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    2020 Proxy Statement


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    Message from our Chairman and Chief Executive Officer Our Response to COVID-19 DEAR FELLOW SHAREHOLDERS: The strength of Foot Locker, Inc. is our Looking back at 2019, we redefined our purpose to inspiring and empowering youth people, and I’m very proud of the way culture and began on our journey to achieving this vision at the heart of the sport and we’ve come together in the face of the sneaker communities by leveraging our new customer connected strategic framework through five essential touchpoints—our Five Cs: Collections, Content, Community, COVID-19 pandemic—in our stores, offices, Connectivity, and Convenience. We are executing against this framework to achieve our distribution centers, and call centers—to four strategic imperatives designed to differentiate our business and enable us to be a truly support our customers and one another. agile organization that can leverage new technologies and adapt quickly to customer and The health and safety of our customers, market changes. I am pleased to report that we are making progress executing against our associates and their families, and strategic framework and laying the foundation for the long-term success of our business. suppliers is our top priority. We are taking all precautionary measures as directed by • Strategic Imperatives. Everything we do starts with our customer. Our customer health authorities and local and national connected strategic framework is built on knowing, engaging, and serving our governments. Based on the escalation customers–wherever and however they want to interact with us–in store or online. By of the COVID-19 virus, and after careful executing against this framework, we have made the following progress to achieve our four key strategic imperatives: consideration, we temporarily closed all stores across all of our banners Elevate the Customer Experience. Our customers are moving faster. They in North America, EMEA, Malaysia, are connected to the greater world around them in unprecedented ways and New Zealand, and Australia. In empowered to find new fashion trends on the go from brands that speak to addition, we took key steps to help them personally. Against this backdrop, over the course of 2019, we made support and protect our associates major strides in creating offerings and experiences that are compelling, globally and limit exposure, including relevant, and exclusive to Foot Locker. Our actions were well-received, as implementing flexible work practices reflected in meaningful improvement across key metrics, including overall and increasing our cleaning customer satisfaction, net promoter scores, and customer identification. We protocol. We have established a worked with our strategic partners to deliver compelling and unique product special management committee concepts, as well as up and coming brands. We continued the roll-out that is taking the necessary of our Power Store offense, with several new locations across domestic precautionary measures to and international markets, and expanded our women’s business through protect the health and safety enhanced spaces for her, elevated assortments, and community activations. of our associates as well as We launched our new membership program, FLX, unifying all Foot Locker, Inc. following the guidance provided banners under one easy-to-use loyalty platform. FLX members are rewarded by health authorities. COVID-19 for shopping and engaging with us. is having a significant effect on Invest for Long-Term Growth. We are making investments to further enhance overall economic conditions in $ our connections with our customers and give us access to new capabilities the various geographic areas and regions. We continued to invest in our store fleet across our markets by in which we have operations. opening new stores and remodeling or relocating existing stores. For example, We are actively monitoring we are capitalizing on the brand heritage of Foot Locker by strategically global developments, and expanding our store footprint in Asia through the addition of new stores, and we will make additional we now have a third-party distribution center in Asia, allowing us to source decisions as needed to product directly from suppliers and operate more efficiently. We launched protect the health and Greenhouse, our new in-house incubator which enables us to connect with safety of our team as well exciting new brands and designers, and to develop new ideas and partnerships as the long-term success that are relevant to youth culture both today and in the future. In addition, our of our business. strategic minority investment in the youth culture e-commerce content platform NTWRK provides us with a unique channel to introduce product, generate excitement, and drive commercial success in our ecosystem.


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    Message from our Chairman and Chief Executive Officer $ Drive Productivity. As we make these important investments in our business, we maintain a disciplined approach to capital allocation, including a continuous quest for improvement in our operating efficiency. In 2019, we made key investments in radio-frequency identification technology (RFID), inventory optimization, and supply chain. In addition, we are focused on taking advantage of data analytics and machine learning to ensure we are taking the right actions to continuously make us more relevant to our customers by offering more personalized experiences through improved product search on our digital channels, data-led campaigns, and other emerging technologies. We completed the roll-out of X-Store, our new point-of-sale software platform across our North American store fleet and most of our European markets. Leverage the Power of our People. Our people remain a critical driver for our business. To that end, in 2019 we rolled-out ‘Lace Up,’ our new associate learning and communications platform. This interactive system provides us with the ability to engage, educate, and empower our more than 50,000 associates around the globe. As a result of these and other actions to develop our team and maintain an inclusive work environment, we are proud that Foot Locker was once again recognized as one of the Best Workplaces in Retail and for Diversity. • Board Refreshment. I want to thank Cheryl Nido Turpin who will be retiring from the Board following the 2020 Annual Meeting after serving for 19 years. Cheryl’s extensive retail and brand marketing experience has been an invaluable source of insights, and I can say for the Board and myself that she will be truly missed. We take a very intentional approach in considering new additions to our Board, ensuring that our directors’ experience, skills, qualifications, and independence meet the Board’s criteria. Consistent with this, I worked with the Governance Committee and our Lead Independent Director to conduct a director search in 2019 for potential director candidates, resulting in the Board welcoming two new independent directors, Darlene Nicosia and Tristan Walker. Darlene and Tristan each bring exceptional experience around the utilization of innovation and technology to drive change and deliver growth. We are fortunate to have them, and I look forward to working with them, and our entire Board. The Notice of 2020 Annual Meeting of Shareholders and Proxy Statement contain details of the business to be conducted at the 2020 Annual Meeting. Your vote is very important to us, so regardless of whether you attend the meeting, please vote your shares. During this extraordinary time, we must all do our part to stop the spread of COVID-19 (Coronavirus). We are monitoring the developments related to the impact of COVID-19 on a daily basis. We intend to hold our 2020 Annual Meeting in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving COVID-19 pandemic. As a result, we may impose additional procedures or limitations on meeting attendees (beyond those described in the Proxy Statement) or may decide to hold our 2020 Annual Meeting in a different location or partly or solely by means of virtual communications, if permitted by applicable law. If we decide to modify the structure of our annual meeting, we will announce the decision to do so in advance, and details on how to participate will be issued by press release (which will be filed with the U.S. Securities and Exchange Commission) and available at footlocker.com/corp and proxyvote.com. Please retain the 16-digit control number included on your notice, on your proxy card, or in the voting instructions that accompanied your proxy materials as you will need this number should we determine to allow for virtual attendance and you elect to participate. If we hold the 2020 Annual Meeting virtually, all shareholders will be afforded the same rights they would have had at a physical meeting, and our current intention would be to then revert to a physical meeting in 2021. We also encourage all shareholders to continue to review guidance from public health authorities as the time for our annual meeting approaches. I’d like to personally thank you for your continued commitment, support, and patience as we navigate this dynamic situation, which is affecting our lives in ways we never thought possible. Foot Locker, Inc. remains resilient and strong, and we‘re definitely in this together. All of us at Foot Locker appreciate your investment and continued support as we work to execute our strategies and achieve our long-term objectives. We are proud of what we accomplished in 2019, but we are just getting started on our new journey to inspire and empower youth culture. As we look ahead, we are optimistic about Foot Locker’s future. I look forward to sharing our success with each of you at the 2020 Annual Meeting. Sincerely, RICHARD A. JOHNSON Chairman and Chief Executive Officer Learn more about the Board’s highlights from 2019 from our Lead Independent Director » See Page 16


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    Notice of 2020 Annual Meeting of Shareholders 330 WEST 34TH STREET NEW YORK, NEW YORK 10001 Items of Business Date and Time May 20, 2020 at 9:00 a.m., Board’s Voting Vote Required to Eastern Daylight Time (“EDT”) Proposal Recommendation Approve Item 1 Elect eleven members to the Board of Directors % FOR each Majority of Votes Cast Location (the “Board”) to serve for one-year terms nominee by Shareholders NYC33, Item 2 Approve, on an advisory basis, our named % FOR Majority of Votes Cast 125 West 33rd Street, executive officers’ (“NEOs”) compensation by Shareholders New York, New York 10001 Item 3 Ratify the appointment of KPMG LLP as our % FOR Majority of Votes Cast Record Date independent registered public accounting firm by Shareholders Shareholders of record as of for the 2020 fiscal year March 23, 2020 can vote at Transact such other business as may properly come before the meeting and at any adjournment or this meeting postponement of the meeting We are monitoring the developments related to the impact of COVID-19 (Coronavirus) on a daily basis. We intend to hold our 2020 Annual Meeting in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving COVID-19 pandemic. As a result, we may impose additional procedures or limitations on meeting attendees (beyond those described in this Proxy Statement) or may decide to hold our 2020 Annual Meeting in a different location or partly or solely by means of virtual communications, if permitted by applicable law. If we decide to modify the structure of our annual meeting, we will announce the decision to do so in advance, and details on how to participate will be issued by press release (which will be filed with the U.S. Securities and Exchange Commission (“SEC”)) and available at footlocker.com/corp and proxyvote.com. Please retain the 16-digit control number included on your notice, on your proxy card, or in the voting instructions that accompanied your proxy materials as you will need this number should we determine to allow for virtual attendance and you elect to participate. If we hold the 2020 Annual Meeting virtually, all shareholders will be afforded the same rights they would have had at a physical meeting, and our current intention would be to then revert to a physical meeting in 2021. We also encourage all shareholders to continue to review guidance from public health authorities as the time for our annual meeting approaches. Proxy Voting You may vote using any of the following methods: Telephone If you are located within the United States or Canada, you may vote your shares by calling 800-690-6903 and following the recorded instructions. Telephone voting is available 24 hours a day and will be accessible until 11:59 p.m. EDT on May 19, 2020. The telephone voting system has easy to follow instructions and allows you to confirm that the system has properly recorded your vote. If you vote by telephone, you do NOT need to return a proxy card or voting instruction form. Scanning You may scan the QR Code provided to you to vote your shares through the internet with your mobile device. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. EDT on May 19, 2020. You will be able to confirm that the system has properly recorded your vote. If you scan your QR code to vote, you do NOT need to return a proxy card or voting instruction form. Ballot You may vote by ballot at the 2020 Annual Meeting if you decide to attend in person. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the meeting. If you plan to vote by ballot at the 2020 Annual Meeting, you do NOT need to return a proxy card or voting instruction form. Internet You may vote your shares through the internet at proxyvote.com. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. EDT on May 19, 2020. You will be able to confirm that the system has properly recorded your vote. If you vote via the internet, you do NOT need to return a proxy card or voting instruction form. Mail If you received printed copies of the proxy materials by mail, you may vote by mail. Simply mark your proxy card or voting instruction form, date and sign it, and return it in the postage-paid envelope that we included with your materials. App You may vote your shares by using the ProxyVote app. Download the app from the App Store or Google Play, scan or enter your control number, and vote. App voting is available 24 hours a day and will be accessible until 11:59 p.m. EDT on May 19, 2020. You will be able to confirm that the system has properly recorded your vote. If you vote using the app, you do NOT need to return a proxy card or voting instruction form. All shares that have been properly voted and not revoked will be voted at the 2020 Annual Meeting. If you sign and return a proxy card but do not give voting instructions, the shares represented by that proxy card will be voted as recommended by the Board. Your vote is very important to us. Please exercise your right to vote. Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual Meeting to be Held on May 20, 2020 The Company’s Proxy Statement and 2019 Annual Report on Form 10-K are available at materials.proxyvote.com/344849. April 9, 2020 SHEILAGH M. CLARKE Senior Vice President, General Counsel and Secretary


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    Table of Contents 1 Proxy Statement Summary 56 Grants of Plan-Based Awards Table 59 Outstanding Equity Awards at Fiscal Year-End 5 Proposal 1: Election of Directors 62 Option Exercises and Stock Vested 5 General 63 Pension Benefits 5 Nominees 64 Defined Benefit Retirement Plans 6 Director Qualifications 66 Potential Payments Upon Termination or Change 8 Summary of Director Qualifications and Experience in Control and Demographic Matrix 69 CEO Pay Ratio 16 Corporate Governance 70 Equity Compensation Plan Information 16 Note from our Lead Independent Director 17 Our Board of Directors 71 Proposal 3: Ratification of the Appointment of our 22 Our Board’s Oversight of Our Business Independent Registered Public Accounting Firm 24 Shareholder Engagement and Voting 72 Audit and Non-Audit Fees 72 Audit Committee Preapproval Policies and 27 Corporate Social Responsibility Procedures 73 Audit Committee Report 30 Board of Directors 30 Committees of the Board 74 Beneficial Ownership of the Company’s Stock 32 Director Compensation 74 Directors and Executive Officers 35 Directors and Officers Indemnification and Insurance 75 Persons Owning More Than Five-Percent of the Company’s Common Stock 36 Proposal 2: Advisory Approval of Executive Compensation 76 Deadlines and Procedures for Nominations and Shareholder Proposals 37 Executive Compensation 76 Proposals for Inclusion in our 2021 Proxy Materials 37 Compensation Discussion and Analysis 76 Director Nominations for Inclusion in our 2021 Proxy 51 Compensation Committee Report Materials (Proxy Access) 51 Compensation Committee Interlocks and 76 Other Proposals or Nominations for the 2021 Insider Participation Annual Meeting 51 Compensation and Risk 52 Summary Compensation Table 77 Questions and Answers about the 2020 Annual Meeting and Voting 55 Employment Agreements


