Edgar Filing: OFFICE DEPOT INC

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OFFICE DEPOT, INC.
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OFFICE DEPOT, INC.
2200 OLD GERMANTOWN ROAD
DELRAY BEACH, FLORIDA 33445

NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS

DATE......................................... Thursday April 25, 2002
TIME......................................... 10:00 a.m. Local Time
LOCATION..................................... The Renaissance Boca Raton Hotel
2000 N.W. 19th Street
Boca Raton, Florida 33431
(561) 368-5252
ITEMS OF BUSINESS............................ 1. To elect twelve (12) members of the
Board of Directors for the term described in
this proxy statement;
2. To ratify our Board's appointment of
Deloitte & Touche LLP as independent
public accountants for the term
described in this proxy statement;
3. To consider the Company's proposal to
amend the Company's Long Term Equity
Incentive Plan;
4. To consider the establishment of an
Executive Bonus Plan by which the
Compensation Committee of our Board of
Directors will establish bonus targets
for the Company's executive management
employees;
5. To transact any other business that may
properly come before the meeting.
RECORD DATE.................................. You must own shares (i.e. be a "holder of
record") of Office Depot common stock as of
the close of business on March 8, 2002
(the "Record Date") to attend and vote at
our Annual Meeting and any adjournment
thereof.
ANNUAL REPORT................................ Our 2001 Annual Report is enclosed with
these Proxy Materials.

By order of the Board of Directors,

/s/ David C. Fannin
David C. Fannin
Executive Vice President, General
Counsel &
Corporate Secretary

March 25, 2002

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING REGARDLESS OF
THE NUMBER YOU OWN. EVEN IF YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE
PROMPTLY SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE OR VOTE YOUR
SHARES ELECTRONICALLY USING A TOUCH-TONE TELEPHONE OR THE INTERNET AS EXPLAINED
ON THE PROXY CARD.

FOR SECURITY REASONS, IF YOU PLAN TO ATTEND OUR ANNUAL MEETING, YOU MUST BRING
THE TICKET ATTACHED TO YOUR PROXY CARD OR A PHOTO IDENTIFICATION AND PROOF OF
OWNERSHIP OF SHARES AS OF MARCH 8, 2002.

CONTENTS

PAGE NUMBER
-----------

PROXY STATEMENT & VOTING
Purposes of the Meeting................................ 1
Voting Your Shares..................................... 1
Proxies................................................ 1
Changing or Revoking Your Proxy........................ 1
Solicitation of Proxies................................ 2
Shareholders Eligible to Vote at Our Annual Meeting;
List of Shareholders Available........................ 2
Establishing a Quorum.................................. 2
MATTERS TO BE CONSIDERED
ITEM 1: ELECTION OF DIRECTORS............................... 3
Nominees for Directors of Office Depot................. 3
Biographical Information............................... 4
COMMITTEES OF OUR BOARD..................................... 7
DIRECTOR COMPENSATION....................................... 8
ITEM 2: RATIFICATION OF OUR BOARD'S APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS............................ 9
ITEM 3: PROPOSAL TO AMEND THE COMPANY'S LONG TERM EQUITY
INCENTIVE PLAN............................................ 10
ITEM 4: PROPOSAL TO APPROVE THE COMPANY'S BONUS PLAN FOR
EXECUTIVE MANAGEMENT EMPLOYEES............................ 17
STOCK OWNERSHIP INFORMATION................................. 20
EXECUTIVE COMPENSATION...................................... 23
Summary Compensation Table............................. 23
Option Grants in Last Fiscal Year...................... 24
Aggregated Option Exercises in the Last Fiscal Year And
Fiscal Year-End Option Values......................... 25
CEO COMPENSATION............................................ 25
CONTRACTUAL ARRANGEMENT WITH OUR VICE-CHAIRMAN, IRWIN
HELFORD................................................... 27
EMPLOYMENT AGREEMENTS WITH OTHER NAMED EXECUTIVE OFFICERS... 27
COMPENSATION COMMITTEE REPORT ON 2001 EXECUTIVE
COMPENSATION.............................................. 28
AUDIT COMMITTEE REPORT FOR 2002............................. 33
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..... 34
COPIES OF FORM 10-K AVAILABLE............................... 34
2003 SHAREHOLDER PROPOSALS.................................. 34
COMMON STOCK PERFORMANCE GRAPH.............................. 35
OTHER MATTERS............................................... 35

PROXY STATEMENT
FOR THE
2002 ANNUAL MEETING OF SHAREHOLDERS OF
OFFICE DEPOT, INC.

2200 OLD GERMANTOWN ROAD
DELRAY BEACH, FLORIDA 33445
TELEPHONE (561) 438-4800

This Proxy Statement contains important information about our 2002 Annual
Meeting of Shareholders, to be held on April 25, 2002. We are mailing this Proxy
Statement and accompanying proxy card to our shareholders on or about March 25,
2002.

PURPOSES OF THE MEETING. Our Annual Meeting will provide you with an
opportunity to vote your shares in connection with important matters outlined in
the Notice of this Meeting. We have mailed you these proxy materials in
connection with the solicitation of proxies by our Board of Directors (our
"Board"). Our Board asks that you authorize your proxy to vote as they
recommend.

WE ENCOURAGE ALL OUR SHAREHOLDERS TO ATTEND OUR ANNUAL MEETING IF AT ALL
POSSIBLE. PLEASE NOTE THAT FOR SECURITY REASONS, WE WILL REQUIRE THAT YOU
PRESENT THE TICKET INCLUDED WITH THIS PROXY STATEMENT. IF YOU DO NOT HOLD A
TICKET FOR ADMITTANCE, WE WILL REQUIRE POSITIVE PICTURE IDENTIFICATION FROM ALL
ATTENDEES AT OUR ANNUAL MEETING. WE RESERVE THE RIGHT TO EXCLUDE ANY PERSON
WHOSE NAME DOES NOT APPEAR ON OUR OFFICIAL SHAREHOLDER LIST. IF YOU HOLD SHARES
IN "STREET NAME" AND DO NOT HAVE A TICKET, PLEASE BRING A LETTER FROM YOUR
STOCKBROKER, OR A CURRENT BROKERAGE STATEMENT, TO INDICATE THAT THE BROKER IS
HOLDING SHARES FOR YOUR BENEFIT. WE ALSO RESERVE THE RIGHT TO REQUEST ANY PERSON
TO LEAVE THE ANNUAL MEETING WHO IS DISRUPTIVE, REFUSES TO FOLLOW THE RULES
ESTABLISHED FOR THE MEETING OR FOR ANY OTHER REASON.

VOTING YOUR SHARES. If you cannot attend the Meeting in person, you may
vote your shares by proxy: (1) by completing, signing and returning your proxy
card to us in the enclosed postage-paid envelope; (2) by voting electronically
using a touch-tone telephone (1-800-435-6710); or (3) by using the Internet to
vote your shares (www.eproxy.com/odp). If your shares are held in "street name"
with a broker or similar party, you will need to contact your broker to
determine whether you will be able to vote using one of these alternative
methods. If you vote over the Internet, you may incur costs such as telephone
and Internet access charges for which you will be responsible. If you choose to
use the Internet or telephone to vote, you must do so by 4:00 p.m. Eastern time
on April 24, 2002.

OUR BOARD RECOMMENDS THAT YOU VOTE FOR ITS NOMINEES AS DIRECTORS OF THE
COMPANY AS DESCRIBED IN ITEM 1, AND THAT YOU VOTE FOR THE RATIFICATION OF
DELOITTE & TOUCHE LLP AS OUR INDEPENDENT ACCOUNTANTS AS DESCRIBED IN ITEM 2. THE
BOARD ALSO RECOMMENDS THAT YOU VOTE FOR ITEM 3: AMENDMENTS TO OUR LONG TERM
EQUITY INCENTIVE PLAN AND FOR ITEM 4: OUR PROPOSED EXECUTIVE MANAGEMENT BONUS
PLAN.

PROXIES. Our Board has appointed certain persons ("proxies") to vote proxy
shares in accordance with the instructions of our shareholders. If you authorize
the proxies to vote your shares, but do NOT specify how your shares should be
voted, they will vote your shares as our Board recommends. We do not expect that
any other matters will be presented for consideration at our Annual Meeting; but
if they are, your shares will be voted as our Board recommends, including voting
FOR Items 1 through 4, unless you withhold authority for proxies to vote on any
such matter(s).

CHANGING OR REVOKING YOUR PROXY. You can change or revoke your proxy at
any time before it is exercised, (1) by mailing your request to our Corporate
Secretary, David C. Fannin, Legal Department,

at our corporate headquarters so that it is received not later than 4:00 p.m.,
on April 24, 2002, the day prior to our Annual Meeting, (2) by filing a proxy
with a later date, or (3) by voting your shares by ballot in person at the
Annual Meeting.

SOLICITATION OF PROXIES. We are soliciting proxies by mail. However, with
the help of our officers and employees, we may also solicit proxies in person,
by telephone or over the Internet. Our employees do not receive additional
compensation for their solicitation services. In addition, certain banking
institutions, brokerage firms, custodians, trustees, nominees and fiduciaries
who hold shares for the benefit of another party (the "beneficial owner") may
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 have also hired Mellon Investor Services LLC ("MIS") to assist us in
communicating with these institutions and forwarding solicitation materials to
them, and we have agreed to pay MIS a fee of $12,000 plus reimbursement of their
reasonable out-of-pocket expenses in connection with this service. We will also
reimburse brokerage firms and other custodians, nominees and fiduciaries for
their expenses incurred in sending proxies and proxy materials to beneficial
owners of our common stock.

SHAREHOLDERS ELIGIBLE TO VOTE AT OUR ANNUAL MEETING; LIST OF SHAREHOLDERS
AVAILABLE. Anyone who owns shares of our common stock as of the close of
business on March 8, 2002 (the "Record Date") will be entitled to vote at our
Annual Meeting. Our official stock ownership records will conclusively determine
whether you are a "holder of record" as of the Record Date. In accordance with
Delaware law, a list of shareholders entitled to vote at the meeting will be
available at the location of our Annual Meeting on April 25, 2002 and for ten
days prior to the meeting between the hours of 9 a.m. and 4 p.m. Eastern time at
our corporate headquarters in Delray Beach, Florida. As of March 8, 2002, there
were 311,408,090 shares of common stock issued by Office Depot 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.

ESTABLISHING A QUORUM. In order for us to transact business at our Annual
Meeting, the holders of the majority of the outstanding shares of our stock must
be present, either in person or by proxy. Shareholders will be counted as
"present" at the meeting: (1) if they attend in person, (2) if they have
properly voted by means of the Internet or by telephone, as described on the
proxy card, or (3) if they have sent to the Company a properly signed proxy
card. 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. Abstentions and broker "non-votes" will not be counted as a
vote "for" or "against" any matter. However, abstentions will have the same
effect as voting "no" or against a matter voted on at our Meeting which requires
the affirmative vote of a majority of the shares present and voting. Broker
non-votes will not be counted as shares entitled to vote and, accordingly will
not affect the outcome with respect to any matter to be voted on at the meeting.

* * * *

MATTERS TO BE CONSIDERED BY OUR SHAREHOLDERS

ITEM 1: ELECTION OF DIRECTORS

NOMINEES FOR DIRECTORS OF OFFICE DEPOT

The Governance & Nominating Committee of our Board has recommended, and our
Board has nominated, the following twelve individuals for election as directors
at our Annual Meeting, to serve for a term of office that continues from the
date and time of their election until our next Annual Meeting of Shareholders,
or until their successors are elected and qualified. Our directors are elected
by a plurality of the votes cast at the meeting, either in person or by proxy.
The twelve nominees for directors who receive the highest number of votes cast
at our Meeting will be elected. All of our directors form a single class of
directors. Information about these individuals, their business experience and
other relevant information is set forth below. One incumbent director, Irwin
Helford, who is also Vice Chairman of our Board, has advised our Board of
Directors of his decision not to seek re-election at the Annual Meeting, and he
will be retiring from our Board effective upon the election of new directors for
the coming year.

Lee A. Ault III W. Scott Hedrick
Neil R. Austrian James L. Heskett
Cynthia R. Cohen Michael J. Myers
David I. Fuente Bruce Nelson
Brenda J. Gaines Frank P. Scruggs, Jr.
Bruce S. Gordon Peter J. Solomon

Should any of these nominees become unable to serve, or otherwise become
unavailable for election (for example, if any of them should become ill or
incapacitated or should die), the current members of our Board of Directors (by
majority vote) may name another person as a substitute nominee. If a substitute
nominee is named by our Board, all proxies will be voted for the person so named
(unless you specify on your proxy card to withhold voting for such person). Our
Board is not required to name a substitute nominee. If a substitute nominee is
not named, all proxies will be voted for the election of the remaining nominees
(or as directed on your proxy card). In no event will more than twelve (12)
directors be elected at our Annual Meeting.

YOUR BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR ITEM 1 ON YOUR PROXY CARD --
ELECTION OF ALL NOMINEES LISTED ABOVE AS DIRECTORS

BIOGRAPHICAL INFORMATION ON THE CANDIDATES

[LEGEND KEY: 1 = AUDIT COMMITTEE; 2 = COMPENSATION COMMITTEE AND 3 = GOVERNANCE
& NOMINATING COMMITTEE]

LEE A. AULT III (1) AGE: 65

Mr. Ault has served as a one of our directors since August 1998. He is
currently Chairman of the Board of In-Q-Tel, Inc., an information technology
company. Mr. Ault served as Chief Executive Officer of Telecredit, Inc., a
payment services company, from November 1968 until January 1992. He also was
President of Telecredit, Inc. from 1968 until 1983 and Chairman of the Board
from 1983 until January 1992. Telecredit, Inc. was merged into Equifax, Inc. in
December 1990. Since 1990, Mr. Ault has served as a director of Equifax, Inc. He
served as a director of Viking Office Products, Inc. ("Viking") from 1992 until
August 1998 when we merged with Viking. He also is a director of American Funds
Insurance Series, a private investment management company.

NEIL R. AUSTRIAN (2) AGE: 62

Mr. Austrian has served as one of our directors since August 1998. Mr.
Austrian served as President and Chief Operating Officer of the National
Football League from April 1991 until December 31, 1999. He was a Managing
Director of Dillon, Read & Co. Inc. from October 1987 until March 1991. Mr.
Austrian served as a director of Viking from January 1988 until August 1998 when
we merged with Viking. He also serves as a director of REFAC Technology
Development Corporation, a publicly traded company, of iWon.com, Inc., a private
Internet portal company and of Integrated Photonics, Inc., a private
manufacturing concern.

CYNTHIA R. COHEN (2) (3) AGE: 49

Ms. Cohen has served as one of our directors since July 1994. She is the
President of Strategic Mindshare, a marketing and strategy consulting firm.
Prior to founding this firm in 1990, she was a Partner with Deloitte Consulting.
Ms. Cohen is a director of The Sports Authority, Inc., and Hot Topic, both
publicly traded companies and a director of several privately held companies.

DAVID I. FUENTE AGE: 56

Mr. Fuente has been a director since he joined Office Depot in December
1987 and until December 29, 2001, he served as Chairman of our Board, when he
was succeeded in that capacity by our Chief Executive Officer, Bruce Nelson.
Until July 17, 2000, Mr. Fuente also served as Chief Executive Officer of our
Company. He is a director of Ryder System, Inc., a publicly traded company, and
Dick's Sporting Goods, a privately held company.

BRENDA J. GAINES (1) AGE: 52

Ms. Gaines was elected to fill a newly created position on our Board by
action of our Board of Directors, effective February 7, 2002. Ms. Gaines has
served since 1999 as North American President of Diners Club International, a
Division of Citigroup. From 1994 until 1999, she served as Executive Vice
President, Corporate Card Sales for Diners Club International, and prior to that
she served in various positions of increasing responsibility within Citigroup or
its predecessor corporations from 1988. From 1985 to 1987, Ms. Gaines was Deputy
Chief of Staff for the Mayor of the City of Chicago. She serves on the Boards of
the Dr. Martin Luther King Jr. Boys and Girls Clubs, Junior Achievement and the
Chicago Museum of Science and Industry, all non-profit boards in the City of
Chicago.

BRUCE S. GORDON (2) AGE: 56

Mr. Gordon was elected to fill a newly created position on our Board by
action of our Board of Directors, effective February 7, 2002. Mr. Gordon is
President of the Retail Markets Group of Verizon Communications, Inc. of New
York, a position he has held since 2000. From 1998 to 2000, he was President of
the Enterprise Business Unit of Bell Atlantic Corporation, and prior to serving
in that position, he served in various executive positions within the Bell
Atlantic organization, including Group President Retail (1996 to 1998) and Group
President, Consumer and Small Business Services (1994 to 1996). Mr. Gordon is a
member of the Board of Directors of The Southern Company, a publicly held
company, and Bartech Personnel Services, Inc., a private company. He is a
Trustee of Gettysburg College and of the Alvin Ailey Dance Foundation. In 1998,
Mr. Gordon was named Black Enterprise Executive of the year by Black Enterprise
Magazine.

W. SCOTT HEDRICK (2) AGE: 56

Mr. Hedrick has served as one of our directors since April 1991. From
November 1986 until April 1991, he was a director of The Office Club, Inc.,
which has been our subsidiary since April 1991, when it was acquired by Office
Depot. He was a founder and has been a general partner of InterWest Partners, a
venture capital fund, since 1979. Mr. Hedrick is also a director of Pearl Izumi
and Sagus International, both private companies; as well as Golden State
Vintners, Inc. and Hot Topic, both publicly traded companies.

JAMES L. HESKETT (1) (3) AGE: 68

Mr. Heskett has served as one of our directors since May 1996. Mr. Heskett
has served on the faculty of the Harvard University Graduate School of Business
Administration since 1965. He has taught courses in marketing, business
logistics, the management of service operations, business policy and service
management. He is also a director of Vanderweil Engineers, Inc., Intelliseek,
Inc. and We Go, Inc., all privately held companies.

MICHAEL J. MYERS (1) AGE: 61

Mr. Myers has served as one of our directors since July 1987. He is the
President and a director of First Century Partners Management Company, an
advisor to private venture capital equity funds. He is also a director of
Salomon Smith Barney Venture Corp., a wholly-owned subsidiary of Smith Barney
Holdings, Inc., which acts as the managing general partner of two private
venture capital equity funds. From 1976 until January 1992, he was President of
Salomon Smith Barney Venture Corp., and also a Managing Director of Smith
Barney, Harris Upham & Co., Inc. from 1980 until 1992. Mr. Myers is a director
of Floral Plant Growers, L.L.C., HASCO Holdings Corp., RomaCorp, Inc. and
Wisconsin Porcelain Company, Inc., all privately held companies.

