EMPLOYMENT AGREEMENT DATED AS OF JUNE 2, 2009 BETWEEN BERNARD CAMMARATA AND THE TJX COMPANIES, INC.
Exhibit 10.2
DATED AS OF JUNE 2, 2009
BETWEEN XXXXXXX XXXXXXXXX AND THE TJX COMPANIES, INC.
| INDEX | PAGE | |||
1. EFFECTIVE DATE; TERM OF AGREEMENT |
1 | |||
2. SCOPE OF EMPLOYMENT |
1 | |||
3. COMPENSATION AND BENEFITS |
2 | |||
4. TERMINATION OF EMPLOYMENT; IN GENERAL |
3 | |||
5. BENEFITS UPON NON-VOLUNTARY TERMINATION OF EMPLOYMENT OR UPON EXPIRATION OF THE AGREEMENT |
4 | |||
6. OTHER TERMINATION |
5 | |||
7. BENEFITS UPON CHANGE OF CONTROL |
6 | |||
8. AGREEMENT NOT TO SOLICIT OR COMPETE |
6 | |||
9. ASSIGNMENT |
9 | |||
10. NOTICES |
9 | |||
11. WITHHOLDING; CERTAIN TAX MATTERS |
9 | |||
12. GOVERNING LAW |
10 | |||
13. ARBITRATION |
10 | |||
14. TERMINATION OF EMPLOYMENT AND SEPARATION FROM SERVICE |
10 | |||
15. ENTIRE AGREEMENT |
11 | |||
EXHIBIT A |
||||
CERTAIN DEFINITIONS |
A-1 | |||
EXHIBIT B |
||||
DEFINITION OF “CHANGE OF CONTROL” |
B-1 | |||
EXHIBIT C |
||||
CHANGE OF CONTROL BENEFITS |
X-0 | |||
XXXXXXX X |
||||
XXXXXXXXXXX XXXXXXXXXX |
X-0 | |||
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XXXXXXX XXXXXXXXX
AGREEMENT dated as of June 2, 2009 between XXXXXXX XXXXXXXXX (“Executive”) and The TJX
Companies, Inc., a Delaware corporation whose principal office is in Xxxxxxxxxx, Xxxxxxxxxxxxx
00000 (the “Company”).
RECITALS
Executive has been employed by the Company as Chairman of the Board and in other executive
capacities, most recently pursuant to an employment agreement dated as of June 6, 2006, as amended.
The Company and Executive intend that Executive shall be employed by the Company on the terms set
forth below and, to that end, deem it desirable and appropriate to enter into this Agreement.
AGREEMENT
The parties hereto, in consideration of the mutual agreements hereinafter contained, agree as
follows:
1. EFFECTIVE DATE; TERM OF AGREEMENT. This Agreement shall become effective as of June 2,
2009 (the “Effective Date”) and, as of that date, shall supersede the employment agreement dated as
of June 6, 2006, as amended. Executive’s employment by the Company shall continue on the terms
provided herein until the date of the annual meeting of stockholders of the Company occurring in
2012 (the “2012 meeting date”), subject to earlier termination as provided herein (such period of
employment from and after the Effective Date hereinafter called the “Employment Period”). This
Agreement is intended to comply with the applicable requirements of Section 409A and shall be
construed accordingly.
2. SCOPE OF EMPLOYMENT.
(a) Nature of Services. During the term hereof, Executive shall diligently perform
the duties and responsibilities of Chairman of the Board upon election or reelection to such
position by the Board, and such additional executive duties and responsibilities as shall from time
to time be assigned to him by the Board. In any matter in which the Board or Committee
deliberates or takes action with respect to this Agreement, Executive, if then a member of the body
so deliberating or taking action, shall recuse himself.
(b) Extent of Services. Executive shall devote such time and efforts as are
reasonably necessary to the proper performance of his duties hereunder, it being understood that
such duties are not expected to require Executive’s full-time attention and that Executive may,
during the Employment Period, participate in other activities (including, without limitation,
charitable or
community activities, activities in trade or professional organizations, service on other
boards or similar bodies, and investments in other enterprises), provided that such other
activities (i) would be permitted under Section 8, and (ii) are not otherwise inconsistent with
Executive’s position, duties and responsibilities hereunder.
3. COMPENSATION AND BENEFITS.
(a) Base Salary. Executive shall be paid a Base Salary at the rate hereinafter
specified, such Base Salary to be paid in the same manner and at the same times as the Company
shall pay base salary to other executive employees. The rate at which Executive’s Base Salary
shall be paid shall be $500,000 per year or such other rate (not less than $500,000 per year) as
the Committee may determine after Committee review. Executive’s Base Salary shall be reviewed by
the Committee no later than February 2010 or, if earlier, when other senior executive base salaries
are reviewed.