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    Proxy Statement Summary Proxies are being solicited by the Board of Directors of Foot Locker, Inc. (NYSE: FL) (“Foot Locker,” the “Company,” “we,” “our,” or “us”) to be voted at our 2020 Annual Meeting. As this is a summary of our Proxy Statement, please refer to the complete Proxy Statement for more complete information. M e e n u a l t i n n A g o s f r Sh e are hold Date and Time Location Record Date May 20, 2020 NYC33, 125 West 33rd Street, March 23, 2020 at 9:00 a.m. EDT New York, New York 10001 Proposal Board’s Voting Recommendation Elect eleven members to the Board to serve for % FOR each nominee 1 one-year terms » Page 5 % FOR 2 Approve, on an advisory basis, our NEOs’ compensation » Page 36 Ratify the appointment of KPMG LLP as our independent % FOR 3 registered public accounting firm for the 2020 fiscal year » Page 71 On or about April 9, 2020, we started mailing a Notice Regarding the Internet Availability of Proxy Materials to our shareholders. 2020 Proxy Statement 1


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    Proxy Statement Summary Director Nominees Eleven directors are standing for election at the 2020 Annual Meeting for one-year terms. Cheryl Nido Turpin will be retiring from the Board when her term expires at the conclusion of the 2020 Annual Meeting in accordance with the retirement policy for directors. The table below provides summary information about each of the nominees for director. See pages 8 through 15 for additional information about each nominee and pages 30 through 31 for additional information about the Committees of the Board. Dona D. Young A G E Tenure Lead Independent Director Retired Chairman, President and 6 Chief Executive Officer of The Phoenix Companies, Inc. Median Age: 66 10 Director Since: 2001 Other Public Company Boards: Aegon N.V. 5 4 4 3 Tristan Walker F G Independent Founder and Chief Executive Officer 0 of Walker & Company Brands Inc. 0-4 5-12 >13 years years years Age: 35 Director Since: 2020 Directors with varied tenure Independence contribute to a range of perspectives and ensure we Kimberly Underhill C F E transition knowledge and Independent 11 experience from longer-serving President, North America Consumer members to those newer to our of Kimberly-Clark Corporation Board. We have a good mix of 10 out of 11 director Age: 55 new and longer-serving directors. Director Since: 2016 nominees are independent. All Age director nominees Ulice Payne, Jr. A G are independent, 64 Independent President and Managing except the CEO Median Member of Addison-Clifton, LLC 10 Age: 64 Director Since: 2016 Other Public Company Boards: 6 ManpowerGroup Inc. 5 4 WEC Energy Group, Inc. 1 0 Steven Oakland C G E 35-59 62-69 >71 Independent Chief Executive Officer and President of TreeHouse Foods, Inc. Attendance Age: 59 Director Since: 2014 Other Public Company Boards: 98% TreeHouse Foods, Inc. Darlene Nicosia A C Over 98% Attendance Independent of Directors at Board and President of the Canada Business Unit Committee Meetings in 2019 of The Coca-Cola Company Age: 52 Director Since: 2020 2


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    Proxy Statement Summary Committees A Audit C Compensation F Finance G Governance E Executive Committee Chair Richard A. Johnson E Chairman, President and Chief Executive Officer of Foot Locker, Inc. Age: 62 Director Since: 2014 Other Public Company Boards: H&R Block Inc. Diversity Maxine Clark C F 63% Independent Founder, Retired Chairman and Chief Executive Bear of Build-A-Bear Workshop, Inc. The majority of the director nominees are women or Age: 71 ethnically diverse Director Since: 2013 Refreshment Other Public Company Boards: Build-A-Bear Workshop, Inc. Our director nominees represent 5 New Directors a range of backgrounds and Added Over Past experience. Our Nominating and Six Years Alan D. Feldman C F Corporate Governance Committee Independent (the “Governance Committee”) is Retired Chairman, President and Chief Executive Officer of Midas, Inc. focused on ensuring continued diversity on the Board—in terms Age: 68 of gender, age, ethnicity, skills, Director Since: 2005 As of Annual Meeting, business experience, service on Other Public Company Boards: 4 Directors Will our Board and the boards of other GNC Holdings, Inc. Have Retired Over John Bean Technologies Corporation organizations, and viewpoints— Past Six Years during refreshment activities by requiring that candidate pools Foot Locker Policy: Guillermo G. Marmol A F E include diverse individuals meeting Retirement Age 72 Independent the recruitment criteria. President of Marmol & Associates Age: 67 10 Director Since: 2011 5 4 Matthew M. McKenna A F E 2 1 Independent 0 General Partner of Open Prairie Women African Hispanic Rural Opportunities, L.P.; Executive in American Residence of Georgetown University, McDonough School of Business Age: 69 Director Since: 2006 2020 Proxy Statement 3


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    Proxy Statement Summary Recognition 2018 Winner of 2018 Ranked No. 4 2019 Ranked NACD NXT Forbes’ 50 Top 50 Recognition Most Engaged Top-Rated Award for Customer List Workplace Board Diversity 2019 Named for 2019 Named 2019 Named Best 2018 Named Best 2018 2018 2018 2017 2017 100 Best 2017 Best 2017 Workplaces Workplaces 2016 Workplaces Workplaces in Retail in New York for Diversity for Diversity Fiscal 2019 Results We built positive momentum and improved our financial results in 2019. Highlights include the following: A record total sales of 31.8% $8 billion gross margin rate $4.56 per share earned net income ($4.93 per share $187 million invested in our business to drive future on non-GAAP* basis) growth through our capital program $499 million returned to shareholders $335 million spent to repurchase $164 million paid in dividends between share repurchase 8.4 million shares program and dividends * A reconciliation to GAAP is provided beginning on page 18 of our 2019 Annual Report on Form 10-K. 4


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    Proposal 1: Election of Directors General There are currently 12 directors on our Board. Cheryl Nido Turpin will be retiring when her term expires at the conclusion of the 2020 Annual Meeting, and the Board has fixed the number of directors at 11 effective at such time. All current directors other than Ms. Turpin are standing for election for a one-year term at this meeting. We have refreshed our Board over the past six years, as five highly-qualified directors were added to the Board and, as of the 2020 Annual Meeting, four directors will have retired during that time period. We believe that the Board possesses the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business and Board experience, and viewpoints. Nominees Our Governance Committee is responsible for recommending director candidates to fill current and anticipated Board vacancies. The Governance Committee identifies and evaluates potential candidates from recommendations from the Company’s directors, management, shareholders, and other outside sources, including professional search firms. In evaluating proposed candidates, the Governance Committee may review their résumés, obtain references, and conduct personal interviews. The Governance Committee considers, among other factors, the Board’s current and future needs for specific skills and the candidate’s experience, leadership qualities, integrity, diversity, ability to exercise judgment, independence, and ability to make the appropriate time commitment to the Board. The Governance Committee strives to ensure the Board has a rich mix of relevant skills and experiences to address the Company’s needs by our strategic plan. During 2019, the Governance Committee conducted a director search for potential director candidates whose experience, skills, qualifications, and independence met the criteria it previously established, and the Governance Committee reviewed its findings with the Board. In conducting its search, the Governance Committee collected names of potential candidates from existing Foot Locker directors and engaged Korn Ferry, a third-party search firm, to identify and recruit qualified candidates. After reviewing the qualifications of the potential pool of candidates and narrowing the field to a handful of candidates, our Chairman, Lead Independent Director, and Governance Committee Chair each interviewed the candidates. Based on the Governance Committee’s review, the candidates’ résumés, and the other directors’ interviews with the candidates, the Governance Committee recommended and the Board approved the election of Darlene Nicosia and Tristan Walker, both of whom were identified by Korn Ferry. Maxine Clark, Alan D. Feldman, Richard A. Johnson, Guillermo G. Marmol, Matthew M. McKenna, Darlene Nicosia, Steven Oakland, Ulice Payne, Jr., Kimberly Underhill, Tristan Walker, and Dona D. Young will be considered for election as directors to serve for one-year terms expiring at the 2021 Annual Meeting. Each nominee has been nominated by the Board for election and has consented to serve. If, prior to the 2020 Annual Meeting, any nominee is unable to serve, then the persons designated as proxies for this meeting (Sheilagh M. Clarke, John A. Maurer, and Lauren B. Peters) will have full discretion to vote for another person to serve as a director in place of that nominee, or the Board may reduce the size of the Board. 2020 Proxy Statement 5


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    Proposal 1: Election of Directors Director Qualifications The Governance Committee reviewed and updated the director skill-set matrix in light of the Company’s long-term strategic plan and evaluated the directors’ skills, experience, and qualifications under the updated matrix, which is shown on pages 8 through 9. The Board, acting through the Governance Committee, considers its members, including those directors being nominated for reelection to the Board at the 2020 Annual Meeting, to be highly qualified for service on the Board due to a variety of factors reflected in each director’s education, areas of expertise, and experience serving on the boards of directors of other organizations during the past five years. Generally, the Board seeks individuals with broad-based experience and the background, judgment, independence, and integrity to represent the shareholders in overseeing the Company’s management in their operation of the business. Within this framework, specific items relevant to the Board’s determination for each director are listed in each director’s biographical information beginning on page 10. The ages shown are as of April 9, 2020. There are no family relationships among our directors or executive officers. The Board recommends a vote FOR the election of each of the eleven % identified nominees to the Board. 6


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    Intentionally Left Blank 2020 Proxy Statement 7


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    Proposal 1: Election of Directors Summary of Director Qualifications and Experience and Demographic Matrix We believe that our slate of director nominees possesses the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business and Board experience, and viewpoints. We have refreshed our Board over the past six years, as five highly-qualified directors were added to the Board and, as of the 2020 Annual Meeting, four directors will have retired during that time period. Nic na Wa hill an n Pa nd ol Oa a so Yo r n g ldm r e i lke kla rm os Ke de rk un yn hn Cla Ma Mc Un Knowledge, Skills, and Experience Fe Jo Leadership Chief Executive experience is important because directors who have served as CEOs of public or substantial privately- held or non-profit companies have experience working, communicating, and engaging with a variety of important stakeholder groups, including shareholders, bondholders, and investment analysts Strategy Broad-Based Business expertise provides a depth of experience to leverage in evaluating issues, and making business judgments Digital and Channel Connectivity experience is important to the Company as we build a more powerful digital experience for our customers Public Service experience is relevant to the Company as it is affected by government actions Information Security experience is relevant given the importance of protecting both the Company’s and our customers’ information International experience is important in understanding and reviewing our business and strategy outside of the United States, particularly in Europe and Asia Retail, Brand Marketing, and Social Media experience gives directors an understanding of assessing, developing, and implementing our marketing and customer engagement strategies Strategic Investments experience is important in evaluating our financial statements and investment strategy Strategic Planning and Analysis experience provides a practical understanding of assessing, developing, and implementing the metrics of our long-term financial objectives and strategic priorities Supply Chain experience is important to understand the omni-channel commerce distribution model with multiple fulfilment points to serve the customer Technology and Systems experience is important given the importance of technology to the retail marketplace, our internal operations, and our customer engagement initiatives Youth Culture / Target Market experience is important to understand our business and strategy as our brands keenly focus on their target customers, particularly youth culture 8


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    Proposal 1: Election of Directors Each director is individually qualified to make unique and substantial contributions. Collectively, our directors’ diverse viewpoints and independent-mindedness enhance the quality and effectiveness of Board deliberations and decision making. This blend of qualifications, attributes, and tenure results in highly effective leadership. Nic na Wa hill an n Pa nd ol Oa a so Yo r n g ldm r e i lke kla rm os Ke de rk un yn hn Cla Ma Mc Un Fe Jo Governance Accounting or Financial expertise gained from experience as a CEO, audit professional, or finance executive is important because it assists our directors in understanding and overseeing our financial reporting and internal controls Business Development / Mergers and Acquisitions experience is important because it helps in assessing potential growth opportunities Environmental, Social, and Governance experience is important because it supports our goals of strong Board and management accountability, transparency, and protection of shareholder interests, including corporate social responsibility Risk Management experience is helpful to the Board’s role in overseeing strategic, financial, and execution risks and exposures; any major litigation and other matters that may present material risk to our operations, plans, prospects, or reputation (including those related to human capital management, supply chain, and environmental sustainability); significant acquisitions and divestitures; and senior management succession planning Demographic Background Board Tenure (Year Joined) ‘13 ‘05 ‘14 ‘11 ‘06 ‘20 ‘14 ‘16 ‘16 ‘20 ‘01 Years 7 15 6 9 14 0.5 6 4 4 0.5 19 Gender Male Female Age (at April 9, 2020) Years old 71 68 62 67 69 52 59 64 55 35 66 Race/Ethnicity African American Hispanic White Number of Other Public Company Boards 1 2 1 — — — 1 2 — — 1 2020 Proxy Statement 9


