EX-10.3



 Exhibit 10.3 

AWARD AGREEMENT FOR 2014 CASH-SETTLED PERFORMANCE AWARD 

We are pleased to advise you that the Compensation Committee (the “Committee”) of the Board of Directors of Office Depot, Inc. (the
“Company”) has granted you a performance award pursuant to the Office Depot, Inc. 2007 Long-Term Incentive Plan (the “Plan”) on March 28, 2014 (the “Grant Date”). Capitalized terms used but not defined in this
Award Agreement for 2014 Cash-Settled Performance Award (the “Agreement”) have the meanings given to them in the Plan. This award is subject to federal and local law and the requirements of the New York Stock Exchange. 

 

	1.	Performance Award 

 You have been granted the right to earn a payment from the Company
based upon satisfaction of certain performance conditions pursuant to the provisions and restrictions contained in the Plan and this Agreement (the “Performance Award”). The target amount of your award is $2,100,000 (your “Target
Award”) and is denominated as a number of shares of common stock of the Company (“Common Stock”) having an aggregate Grant Date value of $2,100,000 based on the “fair value” of the Common Stock on the Grant Date with such
“fair value” to be determined in accordance with the terms of the Plan and generally accepted accounting principles. 
  

	2.	Vesting  

  

	 	a.	Performance Conditions. Subject to the terms and conditions set forth herein and in Sections 2(b) below, you will be eligible to earn up to 150% of your Target Award based on the Company’s free cash flow as
determined by the Committee pursuant to paragraph (i) below (“Free Cash Flow”) and operating income as determined by the Committee pursuant to paragraph (ii) below (“Operating Income”) for the Company’s fiscal year
beginning on December 29, 2013, and ending on December 27, 2014 (the “Performance Period”). If the Committee determines that the Company does not achieve Free Cash Flow equal to at least the threshold amount approved by the
Committee for the Performance Period or does not achieve Operating Income equal to at least the threshold amount approved by the Committee for the Performance Period, you will immediately forfeit all rights to the Performance Award. If the Committee
determines that the Company has achieved at least the threshold amounts of Free Cash Flow and Operating Income for the Performance Period, you will be eligible to earn a percentage of your Target Award determined pursuant to the following table, up
to a maximum of 150% of your Target Award: 









					
	 Percentage of
 Attainment of

Operating Income for

Performance Period
	  	Percentage of
Target Award	 
	 120%
	  	 	150	% 
	 117.5%
	  	 	144	% 
	 115%
	  	 	138	% 
	 112.5%
	  	 	131	% 
	 110%
	  	 	125	% 
	 107.5%
	  	 	119	% 
	 105%
	  	 	113	% 
	 102.5%
	  	 	106	% 
	 100%
	  	 	100	% 
	 97.5%
	  	 	88	% 
	 95%
	  	 	75	% 
	 92.5%
	  	 	63	% 
	 90%
	  	 	50	% 
	 Less than 90%
	  	 	0	% 

 Straight-line interpolation shall be applied to determine the percentage of your Target Award earned for a
percentile that falls between the percentiles specified in the table above. The Committee will determine the percentage of your Target Award, if any, that you are eligible to earn on the foregoing basis as soon as administratively practicable
following December 27, 2014 (your “Eligible Award”). Upon the Committee’s determination of your Eligible Award, you will immediately forfeit the portion of your Performance Award other than your Eligible Award. To become vested
in all or a portion of your Eligible Award, you must satisfy the employment requirements of Section 2(b) below. 
  

	 	i.	Free Cash Flow. The Committee will calculate the Company’s Free Cash Flow by subtracting Capital Expenditures from Net Cash Provided by (Used in) Operating Activities, as reported in the Company’s
Audited Consolidated Statement of Cash Flows for the Company’s 2014 fiscal year, and as adjusted by eliminating the impact of the settlement of individual legal matters in excess of $15 million funding. 


 

	 	ii.	 Operating Income. The Committee will calculate the Company’s Operating Income as the Company’s Adjusted Operating Income (Non-GAAP)
for the Company’s 2014 fiscal year, as adjusted, both positively and negatively, for the following items as approved by the Committee: impacts of unplanned acquisitions and divestitures; impairment charges related to goodwill, other intangible
assets, and long-lived assets (non-cash); unplanned costs and benefits related to real estate strategy 



  
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including, but not limited to, lease terminations or facility closure obligations; and unplanned legal expenses related to attorneys’ fees, settlements, and judgments; and any additional
unplanned and extraordinary events (as determined by the Committee) for which the Committee determines adjustments should be made. All calculations related to foreign exchange rates will be calculated based on the foreign exchange rate used in the
Company’s 2014 annual operating plan. 

  

	 	b.	Employment Requirements. 

  

	 	i.	Continuous Employment. Except as provided in Sections 2(b)(ii) and 2(b)(iii) below, (A) you will vest in your Eligible Award on the date on which the Committee determines your Eligible Award, provided that
you remain continuously employed with the Company or any Subsidiary during the period beginning on the Grant Date and ending on December 31, 2014, and (B) you will immediately forfeit your entire Performance Award upon your termination of
employment with the Company and its Subsidiaries prior to December 31, 2014. 