BRUCE NELSON AGE: 57

Mr. Nelson has been Chairman of our Board of Directors since December 29,
2001 and our Chief Executive Officer since July 17, 2000. Previously, he served
both as President of Office Depot International and as President and Chief
Operating Officer of our subsidiary, Viking Office Products, Inc. He has been
one of our directors since he joined us in August 1998. From January 1996 until
August 1998, he served as President and as a Director of Viking. From July 1995
until January 1996, Mr. Nelson was Chief Operating Officer of Viking, and from
January 1995 until July 1995, he was Executive Vice President of Viking. From
1990 until July 1994, Mr. Nelson was President and Chief Executive Officer of BT
Office Products USA. He had previously worked for over 22 years at Boise Cascade
Office Products in a number of executive positions.

FRANK P. SCRUGGS, JR. (1) AGE: 50

Mr. Scruggs has served as one of our directors since October 1996. Since
May 1995, Mr. Scruggs has been an attorney and shareholder in the law firm of
Greenberg Traurig LLP, Fort Lauderdale, Florida. Greenberg Traurig provided us
with legal services during 2001. Mr. Scruggs specializes in the representation
of management in employment and governmental law matters. From January 1984
until April 1995, Mr. Scruggs was a partner in the law firm of Steel, Hector &
Davis, Miami, Florida, other than during the period from January 1991 to July
1992, when he served as Secretary of Labor for the State of Florida. Mr. Scruggs
is a director of Blue Cross and Blue Shield of Florida, a mutual insurance
company.

PETER J. SOLOMON (3) AGE: 63

Mr. Solomon has served as one of our directors since April 1990. He is
Chairman of Peter J. Solomon Company Limited ("PJSC"), an investment banking
firm. PJSC provided us with professional services in 2001. From 1985 to 1989,
Mr. Solomon was a Vice Chairman and a member of the board of directors of
Shearson Lehman Hutton, Inc. Mr. Solomon is a director of Monroe Muffler/Brake,
Inc., Baker, Fentress and Company, and Phillips-VanHeusen Corporation, all
publicly traded companies.

* * * *

COMMITTEES OF OUR BOARD

Our Board has established three standing committees -- Audit, Compensation,
and Governance & Nominating. Our Board met five (5) times during fiscal 2001 and
acted three (3) times by unanimous written consent. All of our directors
attended more than 75% of the total number of Board meetings and meetings of the
committees on which they serve.

FUNCTIONS NUMBER OF MEETINGS OR ACTIONS
COMMITTEES MEMBERSHIP (HIGHLIGHTS ONLY) BY CONSENT IN 2001
--------------------- ------------------------------- ---------------------------- -------------------------------

Audit Committee(1)... Michael J. Myers, Chairman 1. Meets with internal and Met eight (8) times during 2001
Lee A. Ault III external auditors re
Brenda J. Gaines audit results
James L. Heskett 2. Recommends engagement of
Frank P. Scruggs, Jr.(2) & ensures independence of
outside audit firm
3. Reviews effectiveness of
internal controls
4. Oversees compliance with
Code of Ethical Conduct

Compensation W. Scott Hedrick, Chairman 1. Approves salaries and Met four (4) times during 2001
Committee.......... Neil R. Austrian incentive compensation of
Cynthia R. Cohen elected officers, as well
Bruce S. Gordon as the compensation of
our Board members.
2. Reviews compensation of
certain other executive
management employees
3. Administers employee
benefit plans, including
our Long Term Equity
Incentive Plan (stock
option plan)
4. Reviews management
succession planning.
Governance &
Nominating
Committee.......... James L. Heskett, Chairman 1. Reviews and makes Met two (2) times during 2001
Cynthia R. Cohen recommendations to Board
Peter J. Solomon concerning the size and
composition of our Board
and its committees and
the recruitment and
selection of directors
2. Nominates director
candidates for election
at Annual Meetings
3. Reviews and makes recom-
mendations to Board
concerning corporate
governance policies and
practices
4. Approves certain
financial undertakings,
including investments of
our Company, between
meetings of our full
Board.

---------------

(1) Our Board has reviewed and made the determinations required by the New York
Stock Exchange and the United States Securities and Exchange Commission
("SEC") regarding the independence of, and the financial acumen of, the
members of our Audit Committee. A report from our Audit Committee is set
forth below.
(2) With respect to Mr. Scruggs's membership on the Audit Committee, our Board
has carefully considered the fact that we employ the services of Mr.
Scruggs's law firm, Greenberg Traurig LLP, from time to time, and it has
made the determination required by Rule 303 of the New York Stock Exchange
that the relationship with Mr. Scruggs's law firm does not interfere with
his exercise of independent judgment as a member of this Committee.

DIRECTOR COMPENSATION

For 2001, our Directors who are not employees of the Company were paid an
annual stipend of $25,000 and received a fee of $2,500 for each Board meeting
and $1,000 for each Committee meeting ($1,500 for the Committee Chair) attended
by them. They also were reimbursed for expenses incurred in such attendance.
Under our Long Term Equity Incentive Plan, the amount of options granted to our
non-employee directors and the terms and provisions of these options are at the
discretion of our Board's Compensation Committee. Non-employee Directors were
awarded options to purchase 11,250 shares of our common stock in 2001, and it is
anticipated that non-employee Directors will receive options to purchase 11,250
shares of Office Depot common stock in 2002 upon their election to the Board.
Non-employee Directors are permitted to defer 100% of their compensation under a
deferred compensation plan.

* * * *

ITEM 2: RATIFICATION OF OUR BOARD'S APPOINTMENT OF DELOITTE & TOUCHE LLP AS
OUR INDEPENDENT PUBLIC ACCOUNTANTS FOR 2002

INFORMATION ABOUT THE AUDITORS

Our Board has reappointed the certified public accounting firm of Deloitte
& Touche LLP as independent accountants to audit our consolidated financial
statements for the fiscal year ending December 28, 2002. Deloitte & Touche LLP
has audited our consolidated financial statements each year since 1990.
Representatives of Deloitte & Touche LLP will be present at our Annual Meeting
with the opportunity to make a statement if they desire to do so, and they will
be available to respond to appropriate questions from shareholders. Although our
Board already has designated Deloitte & Touche LLP as our auditors for 2002, we
request the shareholders to confirm this appointment by our Board. Regardless of
the vote of the shareholders, our Board's decision to appoint Deloitte & Touche
LLP as our auditors for this year will not be changed, but our Board will
consider the vote of our shareholders in selecting independent accountants to
serve as our outside auditors in future years.

AUDIT FEES

The aggregate fees billed by our independent accountants for professional
services rendered in connection with (i) the audit of our annual financial
statements set forth in our Annual Report on Form 10-K for the fiscal year ended
December 29, 2001, and (ii) the review of our quarterly financial statements set
forth in our Quarterly Reports on Form 10-Q for each of our fiscal quarters,
were approximately $1,428,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

We did not engage our independent accountants to provide any professional
services in connection with (i) operating or supervising the operation of, our
information system or managing our local area network or (ii) designing or
implementing a hardware or software system that aggregates source data
underlying the financial statements or generates information that is significant
to the Company's financial statements taken as a whole.

ALL OTHER FEES

The aggregate fees paid to our independent accountants for all other
matters in fiscal year 2001 was $3,407,000. Of that total amount, we incurred
audit-related fees of $177,000 for services rendered in connection with a debt
offering in 2001, audit of our employee benefit plans, registration statements
and litigation support. We also incurred fees for all other services rendered by
our independent accountants for our most recent fiscal year of approximately
$1,105,000. In addition, the total of aggregate fees includes amounts we paid to
Deloitte Consulting of approximately $2,125,000 for various consulting projects,
including assisting in our developing an improved warehouse management system
and an overall review of our IT systems. Deloitte & Touche has recently
announced its intent to separate Deloitte Consulting from the Deloitte & Touche
LLP accounting firm.

The Audit Committee of our Board has determined that the non-audit services
rendered by our independent accountants during our most recent fiscal year are
compatible with maintaining their independence.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2 ON YOUR PROXY CARD
-- RATIFICATION OF THE BOARD'S APPOINTMENT
OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT PUBLIC ACCOUNTANTS FOR 2002

SUMMARY INTRODUCTION TO ITEMS 3 AND 4 -- PROPOSED CHANGES IN
HOW WE MOTIVATE AND REWARD EXECUTIVE MANAGEMENT EMPLOYEES;
ALIGNING THEIR INTERESTS MORE CLOSELY WITH OUR SHAREHOLDERS

The following two Proposals, Items 3 and 4, embody proposed changes in how
we compensate our executive management employees. We plan to incentivize those
employees in the following key ways, going forward:

1. Awards of a lesser number of traditional stock options, under our Long
Term Equity Incentive Plan (the "Option Plan"), than have been awarded
to these persons in the past.

2. Awards of "Performance-Accelerated Stock Options" under our Option Plan,
which have a shorter life and a longer vesting schedule than traditional
stock options, but as to which vesting will accelerate if our Company
meets or exceeds certain performance criteria, measured against a peer
group of companies.

3. Awards of "Performance Shares" under a compensation plan that provides
for our executive managers to be awarded a given number of shares of our
stock after a three-year performance cycle, provided that our Company
meets or exceeds certain performance criteria, measured against a peer
group of companies.

4. A bonus plan that affords our Compensation Committee maximum flexibility
to fashion annual bonus targets that take into account various types of
performance criteria that provide the most accurate measures of
performance by our management team.

In order to implement this revised compensation strategy, which we believe
is highly performance-based and is calculated to reward our executive managers
when they reward shareholders with superior performance by our Company, we need
to make certain revisions to the definitions in our Option Plan of the criteria
on which our Compensation Committee may award performance - accelerated stock
options and performance shares. Our directors are also eligible to receive
performance-accelerated stock options and performance shares under our Option
Plan. In addition, our shareholders need to ratify a restatement of our
management bonus plan, to include the scope of criteria which our Compensation
Committee may use to fashion annual bonus plans for our executive management
team that accomplish the goals outlined above.

We urge you to carefully consider the following two important proposals
from our Board of Directors, who respectfully urge our Shareholders to vote in
favor of these proposals.

ITEM 3 -- PROPOSAL TO AMEND THE COMPANY'S LONG TERM EQUITY INCENTIVE PLAN

PURPOSE OF THE PLAN

Our Long-Term Equity Incentive Plan (the "Plan") exists to provide one
important component of compensation for our officers, directors and certain key
employees. The Plan has been adopted and previously approved by our shareholders
for the purpose of attracting, retaining and rewarding the best available
persons for positions of substantial responsibility in our Company. In addition,
the Plan serves to align the interests of our officers, directors and key
employees with the interests of our shareholders, since the benefits of the Plan
are realized generally only if the market price of our stock increases in the
marketplace. The Plan permits issuance of stock options (both incentive stock
options and non-qualified stock options), Stock Appreciation Rights ("SARs"),
Restricted Shares, and Performance Awards relating to our stock. Grants are made
in the discretion of the Compensation Committee of our Board of Directors, which
Committee consists solely of independent, outside directors of our Company.

REASONS FOR PROPOSED AMENDMENTS TO THE PLAN

The Compensation Committee has recommended to our Board, and our Board now
recommends to our shareholders, that certain changes be made in the Plan. These
changes are primarily directed towards making the Plan even more responsive to
shareholder concerns and to further align the interests of our executive
management team with the interests of shareholders.

PERFORMANCE ACCELERATED STOCK OPTIONS

In recent years, a number of companies have moved to various types of
performance-based stock options. Some of these plans utilize stock options
granted at exercise prices that are at a fixed amount or a fixed percentage
above the market price of the issuer's stock on the date of grant. Others use
so-called performance-contingent options, where the stock option is forfeited if
a certain level of stock price performance is not achieved. Yet others use what
are referred to as performance-accelerated stock options. These stock options
are issued at the market price on the date of grant, but have a significantly
longer vesting schedule than traditional stock options. Vesting may be
accelerated, however, if specified company performance criteria are met.

Our Compensation Committee and Board have determined that Office Depot
should utilize the third of these alternatives, or performance-accelerated stock
options, as a component of the stock option grants to our Chairman and Chief
Executive Officer, our Division Presidents, our Executive Vice Presidents and
our directors.

DESCRIPTION OF PLAN CHANGES REQUIRED TO IMPLEMENT THIS PROPOSAL

Currently our Plan does not specifically provide for
performance-accelerated stock options or for the permissible criteria which our
Compensation Committee and Board believe should be available to measure
performance for purposes of determining whether accelerated vesting of
performance-accelerated stock options is permitted. We have proposed including
several alternative measurements, from which our Compensation Committee may
choose in determining whether vesting should be accelerated.

These include:

- Total Shareholder Return (TSR) -- This measure looks at the increase in
the Company's stock price over a given period of time (plus dividends, if
any are paid), as measured against the average increase in stock price of
a group of peer companies in our industry. While the Committee has
discretion in determining the peer group of companies, these will
generally be the same peer companies which our Compensation Committee
considers in determining whether the total compensation paid to our
executives is in line with industry standards.

- Pre-Tax Earnings of the Company

- Net Earnings of the Company

- Earnings per Share (EPS)

- Return on Equity

- Return on Net Assets (RONA)

- Earnings Before Interest and Taxes (EBIT)

- Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

- Comparable Store Sales

- Cash Flow

- Sales per Square Foot of Retail Space

PERFORMANCE SHARES

Our Plan already provides for granting to our senior executives and to our
directors, at the discretion of the Compensation Committee, as an incentive to
increase shareholder returns, awards of performance shares under the Plan,
requiring sustained shareholder returns over time. However, the criteria which
our Compensation Committee may use in measuring performance for purposes of such
performance shares lacks the flexibility our Committee needs. The proposed Plan
amendments will expand those criteria. In practical application, our
Compensation Committee intends to use a period of three years as the measurement
period for each grant of performance shares. Our Company's Total Shareholder
Return over the measurement period will then be compared against the industry
peer group referred to above. Pursuant to a formula established by our
Compensation Committee, participants in this aspect of the Plan would receive a
number of shares of our Company stock ranging from 0% to as much as 150% of the
number designated for that participant at the outset of the three-year program
cycle. Each year our Compensation Committee will consider anew the persons
participating in this aspect of our Plan and the measurement criteria to be
utilized, and a new three year cycle will begin.

DESCRIPTION OF PLAN CHANGES REQUIRED TO IMPLEMENT THIS PROPOSAL

As with the performance-accelerated stock options referred to above, the
implementation of these proposed changes to our Plan requires the addition of
permissible performance criteria, including TSR, to the list of criteria that
our Compensation Committee can use to measure performance for purposes of
determining how many performance shares have been earned by the plan
participants. In the event the shareholders should decline to approve Plan
amendments, including the addition of TSR as a measurement standard available to
our Compensation Committee, then the Committee intends to use the three-year
growth in earnings per share (EPS) relative to the peer group as a measurement
standard. EPS is already approved as a measurement criterion under our Plan.

INCREASE OF ANNUAL LIMIT ON NUMBER OF OPTIONS THAT MAY BE GRANTED TO ANY ONCE
RECIPIENT

In addition to the other changes, we are requesting that our shareholders
approve an increase in the number of shares of our common stock underlying stock
options and/or SARs that may be granted to any one recipient under our Plan from
one million shares to two million shares. The current limit has been in effect
for several years, and we feel that, while the current one million share limit
is unlikely to be exceeded often, the flexibility may be required by our
Compensation Committee from time to time, particularly in the area of providing
competitive compensation to our CEO and possibly other executive management
employees.

GENERAL DESCRIPTION OF THE PLAN

General. The Plan, which our shareholders approved in its basic form,
effective October 1, 1997, allows our Compensation Committee to grant stock
options, stock appreciation rights ("SARs") in tandem with options, restricted
stock, performance awards and any combination of the foregoing to directors,
officers, key employees, and certain other key individuals who perform services
for our Company. The purpose of adopting the Plan was to incentivize eligible
individuals to maximize shareholder value and otherwise contribute to the
success of our Company. The Plan also enables us to attract, retain and reward
the best available persons for positions of substantial responsibility.

The Plan is administered by our Compensation Committee. As grants to be
awarded under the Plan are made entirely at the discretion of this Committee,
the recipients, amounts and values of future benefits to be received pursuant to
the Plan are not determinable. The shares of our Common stock reserved for
issuance pursuant to the Plan are subject to adjustment in the event of a
reorganization, recapitalization, stock split, stock dividend or similar change
in our corporate structure or the outstanding shares of our common stock. Such
shares may be authorized and unissued or reacquired and held as treasury shares.

Eligibility. Our directors (whether or not employees), officers and key
employees, including those of our subsidiaries, who are selected by our
Compensation Committee are eligible to receive grants pursuant to the Plan.
However only our domestic employees may receive grants of incentive stock
options. Approximately 3,500 of our employees participate in the Plan.

Stock Options. Pursuant to the Plan, our Compensation Committee may award
grants of incentive stock options ("incentive options") conforming to the
provisions of Section 422 of the Internal Revenue Code (the "Code"), and other
stock options ("non-qualified options"). The number of shares of our common
stock underlying grants of options and/or SARs made to any participant in any
one year shall not exceed 1,000,000 shares. We are asking, as part of the
overall Plan amendments that this limit be increased to 2,000,000 shares per
year to any one recipient. The exercise price of any option is determined by our
Compensation Committee in its discretion at the time of the grant, but may not
be less than 100% of the fair market value of a share of our stock on the grant
date. The exercise price of an incentive option awarded to a person who owns
stock constituting more than 10% of the voting power of our Company may not be
less than 110% of such fair market value on such date. The Plan also provides
that no option or SAR may be granted in substitution for a previously granted
option or SAR if the new award would have a lower option exercise price or SAR
appreciation base than the award it replaces.

The term of each option is established by our Compensation Committee,
subject to a maximum term of ten years from the date of grant (or five years
from the grant date in the case of an incentive option granted to a person who
owns stock constituting more than 10% of the voting power of Office Depot). In
addition, the Plan provides generally that all options cease vesting on, and
terminate 90 days after, the date on which a grantee ceases to be a director,
officer or employee of, or to otherwise perform services for, Office Depot or
its subsidiaries. The Plan does provide for certain exceptions.

Unless our Compensation Committee decides otherwise:

(a) Upon a Plan grantee's death while still an employee of our Company, all
of the grantee's options become fully vested and exercisable and remain
so for 24 months after the date of death, provided that all incentive
options must be exercised within twelve months of the grantee's death
or they will be treated as non-qualified stock options under the plan;

(b) Upon the retirement of a grantee, only the options vested as of the
date of retirement will remain exercisable for a period of 90 days
after retirement;

(d) Upon a change in control of Office Depot, all options become fully
vested and exercisable.

Upon exercise of an SAR, the grantee will receive an amount in cash and/or
shares of our common stock equal to the difference between the fair market value
of a share of our common stock on the date of exercise and the exercise price of
the option to which it relates, multiplied by the number of shares as to which
the SAR is exercised.