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    Proposal 1: Election of Directors Maxine Clark Independent Director Committees: Age: 71 Compensation, Finance Director since: 2013 Skills and Qualifications: Professional Experience Director Qualifications Build-A-Bear Workshop, Inc. (retail merchants) Ms. Clark has extensive experience in both domestic and international retailing, • Consultant, June 2013 to January 2014 including founding and leading Build-A-Bear Workshop, serving as President of Payless • Founder and Chief Executive Bear, ShoeSource, Inc., and serving for 19 years as an executive of The May Department October 1997 to June 2013 Stores Company. She adds significant experience to our Board in strategic planning, • Chairman, April 2000 to November 2011 real estate, digital technology, and marketing. Her retail and business background, as Clark-Fox Family Foundation well as her financial expertise, are particularly useful for her service as a member of the • Chief Executive Officer, since 2004 Finance and Investment Oversight Committee (the “Finance Committee”). The Delmar DivINe (real estate initiative for Other Directorships community development in St. Louis) • Chief Inspirator, since May 2015 Ms. Clark is a director of another public company, Build-A-Bear Workshop, Inc. She Prosper Women’s Capital (organization serves as chairwoman of the St. Louis Regional Educational and Public Television focused on advancing female entrepreneurs) Commission (KETC/-Channel 9 Public Television) and as a director of each of PBS, • Managing Partner, since December 2014 the Barnes-Jewish Hospital in St. Louis, the Goldfarb School of Nursing at Barnes- Jewish College, New America (non-partisan think tank), and Washington University Washington University in St. Louis, John M. in St. Louis Board of Trustees. She was previously a director of Gymboree Corp. from Olin School of Business November 2014 to September 2017 and a trustee of the International Council of • Executive in Residence, since Shopping Centers. September 2014 Alan D. Feldman Independent Director Committees: Age: 68 Compensation, Finance Director since: 2005 Skills and Qualifications: Professional Experience Director Qualifications Midas, Inc. (automotive repair and Mr. Feldman is a recognized business leader with a broad base of experience in maintenance services) franchised retail operations, brand management, and customer relations. He previously • Chairman, President and Chief Executive served as Chairman, President and Chief Executive Officer of Midas, Inc. Mr. Feldman Officer, May 2006 to April 2012 previously served as an executive of PepsiCo, Inc., Pizza Hut, Inc., and McDonald’s • President and Chief Executive Officer, Corporation. Mr. Feldman’s leadership skills, retail knowledge, financial expertise, January 2003 to April 2006 and executive experience provide particularly useful background for his service as a member of the Finance Committee and the Compensation and Management Resources Committee (the “Compensation Committee”). Other Directorships Mr. Feldman is a director of two other public companies, GNC Holdings, Inc. since June 2013, and John Bean Technologies Corporation since July 2008, and he also serves as the Chair of the Foundation Board of the University of Illinois since September 2012. He was a director of Midas, Inc. from January 2003 to April 2012. Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management 10


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    Proposal 1: Election of Directors Richard A. Johnson Chairman, President and Committees: Chief Executive Officer Executive (Chair) Age: 62 Director since: 2014 Skills and Qualifications: Professional Experience Director Qualifications Foot Locker, Inc. Mr. Johnson has extensive experience as a retail company executive, including 23 • Chairman, since May 2016 years at the Company. He serves as our Chairman, President and Chief Executive • President and Chief Executive Officer, since Officer. Mr. Johnson has led almost all of the Company’s major businesses in the United December 2014 States, International, and Direct-to-Customer and has extensive knowledge of all facets of the Company’s business. He has played an integral role in developing and executing the Company’s strategic plans. Other Directorships Mr. Johnson has been a director of H&R Block Inc. since September 2015, serving on its audit and compensation committees, and was previously a director of Maidenform Brands, Inc. from January 2013 to October 2013. Mr. Johnson is also a director of the Retail Industry Leaders Association (RILA) and the Footwear Distributors and Retailers of America (FDRA) and serves on the University of Wisconsin—Eau Claire, National Leadership Council. Guillermo G. Marmol Independent Director Committees: Age: 67 Audit (Chair), Finance, Executive Director since: 2011 Skills and Qualifications: Professional Experience Director Qualifications Marmol & Associates (consulting firm that Mr. Marmol has a significant background in information technology and systems, which provides advisory services and investment continues to be highly important to the Company as we enhance our technology and capital to early stage technology companies) systems and build a more powerful digital business to connect with our customers. • President, since March 2007 and from Through his long tenure as a management consultant focusing on strategic analysis October 2000 to May 2003 and business processes, he brings valuable knowledge and expertise to his service on Electronic Data Systems Corporation (global the Board, as Audit Committee Chair and as a member on the Finance Committee. technology services company) • Division Vice President, June 2003 to Other Directorships February 2007 Mr. Marmol is a director of Morae Global Corporation, and he is a member of the Board Luminant Worldwide Corporation (internet of Trustees and Finance Committee Chair of the Center for a Free Cuba. Mr. Marmol professional services company) was a director of Vitamin Shoppe, Inc. from February 2016 to December 2019, • Director and Chief Executive Officer, Information Services Group, Inc. from March 2012 to April 2013, KERA/KXT North Texas July 1998 to October 2000 Public Broadcasting Inc., and Principal Solar Inc. Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management 2020 Proxy Statement 11


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    Proposal 1: Election of Directors Matthew M. McKenna Independent Director Committees: Age: 69 Audit, Finance (Chair), Executive Director since: 2006 Skills and Qualifications: Professional Experience Director Qualifications Open Prairie Rural Opportunities Fund, L.P. Mr. McKenna has extensive financial, tax, and legal expertise, having served as (private equity fund) a partner at an international law firm in New York City, a senior financial officer of • General Partner, since April 2018 PepsiCo, Inc., and a general partner of a private equity fund, which is useful for his Georgetown University’s McDonough School service as Finance Committee Chair and as a member of the Audit Committee. The of Business Board has determined that Mr. McKenna qualifies as an “audit committee financial • Executive in Residence, since expert,” as defined by the rules under the Securities Exchange Act of 1934, as amended February 2017 (the “Exchange Act”). In addition, Mr. McKenna has government experience based on his experience as Senior Advisor to the U.S. Secretary of Agriculture. He also brings the U.S. Secretary of Agriculture perspective of the non-profit sector from his previous positions as President and Chief • Senior Advisor, July 2013 to January 2017 Executive Officer of Keep America Beautiful, Inc. and Chairman of Ignatian Volunteer Keep America Beautiful, Inc. (non- Corps., as well as his current positions as Executive in Residence of Georgetown profit community improvement and University and adjunct professor at Fordham University. educational organization) • President and Chief Executive Officer, Other Directorships January 2008 to June 2013 Mr. McKenna serves on the board of Green Dot Bioplastics LLC (bioscience social PepsiCo, Inc. (global snack and enterprise and full-service bioplastics company). Mr. McKenna was a director of beverage company) PepsiAmericas, Inc. from 2001 to 2010. • Senior Vice President of Finance, August 2001 to December 2007 Fordham University School of Law • Adjunct professor Darlene Nicosia Independent Director Committees: Age: 52 Audit, Compensation Director since: 2020 Skills and Qualifications: Professional Experience Director Qualifications The Coca-Cola Company (non-alcoholic Ms. Nicosia is currently President of the Canada Business Unit of The Coca-Cola beverage company) Company. Ms. Nicosia has spent much of her career at The Coca-Cola Company, • President of the Canada Business Unit, serving in increasingly senior positions and working to build some of the world’s biggest since January 2019 brands with retailers and suppliers. She has extensive experience in global supply chain • Vice President, Commercial Product management, having served in increasingly senior supply chain roles at each of The Supply, May 2016 to January 2019 Coca-Cola Company, Kraft Heinz Company, and PepsiCo Inc. She also has extensive • Vice President and Chief Procurement brand marketing experience and has leveraged technology and innovative solutions to Officer, March 2015 to May 2016 drive growth. Her expertise in global supply chain is very useful to our Board. • Vice President, Procurement Center of Excellence & Franchise Leader, May 2012 Other Directorships to March 2015 Ms. Nicosia is a member of the Advisory Board of the Georgia Institute of Technology, Scheller College of Business. Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management 12


  • Page 19

    Proposal 1: Election of Directors Steven Oakland Independent Director Committees: Age: 59 Compensation, Governance (Chair), Director since: 2014 Executive Skills and Qualifications: Professional Experience Director Qualifications TreeHouse Foods, Inc. (manufacturer of Mr. Oakland brings to our Board a broad-based business background and extensive packaged foods and beverages) experience in domestic and international consumer products operations, with particular • Chief Executive Officer and President, strength in customer engagement, marketing, brand-building, and strategic planning. since March 2018 Mr. Oakland is actively involved in management resources issues and governance The J.M. Smucker Company (manufacturer of matters as the chief executive of a public company, providing him with relevant packaged foods and beverages) expertise as a member of the Compensation Committee and Governance Committee • Vice Chair and President, U.S. Food and Chair. Mr. Oakland also has risk management, business development, and mergers and Beverage, May 2016 to March 2018 acquisitions experience. • President, Coffee and Foodservice, April 2015 to April 2016 Other Directorships • President, International Food Service, Mr. Oakland serves on the boards of TreeHouse Foods, Inc., a public packaged foods May 2011 to March 2015 and beverage company, MTD Products, Inc., a privately-held manufacturing company, and Foster Farms, a privately-held poultry business. Ulice Payne, Jr. Independent Director Committees: Age: 64 Audit, Governance Director since: 2016 Skills and Qualifications: Professional Experience Director Qualifications Addison-Clifton, LLC (global trade compliance Mr. Payne brings to our Board significant managerial, operational, financial, public advisory services provider) service, and global experience as a result of the many senior positions he has held, • President and Managing Member, since including as President and Managing Member of Addison-Clifton, LLC, President and May 2004 Chief Executive Officer of the Milwaukee Brewers Baseball Club, Managing Partner Milwaukee Brewers Baseball Club of Foley & Lardner, LLP, and the Wisconsin Commissioner of Securities. As Foot • President and Chief Executive Officer, Locker is a global company, the Board also benefits from his broad experience in, September 2002 to December 2003 and knowledge of, international business and global trade compliance. In addition, Mr. Payne’s past and present experience on the boards of several public corporations Foley & Lardner, LLP (a Milwaukee-based includes service as a member of either the audit or finance committee at each of these law firm) companies, which is beneficial to the Board. • Managing Partner, 2001 to 2002 • Partner, February 1998 to September 2002 Other Directorships State of Wisconsin • Commissioner of Securities, February 1985 Mr. Payne has served as a director of two other public companies, ManpowerGroup to December 1987 Inc. since October 2007 and WEC Energy Group, Inc. since January 2003, and he also sits on the board of the Wisconsin Conservatory of Music. He previously served as a director of Badger Meter, Inc. from February 2000 to April 2010, The Northwestern Mutual Life Insurance Company from January 2005 to May 2018, Midwest Air Group, Inc. from 1998 to 2007, and The Marcus Corporation from 1996 to 2000. Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management 2020 Proxy Statement 13


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    Proposal 1: Election of Directors Kimberly Underhill Independent Director Committees: Age: 55 Compensation (Chair), Finance, Executive Director since: 2016 Skills and Qualifications: Professional Experience Director Qualifications Kimberly-Clark Corporation (manufacturer of Ms. Underhill brings to our Board a broad-based business background and extensive branded personal care, consumer tissue, and experience in domestic and international consumer products operations, with particular professional healthcare products) strength in marketing, brand-building, strategic planning, and international business • President, North America Consumer, since development. Additionally, Ms. Underhill is actively involved in management resources May 2018 issues as a senior executive of a public company, which provides relevant expertise • Global President of Kimberly-Clark to both our Compensation Committee, of which she is Chair, and Finance Committee, Professional, April 2014 to May 2018 of which she is a member. Through her senior executive position at Kimberly-Clark, • President, Consumer Europe, August 2011 Ms. Underhill also has significant international and business development experience. to April 2014 Other Directorships Ms. Underhill is a member of the Board of Directors of the Network of Executive Women (women’s leadership organization serving retail and consumer goods industries). Tristan Walker Independent Director Committees: Age: 35 Finance, Governance Director since: 2020 Skills and Qualifications: Professional Experience Director Qualifications Walker & Company Brands Inc. (manufacturer Mr. Walker is the Founder and Chief Executive Officer of Walker & Company Brands, of health and beauty products for people a consumer products company committed to designing personal care solutions for of color) people of color that was acquired by the Procter & Gamble Company in 2018. Prior to • Founder and Chief Executive Officer, since his founding Walker & Company Brands, Mr. Walker was an Entrepreneur in Residence April 2013 at Andreessen Horowitz (venture capital firm) from June 2012 to April 2013 and oversaw strategic partnerships and monetization as Director of Business Development at Foursquare from August 2009 to June 2012. Mr. Walker’s brand marketing and technology experience are deeply connected to the mission of designing solutions for consumers while bridging the gap between technology product innovation and youth culture. Mr. Walker understands how to utilize innovation and technology to drive change and deliver growth. His work at the intersection of technology and the consumer experience make a great addition to our Board. Other Directorships Mr. Walker co-founded and served as Chairman of the Board of CODE2040 to January 2020, which matches high-performing Black and Latino software engineering students and graduates with technology firms and start-ups. Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management 14


  • Page 21

    Proposal 1: Election of Directors Dona D. Young Lead Independent Director Committees: Age: 66 Audit, Governance, Executive Director since: 2001 Skills and Qualifications: Professional Experience Director Qualifications Independent consultant (specializing in Ms. Young brings significant financial, governance, and legal experience to our Board. corporate social responsibility, corporate Her prior service as General Counsel, and later Chief Executive Officer, of The Phoenix governance, and CEO coaching and Companies, Inc. exposed her to a number of areas, including financial reporting, counseling) leadership and talent development, and risk management. She also has extensive transactional experience, including mergers and acquisitions, divestitures, spin-offs, The Phoenix Companies, Inc. (an insurance and restructurings. Ms. Young’s leadership skills and broad corporate governance and asset management company) experience concerning board succession planning, board composition, and executive • Chairman, President and Chief Executive leadership, are useful for her service as Lead Independent Director and a member Officer, April 2003 to April 2009 of both the Governance Committee and the Audit Committee. Ms. Young is a faculty member of the NACD Board Advisory Services, was named to the NACD Directorship 100 for 2015, and has been an NACD Board Leadership Fellow since 2013. She was a 2012 Advanced Leadership Fellow at Harvard University. Ms. Young completed the NACD Cyber-Risk Oversight Program and earned a CERT Certificate in Cybersecurity Oversight conferred by Carnegie Mellon University. Other Directorships Ms. Young serves as a member of the Supervisory Board, Risk Committee Chair, and a member of the Nominating and Governance Committee and Audit Committee of Aegon N.V. (multinational life insurance, pension, and asset management company). She is also a director of the National Association of Corporate Directors (NACD), a director of Spahn & Rose Lumber Co., a director and Audit Committee Chair of Save the Children US, and a director of Save the Children International and Save the Children Association (each a non-profit organization), and a trustee of Saint James School in Saint James, Maryland. She has previously served as a director of The Phoenix Companies, Inc., Wachovia Corporation, Sonoco Products Company, and Wittenberg University in Springfield, Ohio. Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management 2020 Proxy Statement 15