(b) Existing Awards Under Stock Incentive Plan. Any stock-based awards previously
made to Executive under the Company’s Stock Incentive Plan (including any successor, the “Stock
Incentive Plan”) shall continue for such period or periods and in accordance with such terms as are
set out in the grant and other governing documents relating to such awards (including for this
purpose any prior employment agreement in effect between Executive and the Company insofar as it
relates by its express terms to any such awards), and shall not be affected by the terms of this
Agreement except as otherwise expressly provided herein.
(c) New Award. Effective as of the Effective Date, Executive has received an award
under the Stock Incentive Plan of 20,000 shares of performance-based restricted stock in connection
with the execution of this Agreement (the “new PBRS award”) that shall be subject to the vesting
terms described in (i) and (ii) below.
(i) Subject to satisfaction by Executive of the service condition specified in Section
3(c)(ii) below, the new PBRS award will vest on the April date in calendar 2010 when the
Committee certifies as to MIP performance results for FYE 2010 (the “determination date”)
but only if the Committee certifies that MIP performance for FYE 2010 has been achieved at a
level providing for MIP payout of at least 67% of the target payout amount; provided that,
if for FYE 2010 the Committee certifies that MIP performance has been achieved at a level
authorizing some MIP payout but less than 67% of the target payout amount, the number of
shares of the new PBRS award vesting shall be prorated on a straight line basis (with zero
shares vesting if no MIP payout is authorized);
(ii) Except as hereinafter provided or as provided in the award agreement, the new
PBRS award shall not vest unless Executive remains employed through January 30, 2010.
Notwithstanding the foregoing, if Executive’s employment by the Company is terminated by the
Company other than for Cause prior to January 30, 2010, subject to Section 8 below, the new
PBRS award shall remain outstanding following such termination and shall vest, if at all, in
accordance with Section 3(c)(i) above, provided that, to the extent any portion of the new
PBRS award does not so vest, such portion shall be forfeited as of the determination date.
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(d) Continued Participation in Certain Benefits. During the Employment Period,
Executive shall continue to be eligible to participate in the employee benefit and fringe benefit
plans and programs in effect on the date hereof and made available to executives of the Company
generally (including, without limitation, the tax-qualified retirement and profit-sharing plans
maintained for the benefit of Company employees (the “Qualified Plans”), and the ESP (subject to
clause (iii) below)), in each case in accordance with the terms of such plans or programs as in
effect from time to time, subject to the following:
(i) Executive shall not be entitled to participate in any awards under the Company’s
Long Range Performance Incentive Plan or under the Company’s Management Incentive Plan.
(ii) The Committee shall periodically consider, and may from time to time grant, awards
to Executive under the Stock Incentive Plan in addition to those described in Section 3(b)
and Section 3(c) above, such additional awards, if any, to be granted in such form and with
such terms as the Committee in its discretion may determine.
(iii) Executive shall not be entitled to any employer credits under ESP.
(iv) Executive shall have no rights to benefits under the Company’s Supplemental
Executive Retirement Plan (“SERP”).
Except as provided in Section 3(d)(iii) above, Executive’s entitlement to benefits, if any, under
those Company employee and fringe benefit plans and programs in which he participates will be
determined in accordance with the terms of the applicable plan or program.
4. TERMINATION OF EMPLOYMENT; IN GENERAL.
(a) The Company shall have the right to end Executive’s employment at any time and for any
reason, with or without Cause.
(b) Executive’s employment shall terminate upon written notice by the Company to Executive
(or, if earlier, to the extent consistent with the requirements of Section 409A, upon the
expiration of the twenty-nine (29)-month period commencing upon Executive’s absence from work) if,
by reason of Disability, Executive is unable to perform his duties for at least six continuous
months. Any termination pursuant to this Section 4(b) shall be treated for purposes of Section 5
and the definition of “Change of Control Termination” at subsection (f) of Exhibit A as a
termination by reason of Disability.
(c) Whenever the Employment Period shall terminate, Executive shall resign all offices or
other positions he shall hold with the Company and any affiliated corporations, including all
positions on the Board. For the avoidance of doubt, the Employment Period shall terminate upon
termination of Executive’s employment for any reason.
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5. BENEFITS UPON NON-VOLUNTARY TERMINATION OF EMPLOYMENT OR UPON EXPIRATION OF THE
AGREEMENT.