  

	 	ii.	Death or Disability. If you terminate employment with the Company and its Subsidiaries due to death or Disability prior to December 31, 2014, you will vest in a pro rata portion of your Eligible Award (if
any) on the date on which the Committee determines your Eligible Award and will forfeit the remainder of your Eligible Award (if any) on such date. The portion of your Eligible Award that will vest under the immediately prior sentence shall be
determined by multiplying your Eligible Award by a fraction, the numerator of which is the total number of calendar days during which you were employed by the Company and its Subsidiaries during calendar year 2014 and the denominator of which is
365, rounded up to the nearest whole dollar (as necessary). Your Disabled status must become effective prior to the date on which payment of your Eligible Award (if any) would otherwise be required pursuant to Section 4 below in order to be
recognized under this Agreement. 

  

	 	iii)	Termination of Employment without Cause or for Good Reason. In the event of your termination of employment with the Company and its Subsidiaries without Cause or for Good Reason prior to December 31, 2014,
you will vest in a pro rata portion of your Eligible Award (if any) on the date on which the Committee determines your Eligible Award and will forfeit the remainder of your Eligible Award (if any) on such date, provided that you satisfy the release
requirement and other obligations set out in the employment agreement between you and the Company dated as of November 12, 2013. The portion of your Eligible Award that will vest under the immediately prior sentence shall be determined by
multiplying your Eligible Award by a fraction, the numerator of which is the total number of calendar days during which you were employed by the Company and its Subsidiaries during calendar year 2014 and the denominator of which is 365, rounded up
to the nearest whole dollar (as necessary). 


  
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	 	iv)	Definitions. As used herein, the terms “Cause”, “Good Reason” and “Disability” shall have the meanings set out in the employment agreement between you and the Company dated as of
November 12, 2013. 

  

	 	d.	No Other Special Vesting Rights. The provisions of the Plan with respect to accelerated vesting in the event of retirement and change in control (e.g., Sections 10.5 and 10.8 of the Plan) do not apply to your
Performance Award. If you forfeit your Performance Award at any time, you will cease to have any rights with respect to such forfeited Performance Award. 

  

	3.	Rights as Stockholder 

 You shall have no voting, dividend or any other rights as a
stockholder of the Company with respect to your Performance Award. 
  

	4.	Payment 

 The Company will make payment of the vested portion of your Eligible Award (if
any) in a lump sum in cash during the period beginning January 1, 2015 and ending March 15, 2015. 
  

	5.	Withholding 

 You are required to pay to the Company all applicable federal, state, local
or other taxes, domestic or foreign, with respect to your Performance Award (the “Required Tax Payments”). Unless you make other arrangements with the consent of the Company, all Required Tax Payments will be deducted from the amount of
the payment made to you pursuant to Section 4. 
  

	6.	Transferability of Performance Award 

 Your Performance Award may not be sold, pledged,
assigned or transferred in any manner; any such purported sale, pledge, assignment or transfer shall be void and of no effect. 

  
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	7.	Conformity with Plan 

 Your Performance Award are intended to conform in all respects
with, and are subject to, all applicable provisions of the Plan which is incorporated herein by reference. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan except as expressly provided
otherwise in this Agreement. The Committee reserves its right to amend or terminate the Plan at any time without your consent; provided, however, that your Performance Award shall not, without your written consent, be adversely affected thereby
(except to the extent the Committee reasonably determines that such amendment or termination is necessary or appropriate to comply with applicable law or the rules or regulations of any stock exchange on which the Company’s stock is listed or
quoted). All interpretations and determinations of the Committee or its delegate shall be final, binding and conclusive upon you and your legal representatives with respect to any question arising hereunder or under the Plan or otherwise, including
guidelines, policies or regulations which govern administration of the Plan. By acknowledging this Agreement, you agree to be bound by all of the terms of the Plan and acknowledge availability and accessibility of the Plan document, the Plan
Prospectus, and either the Company’s latest annual report to shareholders or annual report on Form 10-K on the Plan and/or Company websites. You understand that you may request paper copies of the foregoing documents by contacting the
Company’s Director, Executive Compensation & International Compensation. 
  

	8.	Restrictions on Shares 

 If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of shares subject to the grant of the Performance Award is necessary or desirable as a condition of, or in connection with, the granting of same or the issue or purchase of shares
thereunder, no shares may be issued unless such listing, registration or qualification is effected free of any conditions not acceptable to the Committee. In making such determination, the Committee may rely upon an opinion of counsel for the
Company. The Company shall have no liability to make any distribution of the benefits under the Plan unless such delivery or distribution would comply with all applicable state, federal, and foreign laws (including, without limitation and if
applicable, the requirements of the Securities Act of 1933), and any applicable requirements of any securities exchange or similar entity. The Committee shall be permitted to amend this Agreement in its discretion to the extent the Committee
determines that such amendment is necessary or desirable to achieve compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and the guidance thereunder. 
  