  • Page 22

    Corporate Governance Note from our Lead Independent Director Our Board consists of individuals from a diverse range of backgrounds—in terms of gender, age, ethnicity, skills, and business and Board experience—with an equally diverse range of perspectives. What we share is a common desire to support management in achieving the Company’s purpose to inspire and empower youth culture. In pursuit of this purpose, the Board is pleased to share with you some highlights of our work during the past year: • Partnership with Management. The Board looks forward to continuing to support the Company along its journey to realize its vision at the heart of the sport and sneaker communities. For this reason, when it comes to strategy, our role as a Board is to look beyond “the here and now” and focus on the future. How we engage with management to achieve the Company’s long-term strategy, and review both short- and long-term results, is crucial to this task. The Board believes that, particularly because the positions of Chairman and Chief Executive Officer are combined, the role of a lead independent director is critical. As Lead Independent Director, in addition to the responsibilities listed under Our Board of Directors—Lead Independent Director on page 19, I meet regularly with the Chief Executive Officer and members of his leadership team, visit various stores and facilities, and participate in selected Company events. The committee chairs also regularly engage with management regarding the work of their committees. In addition, while regular meetings with the Chief Executive Officer and other members of senior management are essential to what we do, Board visits to stores across all banners continually prove every bit as illuminating, offering a “front line” rather than purely a “board room” perspective. These visits present opportunities to witness how the Company is embracing its latest investments in digital technologies and data analytics and engaging with the people executing these initiatives designed to adapt quickly to customer and market changes. Our Board prioritizes this level of engagement across the organization. • Shareholder Engagement. As a Board, one of our priorities is listening to, and considering the views of, our shareholders. We accomplish this through a robust outreach and engagement program, which we extended in 2019. These meetings provide an important platform to receive feedback from investors. This engagement program promotes transparency between the Board and our shareholders and helps build informed and productive relationships. As Lead Independent Director, I participate in these meetings on behalf of the Board and share the feedback gained from these meetings with the full Board and the Governance Committee, as well as compensation-specific feedback with the Compensation Committee, and, as a result of the feedback, enhancements have been made to this proxy statement to further improve transparency. • Culture. The Board recognizes the importance of doing business the right way. The Board works with the Chief Executive Officer to set and communicate the appropriate ethical “tone” for the Company because the Board believes that associates’ decisions are significantly influenced by an organization’s culture. To help us monitor the engagement of our global workforce, members of our Board meet throughout the year with senior leaders and those on the front lines who have direct customer contact. The Company maintains a robust ethics and compliance program. We also assess associate engagement surveys, associate turnover, and Code of Business Conduct hotline calls to ensure that goals and performance are both reasonable and aligned. In 2019, I co-presented a segment along with our lead audit partner at KPMG at our annual financial controls conference related to our “Culture” to further this mission. • Corporate Social Responsibility. Our global corporate social responsibility (“CSR”) efforts remain an integral part of how we manage the business, interact with the communities where we work and live, create an inclusive and diverse workplace and culture, and sustain value by making decisions that are good for the environment. The Board is actively engaged in the oversight of the Company’s CSR strategy and this message is a key topic during each shareholder engagement meeting. Our commitment to CSR is fundamental to our business and corporate philosophy and serves as the foundation of our long-term success. For additional information regarding our CSR efforts and Board oversight, see Corporate Social Responsibility beginning on page 27, where we detail our various endeavors around these important issues. The Board is impressed with how the Company puts customers first in all that it does. The Company can only do so because of the dedication and expertise of its people. I would, therefore, like to say a big “thank you” on behalf of the Board to the Company’s entire team across all banners and geographies. The Board looks forward to working with management in the year ahead to help them meet their targets and achieve the Company’s purpose to inspire and empower youth culture. “Our commitment to corporate social responsibility is fundamental to our business and corporate philosophy and serves as the foundation of our long-term success.” DONA D. YOUNG Lead Independent Director


  • Page 23

    Corporate Governance Our Board of Directors Our By-Laws provide for a Board consisting of between 7 and 13 directors. The exact number of directors is determined from time to time by the entire Board. There are currently 12 directors on our Board. Cheryl Nido Turpin will be retiring when her term expires at the conclusion of the 2020 Annual Meeting, and the Board has fixed the number of directors at 11 effective at such time. Directors’ Independence A director is not considered independent under New York Stock Exchange (“NYSE”) rules if they have a material relationship with the Company that would impair their independence. In addition to the independence criteria established by the NYSE, the Board has adopted categorical standards to assist it in making its independence determinations regarding individual directors. These categorical standards are contained in the Corporate Governance Guidelines, which are posted on the Company’s corporate website at footlocker.com/corp. The Board has determined that the following categories of relationships are immaterial for purposes of determining whether a director is independent under the NYSE listing standards: Categorical Relationship Description Investment Relationships A director and any family member may own equities or other securities of the Company. with the Company Relationships with A director and any family member may be a director, employee (other than an executive officer), or Other Business Entities beneficial owner of less than 10% of the shares of a business entity with which the Company does business, provided that the aggregate amount involved in a fiscal year does not exceed the greater of $1 million or 2% of either that entity’s or the Company’s annual consolidated gross revenue. Relationships with A director and any family member may be a director or employee (other than an executive Not-for-Profit Entities officer or the equivalent) of a not-for-profit organization to which the Company (including the Foot Locker Foundation) makes contributions, provided that the aggregate amount of the Company’s contributions in any fiscal year do not exceed the greater of $1 million or 2% of the not-for-profit entity’s total annual receipts. 2020 Proxy Statement 17


  • Page 24

    Corporate Governance We individually inquire of each of our directors and executive officers about any transactions in which the Company and any of these related persons or their immediate family members are participants. We also make inquiries within the Company’s records for information on any of these kinds of transactions. Once we gather the information, we then review all relationships and transactions of which we are aware in which the Company and any of our directors, executive officers, their immediate family members or five-percent shareholders are participants to determine, based on the facts and circumstances, whether the related persons have a direct or indirect material interest. The General Counsel’s office coordinates the related person transaction review process. The Governance Committee reviews any reported transactions involving directors and their immediate family members in making its recommendation to the Board on the independence of the directors. In approving, ratifying, or rejecting a related person transaction, the Governance Committee considers such information as it deems important to determine whether the transaction is on reasonable and competitive terms and is fair to the Company. The Company’s written policies and procedures for related person transactions are included within both the Corporate Governance Guidelines and the Code of Business Conduct. There were no related person transactions in 2019. The Board, upon the recommendation of the Governance Committee, has determined that the following directors are independent under NYSE rules because they have no material relationship with the Company that would impair their independence: Maxine Darlene Kimberly Clark Nicosia Underhill Director Director Director Age 71 2013 since Age 52 2020 since Age 55 2016 since Alan D. Steven Tristan Feldman Oakland Walker Director Director Director Age 68 2005 since Age 59 2014 since Age 35 2020 since Guillermo G. Ulice Dona D. Marmol Payne, Jr. Young Director Director Director Age 67 2011 since Age 64 2016 since Age 66 2001 since Matthew M. Cheryl Nido McKenna Turpin Director Director Age 69 2006 since Age 72 2001 since In making its independence determination, the Board reviewed recommendations of the Governance Committee and considered Ms. Young and Mr. Payne’s relationships as directors of companies with which we do business. The Board has determined that these relationships meet the categorical standard for Relationships with Other Business Entities and are immaterial with respect to determining independence. The Board has determined that all members of the Audit Committee, the Compensation Committee, the Finance Committee, and the Governance Committee are independent as defined under the NYSE listing standards and the director independence standards adopted by the Board. Board Independence 11 All Directors are independent except the CEO Directors 18


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    Corporate Governance Board Leadership Structure Our Board evaluates, from time to time as appropriate, whether the same person should serve as Chairman and Chief Executive Officer, or whether the positions should be held by different persons, in light of all relevant facts and circumstances and what it considers to be in the best interests of the Company and our shareholders. Since May 2016, the positions of Chairman and Chief Executive Officer have been held by Richard A. Johnson, with Dona D. Young serving as independent Lead Independent Director. The Board has utilized various leadership structures since 2010, as shown below: May 2015 January 2010 Positions separated, Positions combined, with an independent with an independent director serving as Lead Independent Director Non-Executive Chairman December 2014 May 2016 Positions separated, with Positions combined, the former Chairman and with an independent Chief Executive Officer Lead Independent serving as Executive Director Chairman, and an independent director serving as Lead Independent Director The Board believes that, based on the Company’s current facts and circumstances, its Board leadership structure is appropriate. Lead Independent Director The Board believes that, particularly because the positions of Chairman and Chief Executive Officer are held by the same person, the appointment of an independent lead independent director is appropriate. The Lead Independent Director’s responsibilities include: • presiding at executive sessions of the independent directors, and Board meetings at which the Chairman is absent; • attending meetings of each of the Board committees; • encouraging and facilitating active participation by, and communication among, all directors; • serving as the liaison between the independent directors and the Chairman; • approving Board meeting agendas and schedules after conferring with the Chairman and other members of the Board, as appropriate, and adding agenda items in her discretion; • having the authority to call meetings of the independent directors; • leading the Board’s annual performance evaluation of the Chief Executive Officer; • being available to advise the Chairman and the committee chairs in fulfilling their designated roles and responsibilities; and • performing such other functions as the Board or other directors may request. The Board periodically considers the rotation of the Lead Independent Director, taking into account experience, continuity of leadership, and the best interests of the Company. Dona D. Young currently serves as the Lead Independent Director. The Board believes that Ms. Young is well suited to serve as Lead Independent Director, given her business, financial, and governance background, as well as her experience serving on our Board. 2020 Proxy Statement 19


  • Page 26

    Corporate Governance Director On-Boarding We have an on-boarding program for new directors that is intended to educate a new director on the Company and the Board’s practices. During the first year of the director’s service, the newly-elected director meets with the Company’s Chief Executive Officer, Chief Financial Officer, Chief Human Resources Officer, General Counsel and Secretary, and other members of senior management, to review the Company’s business operations, financial matters, strategy, investor relations, risk management, corporate governance, composition of the Board and its committees, and succession and development plans. Additionally, they visit our stores near the Company’s New York headquarters, and elsewhere, with senior management for an introduction to store operations. During this first year, new directors periodically meet with the Lead Independent Director and with the committee chairs for an immersion into the work of the committees. As part of the on-boarding process, we assign a Board mentor to each new director in addition to the Lead Independent Director. The second phase of the on-boarding program commences approximately 18 months after the director joins the Board and is specifically tailored to the individual director, taking into consideration their experience as a director of other public companies, the committees of our Board on which they serve, and areas of our business and strategy that the director would like to explore more thoroughly with management. For example, during this second phase of the program, directors participate in enhanced discussions in the areas of customer data, retail accounting and operations, and risk management, and meet with key talent. Regular check-ins with the Lead Independent Director continue throughout the on-boarding program. Director Continuing Education Director education is an ongoing process, which begins when a director joins our Board. We host regular Board and Committee presentations, roundtables, and communications presented by management and outside speakers to help to keep directors appropriately apprised of key developments in our businesses and in our industry, so that they can effectively carry out their oversight responsibilities. We also encourage all directors to attend other continuing education programs to maintain their expertise and provide feedback to the other directors on these programs. Our directors have attended a variety of industry conferences and events hosted by universities, trade groups, law firms, accounting firms, and other advisory service firms for continuing education programs on a variety of topics, including corporate governance, legal, risk management, customer data, finance, retail accounting, and strategy. Mandatory Resignation or Retirement The Board has established a policy whereby a non-employee director is required to advise the Governance Committee Chair of any change to their principal employment. If requested by the Chair, after consultation with the members of the Committee, the director will submit a letter of resignation to the Committee Chair, and the Committee would then meet to consider whether to accept or reject the resignation. The Corporate Governance Guidelines also require that directors retire from the Board at the annual meeting of shareholders following the director’s 72nd birthday. Corporate Governance Guidelines The Board has responsibility for establishing broad corporate policies, reviewing significant developments affecting the Company, overseeing the business strategy, and monitoring the general performance of the Company. The Board has adopted Corporate Governance Guidelines. The Board periodically reviews the guidelines and revises them, as appropriate. The Corporate Governance Guidelines are available on the corporate governance section of the Company’s corporate website at footlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters. 20


  • Page 27

    Corporate Governance Board Attendance The Board held six meetings during 2019. All of our directors attended at least 75% of the aggregate of the meetings of the Board and of the committees on which they served in 2019. The Board holds regularly scheduled executive sessions of non-management directors in conjunction with each Board meeting. Dona D. Young, as Lead Independent Director, presides at these executive sessions. Directors are expected to attend annual meetings of shareholders. The annual meeting is normally scheduled on the same day as a quarterly Board meeting. In 2019, all of the directors attended the annual meeting. Retention of Outside Advisors The Board and all of its committees have authority to retain outside advisors and consultants that they consider necessary or appropriate in carrying out their respective responsibilities. The independent accountants are retained by, and report directly to, the Audit Committee. In addition, the Audit Committee is responsible for overseeing the qualifications, performance, and compensation of the internal auditors, which audit function the Company has partially outsourced. Similarly, the consultant retained by the Compensation Committee to assist in the evaluation of senior executive compensation reports directly to that committee. Board Evaluations Each year, the Board and its committees engage in a robust evaluation process consistent with the Board’s goal of continuous improvement. The Governance Committee oversees the evaluation process and reviews the procedures, which may vary from year to year, in advance of each year’s evaluation. The process is designed to elicit candid feedback regarding the areas in which the Board and its committees could improve their effectiveness and utilizes surveys, individual interviews, and action planning. In addition, in 2018, the Board enhanced its evaluation process and undertook a 360-degree peer evaluation process facilitated by an independent third party. Each director completed an evaluation and individual interview with the third party. The Governance Committee Chair and the Lead Independent Director each received copies of the completed evaluations. The Lead Independent Director met separately with each director, and the Governance Committee Chair met with the Lead Independent Director, to discuss the results of the individual evaluations. The Board plans to conduct peer evaluations approximately every three years. Stock Ownership Guidelines The Board has adopted Stock Ownership Guidelines applicable to the Board, the Chief Executive Officer, and other covered executives. The Guidelines are as follows: Covered Position Stock Ownership Guidelines Annual Retainer Fee Non-employee Director 4x (both Cash and Equity) Chief Executive Officer 6x Annual Base Salary Executive Vice President 3x Annual Base Salary Senior Vice President; Senior Vice President and General Manager 2x Annual Base Salary Corporate Vice President; Vice President and General Manager 0.5x Annual Base Salary 2020 Proxy Statement 21