Restricted Stock. Under the Plan, our Compensation Committee also may
award restricted stock subject to conditions and restrictions, and for such
duration (which shall be at least three years, subject to partial vesting at the
end of year one and at any time thereafter), as determined by the Committee in

its discretion. Except as otherwise provided by our Compensation Committee, all
restrictions on a grantee's restricted stock will lapse immediately prior to a
change in control of our Company or at such time as the grantee ceases to be a
director, officer or employee of, or otherwise perform services for us or one of
our subsidiaries due to death or retirement. Unless our Compensation Committee
decides otherwise, if a grantee ceases to serve as a director, officer or
employee of, or otherwise perform services for, our Company, other than as a
result of death or retirement, all of his or her restricted stock as to which
the applicable restrictions have not lapsed will be forfeited immediately.

Performance Awards. Our Compensation Committee may grant performance
awards contingent upon achievement of set goals and objectives with respect to
specified performance criteria, such as return on equity, over a specified
performance cycle, as designated by the Committee. See the discussion of
Performance Shares above in this discussion. Performance awards may include
specific dollar-value target awards, performance units, (the value of which is
established by our Compensation Committee at the time of grant) and/or
performance shares, the value of which is equal to the fair market value of a
share of our common stock on the date of grant. The value of a performance award
may be fixed or may fluctuate on the basis of specified performance criteria.
The number of shares of our common stock or the amount of cash that can be
granted to a participant to satisfy a performance award in any one year cannot
exceed 100,000 shares or $2.0 million, respectively.

Except as otherwise provided by our Compensation Committee, in the event of
a change in control of our company, or if a grantee ceases to be a director,
officer or employee of, or otherwise perform services for, Office Depot or its
subsidiaries due to death, or retirement, prior to completion of a performance
cycle, the grantee will receive the portion of the performance award payable to
him or her based upon the achievement of the applicable performance criteria
over the elapsed portion of the performance cycle. If a grantee ceases to be a
director, officer or employee of, or otherwise perform services for us or one of
our subsidiaries for any reason other than death or retirement prior to
completion of a performance cycle, the grantee will become ineligible to receive
any portion of a performance award.

Vesting. The terms and conditions of each award made under the Plan,
including vesting requirements, will be set forth, consistent with the Plan, in
a written document provided to each grantee. Unless our Compensation Committee
determines otherwise, no award under the Plan may vest and become exercisable
within twelve months of the date of grant; other than immediately prior to a
change in control of our Company and in certain other circumstances upon a
participant's termination of employment or performance of services as described
above.

Transferability. Unless our Compensation Committee determines otherwise,
no award made pursuant to the Plan will be transferable otherwise than by will
or the laws of descent and distribution, and each award may be exercised only by
the grantee or his or her guardian or legal representative.

Amendment and Termination of the Plan. No options may be granted under the
Plan after the close of business on September 30, 2007 and the Plan may be
terminated by our Board at any time. Our Compensation Committee, with
concurrence of the Board, may amend the Plan in its discretion, except that no
amendment will become effective without the approval of our shareholders if such
approval is necessary for continued compliance with the performance-based
compensation requirements of Section 162(m) of the Code or any stock exchange
listing requirements.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN

The following discussion is intended only as a brief summary of the federal
income tax rules relevant to options or shares issued under the Plan, as based
upon the Code as currently in effect. These rules are highly technical and
subject to change in the future. Because federal income tax consequences will
vary as a result of individual circumstances, grantees should consult their
personal tax advisors with respect to the tax consequences associated with stock
options. Moreover, the following summary relates only to

grantees' United States federal income tax treatment, and the state, local and
foreign tax consequences may be substantially different. Certain Plan
participants are residents of foreign countries. These grantees are provided
country-specific tax summary information at the time they receive grants under
the Plan.

Non-Qualified Options. A grantee does not recognize any taxable income,
and we are not entitled to a tax deduction, upon the grant of a non-qualified
option. Upon the exercise of a non-qualified option, the grantee recognizes
ordinary income (subject to wage and employment tax withholding) equal to the
excess of the fair market value of our common stock acquired over the option
exercise price. A grantee's basis in the stock received is equal to such stock's
fair market value on the date of exercise. We are entitled to a tax deduction
equal to the compensation taxable to the grantee.

If a grantee sells our common stock acquired pursuant to the exercise of a
non-qualified option, the grantee will recognize capital gain or loss equal to
the difference between the selling price of the stock and the grantee's basis in
the stock. The capital gain holding period will begin on the exercise date. We
are not entitled to any tax deduction with respect to any capital gain
recognized by the grantee.

Capital losses on the sale of stock may be used to offset capital gains. If
capital losses exceed capital gains, then up to $3,000 of the excess losses may
be deducted from ordinary income. Remaining capital losses may be carried
forward to future tax years.

Incentive Options. An optionee does not recognize taxable income on the
grant or exercise of an incentive option. However, the excess of the stock's
fair market value on the exercise date over the option exercise price will be
included in the grantee's alternative minimum taxable income and thereby may
subject the grantee to an alternative minimum tax. Such alternative minimum tax
may be payable even though the grantee receives no cash upon the exercise of his
or her incentive option with which to pay such tax.

Upon the disposition of shares of our common stock acquired pursuant to the
exercise of an incentive option (i) more than one year after the date of
exercise, and (ii) more than two years after the grant date (the "Required
Holding Periods"), the grantee recognizes long-term capital gain or loss, as the
case may be, measured by the difference between the stock's selling price and
the exercise price. We are not entitled to any tax deduction by reason of the
grant or exercise of an incentive option, or a disposition of stock received
upon the exercise of an incentive option after the Required Holding Periods have
been satisfied.

If a grantee disposes of shares of our common stock acquired pursuant to
the exercise of an incentive option before the expiration of the Required
Holding Periods (a "Disqualifying Disposition"), the difference between the
exercise price of such shares and the lesser of (i) the fair market value of
such shares upon the date of exercise or (ii) the selling price, will constitute
compensation taxable to the grantee as ordinary income. We would be allowed a
corresponding tax deduction equal to the amount of compensation taxable to the
grantee. If the selling price of the stock exceeds the fair market value on the
exercise date, the excess will be taxable to the grantee as capital gain. We are
not allowed a tax deduction with respect to any such capital gain recognized by
the grantee.

One Million Dollar Compensation Limit. If a covered employee's total
compensation from our Company (including compensation related to options)
exceeds $1 million in any given year, such compensation in excess of $1 million
may not be tax deductible by us under Section 162(m) of the Code. The "covered
employees" for any given taxable year of Office Depot are our Chief Executive
Officer and the four other most highly compensated executive officers at the end
of the taxable year. Excluded from the calculation of total compensation for
this purpose is compensation that is "performance-based" within the meaning of
Section 162(m) of the Code. We intend that compensation realized upon the
exercise of an option, SAR or a performance award granted under the Plan be
regarded as "performance-based" under Section 162(m) of the Code and that such
compensation be deductible without regard to the limits of Section 162(m) of the
Code.

Performance-Accelerated Stock Options. The tax treatment of these stock
options is expected to be substantially similar to the tax treatment of other
non-qualified stock options granted under the Plan. A grantee does not recognize
any taxable income, and we are not entitled to a tax deduction, upon the grant
of a performance-accelerated option, or upon the satisfaction of the conditions
to vesting of such an option. Upon the exercise of a performance-accelerated
option, the grantee recognizes ordinary income (subject to wage and employment
tax withholding) equal to the excess of the fair market value of our common
stock acquired over the option exercise price. A grantee's basis in the stock
received is equal to such stock's fair market value on the date of exercise. We
are entitled to a tax deduction equal to the compensation taxable to the
grantee. For other tax considerations, see the discussion above under the
heading Non-Qualified Options.

Performance Shares. The tax treatment of performance shares is similar to
the tax treatment of restricted stock generally under the Plan. A grantee does
not recognize taxable income upon the grant of performance shares. When the
measurement of performance is made at the end of the three-year term of a given
performance share cycle, the recipient will receive the number of shares
determined pursuant to the formula prescribed by our Compensation Committee at
the outset of that performance share cycle. The shares will be valued at the
date of award based upon the market value of our Company's stock at that time.
The recipient will recognize ordinary income (subject to wage and employment tax
withholding) equal to the fair market value of the shares of stock received at
that time. The recipient's basis in the shares of stock received will also be
the fair market value on that date. The Company will be entitled to a tax
deduction equal to the compensation taxable to the recipient of the performance
shares.

VOTE REQUIRED FOR THE PLAN AMENDMENT

The affirmative vote of a majority of the votes cast by the holders of
shares of Office Depot common stock represented in person or by proxy at our
Annual Meeting is required for approval of the proposed Plan Amendments.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
ITEM 3, AMENDING OUR LONG-TERM EQUITY INCENTIVE PLAN.

* * * *

ITEM 4 -- PROPOSAL TO APPROVE THE COMPANY'S BONUS PLAN FOR
EXECUTIVE MANAGEMENT EMPLOYEES

Part of the "at risk" compensation for our executives and other bonus plan
participants is the possible receipt of a bonus, expressed as a percentage of
the base salary of the participant. The terms and conditions under which a bonus
may be earned or awarded to a participant are embodied in our Executive Bonus
Plan (the "Plan"). Under Section 162(m) of the Internal Revenue Code ("Code"), a
bonus payment is deductible to our Company only if:

(a) The recipient's total compensation does not exceed $1 million (the
portion up to $1 million being deductible, while the portion above that
amount is non-deductible); or

(b) The bonus payment is made pursuant to a bonus plan which is
performance-based and which has been approved by our shareholders.

Our shareholders most recently approved our overall bonus plan in 1997, and
we are now requesting that our shareholders approve a new bonus plan that will
serve as the guideline for our Board's Compensation Committee in establishing
bonus goals for the future for our executive management team (generally
"officers" of the Company). As reflected in our Compensation Committee Report
elsewhere in this Proxy Statement, it is our intention that elements of "at
risk" compensation, including bonuses paid under the Plan, be eligible for
deduction under Code Section 162(m).

TEXT OF THE BONUS PLAN:

The Bonus Plan we are requesting our shareholders to approve is as follows:

"There is hereby established an Executive Bonus Plan (the "Plan") for
officers and other designated management employees of the Company. Under the
Plan, we view bonuses as being earned by superior performance by both the
Company and by the individual bonus recipient. A bonus is not a right but rather
a compensation reward for performance.

Generally, bonuses are earned in three ways:

1. Company performance, measured in terms of one or more of the following:

- Earnings per Share ("EPS")

- Total Shareholder Return ("TSR")(1)

- Return on Net Assets ("RONA")

- Return on Investment ("ROI")

- Pre-tax Earnings of the Company

- Net Earnings of the Company

- Return on Equity

- Earnings Before Interest and Taxes (EBIT)

---------------

1 TSR = total shareholder return, measured as the increase in stock price (plus
any dividends paid on the Company's shares) over a period of time, whether or
not compared to the increase in stock price (plus dividends) of other
comparable companies; RONA = total return on net assets of our Company; and
ROI = total return on investment of our Company.
17

- Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

- Comparable Store Sales

- Cash Flow

- Sales per Square Feet of Retail Space

Based on relative performance against a peer group or other measure, or
some other criterion established by the Compensation Committee of our Board of
Directors at or near the beginning of each year; and/or

2. Superior performance by an individual's work unit, measured in terms of
quantifiable, measurable performance in the areas of sales performance,
efficiency, cost containment, productivity, or some other measure of
performance established by the Company's executive management and
approved by the Compensation Committee at or near the beginning of each
year; and/or

3. Individual performance, measured against a set of individual criteria
set by the individual's supervisor at or near the beginning of each
year.

An individual may earn a bonus by meeting any one or more, or all, of the
three general measures of performance outlined above. It is contemplated that
either shortly prior to the beginning of each fiscal year of our Company, or
shortly after the beginning of the fiscal year, the Compensation Committee of
our Board of Directors, consisting solely of independent, outside directors of
our Company, will meet to consider the appropriate criteria for Company
performance for the ensuing year. The Compensation Committee may elect to use
any of the criteria set forth above in this Bonus Plan or a combination of the
criteria set forth above. Establishing the work unit objectives is the province
of management, subject to review and concurrence by the Compensation Committee.
Individual bonus goals are established individually between the Plan participant
and his/her supervisor, and are not subject to Compensation Committee review.

Once the Company's financial performance for a fiscal year is determined,
the Company's Human Resources and Finance Departments will calculate and certify
to the Compensation Committee the level of performance of the Company against
the bonus goals established for that year by the Committee. They also will
calculate the level of performance against the goals established for the work
unit in which a Plan participant works. Finally, the participant's supervisor
will evaluate the individual participant's level of performance against his/her
individual bonus goals.

The authority to determine whether to pay bonuses and in what amounts,
rests with our Compensation Committee of the Board, which may elect in any given
year to pay full or partial bonuses, or no bonus at all, depending upon factors
considered by the Committee to be relevant to such determination. In arriving at
its conclusions, the Compensation Committee may elect to take into consideration
factors that influenced performance during the prior year, including general
economic conditions, industry-specific economic conditions, mitigating factors
and other criteria which the Committee considers relevant to its consideration.

In order to ensure that our Company is afforded the maximum opportunity to
deduct bonus payments paid to individuals whose total compensation may exceed $1
million in any given year, our Compensation Committee shall have the right in
its discretion to defer all or any part of the bonus payment to any individual
Plan participant into a future year, with the objective of ensuring the maximum
deductibility under Code Section 162(m).

The maximum bonus amount that may be paid to any executive officer of the
Company in any one year may not exceed 200% of his or her base salary or $2.5
million per individual in any given year.

FEDERAL INCOME TAX CONSEQUENCES OF THE BONUS PLAN

The foregoing Bonus Plan has income tax consequences for the Company and
for the individual Bonus Plan participants. Generally speaking, the individual
recipient will recognize taxable ordinary income in the calendar year in which
the Bonus is paid to him/her. For the Company, the deduction for compensation
paid is generally deductible with respect to the fiscal year for which the Bonus
was earned (usually the fiscal year prior to the actual payment to the
individual plan participants) in the amount of the payments made to
Bonus-eligible individuals.

Pursuant to Code Section 162(m), bonus payments are not deductible by our
Company to the extent of the amount of total compensation paid to the individual
recipient which exceeds $1 million in any fiscal year of the Company. However,
such bonus payments may be deducted even if total compensation paid to the
recipient exceeds $1 million, to the extent paid pursuant to a performance-
based bonus plan, which has been approved by our shareholders.

The Company considers the Bonus Plan outlined above to be
performance-based, and, assuming the shareholders approve the Bonus Plan,
expects all bonus payments pursuant to the Bonus Plan to be fully deductible in
accordance with Code Section 162(m).

VOTE REQUIRED TO APPROVE THE PLAN

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 4,
APPROVING THE COMPANY'S BONUS PLAN FOR EXECUTIVE MANAGEMENT EMPLOYEES

* * * *

STOCK OWNERSHIP

OUR LARGEST SHAREHOLDERS; OWNERSHIP BY OUR DIRECTORS AND EXECUTIVE OFFICERS

We have provided a stock ownership table below that contains certain
information about shareholders whom we believe are the "beneficial" owners of
more than five percent (5%) of our outstanding common stock, as well as
information regarding stock ownership by our directors and executive officers.

Our information with respect to holders of more than 5% of our stock is
based solely on our review of the Forms 13G described below, filed by such
holders with the SEC. The table below also includes information on the stock
ownership of each of our directors, our "Named Executive Officers" and all of
our executive officers and directors as a group.

Except as otherwise noted below, each person or entity named in the
following table has the sole voting and investment power with respect to all
shares of our common stock that he, she or it beneficially owns.

OWNERSHIP TABLE -- ALL SHARES HELD ARE COMMON UNLESS OTHERWISE NOTED.

PERCENT OF
NUMBER OF SHARES COMMON STOCK
BENEFICIALLY OUTSTANDING(2)
NAME OF INDIVIDUAL OR GROUP OWNED(1) (*) = LESS THEN 1%
--------------------------- ---------------- ------------------

(5% OR GREATER HOLDERS)
FMR Corp.(3)
Edward C. Johnson 3rd
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109....................................... 29,570,000(3) 9.76%(3)
Harris Associates LP and
Harris Associates, Inc. (General Partner)(4)
Two North LaSalle Street,
Suite 500
Chicago, IL 60602-3790................................... 20,790,647(4) 6.86%(4)
(DIRECTORS & NAMED EXECUTIVE OFFICERS)
Lee A. Ault III.......................................... 51,950 *
Neil R. Austrian......................................... 197,022 *
Cynthia R. Cohen......................................... 75,693 *
David I. Fuente(5)....................................... 4,193,867 1.38%
Irwin Helford............................................ 2,551,686 *
Brenda J. Gaines(6)...................................... -0- *
Bruce S. Gordon(6)....................................... -0- *
Scott Hedrick............................................ 128,708 *
James L. Heskett......................................... 57,000 *
Michael J. Myers......................................... 125,181 *
Bruce Nelson............................................. 1,205,927 *
Frank P. Scruggs, Jr..................................... 43,500 *
Peter J. Solomon......................................... 222,471 *
Charles E. Brown......................................... 181,666 *
Jerry Colley............................................. 33,834 *

PERCENT OF
NUMBER OF SHARES COMMON STOCK
BENEFICIALLY OUTSTANDING(2)
NAME OF INDIVIDUAL OR GROUP OWNED(1) (*) = LESS THEN 1%
--------------------------- ---------------- ------------------

David C. Fannin.......................................... 104,357 *
Robert J. Keller......................................... 235,349 *
Rolf van Kaldekerken..................................... 95,167 *
All Executive Officers and Directors as a Group (Twenty
(20) Persons).......................................... 9,566,713 3%

---------------

(1) Includes shares of common stock subject to options which are exercisable
within 60 days of March 8, 2002. The number of options which are or will be
exercisable within 60 days of March 8, 2002 for each person named in the
table above and for our Executive Officers and Directors as a group is as
follows:

Lee A. Ault III.................... 18,750 Neil R. Austrian................... 48,750
Cynthia Cohen...................... 73,581 David I. Fuente.................... 3,564,402
Brenda Gaines...................... -0- Bruce S. Gordon.................... -0-
Scott Hedrick...................... 59,558 Irwin Helford...................... 252,039
James L. Heskett................... 52,500 Michael J. Myers................... 93,445
Bruce Nelson....................... 995,001 Frank P. Scruggs, Jr............... 41,250
Peter J. Solomon................... 80,625 Charles E. Brown................... 141,666
Jerry Colley....................... 33,333 David C. Fannin.................... 88,332
Robert J. Keller................... 182,499 Rolf van Kaldekerken............... 95,167
All Executive Officers and
Directors as a Group (Twenty (20)
Persons)......................... 5,884,233

---------------

(2) Based on 303,095,170 shares of common stock outstanding as of December 29,
2001 (the last day of our fiscal year). Shares subject to options
exercisable within 60 days of March 8, 2002 are considered for the purpose
of determining the option holder's percentage ownership, but not for the
purpose of computing the percentage ownership held by others.

