate compensation package for executives. As such, the Compensation Committee reserves and will exercise its discretion in this area to design a compensation program that serves the long-term interests of the Company, but which may not qualify for tax deductibility under Code Section 162(m).

In addition to Code Section 162(m), the Compensation Committee considers other tax and accounting provisions in developing the pay programs for the NEOs, including:

While the Compensation Committee generally tries to compensate the NEOs in a manner that produces favorable tax and accounting treatment, the main objective is to develop fair and equitable compensation arrangements that appropriately incentivize, reward, and retain the NEOs and aligns our performance goals with shareholder returns.

Share usage requirements and resulting potential shareholder dilution from equity compensation awards is also considered by the Compensation Committee in determining the size of long-term incentive grants.

Why do we have employment letter agreements with our NEOs and an Executive Change in Control Severance Plan?

The Compensation Committee believes that employment letter agreements and change in control arrangements are necessary to attract and retain qualified executives. Our letter agreements with our NEOs generally set forth the terms of the officer’s employment with Office Depot and also promise severance benefits if the officer is involuntarily terminated

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without cause or, in some cases, if the officer voluntarily terminates the officer’s employment for good reason, and such termination is not in connection with a change in control (“CIC”). The retention of key management is essential to and in our and our shareholders’ best interests. The Compensation Committee believes reasonable severance benefits help ensure the continued dedication and efforts of management without undue concern for or distraction by their personal, financial and employment security.

Similarly, the Compensation Committee believes that CIC agreements effectively motivate executives to remain engaged and strive to create shareholder value in the event Office Depot becomes an acquisition target or is targeting another company for acquisition, despite the risk of job loss or the loss of equity vesting opportunity. In addition, these severance and CIC arrangements are necessary to attract and retain qualified executives who may have other job alternatives that may appear to them to be less risky absent these arrangements, and these arrangements are particularly important to Office Depot given the high levels of competition for executive talent in the retail sector.

We have an Executive Change in Control Severance Plan (the “CIC Plan”) pursuant to which we will provide certain severance pay and other benefits to key executives, including the NEOs, who are viewed by us as critical to the continued leadership of the Company in the event of a CIC. The use of a planned approach provides many benefits when compared to entering into individual change in control agreements with each NEO. In most instances, this method ensures consistent terms and provisions and allows us flexibility to amend or change our practices in response to market trends and best practices. The CIC Plan includes features considered to be best practices, including a double trigger for CIC benefits.

Our letter agreements and the CIC Plan generally require the NEO to sign a release of claims and to abide by certain confidentiality, non-solicitation, non-compete and related restrictive covenants as a condition of receiving severance payments.

For a detailed description of our CIC Plan and our letter agreements with our NEOs, please see the section entitled “Summary of Executive Agreements and Potential Payments upon Termination or Change in Control” beginning on page 55.

What types of perquisites are NEOs eligible to receive?

We provide the NEOs with a set of core benefits that are generally available to our other full-time employees (e.g., coverage for medical, dental, vision care, prescription drugs, annual physical, and basic life insurance and long-term disability coverage), plus voluntary benefits that a NEO may select (e.g., supplemental life insurance).

In addition, we have a matching contribution to the 401(k) Plan for all participants, including the NEOs, which is equal to 50% of employee deferrals on the first 6% of eligible earnings (up to plan limits). The Compensation Committee believes it is important to offer a benefit of this nature to further motivate and retain employees.

Consistent with the peer group and the current trend in executive compensation, we limit the perquisites provided to our NEOs. Car allowances, financial planning services, and executive physicals are available to our NEOs. Other perquisites are offered when needed for the attraction and retention of executive talent and to allow NEOs to efficiently handle the responsibilities of their position. Our current Company Aircraft Use Policy states that personal use of the Company-leased aircraft shall be prohibited except in extenuating circumstances, and in such circumstances shall be permitted only upon prior written approval by the chair of the Compensation Committee or the Independent Chair of the Board.