  • Page 28

    Corporate Governance Shares of unvested restricted stock, unvested restricted stock units (“RSUs”), and deferred stock units (“DSUs”) are counted towards ownership for purposes of the Stock Ownership Guidelines. Performance-based RSUs (“PBRSUs”) are counted once earned. Stock options and shares held through the Foot Locker 401(k) Plan are disregarded in calculating ownership. Directors, the Chief Executive Officer, and other covered executives are required to be in compliance within five years of becoming subject to these guidelines. In the event of any increase in the required ownership level, whether as a result of an increase in the annual retainer fee or base salary or an increase in the required ownership multiple, the target date for compliance with the increased ownership guideline is five years after the effective date of such increase. All directors, the Chief Executive Officer, and other covered executives who were required to be in compliance with the guidelines as of the end of the 2019 fiscal year are in compliance. The Company measures compliance with the guidelines at the end of the prior fiscal year based on the market value of the Company’s stock at that time. If a director, the Chief Executive Officer, or other covered executive fails to be in compliance with the guidelines as of the end of the prior fiscal year, they must hold the net shares obtained through future stock option exercises and restricted stock and RSU vestings, after payment of applicable taxes, until again regaining compliance with the guidelines. In order to take into consideration fluctuations in the Company’s stock price, any person who has been in compliance with the guidelines as of the end of at least one of the two preceding fiscal years and who has not subsequently sold shares will not be subject to this holding requirement. For non-employee directors, the Governance Committee will consider a director’s failure to comply with the Stock Ownership Guidelines when considering that director for reelection. Political Contributions Our Code of Business Conduct prohibits making contributions on behalf of the Company to political parties, political action committees, political candidates, or holders of public office. The Company is a member of several trade associations which, as part of their overall activities, may engage in advocacy activities with regard to issues important to the retail industry or the business community generally. Our Board’s Oversight of Our Business Corporate Social Responsibility Oversight The Board is actively engaged in the oversight of the Company’s CSR strategy. In exercising its authority, the Board recognizes that the long-term interests of our shareholders are best advanced when considering other stakeholders and interested parties, including customers, employees, business partners, and the communities in which we operate. The Governance Committee oversees our CSR efforts, including human capital management and supply chain environmental sustainability, and the Board receives updates from the Governance Committee Chair regarding these environmental, social, and governance matters throughout the year. Inspired by engagement with shareholders, the Company posted a summary of our CSR efforts on the Responsibility section of the Company’s corporate website at footlocker.com/corp. Our CSR efforts are focused on Human Capital Management; Community; Worker Dignity; and Environmental Sustainability. For additional information regarding our CSR efforts and Board oversight, see Corporate Social Responsibility beginning on page 27. Risk Oversight The Board has oversight responsibilities regarding risks that could affect the Company. This oversight is conducted primarily through the Audit Committee. The Audit Committee has established procedures for reviewing the Company’s risks. These procedures include regular risk monitoring by management to update current risks and identify potential new and emerging risks, quarterly risk reviews by management with the Audit Committee, and an annual risk report to the full Board. In addition, the Audit Committee 22


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    Corporate Governance receives regular briefings from our Chief Information and Customer Connectivity Officer, Chief Financial Officer, Chief Accounting Officer, General Counsel, Vice President of Internal Audit, and outside experts on cybersecurity risks and cyber risk oversight. During these meetings, the Audit Committee and management discuss these risks, risk management activities and efforts, best practices, lessons learned from incidents at other companies, the effectiveness of our security measures, and other related matters. The Audit Committee Chair reports on the committee’s meetings, considerations, and actions to the full Board at the next Board meeting following each committee meeting. The Compensation Committee considers risk in relation to the Company’s compensation policies and practices. The Compensation Committee’s independent compensation consultant provides an annual report to the committee on risk relative to the Company’s compensation programs. The Company believes that this process for risk oversight is appropriate in light of the Company’s business, size, and active senior management participation, including by the Chief Executive Officer, in managing risk and holding regular discussions on risk with the Audit Committee, the Compensation Committee, and the Board. Cybersecurity Privacy We are subject to technology risks including failures, Our Privacy Policy and Privacy Statement govern security breaches, and cybersecurity risks that could our treatment of customer data. Our policies provide harm our business, damage our reputation, and increase explanations of the types of customer personal information our costs in an effort to protect against such risks. Our we collect, how we use and share that information and cybersecurity program includes the following elements: the measures we take to protect the security of that information. Our policies provide multiple points of contact • Technology: We employ a layered “defense, detect, and through which our customers may initiate inquiries and respond” strategy. raise concerns to us regarding our collection, sharing, • Benchmarking and external engagement: We and use of their personal data. Our privacy policies and benchmark our security practices against other practices in the European Union were updated in 2018 organizations and are active in the information in response to the EU Global Data Protection Regulation security community. (GDPR) requirements. Similarly, our privacy statements and • Third-party assessments: We engage a range of outside practices in the United States were updated in response to experts to regularly assess our organizational security the California Consumer Privacy Act (CCPA), which came programs, processes, and capabilities. into force in January 2020. • Internal assessments: We regularly test and improve our information systems through security risk and compliance review, user access campaigns, and other strategies. Code of Business Conduct The Company has adopted a Code of Business Conduct for directors, officers, and other employees, including its Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer. The Company periodically reviews the Code of Business Conduct and revises it, as appropriate. A copy of the Code of Business Conduct is available on the corporate governance section of the Company’s corporate website at footlocker.com/corp. You may obtain a printed copy of the Code of Business Conduct by writing to the Secretary at the Company’s headquarters. Any waivers of the Code of Business Conduct for directors and executive officers must be approved by the Audit Committee. The Company promptly discloses amendments to the Code of Business Conduct and any waivers of the Code of Business Conduct for directors and executive officers on the corporate governance section of the Company’s corporate website at footlocker.com/corp. 2020 Proxy Statement 23


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    Corporate Governance Global Sourcing Guidelines The Company has adopted Global Sourcing Guidelines that set out standards applicable to the production of all products sold in our stores. The Company periodically reviews the guidelines and revises them, as appropriate. The Global Sourcing Guidelines are available on the corporate governance section of the Company’s corporate website at footlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters. Succession Planning The Board engages in an effective planning process to identify, evaluate, and select potential successors to the Chief Executive Officer and other members of senior management. The Chief Executive Officer reviews senior management succession planning with the Board. Each director has complete and open access to any member of management. Members of management, including those several levels below senior management, are invited regularly to make presentations at Board and committee meetings and meet with directors in informal settings to allow the directors to form a more complete understanding of the executives’ skills and character. Shareholder Engagement and Voting The Board believes that it is important to foster long-term relationships with shareholders and understand shareholder perspectives on the Company. We value an open dialogue with our shareholders, and we believe that regular communication is a critical part of our long-term success. To that end, we continue our outreach to and dialogue with investors on a range of issues, including corporate governance, compensation, and CSR matters, and we closely monitor policy statements and areas of focus for these investors. We also review feedback about our business from individual investors. This shareholder engagement program complements the ongoing dialogue throughout the year among our shareholders and our Chief Executive Officer, Chief Financial Officer, and Investor Relations team on financial and strategic performance. Our engagement program is designed to reach out to our shareholders and hear their perspectives about issues that are important to them, both generally and with regard to the Company, and gather feedback. We believe that this engagement program promotes transparency between the Board and our shareholders and builds informed and productive relationships. As we continued our shareholder engagement program again in 2019, beginning in the fall, our Lead Independent Director and General Counsel and Secretary met individually with eight of our larger shareholders, as well as proxy advisory firms, and discussed topics such as board refreshment and composition, the board evaluation process, boardroom and company culture, executive compensation, and environmental, social, and governance topics. The Lead Independent Director shared the feedback gained from these meetings with the full Board and the Governance Committee, as well as compensation- specific feedback with the Compensation Committee. As reflected in the following engagement cycle, the Company oversees a rigorous and comprehensive shareholder engagement process: 24


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    Corporate Governance Summer Fall • Board reviews the voting results of the • We contact shareholders and Company’s annual shareholders’ meeting. proxy advisors to engage in conversations • Board reviews governance trends and key and listen to their concerns and other topics from the proxy season and peer feedback on our governance and company practices. compensation practices. • Our Lead Independent Director shares the feedback with the Board. Spring Winter • We file our proxy statement and contact • The Board uses the feedback from our shareholders to answer any questions they engagement meetings in its review of may have on the items being voted on at the governance and compensation practices for annual shareholders’ meeting. the coming year. • We hold our annual shareholders’ meeting. • We begin drafting the proxy statement and consider disclosure improvements based on the engagement feedback. We have been responsive to shareholder feedback. In recent years, we have taken a number of actions to strengthen our governance and CSR programs and enhance the disclosure of our practices. For example, the Board voluntarily adopted proxy access and, based on shareholder feedback, the Company enhanced its CSR disclosure on its corporate website at footlocker.com/corp and added a director skill-set matrix to describe each director’s qualifications in this proxy statement. In addition, the Board amended our By-Laws to implement a majority voting standard in uncontested director elections. Enhancements also have been made to this proxy statement to further improve transparency. Instances such as these evidence our continued commitment to remain responsive on a variety of shareholder concerns. Please continue to share your thoughts or concerns at any time. The Board has established a process to facilitate communication by shareholders with the Board, described below. Communications with the Board Shareholders and other interested parties who wish to communicate directly with the non-management directors of the Company should send a letter to the Board of Directors, c/o Secretary, Foot Locker, Inc., 330 West 34th Street, New York, New York 10001. The Secretary will promptly send a copy of the communication to the Lead Independent Director, who may direct the Secretary to send a copy of the communication to the other non-management directors and may determine whether a meeting of the non-management directors should be called to review the communication. A copy of the Procedures for Communications with the Board of Directors is available on the corporate governance section of the Company’s corporate website at footlocker.com/corp. You may obtain a printed copy of the procedures by writing to the Secretary at the Company’s headquarters. 2020 Proxy Statement 25


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    Corporate Governance Majority Voting in the Election of Directors Directors must be elected by a majority of the votes cast in elections for which the number of nominees for election does not exceed the number of directors to be elected. A plurality vote standard applies to contested elections where the number of nominees exceeds the number of directors to be elected. Our Corporate Governance Guidelines provide that any incumbent director who does not receive a majority of the votes cast in an uncontested election is required to tender their resignation for consideration by the Governance Committee. The Governance Committee will make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The director who tenders their resignation will not participate in the Committee’s or the Board’s decision. In determining its recommendation to the Board, the Governance Committee will consider all factors that it deems relevant. Following such determination, the Company will promptly disclose publicly the Board’s decision, including, if applicable, the reasons for rejecting the tendered resignation. Proxy Access Under our proxy access by-law, a shareholder, or a group of up to 20 shareholders, owning at least 3% of the Company’s outstanding common stock, par value $0.01 per share (“Common Stock”) continuously for at least three years as of the date of the notice of nomination, may nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board, whichever is greater (subject to certain limitations set forth in the By-Laws), provided that the shareholder(s) and nominee(s) satisfy the requirements specified in the By-Laws. 26


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    Corporate Social Responsibility Our global CSR efforts are part of the fabric of who we are and reflect our core values of integrity, leadership, excellence, service, team work, innovation, and community. Stakeholders increasingly want to know that the company they are buying from, investing in, working for, or doing business with, is not only delivering strong financial returns, but also acting responsibly and ethically. They look to companies like ours to be good corporate citizens that value their associates, give back to their communities in meaningful ways, and actively address the impact their operations may have on the environment, while simultaneously delivering strong financial performance and long-term shareholder value. For these reasons, we have a global cross-functional CSR team, including representatives from our Legal, Human Resources, Supply Chain, Sourcing, Real Estate, and Product teams, that monitors our CSR efforts. The Governance Committee oversees our CSR program and the Board receives updates from the Governance Committee Chair throughout the year. While important progress to enhance our commitment to CSR already has been made, we are on a journey—continuously working to develop specific CSR goals and improve our reporting. We believe that the Sustainability Accounting Standards Board (“SASB”) provides a clear set of standards for reporting sustainability information across a wide range of issues. For evaluating and reporting climate-related risks, the Task Force on Climate-related Financial Disclosures (“TCFD”) provides a valuable framework. We continue to make progress towards SASB- and TCFD-aligned reporting. We will continue to increase the use of metrics to better demonstrate our progress so that our efforts are transparent for our stakeholders. This process will be more evolutionary than revolutionary, but our goal is to make progress each year. We look forward to sharing more with you over time. We remain passionate about continuously improving our programs and working to make a positive and sustainable impact on the world. We appreciate the opportunity to update you on the exciting progress we are making in each of these areas. Our CSR priorities are focused on Human Capital Management; Community; Worker Dignity; and Environmental Sustainability. To learn more about our evolving efforts, please visit the Responsibility section of our corporate website at footlocker.com/corp. 2020 Proxy Statement 27