(3) Based on our review of a Schedule 13G dated February 14, 2002. Of the
29,570,000 shares shown as beneficially owned by FMR, it has sole
dispositive power with respect to all 29,570,000 shares. It has sole power
to vote or to direct the vote of 1,336,197 such shares. Fidelity Management
& Research Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp., and
an investment adviser registered under Section 203 of the Investment
Advisers Act of 1940, and having the same address as FMR Corp., is the
beneficial ownership of 28,052,300 shares of the Company or 9.138% of the
common stock of the Company as a result of acting as investment adviser to
various investment companies registered under Section 8 of the Investment
Company Act of 1940 (the "Fidelity Funds").

Edward C. Johnson 3rd shares with FMR Corp. and the funds managed by
Fidelity the sole power to dispose of the 28,052,300 shares owned by the
funds. Neither Mr. Johnson nor FMR Corp. has the sole power to vote or
direct the voting of the shares owned directly by the Fidelity Funds, which
power resides with the Fidelity Funds' Boards of Trustees. Fidelity carries
out the voting of the shares under written guidelines established by the
Funds' Boards of Trustees.

Fidelity Management Trust Company, a wholly-owned subsidiary of FMR Corp.
and a bank as defined in Section 3(a)(6) of the Securities Exchange Act of
1934 (and having the same address as FMR Corp.), is the beneficial owner of
1,295,079 shares of the Company's stock and has the sole power to vote or
to direct the voting of 1,112,879 shares of the Company's stock, and no
power to vote or to direct the voting of 182,200 shares of the Company's
stock owned by certain institutional accounts.

Edward C. Johnson 3rd and FMR Corp., through its control of Fidelity
Management Trust Company, each has sole dispositive power over 1,295,079
shares and sole power to vote or to direct the voting of 1,112,879 shares
of the Company's stock, and no power to vote or to direct the voting of
182,200 shares of the Company's stock owned by certain institutional
accounts.

Strategic Advisers, Inc., a wholly-owned subsidiary of FMR Corp., and an
investment adviser under the Investment Advisers Act of 1940 (and having
the same address as FMR), provides investment advice to individual
investors. It does not have sole power to vote or direct the voting of
securities held by its clients, but has sole dispositive power over such
securities. FMR's beneficial ownership of the Company's shares, shown in
the table above, includes 1,118 shares (0.00%) of the Company's stock,
beneficially owned through Strategic Advisers, Inc.

Members of the Edward C. Johnson 3rd family are the predominant owners of
the Class B shares of common stock of FMR Corp., representing approximately
49% of the voting power of FMR Corp. Mr. Johnson owns 12.0% and Abigail
Johnson owns 24.5% of the aggregate outstanding voting stock of FMR Corp.
Mr. Johnson is Chairman of FMR Corp., and Abigail P. Johnson is a Director
of FMR Corp. The Johnson family group and all other Class B shareholders
have entered into a shareholders' voting agreement under which all Class B
shares will be voted in accordance with the majority vote of Class B
shares. Accordingly, through their ownership of voting common stock and the
execution of the shareholders' voting agreement, members of the Johnson
family may be deemed, under the Investment Company Act of 1940, to form a
controlling group with respect to FMR Corp.

Fidelity International Limited, Pembroke Hall, 42 Crowlane, Hamilton,
Bermuda, and various foreign-based subsidiaries provide investment advisory
and management services to a number of non-U.S. investment companies (the
"International Funds") and certain institutional investors. Fidelity
International Limited is the beneficial owner of 221,600 shares or 0.072%
of the Company's common stock outstanding. Fidelity International Limited
has the sole power to vote and the sole power to dispose of 221,600 shares
of the Company. Additional detailed information on Fidelity International
Limited may be obtained by reviewing Exhibit B to the Form 13G filed by FMR
Corp. and others on February 14, 2002.

(4) Based solely upon our review of a Schedule 13G/A dated February 7, 2002. Of
the 20,790,647 shares shown as beneficially owned by Harris Associates LP
("Harris"), Harris Associates, Inc. ("General Partner") has shared power to
vote 100% of such shares; sole dispositive power with respect to 9,014,647
of such shares and shared dispositive power with respect to 11,776,000 of
such shares. Harris's beneficial ownership is by reason of certain advisory
and other relationships with persons who own the shares. Harris has been
granted the power to vote shares in circumstances it determines to be
appropriate in connection with assisting its advised clients to whom it
renders financial advice in the ordinary course of its business, by either
providing information or advice to the persons having such power, or by
exercising the power to vote the shares. In addition Harris serves as
investment adviser to the Harris Associates Investment Trust (the "Trust"),
and various of Harris's officers and directors are also officers and
trustees of the Trust. Harris deems the shares owned by the Trust to be
beneficially owned by Harris because of Harris's power to manage the Trust's
investments.

(5) Includes 2,835 shares held of record by his spouse and 36,006 shares held of
record by irrevocable trusts for his children and grandchildren . Mr. Fuente
disclaims beneficial ownership of the shares held by his spouse, his
stepdaughter and in trust for the benefit of his stepdaughter, his son and
his grandchildren.

(6) Ms. Gaines and Mr. Gordon were first elected to our Board on February 7,
2002, to fill two newly created Board positions and were not members of the
Board at fiscal year end 2001.

EXECUTIVE COMPENSATION

The following table provides a summary of the cash compensation paid to:
(i) our Chief Executive Officer, and (ii) the five other most highly compensated
executive officers who were serving as executive officers of our Company at the
end of fiscal 2001, (collectively referred to herein as the "Named Executive
Officers") for services rendered during the 1999, 2000 and 2001 fiscal years.

SUMMARY COMPENSATION TABLE

LONG-TERM COMPENSATION
----------------------------------------
ANNUAL COMPENSATION AWARDS & PAYOUTS(1)
-------------------------------------- -------------------------
OTHER RESTRICTED
ANNUAL STOCK SECURITIES ALL OTHER
SALARY BONUS COMPENSATION AWARDS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $(2) $(3) $(6) OPTIONS# (4)
--------------------------- ---- --------- --------- ------------ ---------- ---------- ------------

M. Bruce Nelson 2001 1,000,000 1,000,000 69,210 -0- 1,000,000 1,050,427
Chief Executive Officer 2000 1,000,000 -0- 85,427 -0- 650,000 1,774,827
1999 630,032 150,000 -0- 840,625(5) 240,000 105,128
Jerry Colley(6) 2001 432,690(6) 325,000 -0- -0- 250,000 135,085
President, North American Stores
Robert Keller 2001 450,000 300,000 -0- -0- 100,000 21,197
President, Business 2000 400,000 75,000 52,763 -0- 100,000 21,297
Services Group 1999 293,103 75,000 -0- 504,375(5) 115,000 -0-
Charles E. Brown 2001 351,923 255,000 -0- 358,800(5) 100,000 5,444
Executive Vice President & 2000 330,000 200,000 -0- -0- 67,500 5,474
Chief Financial Officer(7) 1999 300,000 62,500 41,640 -0- 37,500 5,499
David C. Fannin 2001 400,000 240,000 -0- -0- 50,000 135,442
Executive Vice President & 2000 400,000 75,000 70,488 -0- 90,000 -0-
General Counsel 1999 290,000 62,500 -0- -0- 15,000 -0-
Rolf Van Kaldekerken(8) 2001 366,972 238,532 -0- -0- 100,000 -0-
President, Office Depot 2000 283,018 141,509 -0- -0- 100,000 -0-
Europe & Viking Europe 1999 204,918 107,104 -0- -0- 15,000 53,279

---------------

(1) There were no long term incentive plan payouts to any of the Named Executive
Officers in any of the years listed.

(2) In addition to the current year bonus amounts shown for Messrs. Nelson,
Colley, Keller, and Brown for 2001, the following amounts have been
designated in a deferred matching bonus account for each of them, which will
be vested only if the executive so named remains continuously employed by
our Company through and including December 31, 2003: Mr. Nelson $750,000;
Mr. Colley $243,750; Mr. Keller $225,000; and Mr. Brown $191,250.

(3) Amounts of perquisites for Named Executive Officers in various categories of
Other Annual Compensation for 2001 are included only to the extent such
amounts exceed the lesser of $50,000 or 10% of total of salary and bonus.
Amounts shown (only categories that account for 25% or more of total
perquisites for each such officer are included) include a car allowance for
Mr. Nelson -- $24,000.

(4) "All Other Compensation" amounts for 2001 include for Mr. Nelson, receipt of
a deferred bonus payout of $777,000, which vested in 2001; and the following
amounts for Split Dollar Life Policies for the following executives:
Nelson -- $230,075; Keller -- $21,197; Brown -- $5,444; Fannin -- $123,309.
Also includes a profit-sharing payment to Mr. Nelson of $43,352; and, for
Mr. Colley, a relocation payment of $102,680.

(5) The fair market value at year-end 2001 for restricted shares held by each of
the following officers was: Nelson -- $926,000; Keller -- $555,600;
Brown -- $740,800.

(6) Mr. Colley joined our Company in February 2001.

(7) Mr. Brown became our Executive Vice President & Chief Financial Officer in
October 2001. Previously, he served as Senior Vice President, Finance &
Controller.

(8) Mr. Van Kaldekerken's cash compensation is paid in Euros. The translation to
U.S. Dollars is based upon the exchange rate in effect as of December 31,
2001.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information with respect to all options
granted in fiscal 2001 to the Named Executive Officers.

PERCENTAGE OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE OR
UNDERLYING EMPLOYEES BASE PRICE GRANT EXPIRATION GRANT DATE
NAME OPTIONS(1) IN YEAR ($/SHARE) DATE DATE PRESENT VALUE(2)($)
---- ---------- ------------- ----------- ---------- ---------- -------------------

Nelson.................... 250,000 3.33% 9.2000 2-12-2001 2-12-11 1,070,125
750,000 9.99% 21.6060(3) 12-20-2001 12-20-11 5,125,275
Colley.................... 250,000 3.33% 9.2000 2-12-2001 2-12-11 1,070,125
Keller.................... 100,000 1.33% 9.2000 2-12-2001 2-12-11 428,050
Brown..................... 50,000 0.67% 9.2000 2-12-2001 2-12-11 214,025
50,000 0.67% 13.7900 10-8-2001 10-8-11 321,330
Fannin.................... 50,000 0.67% 9.2000 2-12-2001 2-12-11 214,025
Van Kaldekerken........... 100,000 1.33% 9.2000 2-12-2001 2-12-11 428,050

---------------

(1) Pursuant to the Company's Long Term Equity Plan, stock options are
automatically adjusted to reflect any stock splits. None of the options were
awarded with tandem stock appreciation rights. In order to prevent dilution
or enlargement of rights under the options, in the event of a merger or any
other reorganization, recapitalization, stock split, stock dividend,
combinations of shares, merger, consolidation or other change in the Common
stock, the number of shares available upon exercise and the exercise price
will be adjusted accordingly. The Compensation Committee may, subject to
specified limitations, advance the date on which an option shall become
exercisable by the grantee.

(2) The Black-Scholes option-pricing model was used to determine the grant date
present value of the stock options granted in 2001 by the Company to the
persons listed above. Details on such calculations are available from the
Company.

(3) Mr. Nelson's grant on December 20, 2001 was at a premium exercise price of
125% of the market price on the date of grant.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES

The following table shows you information about all options exercised in
fiscal 2001 and the year-end value of unexercised options held by our Named
Executive Officers.

NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END FISCAL YEAR-END(1)
SHARES ACQUIRED VALUE ---------------------------------- ---------------------
ON EXERCISE REALIZED (#)EXERCISABLE/ ($)EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- -------- ---------------------------------- ---------------------

Nelson................. -- -- 878,335 1,767,667 3,832,853 8,868,333
Colley................. -- -- -0- 250,000 -0- 2,293,750
Keller................. -- -- 140,833 256,668 528,637 1,729,016
Brown.................. -- -- 112,500 152,500 323,671 1,085,498
Fannin................. 13,333 102,780 63,333 108,334 299,476 1,036,254
Van Kaldekerken........ 41,666 310,509 53,501 172,334 46,876 1,552,962

(1) All options valued using the Black-Scholes option pricing model. Details on
calculations are available from the Company.

CEO COMPENSATION

Employment Agreement. Effective December 29, 2001, we entered into a new
Employment Agreement with Bruce Nelson (the "Employment Agreement") to serve as
our Chairman of the Board and Chief Executive Officer. The Employment Agreement
amends, restates and supersedes certain prior agreements with Mr. Nelson. Mr.
Nelson became our CEO on July 17, 2000. Under the terms of the Employment
Agreement, we have agreed to employ Mr. Nelson through at least December 31,
2004. The Employment Agreement provides for automatic renewal for a period of
one year (and from year to year thereafter) unless and until either Mr. Nelson
or our Company notifies the other, in writing, at least six months prior to the
end of the Employment Term (initially December 31, 2004), that he or it does not
wish to renew the Employment Agreement.

Salary and Bonus. As of December 29, 2001, the date of the Employment
Agreement, Mr. Nelson's base salary is $1,000,000 per year. The Agreement
provides that Mr. Nelson's salary will be reviewed annually by our Compensation
Committee and may be increased, but not decreased. Under the Agreement, Mr.
Nelson also will participate in our Executive Officer Bonus Plan ("Bonus Plan").
Under this Plan, annual performance targets are established for our CEO by our
Compensation Committee. We intend these performance targets to qualify as
incentive compensation under Section 162(m) of the Internal Revenue Code,
insofar as that is possible. Mr. Nelson's bonus, if any, is primarily tied to
earnings per share of the Company. For 2002 and subsequent years under the
Employment Agreement, Mr. Nelson can achieve a bonus which is as high as 200% of
his base salary for achieving the "maximum" level of performance. His "minimum"
bonus level (provided our Company's performance in a given year qualifies for
any bonus payment) is 70% of base salary, and his "target" bonus is 100% of base
salary.

For performance during 2001, Mr. Nelson received a cash bonus of $1,000,000
based upon our Compensation Committee's assessment of the substantial increase
in the value of our shareholders' stock during the period of Mr. Nelson's
service as CEO, during the period from July 2000 and during 2001. In addition,
he has been credited with a deferred bonus amount of $750,000, which vests on
December 31,

2003, provided that Mr. Nelson remains continuously employed by our Company
through and including that date.

Retention Provisions. Under the terms of a prior employment agreement, the
provisions of which are incorporated into his new employment agreement, Mr.
Nelson received a deferred retention payment of $3.8 million, which will vest
only if Mr. Nelson remains as an employee of our Company through and including
December 31, 2002, subject to earlier vesting if there is a Change in Control of
our Company, upon his death or disability, or if he is terminated without Cause
or resigns for "Good Reason" -- all as defined in his Employment Agreement. In
addition, we entered into a three-year Non-Compete Agreement with Mr. Nelson,
for which we paid him the sum of $1.5 million in 2000.

Stock Options. In connection with entering into the new Employment
Agreement as of December 29, 2001, our Compensation Committee provided Mr.
Nelson with a total grant (comprised of two separate tranches of options) of one
million stock options. 750,000 of these stock options have a grant date of
December 20, 2001 and the remaining 250,000 have a grant date of January 2,
2002. All of these stock options vest in full on December 31, 2004, provided Mr.
Nelson remains with our Company through such date, and subject to earlier
vesting in the event of a change in control of our Company, his death or
disability, his termination without Cause or his resignation for "Good Reason."
This one million share grant has the unique feature of so-called premium
pricing. The exercise price for these stock options is 125% of the market price
on the date of grant. These premium-priced stock options have an extended
exercise period of three (3) years, regardless of whether Mr. Nelson remains
employed by our Company during that period of time. In addition to these
premium-priced, performance-based stock options, Mr. Nelson also received
250,000 non-premium priced stock option grants during 2001, in the regular
course of stock option grants made to our executives by our Compensation
Committee.

Change in Control Agreement. Mr. Nelson and our Company also are parties
to a Change in Control Agreement, under the terms of which Mr. Nelson is
entitled, upon a Change in Control of our Company, coupled with certain other
events specified in the agreement, to a sum equal to three times the sum of his
annual base salary at the time of the change in control plus his highest annual
bonus during the period preceding the change in control. Mr. Nelson would also
be entitled to the continuation of his benefits for a period of three years and
certain other benefits.

Other Benefits. Mr. Nelson receives certain additional benefits under the
terms of his Employment Agreement, which are generally comparable to our
benefits for all executive management employees. In addition, Mr. Nelson and his
spouse are entitled to health insurance coverage for their lifetimes.

Residential Real Estate Co-Ownership Agreement. Our Company is a co-owner
of a residential property in Boca Raton, which Mr. Nelson occupies as his
principal residence. We invested $1.85 million in that residence, and our
Company holds a 28% ownership interest in this property. Upon any sale of this
co-owned property, our Company is entitled to recover its initial investment and
its proportionate share of any gain realized upon such a sale.

Termination. If we terminate Mr. Nelson's employment "Without Cause" or
Mr. Nelson quits for "Good Reason," as defined in the Employment Agreement, then
he is entitled to receive his base salary through the second anniversary of his
termination date; a pro rata portion of his bonus; the vested and accrued
amounts under his incentive plans, health and welfare plans, deferred
compensation plans and other benefit plans; and insurance benefits for him and
his family through the second anniversary of his termination date (to the extent
he and his family participated in these benefits prior to the termination) and
vesting of the deferral account and stock options referred to above.

CONTRACTUAL ARRANGEMENT WITH OUR VICE-CHAIRMAN, IRWIN HELFORD

Effective September 30, 1999, we entered into an Executive Part-Time
Employment Agreement with the non-executive Vice Chairman of our Board, Irwin
Helford, in connection with his retirement from his former duties as Chairman
and Chief Executive Officer of our Viking Office Products subsidiary. This
Agreement runs through September 30, 2002 by its terms. However, Mr. Helford has
announced his retirement, effective March 1, 2002, and accordingly this
Agreement terminated as of that date. It has been replaced by a lifetime
consulting agreement, under which Mr. Helford will be entitled to receive
lifetime medical insurance coverage for himself and his spouse from our Company,
in consideration for his agreement to consult from time to time with our CEO.

EMPLOYMENT AGREEMENTS WITH OTHER NAMED EXECUTIVE OFFICERS

We have Employment Agreements with each of our other Named Executive
Officers. Each of these "Executive Employment Agreements" is substantially
similar to the others. Each provides that the executive will devote his full
business time and attention to our Company's business and affairs.