	9.	Non-Compete, Confidentiality, and Non-Solicitation Requirements 

 Your Performance Award
is also subject to your complying with and not breaching the non-compete, confidentiality, and non-solicitation covenants that you were required to sign as a condition of your employment with the Company. 

  
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	10.	Compliance with Section 409A 

  

	 	a.	It is intended, and this Agreement shall be construed and administered, so that all compensation payable to you under this Agreement shall be exempt from section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”). 

  

	 	b.	However, to the extent that any compensation payable under this Agreement constitutes deferred compensation within the meaning of Code Section 409A and the Department of Treasury regulations and other guidance
thereunder, (i) any provisions of this Agreement that provide for payment of compensation that is subject to Section 409A and that has payment triggered by your termination of employment other than on account of your death shall be deemed
to provide for payment that is triggered only by your “separation from service” within the meaning of Treasury Regulation Section §1.409A-1(h) (a “Section 409A Separation from Service”), and (ii) if you are a
“specified employee” within the meaning of Treasury Regulation Section §1.409A-1(i) on the date of your Section 409A Separation from Service (with such status determined by the Company in accordance with rules established by the
Company in writing in advance of the “specified employee identification date” that relates to the date of such Section 409A Separation from Service or in the absence of such rules established by the Company, under the default rules
for identifying specified employees under Treasury Regulation Section 1.409A-1(i)), such compensation triggered by such Section 409A Separation from Service shall be paid to you six months following the date of such Section 409A
Separation from Service (provided, however, that if you die after the date of such Section 409A Separation from Service, this six month delay shall not apply from and after the date of your death). You acknowledge and agree that the Company has
made no representation regarding the tax treatment of any payment under this Agreement and, notwithstanding anything else in this Agreement, that you are solely responsible for all taxes due with respect to any payment under this Agreement.


  

	11.	Employment and Successors 

 Nothing in the Plan or this Agreement shall serve to modify
or amend any employment agreement you may have with the Company or any Subsidiary or to interfere with or limit in any way the right of the Company or any Subsidiary to terminate your employment at any time, or confer upon you any right to continue
in the employ of the Company or any Subsidiary for any period of time or to continue your present or any other rate of compensation subject to the terms of any employment agreement you may have with the Company. The grant of your Performance Award
shall not give you any right to any additional awards under the Plan or any other compensation plan the Company has adopted or may adopt. The agreements contained in this Agreement shall be binding upon and inure to the benefit of any successor of
the Company. 

  
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	12.	Amendment 

 The Committee may amend this Agreement by a writing that specifically states
that it is amending this Agreement, so long as a copy of such amendment is delivered to you, provided that no such amendment shall adversely affect in a material way your rights hereunder without your written consent (except to the extent the
Committee reasonably determines that such amendment or termination is necessary or appropriate to comply with applicable law or the rules or regulations of any stock exchange on which the Company’s stock is listed or quoted). Without limiting
the foregoing, the Committee reserves the right to change, by written notice to you, the provisions of the Performance Award or this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant of the Performance
Award as a result of any change in applicable law or regulation or any future law, regulation, ruling, or judicial decisions; provided that, any such change shall be applicable only to that portion of your Performance Award that is then subject to
restrictions as provided herein. 
  

	13.	Notices 

 Any notice to be given under the terms of this Agreement to the Company shall
be addressed to the Company as follows: 
 Office Depot, Inc. 

c/o Vice President, Global Compensation, Benefits, HRIS and Shared Services 

6600 North Military Trail, C278 

Boca Raton, FL 33496 
 Any notice
to be given under the terms of this Agreement to you shall be addressed to you at the address listed in the Company’s records. By a notice given pursuant to this Section, either party may designate a different address for notices. Any notice
shall be deemed to have been duly given when personally delivered (addressed as specified above) or when enclosed in a properly sealed envelope (addressed as specified above) and deposited, postage prepaid, with the U.S. postal service or an express
mail company. 
  

	14.	Severability 

 If all or any part of this Agreement or the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any section of this Agreement (or part of such a section) so
declared to be unlawful or invalid shall, if possible, be construed in a manner that will give effect to the terms of such section or part of a section to the fullest extent possible while remaining lawful and valid. 

  
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	15.	Entire Agreement 

 This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements or understandings, oral or written, with respect to the subject matter herein. By acknowledging this Agreement, you accept the Performance Award in full satisfaction of any and
all obligations of the Company to grant annual Performance Award to you as of the date hereof. 
  

	16.	Governing Law 

 This Agreement will be governed by and enforced in accordance with the
laws of the State of Florida, without giving effect to its conflicts of laws rules or the principles of the choice of law. 
  

	17.	Venue 

 Any action or proceeding seeking to enforce any provision of or based on any
right arising out of this Agreement may be brought against you or the Company only in the courts of the State of Florida or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of Florida, West Palm
Beach Division; and you and the Company consent to the jurisdiction of such courts in any such action or proceeding and waive any objection to venue laid therein. 

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