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    Corporate Social Responsibility WE AIM TO CREATE OPPORTUNITIES FOR ALL Human Capital Management OF OUR ASSOCIATES. Gender Diversity (Global) Ethnic Diversity (U.S.)* Women serve in several key leadership roles, including as Chief Financial Officer, Chief Human Resources Officer, General Counsel and Secretary, Chief Accounting Officer, Vice President and General Manager, Foot Locker Europe, and Vice President and General Manager, Foot Locker Pacific 27% 20% of executives of executives are are women ethnically diverse 45% 27% 46% of total associates of current 84% of associates are of current globally are women independent directors ethnically diverse independent directors are women are ethnically diverse Over 2 million In 2019, nearly37,000 candidates globally apply new associates joined for jobs with us annually Foot Locker 45% 72% 27% of current of current independent of current 12.5% non-store independent independent Over associates globally directors directors are directors are promoted during 2019, are women ethnically diverse or ethnically 50,000 including large and people employed growing percentage of women, including diverse with us globally female and ethnically our Lead diverse associates Independent Director 12-year average Disability hiring non-store associate tenure program to attract, (at the manager and hire, and retain associates * U.S. workforce represents 70% of global workforce higher levels) with disabilities WE AIM TO HELP STRENGTHEN AND SUPPORT LOCAL COMMUNITIES WHERE WE Community DO BUSINESS. $10 million provided for scholarships through Encourage our U.S. non-store associates to take an annual the Foot Locker Foundation since 2004, in addition to Community Service Day, which provides paid footwear and apparel donations to several organizations time-off for volunteering, to support their communities Operate a number of community-based power stores across a number of cities, which are focused on creating immersive brand connections with a curated group of local brands with whom we have partnered to sell exclusive and limited-release product that are authentically tied to the neighborhoods we serve 28


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    Corporate Social Responsibility Worker Dignity WE RESPECT ALL WORKERS INVOLVED IN OUR SUPPLY CHAIN. We have a long-standing commitment to adhere to the highest social standards in the manufacture of the products we sell We work hard to choose reputable business partners who are committed to ethical standards We are concerned with the safety and fair treatment and business practices of all workers involved in our supply chain, wherever the workers are located We will only do business with suppliers whose We have developed Global Sourcing workers are, in all cases, present voluntarily, Guidelines, which are distributed annually and compensated fairly and allowed the require all branded and private-label vendors and right of free association suppliers globally to respect certain standards We have consolidated our supplier base We ensure compliance with our Global Sourcing over time so that we are working closer with fewer Guidelines by performing factory audits for our suppliers with whom we have deeper partnerships private-label vendors and suppliers to forge a more collaborative approach grounded in continuous engagement and improvement WE AIM TO SAVE ENERGY, SAVE MONEY, AND Environmental Sustainability SAVE THE PLANET. We recognize climate change and our shared responsibility to work toward a lower carbon future. We are doing our part by implementing practices that curb greenhouse gases and minimize our environmental footprint to create more sustainable operations. Energy Conservation Waste Reduction Replaced inefficient fixtures with LED lights—which Recycled cardboard across the U.S. and E.U. annually consume 80% less energy than conventional lights— amounts to and reduced energy consumption 5,537 dump truck 55,374 loads cubic yards KWH Metric Tons Energy Saving 6,152 tons SAVINGS Tons Co2 Co2 (%) 7,119,275 5,548 5,033 44% Supply Chain Efficiency This energy reduction Committed to using cleaner modes of equates to 1,069 automobiles, transportation, including intermodal, and 1,069 or 581 single-family homes, 581 encouraging the use of fuel-saving strategies and operating for one year technologies, including “buy online, pick up in store” Recycling Measurement and Reporting Increased recycling Participated in CDP Climate Change Information Request, CDP Forests programs in our stores and Information Request, and CDP Water Security Information Request in 2019 (more distribution centers information regarding CDP can be found on their website at cdp.net) 2020 Proxy Statement 29


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    Board of Directors Committees of the Board The Board has delegated certain duties to committees, which assist the Board in carrying out its responsibilities. There are five standing committees of the Board. Each independent director serves on at least two committees. The key oversight responsibilities of the committees, the current committee memberships, and the number of meetings held during 2019 are described below. The Board has adopted charters for each of the Audit Committee, the Compensation Committee, the Finance Committee, and the Governance Committee. Copies of the charters for these committees are available on the corporate governance section of the Company’s corporate website at footlocker.com/corp. You may also obtain printed copies of these charters by writing to the Secretary at the Company’s headquarters. As a general principle, the Board believes that the periodic rotation of committee assignments on a staggered basis is desirable and provides an opportunity to foster diverse perspective and develop breadth of knowledge within the Board. AUDIT Chair Other Members Guillermo G. Marmol McKenna, Nicosia, Payne, Young 9 meetings in 2019 Key Oversight Responsibilities • appoints the independent auditors • the qualifications, independence, and performance of • approves the independent auditors’ compensation the independent auditors • assists the Board in fulfilling its oversight responsibilities in the • the qualifications, performance, and compensation of following areas: the internal auditors • accounting policies and practices • reviews and monitors compliance with the Code of • the integrity of the Company’s financial statements Business Conduct • compliance with legal and regulatory requirements • establishes procedures for the receipt, retention, and • the Company’s risk assessment and risk management policies treatment of complaints regarding accounting, internal • cybersecurity accounting controls, and auditing matters This committee consists of five independent directors, as independence is defined under the SEC and NYSE rules applicable to audit committee members. All of the members meet the expertise requirements under the NYSE rules. The Board has determined that Mr. McKenna qualifies as an “audit committee financial expert,” as defined by the rules under the Exchange Act, through his relevant experience as a former senior financial executive of a large multinational corporation. The Audit Committee Report appears on page 73. COMPENSATION Other Members Chair Clark, Feldman, Nicosia, Kimberly Underhill Oakland, Turpin 4 meetings in 2019 Key Oversight Responsibilities • determines the compensation of the Chief Executive Officer • administers the Company’s various compensation • reviews and approves all compensation for the Company’s plans, including the incentive plans, the equity-based executive management group, which consists of the executive compensation plans, and the 2013 Foot Locker Employees officers and corporate officers Stock Purchase Plan (the “ESPP”) (committee members • responsible for decisions regarding equity compensation for are ineligible to participate in these compensation plans, other employees except the Company’s 2007 Stock Incentive Plan (the • assesses risk in relation to the Company’s compensation policies “Stock Incentive Plan”)) and practices • reviews and makes recommendations to the Board concerning executive development and succession • reviews non-employee directors’ compensation and makes recommendations to the Board concerning the form and amount of non-employee directors’ compensation This committee consists of six independent directors, as independence is defined under the NYSE rules applicable to compensation committee members. See the Compensation Discussion and Analysis (“CD&A”) beginning on page 37 for a discussion of the Compensation Committee’s procedures for determining compensation, and the Compensation Committee Report on page 51. 30


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    Board of Directors FINANCE Other Members Chair Clark, Feldman, Matthew M. McKenna Marmol, Underhill, Walker 4 meetings in 2019 Key Oversight Responsibilities • reviews the Company’s financial plans and objectives • reviews the Company’s derivatives policy and its use • reviews and makes recommendations to the Board regarding the of derivatives Company’s annual operating budget and two-year plans • reviews and makes recommendations to the • reviews the Company’s allocation of capital, annual capital budget, Board regarding proposed mergers, combinations, and policies related to capital and other expenditures acquisitions, offers to purchase the Company’s • reviews and makes recommendations to the Board regarding the shares or significant assets, divestitures, and Company’s uses of cash, including capital expenditures, stock and strategic investments bond repurchases, and dividend payments • reviews the Company’s Corporate Development • reviews and makes recommendations to the Board regarding Approval process the Company’s cash requirements and sources of cash, including • reviews reports from the Retirement Plan Committee debt or equity issuances, revolving credit facilities, or other debt regarding the asset allocation and investment instruments or facilities performance of the Company’s North America • reviews the Company’s insurance and self-insurance reserves pension funds GOVERNANCE Chair Other Members Steven Oakland Payne, Turpin, Walker, Young 4 meetings in 2019 Key Oversight Responsibilities • oversees corporate governance matters affecting the Company, • reviews membership on the Board committees including developing and recommending criteria and policies and, after consultation with the Chief Executive relating to director service and tenure Officer and the Lead Independent Director, makes • establishes criteria for Board candidates recommendations to the Board annually regarding • retains a third-party search firm from time to time to identify committee members and committee chair assignments potential director candidates • oversees the annual self-assessment process for the • selects new director nominees to recommend to the Board Board and committees • considers the re-nomination of existing directors after it conducts • reviews trends and governance with regard to an annual review of each director’s qualifications, experience, and non-employee directors’ compensation independence • oversees CSR and sustainability efforts and considers public reporting with regard thereto Shareholders who wish to recommend candidates for Board membership may contact the Governance Committee in the manner described on page 25 under Communications with the Board. Shareholder nominations must be made according to the procedures required under, and within the timeframe described in, the By-Laws and under Deadlines and Procedures for Nominations and Shareholder Proposals on page 76. Shareholder-recommended candidates and shareholder nominees whose nominations comply with these procedures will be evaluated by the Governance Committee in the same manner as the Company’s nominees. EXECUTIVE Other Members Chair Marmol, McKenna, Oakland, Richard A. Johnson Underhill, Young No meetings in 2019 Key Oversight Responsibilities • shares all of the powers of the Board during intervals between Board meetings, except for certain matters reserved to the Board 2020 Proxy Statement 31


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    Board of Directors Director Compensation This discussion relates to the compensation we pay to directors who are not Company employees. We do not pay additional compensation for service on the Board or any committee to any director who is also a Company employee. Key Principles of Director Compensation Program The Company compensates its non-employee directors for their service according to the following principles: Category Description Pay Position The targeted pay position for our outside directors’ compensation program is the median of the retail and general industry market reference points. Peer Groups When establishing reference points for market comparisons of our outside directors’ compensation program, we consider the retail peer group used for our executive compensation purposes and general industry data for similarly-sized companies. See Benchmarking Approach on page 48 for more information on our peer group. Pay Evaluation When assessing the competitive position of our outside directors’ compensation program, the Perspective primary focus is on total targeted compensation opportunity. Pay Mix Our outside directors’ compensation program consists of a balance of cash and equity, with an emphasis on equity over cash. See Components of Director Compensation Program beginning on page 32 for further information. Differentiation The outside directors’ compensation provides additional compensation for leadership positions on the Board, including non-executive chair, lead independent director, and committee chair roles. See Components of Director Compensation Program beginning on page 32 for further information. Stock Ownership Significant stock ownership guidelines established for outside directors encourage better alignment with shareholders’ interests, with compliance measured at least annually, as described further in Stock Ownership Guidelines beginning on page 21. Deferral Opportunities Outside directors are provided with the opportunity to defer compensation by making additional investments in our Common Stock on an elective basis. See Deferral Opportunities on page 33 for further information. Total Compensation Meaningful limits on outside directors’ compensation have been established to ensure Limits consistency with sound governance practices. Regular Review The Governance Committee conducts regular reviews of governance practices and trends in directors’ compensation to ensure consistency of our program with sound governance practices and makes recommendations, as appropriate, to the Board. The Compensation Committee conducts regular reviews of our outside directors’ compensation program and makes recommendations to the Board regarding the amount and form of directors’ compensation each year. Components of Director Compensation Program Our non-employee directors are paid an annual retainer fee and meeting fees for attendance at each Board and committee meeting. The Lead Independent Director and the committee chairs are each paid additional retainer fees for service in these capacities. We do not pay additional compensation to any director who is also a Company employee for service on the Board or any committee. 32


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    Board of Directors Below is a summary of the fees paid to the non-employee directors in 2019: Fee Amount Annual Retainer $140,000 (increased to $150,000 beginning January 2020) payable 50% in cash and 50% in Common Stock. We calculate the number of shares paid to the directors for their annual retainer by dividing their retainer fee by the closing price of a share of Common Stock on the last business day preceding the July stock payment date. Committee Chair Retainers $25,000: Audit Committee Chair $25,000: Compensation Committee Chair $15,000: Finance Committee Chair $15,000: Governance Committee Chair None: Executive Committee Chair The committee chair retainers are paid in the same form as the annual retainer. Lead Independent $50,000 payable in cash. Director Retainer Meeting Fees $2,000 for attendance at each Board meeting, and, for committee members, for attendance at each committee meeting. RSUs RSUs valued at $70,026 awarded to continuing directors following the 2019 Annual Meeting. In May 2019, each director received an award of 1,292 RSUs. The number of RSUs granted was calculated by dividing $70,000 by the closing price of a share of Common Stock on the grant date ($54.20). The RSUs will vest in May 2020, one year following the grant date, provided that the director continues to serve on the Board through the vesting date. Each RSU represents the right to receive one share of Common Stock on the vesting date. No dividends are paid or accrued on the RSU awards. Directors may elect to receive up to 100% of their annual retainer, including their committee chair retainer, in Common Stock. Deferral Opportunities Non-employee directors may elect to receive all or a portion of the cash component of their annual retainer fee, including committee chair retainers, in the form of DSUs or to have these amounts placed in an interest account. Directors may also elect to receive all or part of the stock component of their annual retainer fee in the form of DSUs. A DSU is an accounting equivalent of one share of Common Stock. The interest account is a hypothetical investment account bearing interest at the rate of 120% of the applicable federal long-term rate, compounded annually, and set as of the first day of each plan year. None of the current directors have elected to place any amount of their annual retainer fee in an interest account. Governance The Governance Committee and Compensation Committee jointly oversee our non-employee director compensation program, and conduct annual reviews and make recommendations for adjustments, as appropriate, to the Board. The Compensation Committee reviews non-employee directors’ compensation and makes recommendations to the Board concerning the form and amount of non-employee directors’ compensation. The Governance Committee reviews trends and governance with regard to non-employee directors’ compensation. In connection with the review conducted in fiscal year 2019, the independent outside consultant on director compensation retained by the Compensation Committee assessed the compensation paid to our non-employee directors against non-employee director compensation trends and data from our company peer group, including overall trends and governance principles, market competitiveness of our program, and the mix of cash and equity provided under our program. After consultation with the independent outside consultant, the Governance Committee and Compensation Committee recommended to the Board that the annual retainer be increased based on the peer group median and pay mix. In February 2019, on the recommendation of the Governance Committee, the Board placed a cap of $600,000 on non-employee directors’ compensation, inclusive of cash and equity, for each non-employee director for each fiscal year. 2020 Proxy Statement 33