Salary. Each Executive Employment Agreement provides for a base salary
which may be increased, but not reduced, and further provides that the executive
will be entitled to participate in our bonus plan and other benefit plans. The
base salaries of these executives as of December 31, 2001 were:

Mr. Colley............................................ $500,000
Mr. Keller............................................ $450,000
Mr. Brown............................................. $425,000
Mr. Fannin............................................ $400,000
Van Kaldekerken....................................... $367,000*

---------------

* Amount calculated based upon Euro/Dollar exchange rate as in effect at
December 31, 2001

Term. All of these Executive Employment Agreements are one-year
"evergreen" agreements, which automatically renew each year unless either party
notifies the other at least six (6) months in advance of expiration that it does
not wish the agreement to be extended for an additional year.

Non-Competition and Confidentiality Agreements. The Executive Employment
Agreements also contain confidentiality, non-compete and non-solicitation
provisions.

Change In Control Agreements. All of our Named Executive Officers also are
parties to Change in Control Employment Agreements ("CIC Agreements"). The
purpose of the CIC Agreements is to assure the continued dedication of these
executives, notwithstanding the possibility, threat or occurrence of a change in
control ("CIC"). In the event of a CIC, each of these executives will be
entitled to certain employment rights, including: (i) a minimum annual base
salary and bonus; (ii) participation rights in our incentive, savings,
retirement and welfare benefit plans; and (iii) certain payments and other
benefits upon termination of employment.

COMPENSATION COMMITTEE REPORT ON 2001 EXECUTIVE COMPENSATION

The following report of the Compensation Committee and the Performance
Graph shall not be deemed to be incorporated by reference by any general
statement incorporating this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent we specifically incorporate this information by reference.

WHAT IS OUR PHILOSOPHY OF EXECUTIVE COMPENSATION?

Our compensation philosophy is to design and implement compensation
practices that motivate employees to enhance shareholder value. Our compensation
practices are designed to attract, motivate and retain key personnel by
recognizing individual contributions as well as the achievement of specific
pre-determined goals and objectives, primarily through the use of "at risk"
compensation strategies. Our compensation program for executive officers
consists of five (5) main components:

(i) competitive base salaries,

(ii) annual cash incentives based on our overall Company performance
under our bonus plans;

(iii) stock option awards intended to encourage the achievement of
superior results over time and to align executive officer and shareholder
interests; and

(iv) beginning in 2002, the addition of two additional components for
our most senior executive officers, including our Chairman and Chief
Executive Officer, our Division Presidents and our Executive Vice
Presidents, consisting of (a) performance accelerated stock options and (b)
performance shares, each of which is discussed in more detail below in this
report.

The second, third and fourth (which is in two parts) components constitute
"at risk" or "performance based" elements of each executive's total
compensation.

Base Salary. Our Compensation Committee determines base salaries for
executive officers utilizing market survey data which focuses on other high
performance and specialty retail companies. A number of the companies included
in the comparison base are included in the S&P Retail Stores Composite and in
the S&P 500. The Committee generally considers the median level of the executive
market for comparably sized companies within these surveys in determining
executive base pay levels.

Salary Adjustments in 2001. The 2002 base salary for Bruce Nelson, our
Chairman and Chief Executive Officer, will remain the same for 2002 as it was in
2001. Salaries for our five other Named Executive Officers, Messrs. Colley,
Keller, Brown, Fannin and van Kaldekerken (the "NEO's"), as a group, did not
increase in 2001 over the levels of their salaries in 2000, except for Mr. Van
Kaldekerken, whose salary was adjusted to meet competitive market conditions.
For 2002, these Named Executive Officers, as a group, have received salary
increases totaling $106,000, effective January 1, 2002, or approximately 6% over
their salaries in 2001. The increases in salaries for these executive officers
position these executives competitively with their respective peer groups and
reflect the increase in responsibilities consistent with our growth and in some
cases with promotions afforded to these individuals.

Annual Bonus. The bonus compensation of our executive officers is
generally determined pursuant to our bonus plans, which provide for cash awards
to eligible participants, based upon objectives determined each year. The
objective of our bonus plan, which is described elsewhere in this Proxy
Statement under the heading Item 4 -- Shareholder Approval of the Company's
Bonus Plan for Executive Management Employees ("Bonus Plan") is to enhance
shareholder value by rewarding employees for the attainment of financial
objectives and for the attainment of specific work unit and individual goals
linked to specified strategic elements of the business. By extending annual
bonuses deep into the organization, we seek to motivate all managerial employees
to help achieve our profit objectives and other key strategic initiatives.

Awards under our Bonus Plan are expressed as a percentage of base salary
earnings. These awards to executive officers are a function of the participant's
level of responsibility and our financial performance for the year. Awards to
other management employees under our Bonus Plan are also based on achievement of
individual performance objectives.

Under our Bonus Plan, performance is measured in connection with attainment
of specific financial objectives (including earnings per share) and may also be
based on individual goals, where appropriate, that are established by the
participant and his or her immediate supervisor. Our Executives are measured in
connection with attainment of specific objectives based on one or more of the
following measurements of our performance: EPS, TSR, RONA, ROI,(2) pre-tax
earnings, net earnings, earnings per share, return on net assets, return on
equity, relative performance against a peer group or other measure, or some
other criterion established by the Compensation Committee of our Board of
Directors at or near the beginning of each year. The Bonus Plan allows our
Compensation Committee to adjust these measurements under certain circumstances.
Our Compensation Committee approves the goals set for and awards made to our
Chief Executive Officer, our Group Presidents, and our Executive Officers under
our Bonus Plan. This emphasis on "at risk" compensation is consistent with our
compensation philosophy and supports continued creation of shareholder value.

In order to ensure the eligibility for deduction of annual bonus payments
(where the recipient's total income exceeds $1 million), under Section 162(m) of
the Code, it is necessary that our shareholders periodically approve the overall
bonus plan of our Company. In this year's Proxy Statement there is a proposal
requesting that our shareholders approve our Bonus Plan for future years. This
proposal contains the full text of the proposed Bonus Plan.

Deferred Matching Bonus Awards; Performance Shares. Prior to December 31,
2001, we had in place a compensation program for certain senior executives which
permitted certain of such executives to receive a matching bonus payment,
deferred until a specified future date, and dependent upon the executive's
remaining with our Company through that future date. Our Committee has voted to
discontinue the deferred matching bonus award program for years beginning with
our fiscal year 2002 and instead to institute a program of granting Performance
Shares to certain of our senior executives.

These shares of stock are essentially awards of restricted stock, having a
three-year "cliff vesting" provision. Performance Shares will vest only if our
Company's TSR exceeds the return of a group of peer companies, which our
Committee has selected and designated. Most of these comparison companies are in
the retail sector. In the event our shareholders do not approve adding TSR as a
measure for this purpose, then our Committee plans to utilize EPS as an
alternative measure for this program. The purpose of our Performance Share
program is to further incentivize those senior executives who are most in a
position to influence the future success of our Company to outperform our
competition in terms of return to our shareholders. We view this new program as
a further alignment of the interests of our executive management team with the
interests of our shareholders. It is the intention of our Committee to institute
a similar three-year Performance Share program at the beginning of future years.
Each such program will have its own three-year performance measurement cycle,
peer group and list of participants. Once a performance cycle is in place, there
will not be any change in the measurement criteria, peer group companies (other
than as a result of peer group bankruptcies, sales or mergers) or participants.

Bonus Awards in 2001. For 2001, potential Bonus awards to our executive
officers were based on earnings per share and, to a lesser extent, return on net
assets as approved by the Compensation

---------------

2 EPS = earnings per share; TSR = total shareholder return, measured as the
increase in stock price (plus any dividends paid on the Company's shares) over
a period of time, whether or not compared to the increase in stock price (plus
dividends) of other comparable companies; RONA = total return on net assets of
our Company; and ROI = total return on investment of our Company.
29

Committee. Our Company did not earn the level of EPS necessary to qualify for
minimum bonus payments in 2001. As a result, our Committee had to consider
whether to award discretionary bonuses to our bonus eligible employees. Although
our Company did not achieve the level of earnings per share performance called
for by our Compensation Committee in setting goals for 2001, our Committee did
review the individual performances of our executive officers and other Bonus
Plan participants, taking into account several mitigating and other factors,
including one-time charges and credits, the severe recession which began early
in 2001 and the events of September 11, 2001, all of which had a general
dislocative effect on businesses, including customers of our Company. The
Committee also considered the significant increase in shareholder value (Total
Shareholder Return) generated by our management team in 2001 (with the share
price more than doubling from the beginning to the end of 2001). As a result, we
decided to make awards to our CEO, Presidents, Executive Vice Presidents and
other managers, which reflect their individual accomplishments. Our Compensation
Committee carefully considered both the granting of any bonus compensation and
the size of such compensation in light of all the circumstances relevant to
2001.

Stock Based Incentive Program -- Stock Options. The objective of stock
option awards is to motivate grantees to maximize our long-term growth and
profitability. Grantees can realize value from options granted only if our stock
price increases after the date on which such options are granted, because the
exercise price of options granted must be at least equal to the fair market
value of our stock on the date of grant. The award of options thus aligns the
long-range interests of the grantees with those of our shareholders. Grants of
options are generally made annually. The Compensation Committee determined the
grant levels for awards to our Chief Executive Officer and our other executive
officers after taking into consideration prior year's grants, the organizational
impact of the participant and the level of emphasis we placed on participant
retention. Stock option awards below the executive officer level are a function
of position within the organization.

In granting stock options in 2001, the Compensation Committee took into
account the turn around efforts with which our officers were charged, and
accordingly granted stock options to incentivize our management team to continue
its good work in revitalizing the Company. To keep our Company competitive for
top management talent, we believe our stock option program must remain viable by
granting sufficient numbers of new stock options to keep our valued management
talent incentivized and motivated to continue with our Company and to excel in
future performance.

Performance-Accelerated Stock Options. Our Committee has carefully
considered various proposals that it grant stock options at a "premium" to
current market value. As a result, there is a Company-sponsored proposal in this
year's Proxy Statement that calls for a modification of the incentive
compensation program for our most senior officers, including our Chairman and
CEO. The proposed new elements of our overall compensation plan for executive
officers will add performance-accelerated stock options and performance shares
to the traditional stock option element of their overall compensation. These
proposed new aspects of executive compensation are discussed in detail in this
Proxy Statement at Item 3 -- Proposal to Amend the Long Term Equity Incentive
Plan of the Company ("Option Plan"). These changes are intended to further align
the interests of our executives with the interests of our shareholders, and to
be responsive to various positions voiced by shareholders over the past couple
of years.

If approved by our shareholders, our amended Option Plan will be used by
this Committee to provide a reduced number of traditional stock options
("TSO's") to our Chairman and CEO, Division Presidents and Executive Vice
Presidents, along with new performance-accelerated stock options ("PSO's").
Generally speaking, the more senior the executive officer, the more heavily
weighted are his or her stock options in favor of PSO's rather than TSO's.
Unlike TSO's, our PSO's will have a significantly longer vesting schedule than
TSO's (5 years versus 3 years), and a shorter option life (7 years versus 10
years), but the PSO's may vest significantly earlier if the Company's TSR (total
shareholder return, which is a measure of the increase in share price, plus
dividends paid to shareholders

(if any)). In the event our shareholders do not approve using TSR as a measure
of performance, our Committee intends to utilize EPS as an alternative measure
of performance.

Value of Stock Options Awarded in 2001. Based on the Black-Scholes
option-pricing model, the present value at date of grant of Mr. Nelson's 2001
stock options represented 72% of his total 2001 compensation. With his bonus
payment in 2001 of $1,000,000(3), Mr. Nelson's total "at risk" portion of his
compensation (consisting of stock options plus the portion of any annual bonus
requiring vesting) represented 88.86% of his total compensation in 2001.

Stock option awards granted to our other NEO's for 2001 represented 37% of
their total 2001 compensation. The total "at risk" portion, annual bonus and
stock options for our other NEO's represented 56% of their total 2001
compensation.

Deferred Compensation Plan. Our executive officers and other key employees
are permitted to defer up to 25% of their base salaries and up to 100% of their
bonuses under the Office Depot, Inc. Officer Deferred Compensation Plan.
Deferrals may generally be made for any period of time selected by the
executive, but we have the right to further defer payouts under the plan in
order to avoid exceeding the $1 million limit on executive compensation under
Section 162(m) of the Code. Although the plan allows us to make additional
matching deferrals and incentive contributions at our discretion, no such
contributions were made under the plan for 2001.

Split Dollar Life Insurance. Effective April 1995, we provided certain of
our executive officers the opportunity to purchase whole life insurance
policies, with the premiums paid by us. If our assumptions regarding mortality,
dividends and other factors are realized, we will recover all of our payments
for premiums either from death benefits or from the executive, if the policy is
transferred to the executive. Messrs. Nelson, Colley, Keller, Brown and Fannin
all are beneficiaries of this program.

Executive Management Deferred Compensation Plan. We have implemented the
Executive Management Deferred Compensation Plan (a non qualified retirement
savings plan) to provide our executive officers and other management and sales
executives the opportunity to defer retirement savings in addition to those
amounts which may be deferred under the Office Depot Retirement Savings Plan
(401(k) Plan). The Executive Management Deferred Compensation Plan allows us to
supplement our matching contributions, which are limited under the Office Depot
Retirement Savings Plan (401(k)) pursuant to provisions of the Internal Revenue
Code.

Philosophy of Compensation of our Chairman and Chief Executive
Officer. Our Employment Agreement with Mr. Nelson, entered into effective
December 29, 2001, the date of his becoming our Chairman, as well as CEO,
provides him with a base salary at the maximum deductible amount (to the
Company) under Section 162(m) of the Code. Salary survey work performed for us
by a reputable outside consultant indicates that Mr. Nelson's base salary is
competitive with the salaries paid to similarly situated executives at other
similarly sized companies and is not excessive. In lieu of a larger base salary
payment (a portion of which would be non-deductible by the Company for income
tax purposes) to Mr. Nelson, the Compensation Committee and Board of Directors
have elected to incentivize Mr. Nelson through substantial grants of stock
options, some of which are premium-priced or performance-accelerated, as
described above, as well as his receipt of performance shares. We believe that
his overall compensation package closely aligns his interests with those of our
shareholders. The Committee feels that Mr. Nelson's compensation, including base
salary, bonus payments and equity

---------------

3 Mr. Nelson also was awarded a deferred bonus of $750,000, which has been
designated for his account and remains at risk. Such deferred matching bonus
amount vests only if Mr. Nelson remains continuously employed by our Company
through and including December 31, 2003. At December 31, 2001, he also was
entitled to a $777,000 deferred bonus, from our fiscal year 1998, which had a
three year vesting schedule.
31

incentives, is properly oriented towards risk-based, incentive compensation and
that the combination of base salary and incentive compensation is competitive
with similarly situated chief executives. See the discussion above under the
heading "CEO Compensation" for a more complete description of our employment
agreement with Mr. Nelson.

Section 162(m) and Deductibility Limits under the Internal Revenue
Code. Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation exceeding $1 million paid to our
Named Executive Officers. However, certain "at risk" portions of our executive
officers' compensation (those portions currently being stock option grants and
annual bonus and in the future to include Performance Stock Options and
Performance Shares, subject to shareholder approval at our Annual Meeting) may
qualify for deduction under Section 162(m). The Compensation Committee intends
to continue to take actions, including seeking shareholder approval of bonus
plans and other incentives, to ensure that our executive compensation programs
meet the eligibility requirements under Section 162(m) of the Code. In certain
cases, where our Committee believes our shareholder interests are best served by
retaining flexibility of approach, we do grant incentive compensation that does
not necessarily qualify for deduction under Section 162(m). In some cases, it
may not be possible to keep a given person's compensation under the Section
162(m) limit or to qualify all compensation for deductibility under Section
162(m) in a particular year, but that remains always the goal of this Committee.
We strive to meet that goal, but the more important goal is to ensure that our
compensation systems are competitive and enable us to attract and retain the
most capable management team possible in furtherance of the interests of our
shareholders.

Report of Compensation Committee

W. Scott Hedrick, Chairman
Neil R. Austrian, Member
Cynthia R. Cohen, Member
Bruce S. Gordon, Member*

* Mr. Gordon did not join the
Compensation Committee until
February 2002.

AUDIT COMMITTEE REPORT FOR 2002

The Audit Committee of the Office Depot Board of Directors (the
"Committee") is comprised of five independent directors. The responsibilities of
the Committee are set forth in its written charter (the "Charter"), which has
been adopted by our Board of Directors (the "Board"). The Charter of our Audit
Committee has not been amended since the date of our Proxy Statement in the year
2001 and therefore is not required to be attached to this Proxy Statement. A
copy is attached to our 2001 Proxy Statement and also is available upon request
from the Company.

The duties of this Committee include oversight of the financial reporting
process for the Company through periodic meetings with the Company's independent
auditors, internal auditors and management of the Company to review accounting,
auditing, internal controls and financial reporting matters.

During fiscal year 2001, this Committee met eight times, four times in
person and four times by telephonic communication prior to the release of
quarterly earnings information. The Company's senior financial management and
independent and internal auditors were in attendance at all such meetings. At
each such meeting held in person, this Committee conducted a private session
with the internal and independent auditors, without the presence of management.

The management of the Company is responsible for the preparation and
integrity of the financial reporting information and related systems of internal
controls. The Audit Committee, in carrying out its role, relies on the Company's
senior management, including particularly its senior financial management, to
prepare financial statements with integrity and objectivity and in accordance
with generally accepted accounting principles, and relies upon the Company's
independent auditors to review or audit, as applicable, such financial
statements in accordance with generally accepted auditing standards.

We have reviewed and discussed with senior management the Company's audited
financial statements for the fiscal year ended December 29, 2001, included in
the Company's 2001 Annual Report to Shareholders. Management has confirmed to us
that such financial statements (i) have been prepared with integrity and
objectivity and are the responsibility of management and (ii) have been prepared
in conformity with generally accepted accounting principles.

In discharging our oversight responsibility as to the audit process, we
have discussed with Deloitte & Touche LLP ("Deloitte"), the Company's
independent auditors, the matters required to be discussed by SAS 61
(Communications with Audit Committees). SAS 61 requires our independent auditors
to provide us with additional information regarding the scope and results of
their audit of the Company's financial statements, including with respect to (i)
their responsibilities under generally accepted auditing standards, (ii)
significant accounting policies, (iii) management judgments and estimates, (iv)
any significant accounting adjustments, (v) any disagreements with management
and (vi) any difficulties encountered in performing the audit.

We have obtained from Deloitte a letter providing the disclosures required
by Independence Standards Board Standard No. 1 (Independence Discussion with
Audit Committees) with respect to any relationship between Deloitte and the
Company that in their professional judgment may reasonably be thought to bear on
independence. Deloitte has discussed its independence with us, and has confirmed
in its letter to us that, in its professional judgment, it is independent of the
Company within the meaning of the United States securities laws.

