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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 25, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
STOCK-BASED COMPENSATION | NOTE 13. STOCK-BASED COMPENSATION LONG-TERM INCENTIVE PLANS During 2019, the Company’s Board of Directors adopted, and the shareholders approved, the Office Depot, Inc. 2019 Long-Term Incentive Plan (the “Plan”). The Plan replaces the Office Depot, Inc. 2017 Long-Term Incentive Plan, the Office Depot, Inc. 2015 Long-Term Incentive Plan, the Office Depot, Inc. 2007 Long-Term Incentive Plan, as amended, and the 2003 OfficeMax Incentive and Performance Plan (together, the “Prior Plans”). No additional awards were granted under the Prior Plans effective May 7, 2019, the effective date of the Plan. The Plan permits the issuance of stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and other equity-based incentive awards. Employee share-based awards are generally issued in the first quarter of the year. Total compensation expense for share-based awards was $38 million in 2021, $41 million in 2020 and $33 million in 2019, and the total recognized tax benefit related thereto was $14 million in 2021, $3 million in 2020 and $6 million in 2019. In accordance with the Plan and the Prior Plans (collectively, the “Stock Plans”), the Board of Directors will adjust the number of shares of common stock available for future grant, the number of shares of common stock underlying outstanding awards, the exercise price per share of outstanding stock options, and other terms of outstanding awards granted by the Stock Plans to reflect the effects of the 1-for-10 reverse stock split. Any fractional shares that would otherwise result from the reverse stock split adjustments related to outstanding equity awards will be eliminated through rounding in accordance with the Stock Plans. Refer to Note 1 for additional information about the 1-for-10 reverse stock split. RESTRICTED STOCK AND RESTRICTED STOCK UNITS In 2021, the Company granted 0.5 million shares of restricted stock and restricted stock units to eligible employees which included 30,000 shares granted to the Board of Directors. The Board of Directors are granted restricted stock units as part of their annual compensation which vest immediately on the grant date with distribution to occur following their separation from service with the Company. Restricted stock grants to Company employees typically vest annually over a three-year service period. A summary of the status of the Company’s nonvested shares and changes during 2021, 2020 and 2019 is presented below.
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | Shares |  |  | Weighted Average Grant- Date Price |  |  | Shares |  |  | Weighted Average Grant- Date Price |  |  | Shares(1) |  |  | Weighted Average Grant- Date Price(1) |
Outstanding at beginning of year |  |  | 1,526,653 |  |  | $ | 24.71 |  |  |  | 1,394,756 |  |  | $ | 30.40 |  |  |  | 1,496,419 |  |  | $ | 30.48 |
Granted |  |  | 521,512 |  |  |  | 39.55 |  |  |  | 835,828 |  |  |  | 19.92 |  |  |  | 740,236 |  |  |  | 29.90 |
Vested |  |  | (593,249 | ) |  |  | 23.72 |  |  |  | (579,584 | ) |  |  | 30.71 |  |  |  | (593,440 | ) |  |  | 30.88 |
Forfeited |  |  | (68,138 | ) |  |  | 29.20 |  |  |  | (124,347 | ) |  |  | 28.60 |  |  |  | (248,459 | ) |  |  | 28.56 |
Outstanding at end of year |  |  | 1,386,778 |  |  | $ | 30.48 |  |  |  | 1,526,653 |  |  | $ | 24.71 |  |  |  | 1,394,756 |  |  | $ | 30.40 |
(1)As disclosed in Note 1, a 1-for-10 reverse stock split of the Company’s outstanding shares of common stock and a reduction in the number of authorized shares of the Company’s common stock by a corresponding ratio became effective on June 30, 2020. All shares and per share amounts have been retroactively adjusted for the 2019 period presented to give effect to this reverse stock split. As of December 25, 2021, there was approximately $23 million of total unrecognized compensation cost related to nonvested restricted stock. This expense, net of forfeitures, is expected to be recognized over a weighted-average period of approximately 2.1 years. Total outstanding shares of 1.4 million include 0.2 million granted to members of the Board of Directors that have vested but will not be issued until separation from service and 1.2 million unvested shares granted to employees. The Company estimates that all 1.2 million unvested shares at year end will vest. The total fair value of shares at the time they vested during 2021 was $24.2 million. PERFORMANCE-BASED INCENTIVE PROGRAM The Company has a performance-based long-term incentive program consisting of performance stock units. Payouts under this program are based on achievement of certain financial targets, including the Company’s financial performance and total shareholder return performance set by the Board of Directors and are subject to additional service vesting requirements, generally three years from the grant date. A summary of the activity in the performance-based long-term incentive program since inception is presented below.
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | Shares |  |  | Weighted Average Grant- Date Price |  |  | Shares |  |  | Weighted Average Grant- Date Price |  |  | Shares(1) |  |  | Weighted Average Grant- Date Price(1) |
Outstanding at beginning of year |  |  | 2,458,978 |  |  | $ | 24.22 |  |  |  | 1,994,111 |  |  | $ | 29.05 |  |  |  | 1,913,397 |  |  | $ | 28.83 |
Granted |  |  | 1,298,868 |  |  |  | 41.44 |  |  |  | 932,344 |  |  |  | 19.42 |  |  |  | 1,026,743 |  |  |  | 31.00 |
Vested |  |  | (1,374,442 | ) |  |  | 23.47 |  |  |  | (151,905 | ) |  |  | 41.80 |  |  |  | (284,366 | ) |  |  | 33.12 |
Forfeited |  |  | (207,573 | ) |  |  | 28.71 |  |  |  | (315,572 | ) |  |  | 27.10 |  |  |  | (661,663 | ) |  |  | 28.87 |
Outstanding at end of year(2) |  |  | 2,175,831 |  |  | $ | 29.33 |  |  |  | 2,458,978 |  |  | $ | 24.22 |  |  |  | 1,994,111 |  |  | $ | 29.05 |
| (1) | As disclosed in Note 1, a 1-for-10 reverse stock split of the Company’s outstanding shares of common stock and a reduction in the number of authorized shares of the Company’s common stock by a corresponding ratio became effective on June 30, 2020. All shares and per share amounts have been retroactively adjusted for the 2019 period presented to give effect to this reverse stock split.
| (2) | Outstanding shares at the end of 2021 include 5.6 million shares of awards granted in 2020 that will be settled in cash in 2023. These awards are remeasured to fair value at each reporting period. The remeasurement impact was not material in 2021 and 2020.
As of December 25, 2021, there was approximately $29 million of total unrecognized compensation expense related to the performance-based long-term incentive program. This expense, net of forfeitures, is expected to be recognized over a weighted-average period of approximately 2 years. Forfeitures in the table above include adjustments to the share impact of anticipated performance achievement. The Company estimates that 2.2 million unvested shares at year end will vest. The total fair value of shares at the time they vested during 2021 was $55 million.

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