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Are the NEOs subject to any minimum requirements regarding ownership of our stock?

The Compensation Committee believes that the NEOs should maintain a meaningful equity interest in the Company through the ownership of stock. As such, the following stock ownership guidelines are in place for our NEOs still employed by the Company:

Our stock ownership guidelines are reviewed annually and are robust and continue to reflect current corporate governance trends. We require that all NEOs satisfy the ownership requirement by holding Company stock equal to a multiple of base salary rather than as a fixed number of shares. This requires NEOs to hold more shares in the event that our stock price decreases. Our CEO and NEOs are only permitted to sell stock before meeting the ownership requirements if they retain 50% of the net shares (after shares are disposed of to pay for taxes and acquisition), which is in line with peer group practice. The type of equity considered for purposes of determining compliance with the stock ownership guidelines is equity that is earned or vested, which is defined as the following:

The current guidelines are considered competitive according to the market data provided by FW Cook. The Compensation Committee annually reviews each NEO’s progress toward meeting the ownership guidelines.

FORWARD LOOKING STATEMENTS

This Proxy Statement and other Company communications may contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”), that involve risks and uncertainties. These forward-looking statements include both historical information and other information that can be used to infer future performance. While certain information has specifically been identified as being forward-looking in the context of its presentation, we caution you that, with the exception of information that is historical, all the information contained in this Proxy Statement should be considered to be “forward-looking statements” as referred to in the Reform Act. Without limiting the generality of the preceding sentence, any time we use the words “estimate,” “project,” “intend,” “expect,” “believe,” “anticipate,” “continue” and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature.

Significant factors that could impact our future results are described in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission. Office Depot does not assume any obligation to update or revise any forward-looking statements. We assume no obligation (and specifically disclaim any such obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Ms. Campbell, Mr. Marino, Ms. Ruiz de Luzuriaga and Mr. Travis served as members of the Compensation Committee in fiscal year 2019. None of such committee members (i) was, during fiscal year 2019, an officer or employee of the Company or any of its subsidiaries, (ii) was formerly an officer of the Company or any of its subsidiaries; or (iii) had any relationship requiring disclosure by the Company pursuant to any paragraph of Item 404 of Regulation S-K promulgated by the SEC. No executive officer of the Company served as an executive officer, director or member of a compensation committee of any other entity of which an executive officer or director of such entity is a member of the Compensation Committee of the Company or the Company’s Board of Directors.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed this Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our management and, based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by the Compensation Committee of the Board of Directors:

V. James Marino (Chair)

Kristin A. Campbell

Francesca Ruiz de Luzuriaga

Nigel Travis

COMPENSATION PROGRAMS RISK ASSESSMENT

In February 2020, the Compensation Committee, in a joint meeting with the Audit Committee, assessed our 2019 compensation programs and practices and concluded that such programs and practices do not create risks that are reasonably likely to have a material adverse effect on us. The Compensation Committee’s independent compensation consultant also reviews and assesses the risk in our compensation programs.

We conducted a risk assessment that included a detailed qualitative and quantitative analysis of our compensation programs to which employees at all levels of the organization may participate, including the NEOs. The Compensation Committee also considers how the design of our compensation programs compares to compensation programs maintained by our peer companies. Based on our risk assessment, and the reviews done by the independent compensation consultant and the Compensation and Audit Committees jointly, the Compensation Committee believes that our 2019 compensation programs have been appropriately designed to attract and retain talent and properly incentivize employees to act in the best interests of Office Depot.

We have programs and features that are designed to ensure that our employees, including the NEOs, are not encouraged to take unnecessary risks in managing our business, including:

We periodically monitor our incentive programs throughout the year to ensure that such programs do not encourage undue risk taking and appropriately balance risk and reward consistent with our enterprise risk management efforts.

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COMPENSATION TABLES

SUMMARY COMPENSATION TABLE

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OTHER COMPENSATION TABLE FOR FISCAL YEAR 2019

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GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 2019