Based upon the foregoing review and discussions with our independent and
internal auditors and senior management of the Company, we have recommended to
our Board that the financial statements prepared by the Company's management and
audited by its independent auditors be included in the Company's 2001 Annual
Report to Shareholders, and that such financial statements also be included in
the Company's Annual Report on Form 10-K, for filing with the United States
Securities & Exchange Commission. The Committee also has recommended to the
Board the reappointment of Deloitte as the

Company's independent outside accounting firm for 2002, and the Board has
concurred in such recommendation.

As specified in the Charter, it is not the duty of this Committee to plan
or conduct audits or to determine that the Company's financial statements are
complete and accurate and in accordance with generally accepted accounting
principles. These are the responsibilities of the Company's management and
independent auditors. In giving our recommendations to the Board, we have relied
on (i) management's representations to us that the financial statements prepared
by management have been prepared with integrity and objectivity and in
conformity with generally accepted accounting and (ii) the report of the
Company's independent auditors with respect to such financial statements.

Presented by the members of the Audit
Committee:

Michael J. Myers (Chair)
Lee A. Ault, III, Member
James L. Heskett, Member
Frank P Scruggs, Jr., Member
Brenda J. Gaines, Member*

* Ms. Gaines did not join our Audit
Committee until February 2002.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers to file reports of their holdings and transactions of
Office Depot common stock with the Securities and Exchange Commission and the
New York Stock Exchange. Based on our records and other information, we believe
that each of our officers and directors complied with all Section 16(a) filing
requirements applicable to them during fiscal 2001.

COPIES OF FORM 10-K AVAILABLE

WE WILL PROVIDE A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR OUR FISCAL
YEAR ENDED DECEMBER 29, 2001, WHICH INCLUDES OUR CONSOLIDATED FINANCIAL
STATEMENTS AND NOTES TO OUR FINANCIAL STATEMENTS, TO ANY SHAREHOLDER UPON
WRITTEN REQUEST. REQUESTS SHOULD BE SENT TO THE VICE PRESIDENT, INVESTOR
RELATIONS & PUBLIC RELATIONS AT OUR CORPORATE OFFICES, 2200 OLD GERMANTOWN ROAD,
DELRAY BEACH, FL 33445.

2003 SHAREHOLDER PROPOSALS

Any shareholder proposal intended to be presented for consideration at the
2003 Annual Meeting of Shareholders and to be included in our Proxy Statement
for that meeting must be received by the Secretary at our corporate offices,
2200 Old Germantown Road, Delray Beach, FL 33445, on or before November 25,
2002. Shareholder proposals to be brought before the 2003 Annual Meeting but not
included in the Proxy Statement will be considered untimely after December 31,
2002, and the proxies we solicit for next year's Annual Meeting may confer
discretionary authority to vote on any such matters without a description of
them in the proxy statement for that meeting. Notice of any shareholder proposal
must include various matters, including a clear and concise description of the
proposal, and the reasons for proposing it.

COMMON STOCK PERFORMANCE GRAPH

The graph shown below compares the cumulative total shareholder return on
our common stock since December 31, 1997 with the S&P 500 Index and the S&P
Retail Stores Composite Index.

(PERFORMANCE GRAPH)

--------------------------------------------------------------------------------
12/97 12/98 12/99 12/00 12/01
--------------------------------------------------------------------------------

OFFICE DEPOT, INC. $102 $158 $ 70 $ 54 $156
S&P 500 $226 $290 $351 $232 $166
S&P RETAIL STORES
COMPOSITE $191 $308 $373 $280 $259

OTHER MATTERS

It is not presently expected that any matters other than those discussed
herein will be brought before our Annual Meeting. If, however, other matters do
come before the Meeting, it is the intention of the persons named as
representatives in the accompanying proxy to vote in accordance with the
recommendation of our Board of Directors.

Appendix A

OFFICE DEPOT, INC.
AMENDED LONG-TERM EQUITY INCENTIVE PLAN
As Proposed to be Revised and Amended by the Shareholders
At the Annual Meeting, April 25, 2002

1. PURPOSE.

This plan shall be known as the Office Depot, Inc. Long-Term Equity
Incentive Plan (the "Plan"). The purpose of the Plan shall be to promote the
long-term growth and profitability of Office Depot, Inc. (the "Company") and its
Subsidiaries by (i) providing certain directors, officers and key employees of,
and certain other key individuals who perform services for, the Company and its
Subsidiaries with incentives to maximize stockholder value and otherwise
contribute to the success of the Company and (ii) enabling the Company to
attract, retain and reward the best available persons for positions of
substantial responsibility. Grants of incentive or nonqualified stock options,
stock appreciation rights ("SARs"), either alone or in tandem with options,
restricted stock, performance awards, or any combination of the foregoing may be
made under the Plan. The provisions of this Plan hereby supersede and replace
all prior versions and/or iterations of the Plan. This Plan may be modified for
purposes of local law in jurisdictions outside the United States by the adoption
by the Company, acting by and through a duly authorized Committee appointed by
the Board of Directors, of any amendment or Subplan required by such local law
requirements.

2. DEFINITIONS.

(a) "BOARD OF DIRECTORS" and "BOARD" mean the board of directors of Office
Depot.

(b) "CAUSE" (unless otherwise defined in the Participant's grant letter or
in an employment contract to which he/she is a party). means the occurrence of
one of the following events:

(i) Conviction of a felony or any crime or offense lesser than a felon
involving the property of the Company or a Subsidiary; or

(ii) Conduct that has caused demonstrable and serious injury to the
Company or a Subsidiary, monetary or otherwise; or

(iii) Willful refusal to perform or substantial disregard of duties
properly assigned, as determined by the Company; or

(iv) Breach of duty of loyalty to the Company or a Subsidiary or other
act of fraud or dishonesty with respect to the Company or a Subsidiary.

(c) "CHANGE IN CONTROL" means, except as may otherwise be provided by the
Committee, the occurrence of one of the following events:

(i) if any "person" or "group" as those terms are used in Sections
12(d) and 13(d) of the Exchange Act, other than an Exempt Person, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities; or

(ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board and any new directors whose
election by the Board or nomination for election by the

Company's stockholders was approved by at least two-thirds of the directors then
still in office who either were directors at the beginning of the period or
whose election was previously so approved, cease for any reason to constitute a
majority thereof; or

(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation; provided, however, a
Change of Control shall not be deemed to have occurred (A) if such merger or
consolidation would result in all or a portion of the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) either directly or indirectly more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (B) if the
corporate existence of the Company is not affected and following the merger or
consolidation the Company's chief executive officers retain their positions with
the Company and the directors of the Company prior to such merger or
consolidation constitute at least a majority of the board of the Company or the
entity that directly or indirectly controls the Company after such merger or
consolidation; or

(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets, other than a sale to
an Exempt Person.

(d) "CODE" means the Internal Revenue Code of 1986, as amended.

(e) "COMMITTEE" means the Compensation Committee of the Board. The
membership of the Committee shall be constituted so as to comply at all times
with the applicable requirements of Rule 16b-3 under the Exchange Act and
Section 162(m) of the Code.

(f) "COMMON STOCK" means the Common Stock, par value $.01 per share, of the
Company, and any other shares into which such stock may be changed by reason of
a recapitalization, reorganization, merger, consolidation or any other change in
the corporate structure or capital stock of the Company.

(g) "EMPLOYEE" means any person who is a regular employee of the Company
(including officers and directors who are also employees) of the Company, either
within or outside the United States, who is selected by the Committee to
participate in the Plan.

(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

(i) "EXEMPT PERSON" means any employee benefit plan of the Company or a
trustee or other administrator or fiduciary holding securities under an employee
benefit plan of the Company.

(j) "FAIR MARKET VALUE" of a share of Common Stock of the Company means, as
of the date in question,

(1) if the Common Stock is listed for trading on the New York Stock
Exchange, the mean of the highest and lowest sale prices of the
Common Stock on such date, as reported on the New York Stock
Exchange Composite Tape, or if no such reported sale of the
Common Stock shall have occurred on such date, on the last day
prior to such date on which there was such a reported sale; or

(2) if the Common Stock is not so listed, but is listed on another
national securities exchange or authorized for quotation on the
National Association of Securities Dealers Inc. NASDAQ National
Market System ("NASDAQ/NMS"), the mean of the highest and lowest
sale price of the Common Stock on such date as reported on such
exchange or NASDAQ/NMS, or if no such reported sale of the Common
Stock shall have occurred on such date, on the last day prior to
such date on which there was such a reported sale;

(3) if the Common Stock is not listed for trading on a national
securities exchange or authorized for quotation on NASDAQ/NMS,
the mean of the highest and lowest sale prices of the Common
Stock on such date as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or, if
no such prices shall have been so reported for such date, on the
last day prior to such date on which there was such a reported
sale.

(k) "INCENTIVE STOCK OPTION" means an option conforming to the requirements
of Section 422 of the Code and any successor thereto.

(l) "INTERNATIONAL PARTICIPANT" means a participant in the Plan who resides
or works outside of the United States.

(m) "NON-EMPLOYEE" means any person, not an Employee of the Company, as
defined herein, who serves as a director, consultant or adviser to the Company.

(n) "NON-EMPLOYEE DIRECTOR" has the meaning given to such term in Rule
16b-3 under the Exchange Act.

(o) "NONQUALIFIED STOCK OPTION" means any stock option other than an
Incentive Stock Option.

(p) "OFFICER" means an Employee or a Non-Employee of the Company whose
position in the Company or in any affiliate or subsidiary entity of the Company
is that of a corporate officer, as determined by the Board of Directors.

(q) "OTHER COMPANY SECURITIES" mean securities of the Company other than
Common Stock, which may include, without limitation, unbundled stock units or
components thereof, debentures, preferred stock, warrants and securities
convertible into or exchangeable for Common Stock or other property.

(r) "PARTICIPANT" means a recipient of any grant of stock options,
restricted stock, stock appreciation rights or performance awards under this
Plan.

(s) "PRIOR PLAN(S)" means the Office Depot, Inc. Omnibus Equity Plan, the
Office Depot, Inc. Directors Stock Option Plan or any other plan which these
plans subsumed or replaced.

(t) "RETIREMENT" means retirement as defined under any Company pension plan
or retirement program or termination of one's employment on retirement with the
approval of the Committee.

(u) "SUBSIDIARY" means a corporation or other entity of which outstanding
shares or ownership interests representing 50% or more of the combined voting
power of such corporation or other entity entitled to elect the management
thereof, or such lesser percentage as may be approved by the Committee, are
owned directly or indirectly by the Company.

3. ADMINISTRATION; POWERS OF THE COMMITTEE; LIMITATIONS OF LIABILITY

The Plan shall be administered by the Committee; provided that the Board
may, in its discretion, at any time and from time to time, resolve to administer
the Plan, in which case the term "Committee" shall be deemed to mean the Board
for all purposes herein. The Committee shall consist of at least two directors.
Subject to the provisions of the Plan, the Committee shall be authorized to (i)
select persons to participate in the Plan, (ii) determine the form and substance
of grants made under the Plan to each participant, and the conditions and
restrictions, if any, subject to which such grants will be made, (iii) modify
the terms of grants made under the Plan in the event of a Change in Control or
death, disability, retirement of the participant, or other situation which the
Committee deems as a special circumstance, (iv) interpret the Plan and grants
made thereunder, (v) make any adjustments necessary or desirable in connection
with grants made under the Plan to eligible participants located outside the
United States and (vi) adopt, amend, or rescind such rules and regulations, and
make such other determinations, for carrying out the Plan as it may deem
appropriate. Decisions of the Committee on all matters relating to the Plan
shall be in the Committee's sole discretion and shall be conclusive and binding
on all parties. The validity, construction, and effect of the Plan and any rules
and regulations relating to the Plan shall be determined in accordance with
applicable federal and state laws and rules and regulations promulgated pursuant
thereto.

No member of the Committee and no officer of the Company shall be liable
for any action taken or omitted to be taken by such member, by any other member
of the Committee or by any officer of the Company in connection with the
performance of duties under the Plan, except for such person's own willful
misconduct or as expressly provided by statute. Members of the Committee and
officers of the Company shall be indemnified in connection with their
administration of the Plan to the fullest extent provided by the Delaware
General Corporation Law and by the Bylaws of the Company.

4. EXPENSES OF THE PLAN.

The expenses of the Plan shall be borne by the Company. The Company shall
not be required to establish any special or separate fund or make any other
segregation of assets to assume the payment of any award under the Plan, and
rights to the payment of such awards shall be no greater than the rights of the
Company's general creditors.

5. SHARES AVAILABLE FOR THE PLAN.

Subject to adjustments as provided in Section 20, to allow for stock
splits, recapitalizations and similar occurrences, as of any date the total
number of shares of Common Stock with respect to which awards may be granted
under the Plan (the "Shares") shall equal the excess (if any) of 47,068,750 over
(i) the number of shares of Common Stock subject to outstanding awards under the
Plan or the Prior Plans, (ii) the number of shares of Common Stock in respect of
which options and stock appreciation rights have been exercised under the Plan
or the Prior Plans, and (iii) the number of shares of Common Stock issued
pursuant to performance awards or issued subject to forfeiture restrictions
which have lapsed under the Plan or the Prior Plans. Such Shares may be in whole
or in part authorized and unissued, or shares which are held by the Company as
treasury shares. If any grant under the Plan or any Prior Plan expires or
terminates unexercised, becomes unexercisable or is forfeited as to any Shares,
such unpurchased or forfeited Shares shall thereafter be available for further
grants under the Plan unless, in the case of options granted under the Plan or
any Prior Plan, related SARs are exercised.

6. PARTICIPATION.

Participation in the Plan shall be limited to those directors (including
Non-Employee Directors), officers (including non-employee officers) and key
employees of, and other key individuals (including Non-Employees of the Company)
performing services for, the Company and its Subsidiaries selected by the
Committee (including participants located outside the United States). Nothing in
the Plan or in any grant thereunder shall confer any right on a participant to
continue in the employ of or the performance of services for the Company or
shall interfere in any way with the right of the Company to terminate the
employment or performance of services of a participant at any time. By accepting
any award under the Plan, each participant and each person claiming under or
through him or her shall be conclusively deemed to have indicated his or her
acceptance and ratification of, and consent to, any action taken under the Plan
by the Company, the Board or the Committee.

Determinations made by the Committee under the Plan need not be uniform and
may be made selectively among eligible individuals under the Plan, whether or
not such individuals are similarly situated. A grant of any type made hereunder
in any one year to an eligible participant shall neither guarantee nor preclude
a further grant of that or any other type to such participant in that year or
subsequent years.

7. INCENTIVE AND NONQUALIFIED OPTIONS.

The Committee may from time to time grant to eligible participants
Incentive Stock Options, Nonqualified Stock Options, or any combination thereof;
provided that the Committee may grant Incentive Stock Options only to eligible
Employees of the Company or its subsidiaries (as defined for this purpose in
Section 424(f) of the Code). In any one calendar year, the Committee shall not
grant to any one participant, options or SARs to purchase a number of shares of
Common Stock in excess of Two Million (2,000,000) shares (subject to such
adjustments as may be provided for under Section 20 hereof). The options granted
shall take such form as the Committee shall determine, subject to the following
terms and conditions.

It is the Company's intent that Nonqualified Stock Options granted under
the Plan not be classified as Incentive Stock Options, that Incentive Stock
Options be consistent with and contain or be deemed to contain all provisions
required under Section 422 of the Code and any successor thereto, and that any
ambiguities in construction be interpreted in order to effectuate such intent.
If an Incentive Stock Option granted under the Plan does not qualify as such for
any reason, then to the extent of such nonqualification, the stock option
represented thereby shall be regarded as a Nonqualified Stock Option duly
granted under the Plan, provided that such stock option otherwise meets the
Plan's requirements for Nonqualified Stock Options.

Incentive Stock Options or Nonqualified Stock Options, SARs, alone or in
tandem with options, restricted stock awards, performance awards, or any
combination thereof, may be granted to such persons and for such number of
Shares as the Committee shall determine (such individuals to whom grants are
made being sometimes herein called "optionees" or "grantees," as the case may
be).

8. TERMS OF STOCK OPTIONS

(a) PRICE. The price per Share payable by an optionee upon the exercise of
each option (the "exercise price") shall be established by the Committee, except
that the exercise price may not be less than 100% of the Fair Market Value of a
share of Common Stock as of the date of grant of the option, and in the case of
the grant of any Incentive Stock Option to an employee who, at the time of the
grant, owns more than 10% of the total combined voting power of all classes of
stock of the Company or any of its

Subsidiaries, the exercise price may not be less than 110% of the Fair Market
Value of a share of Common Stock as of the date of grant of the option, in each
case unless otherwise permitted by Section 422 of the Code.

(b) TERMS OF OPTIONS. The term during which each option may be exercised
shall be determined by the Committee, but, except as otherwise provided herein,
in no event shall an option be exercisable in whole or in part, in the case of a
Nonqualified Stock Option or an Incentive Stock Option (other than as described
below), more than ten years from the date it is granted or, in the case of an
Incentive Stock Option granted to an employee who at the time of the grant owns
more than 10% of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, if required by the Code, more than five
years from the date it is granted. All rights to purchase Shares pursuant to an
option shall, unless sooner terminated, expire at the date designated by the
Committee. The Committee shall determine the date on which each option shall
become exercisable and may provide that an option shall become exercisable in
installments. The Committee shall have the discretion to provide in the form of
option grant that the vesting and exercisability of the option may be
accelerated by the achievement of performance goals established by the Committee
at the time of grant. The performance goals shall be based on one or more of the
standards set forth in Section 15 hereof. The Shares constituting each
installment may be purchased in whole or in part at any time after such
installment becomes exercisable, subject to such minimum exercise requirements
as may be designated by the Committee. Unless otherwise provided herein or in
the terms of the related grant, an optionee may exercise an option only if he or
she is, and has continuously since the date the option was granted, been a
director, officer or employee of or performed other services for the Company or
a Subsidiary. Prior to the exercise of an option and delivery of the Shares
represented thereby, the optionee shall have no rights as a stockholder with
respect to any Shares covered by such outstanding option (including any dividend
or voting rights).

(c) LIMITATIONS ON GRANTS. If required by the Code, the aggregate Fair
Market Value (determined as of the grant date) of Shares for which an Incentive
Stock Option is exercisable for the first time during any calendar year under
all incentive stock option plans of the Company and its subsidiaries (as defined
in Section 424 of the Code) may not exceed $100,000.