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    Board of Directors Other Compensation of Directors DIRECTORS’ RETIREMENT PLAN None of the current independent directors is entitled to receive any retirement benefits, but two former directors receive benefits under a Directors’ Retirement Plan that was frozen as of December 31, 1995. The retirement benefit under that plan is $24,000 per year, payable quarterly for the lesser of 10 years after the director leaves the Board or until the director’s death. REIMBURSEMENT OF EXPENSES We reimburse non-employee directors for reasonable expenses incurred in attending Board and committee meetings, other meetings with management, and continuing education programs, including their transportation, hotel accommodations, and meals. Directors are eligible to receive the same discount on purchases of merchandise from our stores, catalogs, and websites that is available to employees. Fiscal 2019 Director Compensation The amounts paid to each non-employee director for fiscal 2019, including amounts deferred under the Company’s Stock Incentive Plan, and the RSUs granted to each director are reported in the tables below: Director Compensation (a) (b) (c) (d) Fees Earned Stock or Paid in Awards Total Name Cash ($) ($)(1) ($) Clark 98,452 139,990 238,442 Feldman 96,452 183,498 279,950 Marmol 120,918 152,525 273,443 McKenna 115,949 147,494 263,443 Oakland 105,949 149,928 255,877 Payne 108,452 139,990 248,442 Turpin 98,452 209,702 308,154 Underhill 108,918 152,525 261,443 Young 158,452 239,655 398,107 Notes to Director Compensation Table (1) Column (c) reflects the following three items: (i) the grant date fair value determined in accordance with FASB ASC 718 for the portion of a director’s annual retainer fees (including committee chair retainer fees) for fiscal year 2019 paid in shares of Common Stock (including any portions deferred in the form of DSUs under the Stock Incentive Plan) ($41.92 per share representing the closing price of a share of Common Stock on July 1, 2019). Such shares of Common Stock are fully vested on grant, regardless of whether deferred into DSUs. (ii) the grant date fair value determined in accordance with FASB ASC 718 for RSUs granted in fiscal year 2019 ($54.20 per share representing the closing price of a share of Common Stock on the grant date). The RSUs will vest in May 2020. The amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. (iii) the grant date fair value, determined in accordance with FASB ASC 718, for dividend equivalents paid on DSUs and credited in the form of additional DSUs, made to Messrs. Feldman and Oakland and Mmes. Turpin and Young ($55.27 per share for DSUs granted on May 3, 2019, $39.36 per share for DSUs granted on August 2, 2019, $44.28 per share for DSUs granted on November 1, 2019, and $37.97 per share for DSUs granted on January 31, 2020, representing the closing price of a share of stock on the quarterly payment date). Such DSUs are fully vested on grant. 34


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    Board of Directors The following table sets forth the grant date fair value of the above stock awards granted to our directors in fiscal year 2019: Stock Fees RSUs DSUs Total Name ($) ($) ($) ($) Clark 69,964 70,026 — 139,990 Feldman 69,964 70,026 43,508 183,498 Marmol 82,499 70,026 — 152,525 McKenna 77,468 70,026 — 147,494 Oakland 77,468 70,026 2,434 149,928 Payne 69,964 70,026 — 139,990 Turpin 69,964 70,026 69,712 209,702 Underhill 82,499 70,026 — 152,525 Young 69,964 70,026 99,665 239,655 For additional information on the valuation assumptions, refer to Note 21 to the Company’s financial statements in our 2019 Annual Report on Form 10-K. As of end of fiscal year 2019, the number of RSUs and DSUs held by our directors was as follows: RSUs Outstanding DSUs Outstanding on 02/01/20 on 02/01/20 Name (#) (#) Clark 1,292 — Feldman 1,292 29,285 Marmol 1,292 — McKenna 1,292 — Oakland 1,292 1,639 Payne 1,292 — Turpin 1,292 46,923 Underhill 1,292 — Young 1,292 67,084 Directors and Officers Indemnification and Insurance The Company has entered into indemnification agreements with its directors and officers, as approved by shareholders at the 1987 Annual Meeting. We have purchased directors and officers liability and corporation reimbursement insurance from a group of insurers comprising ACE American Insurance Co. (Chubb), Zurich American Insurance Co., North American Specialty Insurance Co. (SwissRe), Continental Casualty Company (CNA), Freedom Specialty Insurance Co. (Nationwide), Berkley Insurance Co., Argonaut Insurance Co. (ARGO RE), Beazley Insurance Company, Inc., Euclid Exc., Chubb Bermuda Ins Ltd. (Chubb), National Union (AIG), and Endurance American Insurance Co. (Sampo International), These policies insure the Company and all of its wholly-owned subsidiaries. They also insure all of the directors and officers of the Company and the covered subsidiaries. The policies were written for a term of 12 months, from October 12, 2019 until October 12, 2020. The total annual premium for these policies, including fees and taxes, is $1,195,064. Directors and officers of the Company, as well as all other employees with fiduciary responsibilities under the Employee Retirement Income Security Act of 1974, as amended, are insured under policies issued by a group of insurers comprising Zurich American Insurance Co., Continental Casualty Company (CNA), Beazley Insurance Company, Inc., and ACE American Insurance Co. (Chubb), which have a total premium, including fees and taxes, of $321,250 for the 12-month period ending October 12, 2020. 2020 Proxy Statement 35


  • Page 42

    Proposal 2: Advisory Approval of Executive Compensation The Board is asking our shareholders to approve, on a non-binding, advisory basis, the compensation of our NEOs, as described beginning on page 37. We currently hold our “Say-on-Pay” vote every year. Shareholders have an opportunity to cast an advisory vote on the frequency of Say-on-Pay votes at least every six years. The next advisory vote on the frequency of the Say-on-Pay vote is expected to occur at the 2022 Annual Meeting. As described in detail under the CD&A beginning on page 37, our compensation program is designed to attract, motivate and retain talented executives responsible for leading our strategic priorities and, in turn, deliver value to our shareholders. Our executive compensation program ties pay closely to performance. A significant portion of the compensation provided to the NEOs is based upon the Company’s performance or the performance of our share price, and we believe this compensation structure closely aligns the interests of our NEOs with the interests of our shareholders. The more senior an executive’s position, the greater portion of their compensation that is tied to performance. At the 2019 Annual Meeting, over 91% of the votes cast on the advisory vote to approve the compensation of our NEOs were voted in favor of the proposal. The Compensation Committee believes this affirms our shareholders’ support for the Company’s approach to executive compensation. We believe you should read the CD&A and the compensation tables beginning on page 37 in determining whether to approve this proposal. The Board recommends approval of the following resolution: “RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of our NEOs, as disclosed in the Company’s Proxy Statement for the 2020 Annual Meeting pursuant to the SEC’s compensation disclosure rules, including the CD&A, the 2019 Summary Compensation Table, and the other related tables and disclosures.” % The Board recommends a vote FOR Proposal 2. 36


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    Executive Compensation Compensation Discussion and Analysis This Compensation Discussion and Analysis, or CD&A, describes our compensation philosophy and objectives and provides context for compensation decisions for our NEOs, and discusses how our 2019 compensation is linked to performance against the goals that were established for the annual and long-term incentive compensation programs. For 2019, our NEOs were as follows: Richard A. Lauren B. Johnson Peters Chairman, Executive Vice President and Chief President and Chief Executive Officer Financial Officer Stephen D. “Jake” Lewis P. Pawan Jacobs Kimble* Verma Executive Vice Executive Vice President Executive Vice President President and Chief and Chief Executive and Chief Information Executive Officer— Officer—Asia Pacific and Customer North America Connectivity Officer * Mr. Kimble served as Executive Vice President and Chief Executive Officer–International during part of 2019. He has served as Executive Vice President and Chief Executive Officer–Asia Pacific since March 11, 2019. Table of Contents 38 Executive Summary 46 Perquisites 38 Key Compensation Practices and Policies 46 Employment Agreements 39 Performance Highlights 47 Procedures for Determining Compensation 39 Impact of Company Performance on Annual and 47 Setting Compensation, Establishing Goals, and Long-Term Incentive Pay Evaluating Performance 40 Say-on-Pay Shareholder Vote 48 Benchmarking Approach 40 2019 Compensation Decisions 48 Use of Compensation Consultants 41 Compensation Program Design and Structure 49 Management Involvement in Developing the 41 Components of Executive Compensation Program Compensation Program 41 Base Salaries 49 Additional Information 42 Annual Incentive Plan 49 Key Compensation Governance Policies 43 Long-Term Incentive Program 49 Compensation Plans and Risk 45 Retirement Plan and Excess Cash Balance Plan 50 Delegation of Authority 45 401(k) Plan 50 Items Disregarded for Bonus Calculations 46 Supplemental Executive Retirement Plan 51 Accounting and Tax Considerations of 46 International Assignment Compensation Executive Compensation 2020 Proxy Statement 37


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    Executive Compensation Executive Summary Our Compensation Committee, comprised of six independent directors, oversees the executive compensation program. We design our executive compensation program to attract, motivate, and retain talented executives responsible for executing the Company’s short- and long-term strategic priorities and, in turn, deliver value to our shareholders. The centerpiece of our program is our pay-for-performance philosophy that aligns pay outcomes to the achievement of our annual operating plan and long-term strategy, and the creation of shareholder value. This is especially true at senior levels of the Company where most of the compensation of our NEOs is tied to Company operating performance as well as the performance of our stock. As shown in the charts below, for 2019, 87% of the CEO’s target compensation mix, and 71%, on average, of the other NEOs’ target compensation mix, for the compensation program represented variable/performance-based compensation. CEO’s 2019 Target Compensation Mix Average of Other NEOs’ 2019 Target Compensation Mix Salary 13% Salary 29% Long-Term Annual Bonus Incentive 27% 47% Long-Term Incentive 60% Annual Bonus 24% Variable/ Variable/ Performance-Based Performance-Based Compensation Compensation 87% 71% Key Compensation Practices and Policies WHAT WE DO WHAT WE DO NOT DO % Align executive pay closely with performance and X No tax gross-ups for perquisites or change in Company’s strategy control payments % Set rigorous, objective performance goals X No hedging or pledging of the % Maintain a clawback policy Company’s stock % Impose and monitor meaningful stock ownership guidelines X No repricing of stock options without shareholder approval % Require a one-year time-based vesting period for earned long-term incentive plan (“LTIP”) payouts following attainment of X No stock options granted below fair performance goals market value % Include double-trigger change in control provisions in employment X No dividends or dividend equivalents on agreements and equity awards time-based RSUs or unearned PBRSUs % Mitigate undue risk in compensation programs X No excessive severance benefits % Provide reasonable perquisites % Retain independent compensation consultant to advise the Compensation Committee % Hold annual “Say-on-Pay” advisory vote % Conduct shareholder outreach to regularly obtain feedback on compensation and other topics 38


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    Executive Compensation Performance Highlights We built positive momentum and improved our financial results in 2019. Highlights include the following: A record total sales of 31.8% $8 billion gross margin rate $4.56 per share earned net income ($4.93 per share $187 million invested in our business to drive future on non-GAAP* basis) growth through our capital program $499 million returned to shareholders $335 million spent to repurchase $164 million paid in dividends between share repurchase 8.4 million shares program and dividends * A reconciliation to GAAP is provided beginning on page 18 of our 2019 Annual Report on Form 10-K. Impact of Company Performance on Annual and Long-Term Incentive Pay We have a history of setting very challenging performance goals. Incentive payouts are earned only when we achieve or exceed our goals. ANNUAL INCENTIVE PLAN Our most-recently completed performance periods illustrate our commitment to pay for performance. We built positive momentum and improved our financial results in 2019, and we were profitable; however, we fell short of our plan in certain areas of the business. As a result, Mr. Johnson, Ms. Peters, and Mr. Verma earned annual incentive payouts of 60.6% of their respective target awards for 2019. Payout as a Percentage Weighting Performance Metric Threshold Target Maximum of Target Financial Performance Actual: $729.5 80% (in millions) $705.7 $784.1 $862.5 47.7% Adjusted Pre-Tax Income Customer Connected Scorecard 20% Know Our Customers / 111.8% Satisfy Our Customers Total Annual Incentive Payout 60.6% 2020 Proxy Statement 39