(a) Certain Terminations Prior to the 2012 meeting date. If the Employment Period
shall have terminated prior to the 2012 meeting date by reason of (I) death or Disability of
Executive, (II) termination by the Company for any reason other than Cause, or (III) a Constructive
Termination, then all compensation and benefits for Executive shall be as follows:
(i) For a period of twelve (12) months after the Date of Termination (the “termination
period”), the Company will pay to Executive or his legal representative, without reduction
for compensation earned from other employment or self employment, continued Base Salary at
the rate in effect at termination of employment, in accordance with its regular payroll
practices for executive employees of the Company (but not less frequently than monthly);
provided, that if Executive is a Specified Employee at the relevant time, the Base Salary
that would otherwise be payable during the six-month period beginning on the Date of
Termination shall instead be accumulated and paid, without interest, in a lump sum on the
date that is six (6) months and one day after such date (or, if earlier, the date of
Executive’s death); and further provided, that if Executive is eligible for long-term
disability compensation benefits under the Company’s long-term disability plan, the amount
payable under this clause shall be paid at a rate equal to the excess of (a) the rate of
Base Salary in effect at termination of employment, over (b) the long-term disability
compensation benefits for which Executive is approved under such plan.
(ii) If Executive elects so-called “COBRA” continuation of group health plan coverage
provided pursuant to Part 6 of Subtitle B of Title I of the Employee Retirement Income
Security Act of 1974, as amended, there shall be added to the amounts otherwise payable
under Section 5(a)(i) above, during the continuation of such coverage but not beyond the end
of the termination period, an amount (grossed up for federal and state income taxes) equal
to the participant cost of such coverage during such period, except to the extent that
Executive shall obtain no less favorable coverage from another employer or from
self-employment in which case such additional payments shall cease immediately.
(iii) In addition, the Company will pay to Executive or his legal representative such
vested amounts as shall then remain credited to Executive’s account (but not received) under
GDCP and ESP in accordance with the terms of those programs.
(iv) Executive or his legal representative shall be entitled to the benefits described
in Section 3(b) (Existing Awards Under Stock Incentive Plan) and Section 3(c) (New Award),
and any other awards under the Stock Incentive Plan, in accordance with and subject to the
terms of the applicable arrangement (including, for the avoidance of doubt, any
award-related provision of this Agreement), and to payment of his vested benefits, if any,
under the Qualified Plans.
(v) If termination occurs by reason of Disability, Executive shall be entitled to such
compensation, if any, as is payable pursuant to the Company’s long-term disability
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plan. If for any period Executive receives long-term disability compensation payments
under a long-term disability plan of the Company as well as payments under Section 5(a)(i)
above, and if the sum of such payments (the “combined salary/disability benefit”) exceeds
the payment for such period to which Executive is entitled under Section 5(a)(i) above
(determined without regard to the proviso set forth therein), he shall promptly pay such
excess in reimbursement to the Company; provided, that in no event shall application of this
sentence result in reduction of Executive’s combined salary/disability benefit below the
level of long-term disability compensation payments to which Executive is entitled under the
long-term disability plan or plans of the Company.
(vi) Except as expressly set forth above or as required by law, Executive shall not be
entitled to continue participation during the termination period in any employee benefit or
fringe benefit plans, except for continuation of any automobile allowance which shall be
added to the amounts otherwise payable under Section 5(a)(i) above during the continuation
of such coverage but not beyond the end of the termination period.
(b) Termination on the 2012 meeting date. Unless earlier terminated or except as
otherwise mutually agreed by Executive and the Company, Executive’s employment with the Company
shall terminate on the 2012 meeting date. Unless the Company in connection with such termination
shall offer to Executive continued service in a position acceptable to Executive and upon mutually
and reasonably agreeable terms, Executive shall be treated as having been terminated under
Section 5(a)(II) on the day immediately preceding the 2012 meeting date and shall be entitled to
the compensation and benefits described in Section 5(a) in respect of such a termination, subject,
for the avoidance of doubt, to the other provisions of this Agreement including, without
limitation, Section 8. If the Company in connection with such termination offers to Executive
continued service in a position acceptable to Executive and upon mutually and reasonably agreeable
terms, and Executive declines such service, he shall be treated for all purposes of this Agreement
as having terminated his employment voluntarily on the 2012 meeting date and he shall be entitled
only to those benefits to which he would be entitled under Section 6(a) (Voluntary termination of
employment). For purposes of the two preceding sentences, “service in a position acceptable to
Executive” shall mean service in a position comparable to the position in which Executive was
serving immediately prior to the 2012 meeting date, as reasonably determined by the Board, or
service in such other position, if any, as may be acceptable to Executive.