9. WRITTEN AGREEMENT; VESTING; CONFIDENTIALITY AGREEMENT.

(a) Each Participant to whom a grant is made under this Plan shall enter
into a written agreement with the Company that shall contain such
provisions, including without limitation vesting requirements,
consistent with the provisions of the Plan, as may be approved by the
Committee. Unless the Committee may otherwise provide and except as
otherwise provided in Section 11 in connection with a Change of
Control or certain occurrences of termination, no grant under this
Plan may be exercised, and no restrictions relating thereto may lapse,
within six months of the date such grant is made.

(b) Each Participant shall, as a condition to receiving a grant under this
Plan, enter into an agreement with the Company containing non-compete,
confidentiality, non-solicitation and no-hire provisions substantially
in conformity with the provisions of ATTACHMENT A hereto and
incorporated by reference herein, or in such other form of
non-compete, confidentiality, non-solicitation and no-hire agreement
as the Committee may adopt and approve from time to time (as so
modified or amended, the "Non-Compete Agreement"). Such provisions may
be included in, or incorporated by reference in, the written agreement
referred to in Section 9(a) above. Such agreement shall provide that
in the event the Participant shall violate or breach such provisions,
the Company shall have the right, among such other remedies for breach
as may be available to it at law or in

equity, to require the Participant to forfeit any unexercised options,
SAR's, performance awards or unvested restricted stock awarded to
Participant under this Plan, and, in the event the Participant has
realized any proceeds from the disposition of any such stock or other
awards within two years prior to such violation or breach, the Company
shall have the right to seek to recover such proceeds from the
Participant.

(c) The written agreement referred to in Section 9(a) above may consist of
a signed acknowledgment of receipt of a grant letter from the Company
to the Participant, pursuant to which the Participant agrees that the
terms of this Plan are incorporated by reference into such grant
letter, are available upon request from the Office of the Plan
Administrator at the Company or on the Company's Intranet Site under
Human Resources. Similarly, the Participant shall be deemed to have
entered into a Non-Compete Agreement with the Company, in the form
attached hereto as ATTACHMENT A (or in such other form as the
Committee may adopt and specify from time to time), each time the
Participant signs an acknowledgment of receipt of such a grant letter.

10. EXERCISE OF STOCK OPTIONS

(a) NOTICE. Options may be exercised, in whole or in part, upon the
Company's receipt of written notice of exercise in the form prescribed by the
Company, accompanied by payment of the exercise price of the Shares to be
acquired. However, no participant shall be eligible to exercise any Stock Option
(i) if the participant, at the time of the purported exercise, is not in
compliance with any provision of the Plan or (ii) with respect to which the
participant has not signed and returned to the Company a letter in the form
prescribed by the Company, acknowledging receipt of such Stock Option, agreeing
to abide by the provisions of the Plan and otherwise containing such provisions
as the Company shall prescribe. Once given, a notice may not be withdrawn
without the consent of the Company.

(b) METHOD OF PAYMENT. Unless otherwise determined by the Committee,
payment shall be made (i) in cash (including check, bank draft or money order),
(ii) by delivery of outstanding shares of Common Stock with a Fair Market Value
on the date of exercise equal to the aggregate exercise price payable with
respect to the options' exercise, (iii) by simultaneous sale through a broker
reasonably acceptable to the Committee of Shares acquired on exercise, as
permitted under Regulation T of the Federal Reserve Board, (iv) by authorizing
the Company to withhold from issuance a number of Shares issuable upon exercise
of the options which, when multiplied by the Fair Market Value of a share of
Common Stock on the date of exercise is equal to the aggregate exercise price
payable with respect to the options so exercised or (v) by any combination of
the foregoing. or (v) such other form of payment as the Committee may permit in
its discretion.

(c) PAYMENT BY TENDER OF SHARES. In the event a grantee elects to pay the
exercise price payable with respect to an option pursuant to clause (ii) of
Section 10(b) above, (A) only a whole number of share(s) of Common Stock (and
not fractional shares of Common Stock) may be tendered in payment, (B) such
grantee must present evidence acceptable to the Company that he or she has owned
any such shares of Common Stock tendered in payment of the exercise price (and
that such tendered shares of Common Stock have not been subject to any
substantial risk of forfeiture) for at least six months prior to the date of
exercise, and (C) Common Stock must be delivered to the Company. Delivery for
this purpose may, at the election of the grantee, be made either by (A) physical
delivery of the certificate(s) for all such shares of Common Stock tendered in
payment of the price, accompanied by duly executed instruments of transfer in a
form acceptable to the Company, or (B) direction to the grantee's broker to
transfer, by book entry, such shares of Common Stock from a brokerage account of
the grantee to a brokerage account specified by the Company. When payment of the
exercise price is made by delivery of Common Stock, the

difference, if any, between the aggregate exercise price payable with respect to
the option being exercised and the Fair Market Value of the share(s) of Common
Stock tendered in payment (plus any applicable taxes) shall be paid in cash. No
grantee may tender shares of Common Stock having a Fair Market Value exceeding
the aggregate exercise price payable with respect to the option being exercised
(plus any applicable taxes).

(d) PAYMENT BY WITHHOLDING OF A PORTION OF SHARES. In the event a grantee
elects to pay the exercise price payable with respect to an option pursuant to
clause (iv) above, (A) only a whole number of Share(s) (and not fractional
Shares) may be withheld in payment and (B) such grantee must present evidence
acceptable to the Company that he or she has owned a number of shares of Common
Stock at least equal to the number of Shares to be withheld in payment of the
exercise price (and that such owned shares of Common Stock have not been subject
to any substantial risk of forfeiture) for at least six months prior to the date
of exercise. When payment of the exercise price is made by withholding of
Shares, the difference, if any, between the aggregate exercise price payable
with respect to the option being exercised and the Fair Market Value of the
Share(s) withheld in payment (plus any applicable taxes) shall be paid in cash.
No grantee may authorize the withholding of Shares having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option being
exercised (plus any applicable taxes). Any withheld Shares shall no longer be
issuable under such option.

11. EFFECT OF TERMINATION; CHANGE OF CONTROL ON OPTIONS

(a) TERMINATION. Except as may otherwise be provided by the Committee:

(i) If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company and any
Subsidiary due to the death of the participant, all of the
participant's options and SARs shall become fully vested and
exercisable and shall remain so for a period of 24 months from
the date of such death but in no event after the expiration
date of the options or SARs.

(ii) If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company and any
Subsidiary upon the occurrence of his or her Retirement, (A)
all of the participant's options and SARs that were exercisable
on the date of Retirement shall remain exercisable for, and
shall otherwise terminate at the end of, a period of up to 90
days after the date of Retirement, but in no event after the
expiration date of the options or SARs and (B) all of the
participant's options and SARs that were not exercisable on the
date of Retirement shall be forfeited immediately upon such
Retirement.

(iii) If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company or a
Subsidiary due to Cause, all of the participant's options and
SARs shall be forfeited immediately upon such cessation,
whether or not then exercisable.

(iv) If a participant ceases to be a director, officer or employee
of, or to otherwise perform services for, the Company or a
Subsidiary for any reason other than death, Retirement or
Cause, (A) all of the participant's options and SARs that were
exercisable on the date of such cessation shall remain
exercisable for, and shall otherwise terminate at the end of, a
period of 90 days after the date of such cessation, but in no
event after the expiration date of the options or SARs and (B)
all of the participant's options and SARs that were not
exercisable on the date of such cessation shall be forfeited
immediately upon such cessation. The Committee may, at its sole
discretion, determine (i) whether any leave of absence
(including short-term or long-term disability or medical

leave) shall constitute a termination of employment for
purposes of this Plan and (ii) the impact, if any, of any such
leave on outstanding awards under the Plan.

(b) CHANGE IN CONTROL. If there is a Change in Control, all of the
participant's options and SARs shall become fully vested and
exercisable immediately prior to such Change in Control and shall
remain so until the expiration date of the options and SARs.

12. RELOAD OPTIONS

The Committee may provide (either at the time of grant or exercise of an
option), in its discretion, for the grant to a grantee who exercises all or any
portion of an option ("Exercised Options") and who pays all or part of such
exercise price with shares of Common Stock, of an additional option (a "Reload
Option") for a number of shares of Common Stock equal to the sum (the "Reload
Number") of the number of shares of Common Stock tendered or withheld in payment
of such exercise price for the Exercised Options plus, if so provided by the
Committee, the number of shares of Common Stock, if any, tendered or withheld by
the grantee or withheld by the Company in connection with the exercise of the
Exercised Options to satisfy any federal, state or local tax withholding
requirements. The terms of each Reload Option, including the date of its
expiration and the terms and conditions of its exercisability and
transferability, shall be the same as the terms of the Exercised Option to which
it relates, except that (i) the grant date for each Reload Option shall be the
date of exercise of the Exercised Option to which it relates and (ii) the
exercise price for each Reload Option shall be the Fair Market Value of the
Common Stock on the grant date of the Reload Option.

13. STOCK APPRECIATION RIGHTS.

The Committee shall have the authority to grant SARs under this Plan,
either alone or to any optionee in tandem with options (either at the time of
grant of the related option or thereafter by amendment to an outstanding
option). SARs shall be subject to such terms and conditions as the Committee may
specify.

No SAR may be exercised unless the Fair Market Value of a share of Common
Stock of the Company on the date of exercise exceeds the exercise price of the
SAR or, in the case of SARs granted in tandem with options, any options to which
the SARs correspond. Prior to the exercise of the SAR and delivery of the cash
and/or Shares represented thereby, the participant shall have no rights as a
stockholder with respect to Shares covered by such outstanding SAR (including
any dividend or voting rights).

SARs granted in tandem with options shall be exercisable only when, to the
extent and on the conditions that any related option is exercisable. The
exercise of an option shall result in an immediate forfeiture of any related SAR
to the extent the option is exercised, and the exercise of an SAR shall cause an
immediate forfeiture of any related option to the extent the SAR is exercised.

Upon the exercise of an SAR, the participant shall be entitled to a
distribution in an amount equal to the difference between the Fair Market Value
of a share of Common Stock on the date of exercise and the exercise price of the
SAR or, in the case of SARs granted in tandem with options, any option to which
the SAR is related, multiplied by the number of Shares as to which the SAR is
exercised (less any applicable taxes). The Committee shall decide whether such
distribution shall be in cash, in Shares having a Fair Market Value equal to
such amount, in Other Company Securities having a Fair Market Value equal to
such amount or in a combination thereof.

All SARs will be exercised automatically on the last day prior to the
expiration date of the SAR or, in the case of SARs granted in tandem with
options, any related option, so long as the Fair Market Value of a share of
Common Stock on that date exceeds the exercise price of the SAR or any related
option, as applicable. An SAR granted in tandem with options shall expire at the
same time as any related option expires and shall be transferable only when, and
under the same conditions as, any related option is transferable.

14. RESTRICTED STOCK.

The Committee may at any time and from time to time grant Shares of
restricted stock under the Plan to such participants and in such amounts as it
determines. Each grant of restricted stock shall specify the applicable
restrictions on such Shares, the duration of such restrictions (which shall be
at least 3 years, subject to partial vesting at the end of year 1 and any time
thereafter, and except as otherwise provided in the third paragraph of this
Section 14), and the time or times at which such restrictions shall lapse with
respect to all or a specified number of Shares that are part of the grant.

The participant will be required to pay the Company the aggregate par value
of any Shares of restricted stock (or such larger amount as the Board may
determine to constitute capital under Section 154 of the Delaware General
Corporation Law, as amended) within ten days of the date of grant, unless such
Shares of restricted stock are treasury shares. Unless otherwise determined by
the Committee, certificates representing Shares of restricted stock granted
under the Plan will be held in escrow by the Company on the participant's behalf
during any period of restriction thereon and will bear an appropriate legend
specifying the applicable restrictions thereon, and the participant will be
required to execute a blank stock power therefor. Except as otherwise provided
by the Committee, during such period of restriction the participant shall have
all of the rights of a holder of Common Stock, including but not limited to the
rights to receive dividends and to vote, and any stock or other securities
received as a distribution with respect to such participant's restricted stock
shall be subject to the same restrictions as then in effect for the restricted
stock.

Except as may otherwise be provided by the Committee, (a) immediately prior
to a Change in Control or at such time as a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company and
its Subsidiaries due to death or Retirement during any period of restriction,
all restrictions on Shares granted to such participant shall lapse, and (b) at
such time as a participant ceases to be a director, officer or employee of, or
to otherwise perform services for, the Company or its Subsidiaries for any other
reason, all Shares of restricted stock granted to such participant on which the
restrictions have not lapsed shall be immediately forfeited to the Company.

15. PERFORMANCE AWARDS.

Performance awards may be granted to participants at any time and from
time to time as determined by the Committee. The Committee shall have complete
discretion in determining the size and composition of performance awards so
granted to a participant and the appropriate period over which performance is to
be measured (a "performance cycle"), except that no performance cycle shall be
less than 12 months in duration. Performance awards may include (i) specific
dollar-value target awards, (ii) performance units, the value of each such unit
being determined by the Committee at the time of issuance, and/or (iii)
performance Shares, the value of each such Share being equal to the Fair Market
Value of a share of Common Stock. The value of each performance award may be
fixed or it may be permitted to fluctuate based on a performance factor (e.g.,
return on equity) selected by the Committee. The maximum aggregate payout
(determined as of the end of the applicable performance cycle) with

respect to specific dollar-value target awards or performance units awarded in
any one fiscal year to any one Participant shall be $2,500,000, and the maximum
aggregate payout (determined as of the end of the applicable performance cycle)
with respect to performance Shares granted in any one fiscal year to any one
Participant shall be 100,000 performance Shares.

The Committee shall establish performance goals and objectives for each
performance cycle on the basis of one or more of the following measurements of
the Company's performance for the relevant period: earnings per share (EPS); net
earnings; pre-tax earnings; earnings before interest and taxes (EBIT); earnings
before interest, taxes, depreciation and amortization (EBITDA); net operating
profit after tax (NOPAT) return on assets; return on equity; return on net
assets (RONA); return on investment; return on capital; total shareholder
return; stock price (and stock price appreciation, either in absolute terms or
in relationship to the appreciation among members of a peer group to be
determined by the Committee); revenues; comparable store sales; cash flow;
economic profit; and sales per square foot; inventory turnover and strategic
milestones. The performance objectives established by the Committee for any
performance cycle may be expressed in terms of attaining a specified level of
the performance objective or the attainment of a percentage increase or decrease
in the particular objective, and may involve comparisons with respect to
historical results of the Company and its Subsidiaries and/or operating groups
or segments thereof, all as the Committee deems appropriate. The performance
objectives established by the Committee for any performance cycle may be applied
to the performance of the Company relative to a market index, a peer group of
other companies or a combination thereof, all as determined by the Committee for
such performance cycle. The performance objectives established by the Committee
must preclude the discretion to increase the amount of any incentive award
payable to a Participant.

During any performance cycle, the Committee shall have the authority to
adjust the performance goals and objectives for such cycle for such reasons as
it deems equitable to the extent permitted under Section 162(m) of the Code.
Specifically, the Committee is authorized to make adjustments in the method of
calculating attainment of performance goals and objectives for a performance
cycle as follows: (i) to exclude the dilutive effects of acquisitions or joint
ventures; (ii) to assume that any business divested by the Company achieved
performance objectives at targeted levels during the balance of a performance
cycle following such divestiture; (iii) to exclude restructuring and/or other
nonrecurring charges; (iv) to exclude exchange rate effects, as applicable, for
non-U.S. dollar denominated net sales and operating earnings; (v) to exclude the
effects of changes to generally accepted accounting standards required by the
Financial Accounting Standards Board; (vi) to exclude the effects to any
statutory adjustments to corporate tax rates; (vii) to exclude the impact of any
"extraordinary items" as determined under generally accepted accounting
principles; (viii) to exclude the effect of any change in the outstanding shares
of common stock of the Company by reason of any stock dividend or split, stock
repurchase, reorganization, recapitalization, merger, consolidation, spin-off,
combination or exchange of shares or other similar corporate change, or any
distributions to common shareholders other than regular cash dividends; and (ix)
to exclude any other unusual, non-recurring gain or loss or other extraordinary
item.

The Committee shall determine the portion of each performance award that is
earned by a participant on the basis of the Company's performance over the
performance cycle in relation to the performance goals for such cycle. The
earned portion of a performance award may be paid out in Shares, cash, Other
Company Securities, or any combination thereof, as the Committee may determine.

A participant must be a director, officer or employee of, or otherwise
perform services for, the Company or its Subsidiaries at the end of the
performance cycle in order to be entitled to payment of a performance award
issued in respect of such cycle; provided, however, that, except as otherwise
provided by the Committee, (a) if a participant ceases to be a director, officer
or employee of, or to otherwise

perform services for, the Company and its Subsidiaries upon his or her death or
Retirement prior to the end of the performance cycle, the participant shall earn
a proportionate portion of the performance award based upon the elapsed portion
of the performance cycle and the Company's performance over that portion of such
cycle and (b) in the event of a Change in Control, a participant shall earn no
less than the portion of the performance award that the participant would have
earned if the performance cycle(s) had terminated as of the date of the Change
in Control.

16. WITHHOLDING TAXES.

(a) PARTICIPANT ELECTION. The Committee may provide that a participant may
be permitted to elect to deliver shares of Common Stock (or have the Company
withhold shares acquired upon exercise of an option or SAR or deliverable upon
grant or vesting of restricted stock, as the case may be) to satisfy, in whole
or in part, the amount the Company is required to withhold for taxes in
connection with the exercise of an option or SAR or the delivery of restricted
stock upon grant or vesting, as the case may be. Such election must be made on
or before the date the amount of tax to be withheld is determined. Once made,
the election shall be irrevocable. The fair market value of the shares to be
withheld or delivered will be the Fair Market Value as of the date the amount of
tax to be withheld is determined. In the event a participant elects to deliver
shares of Common Stock pursuant to this Section 10(a), such delivery must be
made subject to the conditions and pursuant to the procedures set forth in
Section 6(b) with respect to the delivery of Common Stock in payment of the
exercise price of options.

(b) COMPANY REQUIREMENT. The Company may require, as a condition to any
grant or exercise under the Plan, to the payment of any SAR or to the delivery
of certificates for Shares issued hereunder, that the grantee make provision for
the payment to the Company, either pursuant to Section 10(a) or this Section
10(b), of any federal, state or local taxes of any kind required by law to be
withheld with respect to any grant or payment or any delivery of Shares. The
Company, to the extent permitted or required by law, shall have the right to
deduct from any payment of any kind (including salary or bonus) otherwise due to
a grantee, an amount equal to any federal, state or local taxes of any kind
required by law to be withheld with respect to any grant or payment or to the
delivery of Shares under the Plan, or to retain or sell without notice a
sufficient number of the Shares to be issued to such grantee to cover any such
taxes, the payment of which has not otherwise been provided for in accordance
with the terms of the Plan, provided that the Company shall not sell any such
Shares if such sale would be considered a sale by such grantee for purposes of
Section 16 of the Exchange Act that is not exempt from matching thereunder.

