During 2021, the Company’s Board of Directors adopted, and the shareholders approved, the ODP Corporation 2021 Long-Term Incentive Plan (the “Plan”). The Plan replaces the Office Depot, Inc. 2019 Long-Term Incentive Plan, 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 March 10, 2021, 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 $32 million in 2024, $29 million in 2023 and $35 million in 2022, and the total recognized tax benefit related thereto was $9 million in 2024, $12 million in 2023 and $11 million in 2022.

In 2024, the Company granted 464 thousand shares of restricted stock and restricted stock units to eligible employees which included 36 thousand 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 2024, 2023 and 2022 is presented below.


	2024					2023					2022
	Shares			Weighted Average Grant- Date Price		Shares			Weighted Average Grant- Date Price		Shares			Weighted Average Grant- Date Price
Outstanding at beginning of year		1,203,353		$	41.75		1,530,962		$	37.54		1,386,778		$	30.48
Granted		463,959			46.47		407,028			47.28		933,487			42.81
Vested		(624,785	)		41.09		(616,705	)		34.64		(585,563	)		29.65
Forfeited		(124,818	)		46.23		(117,932	)		43.41		(203,740	)		36.29
Outstanding at end of year		917,709		$	43.98		1,203,353		$	41.75		1,530,962		$	37.54

As of December 28, 2024, there was $21 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 1.8 years. Total outstanding shares of 918 thousand include 152 thousand granted to members of the Board of Directors that have vested but will not be issued until separation

from service and 765 thousand unvested shares granted to employees. The Company estimates that all 765 thousand unvested shares at year end will vest. The total fair value of shares at the time they vested during 2024 was $30 million.

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.


	2024					2023					2022
	Shares			Weighted Average Grant- Date Price		Shares			Weighted Average Grant- Date Price		Shares			Weighted Average Grant- Date Price
Outstanding at beginning of year		1,128,207		$	45.82		1,457,725		$	31.84		2,175,831		$	29.33
Granted		308,039			57.17		774,836			51.22		421,038			45.01
Vested		(388,756	)		42.07		(1,003,764	)		19.39		(796,019	)		29.71
Forfeited		(184,263	)		49.86		(100,590	)		45.29		(343,125	)		30.21
Outstanding at end of year		863,227		$	52.44		1,128,207		$	45.82		1,457,725		$	31.84

As of December 28, 2024, there was $22 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 1.9 years. Forfeitures in the table above include adjustments to the share impact of anticipated performance achievement. The Company estimates that 863 thousand unvested shares at year end will vest. The total fair value of shares at the time they vested during 2024 was $20 million.

The Company had stock options issued under the Varis Incentive Plan, which was executed in 2023 by its subsidiary Varis, Inc., that comprised its Varis Division. The Varis Division was sold in October 2024, and $2 million of compensation expense related to these awards in 2024 and 2023, is presented within discontinued operations in the Consolidated Statements of Operations.