  • Page 46

    Executive Compensation As division executives, Mr. Jacobs’ and Mr. Kimble’s annual incentive awards were based on their respective division’s omni-channel profit (weighted 60%), Adjusted Pre-Tax Income (weighted 20%), and customer connected scorecard (weighted 20%). Mr. Jacobs and Mr. Kimble earned annual incentive payouts of 59.9% and 52.9%, respectively, of their target awards. LTIP The Compensation Committee established the net income and ROIC targets in 2018 for the 2018-19 performance period. The Company achieved average annual net income of $555.4 million and ROIC of 12.7% for this performance period, which resulted in target LTIP awards being earned by the NEOs. The LTIP awards are denominated 100% in RSUs and the RSUs will be paid out in 2021, following a one-year time-based vesting period. The targets, along with the adjusted actual performance for the period, and the calculation of ROIC are shown in the table below: Payout as a Percentage Weighting Performance Metric Threshold Target Maximum of Target Actual: $555.4 Average Annual Adjusted Net Income 70% (in millions) $483.7 $569.1 $682.9 102.3% Actual: 12.7% 30% Two-Year Average ROIC 10.5% 12.0% 14.0% See pages 41 through 44 for more details on these incentive programs and performance goals. Say-on-Pay Shareholder Vote At our 2019 Annual Meeting, over 91% of shareholders voting on the advisory vote on executive compensation supported the executive compensation program. The Compensation Committee considered the results of the 2019 Say-on-Pay vote and our shareholders’ support of our executive compensation program in reviewing the program for 2020. In light of this 91% support, the Compensation Committee decided to retain the general program design. In the Support future, the Compensation Committee will continue to assess the executive compensation program against changing business conditions and shareholder feedback. Our Say-on-Pay vote is currently held on an annual basis, consistent with the preference expressed by a majority of our shareholders. See pages 24 through 25 for more details on our shareholder engagement program. 2019 Compensation Decisions The Compensation Committee made compensation decisions for our NEOs in 2019, including setting and approving incentive compensation performance goals. In making its decisions, the Compensation Committee considered (i) each executive’s compensation in light of their performance, position, and career potential, (ii) internal peer pay comparisons, (iiii) relevant market data for comparable positions and, where applicable, year-over-year changes in market data, and (iv) retention and succession planning. Base Salaries • As part of its annual review of compensation, the Compensation Committee approved base salary increases for Mr. Johnson, Ms. Peters, Mr. Jacobs, and Mr. Verma as of May 1, 2019, of 4.5%, 3.7%, 2.9%, and 13.6%, respectively, based on each executive’s performance and a position-oriented analysis of market salaries. CEO Long-Term • The Compensation Committee increased the target long-term equity incentive award for Equity Incentives Mr. Johnson to 325% of his annual base salary, from 250% in the prior year, to reflect a position-oriented analysis of market compensation. Target long-term equity incentive awards for our other NEOs remained unchanged. 40


  • Page 47

    Executive Compensation Compensation Program Design and Structure Components of Executive Compensation Program One goal of the Compensation Committee is to align the compensation program with our business strategy and our shareholders’ interests. In order to achieve these objectives, our executive compensation program includes a mix of annual and long-term compensation, as well as a mix of cash and equity compensation. The key components of our executive compensation program are described in the following chart: Compensation Component Description and Purpose Base Salary Supports the objective of attracting and retaining talented executives with annual fixed compensation. ANNUAL Provides executives with market-competitive fixed compensation appropriate to their position, experience, and responsibilities. Performance-Based Links annual cash compensation to attainment of short-term performance goals Annual Cash based on the Company’s pre-tax income, division omni-channel profit, and customer Incentive connected objectives. LTI Program Comprised of the performance-based LTIP, stock options, time-based RSUs, and the Variable/Performance-Based Compensation one-time AFG Award. These long-term incentives and awards, which are linked to multi-year performance goals and the Company’s stock price, provide an incentive to work towards achievement of long-term strategic objectives. Long-term incentives support executive retention. LTIP Links compensation to attainment of long-term performance goals and service requirement, supporting executive retention. Earned awards are payable in equity based on two-year performance goals based on net income (70%) and ROIC (30%), with an LONG-TERM additional one-year vesting period for earned awards. Stock Options Provides the opportunity to purchase stock at the exercise price over a ten-year period from the grant date, subject to applicable vesting and exercisability conditions. Links realized compensation over long-term appreciation in stock price and represent value to executives only if the stock price increases. RSUs Aligns time-based RSUs with executives’ and shareholders’ interests with value that fluctuates based on stock price performance. RSUs support executive retention. AFG Award Incentivizes accelerated growth over a three-year period (2018-20) with this one-time AFG award made in 2018 to build on our strength and grow our business in a disruptive retail environment. This award is 100% performance based for the CEO and 75% performance based for the other NEOs. Retirement Provides pension and retirement savings benefits, which align with the objective of OTHER Benefits attracting and retaining talented executives. Perquisites Offers reasonable perquisites similar to our peer companies, which also aid in attracting and retaining talented executives. Base Salaries As part of its annual review of compensation, the Compensation Committee approved base salary increases effective May 1, 2019, for Mr. Johnson, Ms. Peters, Mr. Jacobs, and Mr. Verma, as shown below, based on each executive’s performance and a position-oriented analysis of market salaries. Name 2018 Base Salary ($) 2019 Base Salary ($) Base Salary Increase (%) Johnson 1,100,000 1,150,000 4.5 Peters 675,000 700,000 3.7 Jacobs 850,000 875,000 2.9 Kimble 650,000 650,000 — Verma 550,000 625,000 13.6 2020 Proxy Statement 41


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    Executive Compensation Annual Incentive Plan The annual incentive plan incorporates profit targets, which have long been utilized for this performance-based plan, and customer connected objectives, to further incentivize execution of our customer-centric initiatives. The financial targets are weighted 80%, and the customer connected objectives are weighted 20%. However, unless at least threshold performance is achieved for the financial targets, notwithstanding performance against the customer connected objectives, nothing is earned under the annual incentive plan. The financial targets established by the Compensation Committee under the annual incentive plan are based upon the business plan and budget reviewed and approved each year by our Finance Committee and the Board. The financial targets applicable to Mr. Johnson, Ms. Peters, and Mr. Verma were based on the Company achieving Adjusted Pre-Tax Income of $784.1 million for 2019, in line with the Company’s financial plan and strategic objectives and reflects an increase of 4.0% compared to 2018 results. Actual Adjusted Pre-Tax Income totaled $729.5 million for 2019. As division executives, the 2019 annual incentive targets for Mr. Jacobs and Mr. Kimble were based on division omni- channel profit targets for the North America division and the Asia Pacific division, respectively, adjusted pre-tax income, and customer connected objectives. In 2019, the North America division comprised the store In 2019, the Asia Pacific division included the store and and direct-to-customer operations of the following banners: direct-to-customer operations of the following banners: U.S. Asia Pacific Canada For competitive reasons, we do not disclose the profit targets for the North America or Asia Pacific divisions, as we do not publicly disclose results of these divisions on a separate basis, and we consider it competitively harmful to make that information public. Our objective is to set challenging performance goals for our executives throughout the Company. We believe that achieving these challenging performance goals for these divisions is demanding. The Compensation Committee established the customer connected objectives for the NEOs based on: Knowing our Customers – Increasing the percentage of transactions with identified customers; and Engaging and Servicing our Customers – Improving overall customer satisfaction scores by purchaser surveys in stores, and digital post-purchase and post-fulfillment surveys. Along with these objectives, the Compensation Committee established “enablers” for measuring progress based on: Information Systems & Technology (“IS&T”) Foundational Projects – Completing year-two milestones of foundational projects within IS&T business initiatives aimed at increasing global store effectiveness and our customers’ online experience; Supply Chain – Leveraging our physical stores in our supply chain to reduce friction points in customer interactions and encouraging customers to visit our stores to complete digital transactions; Loyalty Program – Identifying our customers better and rewarding them for shopping with all of our brands; and Hyper-Localization Strategy – Activating community programs to create hyper-local pathways for customers to engage with our brands. 42


  • Page 49

    Executive Compensation The evaluation of full-year customer connected objectives utilizes the Company’s global performance management rating scale, in which performance can range from 25% to 200% based on the relative achievement of the metrics and enablers. As described above, payout percentages associated with ratings for the metrics and enablers were averaged and resulted in an overall corporate payout percentage of 111.8%. The annual incentive plan for the NEOs makes incentive payments based upon the Company or relevant division’s results, without individual performance adjustments. However, executives who receive a “not meeting performance” rating in their annual performance review are ineligible to receive an annual incentive payment. All annual incentive targets and calculations are based on the results of continuing operations through the end of the 2019 fiscal year. The payment of performance-based annual cash bonuses is calculated as a percentage of actual base salary earned by the executive during the year. The maximum payout under this plan is 200% of target, with a maximum payout in any year for any participant capped at $6 million. Bonus payouts are calculated on the basis of straight-line interpolation between the threshold (90%), target (100%), and maximum (110%) points. If the Company does not achieve threshold performance, then no annual bonus is earned or paid. Actual 2019 Target as a Payout Percentage of as a Percentage Actual 2019 Base Salary of Target Payout ($) Johnson 200% 60.6% 1,378,650 Peters 75% 60.6% 315,309 Jacobs 100% 59.9% 520,381 Kimble 75% 52.9% 257,888 Verma 75% 60.6% 275,541 See page 39 for the performance targets, along with the adjusted actual performance for the period. Due to the financial impact of COVID-19, all payments under our Annual Incentive Plan earned in respect of 2019 performance, typically paid in early 2020, have been delayed until a later to-be-determined date in 2020. All participants, including the NEOs, are required to be employed on the payment date to receive payment. Long-Term Incentive Program Our long-term incentive program includes the performance-based LTIP awards and other long-term equity awards granted under the Stock Incentive Plan in the form of stock options, RSUs, and time-based restricted stock. A combination of performance-based LTIP awards, stock options, and time-based RSUs are granted annually. LTIP The LTIP is designed to reward executives for achieving multi-year performance targets. The LTIP is formula-driven, with targets established by the Compensation Committee based upon financial targets included in the business plan reviewed and approved each year by our Finance Committee and the Board. The LTIP pays out based upon the Company’s results, without individual performance adjustments. Key design features of the LTIP are: 100% Equity 100% of earned payouts of the LTIP award are made in equity in the form of RSUs payable under the Stock Incentive Plan for all of the NEOs. Two-Year Performance Period The performance period is two years; however, while shares earned are calculated and Additional One-Year following the end of the two-year performance period, settlement of shares require Vesting Period continued employment and are subject to forfeiture, as well as stock price fluctuations, for another year—that is, settlement of shares are not made until the end of a three-year period. Net Income and ROIC Targets The performance targets are based on Adjusted Net Income (70%) and ROIC (30%) that are contained in the business and financial plan approved by the Finance Committee and the Board for the performance period. Target Awards are a The target awards are expressed as a percentage of initial base salary—that is, the Percentage of Base Salary base salary paid to the executive following any salary adjustments that take place on May 1 of the first year of the performance period, adjusted only for promotion-related salary increases. 2020 Proxy Statement 43


  • Page 50

    Executive Compensation The target awards for the NEOs are listed in the following table: Target Award as a Percentage of Name Base Salary Johnson 325% Peters and Jacobs 100% Kimble and Verma 75% Determination of Payout for 2018-19 LTIP Awards. Consistent with our pay-for-performance culture, the Compensation Committee established rigorous Adjusted Net Income and ROIC targets at the beginning of 2018 for the 2018-19 performance period and set a “performance floor” for each performance measure. The targets the Compensation Committee established were based on the Company achieving two-year average annual net income of $569.1 million (which accounts for 70% of the payout) and ROIC of 12.0% (which accounts for 30% of the payout). The Company achieved two-year average annual net income of $555.4 million and ROIC of 12.7% for this performance period. As a result, a 102.3% payout was earned for this performance period. See page 40 for the targets, along with the adjusted actual performance for the period. Determination of Performance Targets for 2019-20 LTIP Awards. In 2019, the Compensation Committee established LTIP performance targets for the 2019-20 performance period, which are also based on two-year average annual Adjusted Net Income (70%) and ROIC (30%). For competitive reasons, since this performance period is still on-going, we have not disclosed the targets established for the period. The Compensation Committee will determine whether payouts have been earned following the end of the Company’s 2020 fiscal year, and we will provide specific information on the targets and results after the completion of the performance period. If awards are earned for the current 2019-20 performance period, payment will be made to participating executives in 2022, following the completion of a one-year time-based vesting period. ROIC Calculation for LTIP. Return on Invested Capital, or ROIC, is a non-GAAP financial measure. For purposes of calculating this long-term incentive, we define ROIC as follows: ROIC = Operating Profit After Taxes Pre-tax income ÷ Average Invested Capital Average total assets +/– interest expense/income – average cash and cash equivalents + implied interest portion of – average year-end inventory operating lease payments – non-interest-bearing current liabilities +/– Unusual/non-recurring items + 13-month average inventory + LTIP award expense + average estimated asset base of = Earnings before LTIP award capitalized operating leases, as expense, interest and taxes it relates to performance periods – Estimated income tax expense through 2018, and average lease = Operating Profit After Taxes asset, as it relates to performance periods after 2018 = Average Invested Capital Certain items used in the calculation of ROIC for bonus purposes, such as the implied interest portion of operating lease payments, certain unusual or non-recurring items, average estimated asset base of capitalized operating leases, as it relates to performance periods through 2018, and average lease asset, as it relates to performance periods after 2018, and 13-month average inventory, while calculated from our financial records, cannot be calculated from our audited financial statements. Prior to the Compensation Committee determining whether bonus targets have been achieved, the Company’s independent registered public accounting firm, at the request, and for the restricted use, of the Compensation Committee, reviews the bonus calculations to ensure that the payout is calculated in accordance with the plan. There is a calculation of basic ROIC, which is not precisely the same as the ROIC calculation used for incentive compensation purposes because of the exclusion of certain items (see pages 50 through 51 for a discussion of disregarded items, and page 18 of our 2019 Annual Report on Form 10-K for a reconciliation to GAAP). 44

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