17. TRANSFERABILITY.

Unless the Committee determines otherwise, no option, SAR, performance
award, or restricted stock granted under the Plan shall be transferable by a
participant otherwise than by will or the laws of descent and distribution.
Unless the Committee determines otherwise, an option, SAR, or performance award
may be exercised only by the optionee or grantee thereof or his guardian or
legal representative; provided that Incentive Stock Options may be exercised by
such guardian or legal representative only if permitted by the Code and any
regulations promulgated thereunder.

18. LISTING, REGISTRATION AND QUALIFICATION UNDER 162 (M) OF THE IRC AND SECTION
16 OF THE SECURITIES EXCHANGE ACT OF 1934.

If the Committee determines that the listing, registration or qualification
upon any securities exchange or under any law of Shares subject to any option,
SAR, performance award or restricted stock grant 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 such option or SAR may be exercised in whole
or in part, no such performance award may be paid out and no Shares may be
issued unless such listing, registration or qualification is effected free of
any conditions not acceptable to the Committee.

It is the intent of the Company that the Plan comply in all respects with
Section 162(m) of the Code, that awards made hereunder comply in all respects
with Rule 16b-3 under the Exchange Act, that any ambiguities or inconsistencies
in construction of the Plan be interpreted to give effect to such intention and
that if any provision of the Plan is found not to be in compliance with Section
162(m), such provision shall be deemed null and void to the extent required to
permit the Plan to comply with Section 162(m), as the case may be.

19. TRANSFER OF EMPLOYEE.

The transfer of an employee from the Company to a Subsidiary, from a
Subsidiary to the Company, or from one Subsidiary to another shall not be
considered a termination of employment; nor shall it be considered a termination
of employment if an employee is placed on military, disability or sick leave or
such other leave of absence which is considered by the Committee as continuing
intact the employment relationship.

20. ADJUSTMENTS FOR REORGANIZATION, STOCK SPLITS, ETC.

In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other change in the corporate structure or shares of the Company, the
Committee shall make such adjustment as it deems appropriate in the number and
kind of Shares or other property reserved for issuance under the Plan, in the
number and kind of Shares or other property covered by grants previously made
under the Plan, and in the exercise price of outstanding options and SARs. Any
such adjustment shall be final, conclusive and binding for all purposes of the
Plan. In the event of any merger, consolidation or other reorganization in which
the Company is not the surviving or continuing corporation or in which a Change
in Control is to occur, all of the Company's obligations regarding options, SARs
performance awards, and restricted stock that were granted hereunder and that
are outstanding on the date of such event shall, on such terms as may be
approved by the Committee prior to such event, be assumed by the surviving or
continuing corporation or canceled in exchange for property (including cash).

Without limitation of the foregoing, in connection with any transaction of
the type specified by clause (iii) of the definition of a Change in Control in
Section 2(c), the Committee may, in its discretion, (i) cancel any or all
outstanding options under the Plan in consideration for payment to the holders
thereof of an amount equal to the portion of the consideration that would have
been payable to such holders pursuant to such transaction if their options had
been fully exercised immediately prior to such transaction, less the aggregate
exercise price that would have been payable therefor, or (ii) if the amount that
would have been payable to the option holders pursuant to such transaction if
their options had been fully exercised immediately prior thereto would be less
than the aggregate exercise price that would have been payable

therefor, cancel any or all such options for no consideration or payment of any
kind. Payment of any amount payable pursuant to the preceding sentence may be
made in cash or, in the event that the consideration to be received in such
transaction includes securities or other property, in cash and/or securities or
other property in the Committee's discretion.

21. TERMINATION OR MODIFICATION OF THE PLAN.

The Board of Directors or the Committee, without approval of the
stockholders, may modify or terminate the Plan, except that no modification
shall become effective without prior approval of the stockholders of the Company
if stockholder approval would be required for continued compliance with the
performance-based compensation exception of Section 162(m) of the Code or any
listing requirement of the principal stock exchange on which the Common Stock is
then listed. With respect to International Participants, the Committee may, in
its sole discretion, amend the terms of the Plan or any Awards under the Plan
with respect to such International Participants in order to conform such terms
to the requirements of local laws in the country in which the International
Participant resides or works.

22. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN.

The terms of any outstanding award under the Plan may be amended from time
to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of exercise
of any award and/or payments thereunder or of the date of lapse of restrictions
on Shares) in the event of a change in control or death, disability, retirement
of the participant, or other situation which the Committee deems as a special
circumstance; provided that, except as otherwise provided in Section 15, no such
amendment shall adversely affect in a material manner any right of a participant
under the award without his or her written consent. The Committee may, with the
grantee's consent, cancel any award under the Plan and issue a new award in
substitution therefor upon such terms as the Committee may in its sole
discretion determine, provided that the substituted award shall satisfy all
applicable Plan requirements as of the date such new award is made; and further
provided, notwithstanding the foregoing or any other provision of this Plan,
that in no event shall an option or stock appreciation right be granted in
substitution for a previously granted option or stock appreciation right, with
the old award being canceled or surrendered as a condition of receiving the new
award, if the new award would have a lower option exercise price or stock
appreciation right appreciation base than the award it replaces. The foregoing
is not intended to prevent equitable adjustment of awards upon the occurrence of
certain events as herein provided, for example, without limitation, adjustments
pursuant to Section 15.

23. COMMENCEMENT DATE; TERMINATION DATE.

The date of commencement of the Plan shall be October 1, 1997, subject to
approval by the stockholders of the Company. Unless previously terminated upon
the adoption of a resolution of the Board terminating the Plan, no Incentive
Stock Options shall be issued under this plan after the close of business on
September 30, 2007. No termination of the Plan shall materially and adversely
affect any of the rights or obligations of any person, without his consent,
under any grant of options or other incentives theretofore granted under the
Plan.

24. GOVERNING LAW.

The Plan shall be governed by the laws of the State of Florida, without
giving effect to any choice of law provisions.

NON-COMPETE, CONFIDENTIALITY
AND NON-SOLICITATION AGREEMENT

THIS AGREEMENT is made as of __________ between Office Depot, Inc., a Delaware
corporation (the "COMPANY") and _____________ ("EMPLOYEE"), having employee
identification number _____________.

In consideration of the mutual covenants contained herein and other
good and valuable consideration, including the compensation paid to and benefits
received by Employee as an employee of the company, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

1. NON-COMPETE AGREEMENT. Employee hereby agrees that, during the term of
Employee's employment by the Company (including by any subsidiary of
the Company), and for a period of 12 months thereafter (as used herein,
the "NONCOMPETE Period"), Employee shall not directly or indirectly own
or have any interest in, manage, control, participate in, consult with,
render services for, or in any manner engage in any business competing
with the businesses of the Company (or any of its subsidiaries), as
such businesses exist or are in process on the date hereof, within any
geographical area in which the Company (or its subsidiaries) engage in
such businesses on the date hereof. Nothing herein shall prohibit
Employee from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly
traded, so long as Employee has no active participation in the business
of such corporation.

2. CONFIDENTIAL INFORMATION. Employee acknowledges that the information,
observations and data obtained by Employee while employed by the
Company and its subsidiaries concerning the business or affairs of the
Company or any subsidiary of the Company ("CONFIDENTIAL INFORMATION")
are the property of the Company or such subsidiary. Therefore, Employee
agrees that Employee shall not disclose to any unauthorized person or
use for Employee's own purposes any Confidential Information without
the prior written consent of the Company, unless and to the extent that
the aforementioned matters become generally known to and available for
use by the public other than as a result of Employee's

acts or omissions. Employee shall deliver to the Company at the
termination of Employee's employment, or at any other time the Company
may request, all memoranda, notes, plans, records, reports, computer
tapes, disks, printouts and software and other documents and data (and
copies thereof) relating to the Confidential Information, Work Product
(as defined below) or the business of the Company or any subsidiary
which Employee may then possess or have under Employee's control.

3. INVENTIONS AND PATENTS.

(a) Employee acknowledges that all inventions, innovations,
improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information
(whether or not patentable) which relate to the Company's or
any of its subsidiaries' actual or anticipated business,
research and development or existing or future products or
services and which are conceived, developed or made by
Employee while employed by the Company and its subsidiaries
("WORK PRODUCT") belong to the Company and/or such subsidiary.
Employee shall promptly disclose such Work Product to the
Company and perform all actions reasonably requested by the
Company (whether during or after employment) to establish and
confirm such ownership (including, without limitation, the
execution of assignments, consents, powers of attorney and
other instruments).

(b) Notwithstanding the obligations set forth in paragraphs 1 and
2(a) above, after termination of Employee's employment with
the Company, the Employee shall be free to use Residuals of
the Company's Confidential Information and Work Product for
any purpose, subject only to its obligations with respect to
disclosure set forth herein and any copyrights and patents of
the Company. The term "Residuals" means information in
non-tangible form that may be retained in the unaided memory
of Employee derived from the Company's Confidential
Information and Work Product to which Employee has had access
during his or her employment with the Company. Employee may
not retain or use the documents and other tangible materials
containing the Company's Confidential Information or Work
Product after the termination of his or her employment with
the Company.

4. NON-SOLICITATION.

a) While employed by the Company or any subsidiary thereof and
for a period of six months after the termination of Employee's
employment, Employee shall not directly or indirectly through
another entity (i) induce or attempt to induce any employee of
the Company or any subsidiary to leave the employ of the
Company or subsidiary, or in any way interfere with the
relationship between the Company or any subsidiary and any
employee thereof, (ii) hire any person who was an employee of
the Company or any subsidiary at any time during his/her
employment or (iii) induce or attempt to induce any customer,
supplier, licensee, licenser, franchisee or other business
relation of the Company or any subsidiary to cease doing
business with the Company or such subsidiary, or in any way
interfere with the relationship between any such customer,
supplier, licensee or business relation and the Company or any
subsidiary (including, without limitation, making any negative
statements or communications about the Company or its
subsidiaries).

b) The provisions of this paragraph 3 will be enforced to the
fullest extent permitted by the law in the jurisdiction in
which Employee resides at the time of the enforcement of the
provision.

c) In the event of the breach or a threatened breach by Employee
of any of the provisions of this paragraph 3, the Company, in
addition and supplementary to other rights and remedies
existing in its favor, may apply to any court of law or equity
of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or
other security).

5. EMPLOYEE'S REPRESENTATIONS. Employee hereby represents and warrants to
the Company that (i) the execution, delivery and performance of this
Agreement by Employee do not and shall not conflict with, breach,
violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Employee is a party or by which
Employee is bound, (ii) Employee is not a party to or bound by any
employment agreement, non-compete agreement or confidentiality
agreement with any

other person or entity and (iii) upon the execution and delivery of
this Agreement by the Company, this Agreement shall be the valid and
binding obligation of Employee, enforceable in accordance with its
terms. Employee hereby acknowledges and represents that Employee has
had an opportunity to consult with independent legal counsel regarding
Employee's rights and obligations under this Agreement and that
Employee fully understands the terms and conditions contained herein.

6. SURVIVAL. This Agreement shall survive and continue in full force in
accordance with its terms notwithstanding any termination of
employment. Nothing in this Agreement shall be deemed to imply any
obligation of continued employment of Employee by the Company which
employment shall be "at will" unless otherwise specifically agreed in
writing.

7. NOTICES. Any notice provided for in this Agreement shall be in writing
and shall be either personally delivered, or mailed by first class
mail, return receipt requested, to the recipient at the address below
indicated:

NOTICES TO EMPLOYEE:

Employee's last address appearing in the payroll/personnel
records of the Company.

NOTICES TO THE COMPANY:

Office Depot, Inc.
2200 Old Germantown Road
Delray Beach, Florida 33445
Attention: Executive Vice President - Human Resources

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or mailed.

8. SEVERABILITY. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.

9. COMPLETE AGREEMENT. This Agreement and those documents expressly
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede
and preempt any prior understandings, agreements or representations by
or among the parties, written or oral, which may have related to the
subject matter hereof in any way.

10. NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied
against any party.

11. COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

12. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to
the benefit of and be enforceable by Employee, the Company and their
respective heirs, successors and assigns, except that Employee may not
assign Employee's rights or delegate Employee's obligations hereunder
without the prior written consent of the Company.

13. CHOICE OF LAW. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Florida, without giving
effect to any choice of law or conflict of law rules or provisions
(whether of the State of Florida or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
State of Florida.

14. AMENDMENT AND WAIVER. The provisions of this Agreement may be amended
or waived only with the prior written consent of the Company and
Employee, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect
or enforceability of this Agreement.

15. STOCK OPTION PLAN AWARDS. Employee may receive from time to time,
grants of stock options and/or awards of shares of restricted stock
pursuant to the terms of the Office Depot, Inc. Amended Long-Term
Equity Incentive Plan, or under another comparable plan of the Company
(herein collectively referred to as the "Stock Option Plan"). Employee
hereby agrees that his or her signature on this Agreement is deemed to
be "remade" on each and every occasion on which Employee receives any
grant or award under the Stock Option Plan. Employee further agrees
that as a remedy available to the Company for any breach of this
Agreement by Employee, the Company shall have the absolute right to
cancel any unvested or vested but unexercised stock option or any award
of restricted stock under the Stock Option Plan upon evidence that
Employee has breached, or intends to breach this Agreement. Employee
shall not be required to separately sign any document to cause this
provision of this Agreement to be applicable to any future grant or
award under the Stock Option Plan.

16. ARBITRATION PROVISIONS. Any dispute or controversy between the Company
and Executive arising out of or relating to this Agreement or the
breach of this Agreement shall be settled by arbitration administered
by the American Arbitration Association ("AAA") in accordance with its
National Rules for the Resolution of Employment Disputes then in
effect, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Any arbitration shall
be held before a single arbitrator who shall be selected by the mutual
agreement of the Company and Executive, unless the parties are unable
to agree to an arbitrator, in which case the arbitrator will be
selected under the procedures of the AAA. The arbitrator shall have the
authority to award any remedy or relief that a court of competent
jurisdiction could order or grant, including, without limitation, the
issuance of an injunction. However, either party may, without
inconsistency with this arbitration provision, apply to any court
otherwise having jurisdiction over such

dispute or controversy and seek interim provisional, injunctive or
other equitable relief until the arbitration award is rendered or the
controversy is otherwise resolved. Except as necessary in court
proceedings to enforce this arbitration provision or an award rendered
hereunder, or to obtain interim relief, or as may otherwise be required
by law, neither a party nor an arbitrator may disclose the existence,
content or results of any arbitration hereunder without the prior
written consent of the Company and Executive. The Company and Executive
acknowledge that this agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision
included in this Agreement, the United States Federal Arbitration Act
shall govern the interpretation and enforcement of this arbitration
provision. The arbitration proceeding shall be conducted in Palm Beach
County, Florida or such other location to which the parties may agree.
The Company shall pay the costs of any arbitrator appointed hereunder
and the administrative fees and costs imposed by the AAA.

* * * * *

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

OFFICE DEPOT, INC.

By:
-------------------------------------

Print Name:
----------------------------

EMPLOYEE:

-----------------------------------------
Name:

Date
------------------------------------

Print Name:
------------------------------

PROXY CARD

OFFICE DEPOT, INC.
2200 OLD GERMANTOWN ROAD
DELRAY BEACH, FL 33445

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Brian D. Dan, Merry E. Lindberg and Anne
Zuckerman as Proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote as designated below all the
shares of common stock of Office Depot, Inc. held of record by the undersigned
on March 8, 2002, at the annual meeting of shareholders to be held on April 25,
2002 or any adjournment thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1, 2, 3 AND 4.

(CONTINUED ON REVERSE SIDE)

Item 1 - Election of Directors

[ ] FOR all of the nominees listed [ ] WITHHOLD AUTHORITY
below (except as marked in the space to vote for all of the nominees
provided below) listed below

Lee A. Ault Iii, Neil R. Austrian, Cynthia R. Cohen, David I. Fuente,
Brenda J. Gaines, Bruce S. Gordon, W. Scott Hedrick, James L. Heskett, Michael
J. Myers, M. Bruce Nelson, Peter J. Solomon and Frank P. Scruggs, Jr.

(INSTRUCTION: To withhold authority to vote for any individual nominee(s)
strike a line through that nominee's name in the list above.

Item 2 - Proposal to ratify appointment of Deloitte & Touche LLP as Independent
Public Accountants

[ ] FOR [ ] AGAINST [ ] ABSTAIN

Item 3 - Proposal to Amend the Company's Long Term Equity Incentive Plan

[ ] FOR [ ] AGAINST [ ] ABSTAIN

Item 4 - Proposal to Approve the Bonus Plan for Executive Management Employees

[ ] FOR [ ] AGAINST [ ] ABSTAIN

ITEM 5 - In Their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting unless you indicate
that you withhold such authority by so indicating below.

By checking the box at the end of this paragraph, I consent to future access of
the Annual Report, Proxy Statements, prospectuses and other communications
electronically via the Internet. I understand that the Company may no longer
distribute printed materials to me for any future shareholder meeting until such
consent is revoked. I understand that I may revoke any consent at any time by
contacting the Company's transfer agent, Mellon Investor Services, LLC
Ridgefield Park, New Jersey and that costs normally associated with electronic
access, such as usage and telephone charges, will be my responsibility. [ ]

Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership by authorized person.

------------------------------------------------
Signature

------------------------------------------------
Signature if held jointly

DATED ___________________________________, 2002

VOTE BY INTERNET OR TELEPHONE OR MAIL

24 Hours a Day, 7 Days a Week

Internet and telephone voting is available through 4 pm Eastern Time
The business day prior to the annual meeting day.

YOUR INTERNET OR TELEPHONE VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.

INTERNET TELEPHONE MAIL

http://www.proxyvoting.com/odp 1-800-840-1208
------------------------------
Use the Internet to vote your Use any touch-tone telephone to Mark, sign and date
proxy. Have your proxy card in vote your proxy. Have your proxy your proxy card
hand when you access the web OR card in hand when you call. You will OR and
site. You will be prompted to enter be prompted to enter your control return it in the
your control number, located in number, located in the box below, enclosed postage-paid
the box below, to create and and then follow the directions given. envelope.
submit an electronic ballot.

IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.

YOU CAN VIEW THE ANNUAL REPORT AND PROXY STATEMENT
ON THE INTERNET AT www.proxyvoting.com/odp
http://www.proxyvoting.com/odp

SEE THE LINKS TO THE LEFT.

ADMITTANCE PASS

2002 ANNUAL MEETING OF SHAREHOLDERS

OFFICE DEPOT, INC.

Thursday, April 25, 2002

10:00 a.m. Local Time

The Renaissance Boca Hotel
2000 N.W. 19th Street
Boca Raton, Florida 33431

For Security Reasons, You Must Present this Admittance Pass To Enter the Meeting