6. OTHER TERMINATION.
(a) Voluntary termination of employment. If Executive terminates his employment
voluntarily and other than as provided in Section 5(a)(III), Executive or his legal representative
shall be entitled (in each case in accordance with and subject to the terms of the applicable
arrangement) to the following: (i) such vested amounts, if any, as are credited to Executive’s
account (but not received) under GDCP and ESP in accordance with the terms of those programs; (ii)
any vested benefits described at Section 3(b) (Existing Awards Under Stock Incentive Plan) and
Section 3(c) (New Award), and vested benefits under any other Stock Incentive Plan awards; and
(iii) any vested benefits under the Qualified Plans. No other benefits
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shall be paid under this Agreement upon a voluntary termination of employment under this
Section 6(a).
(b) Termination for Cause. If the Company should end Executive’s employment for
Cause, all compensation and benefits otherwise payable pursuant to this Agreement shall cease,
other than the benefits described at Section 6(a) above. The Company does not waive any rights it
may have for damages or for injunctive relief.
7. BENEFITS UPON CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement,
in the event of a Change of Control, the determination and payment of any benefits payable
thereafter with respect to Executive shall be governed exclusively by the provisions of Exhibit C;
provided, for the avoidance of doubt, that the provisions of Section 11 of this Agreement shall
also apply to the determination and payment of any payments or benefits pursuant to Exhibit C.
8. AGREEMENT NOT TO SOLICIT OR COMPETE.
(a) During the Employment Period and for a period of twenty-four (24) months thereafter (the
“Nonsolicitation Period”), Executive shall not, and shall not direct any other individual or entity
to, directly or indirectly (including as a partner, shareholder, joint venturer or other investor)
(i) hire, offer to hire, attempt to hire or assist in the hiring of, any protected person as an
employee, director, consultant, advisor or other service provider, (ii) recommend any protected
person for employment or other engagement with any person or entity other than the Company and its
Subsidiaries, (iii) solicit for employment or other engagement any protected person, or seek to
persuade, induce or encourage any protected person to discontinue employment or engagement with the
Company or its Subsidiaries, or recommend to any protected person any employment or engagement
other than with the Company or its Subsidiaries, (iv) accept services of any sort (whether for
compensation or otherwise) from any protected person, or (v) participate with any other person or
entity in any of the foregoing activities. Any individual or entity to which Executive provides
services (as an employee, director, consultant, advisor or otherwise) or in which Executive is a
shareholder, member, partner, joint venturer or investor, excluding interests in the common stock
of any publicly traded corporation of one percent (1%) or less), and any individual or entity that
is affiliated with any such individual or entity, shall, for purposes of the preceding sentence, be
irrebuttably presumed to have acted at the direction of Executive with respect to any “protected
person” who worked with Executive at any time during the six months prior to termination of the
Employment Period. A “protected person” is a person who at the time of termination of the
Employment Period, or within six months prior thereto, is or was employed by the Company or any of
its Subsidiaries either in a position of Assistant Vice President or higher, or in a salaried
position in any merchandising group. As to (I) each “protected person” to whom the foregoing
applies, (II) each subcategory of “protected person,” as defined above, (III) each limitation on
(A) employment or other engagement, (B) solicitation and (C) unsolicited acceptance of services, of
each “protected person” and (IV) each month of the period during which the provisions of this
subsection (a) apply to each of the foregoing, the provisions set forth in this subsection (a)
shall be deemed to be separate and independent agreements. In the event of unenforceability of any
one or more such agreement(s), such unenforceable agreement(s) shall be deemed automatically
reformed in order to allow for the greatest degree of enforceability authorized by law or, if no
such
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reformation is possible, deleted from the provisions hereof entirely, and such reformation or
deletion shall not affect the enforceability of any other provision of this subsection (a) or any
other term of this Agreement.
(b) During the course of his employment, Executive will have learned vital trade secrets of
the Company and its Subsidiaries and will have access to confidential and proprietary information
and business plans of the Company and its Subsidiaries. Therefore, during the Employment Period
and for a period of twenty-four (24) months thereafter (the “Noncompetition Period”), Executive
will not, directly or indirectly, be a shareholder, member, partner, joint venturer or investor
(disregarding in this connection passive ownership for investment purposes of common stock
representing one percent (1%) or less of the voting power or value of any publicly traded
corporation) in, serve as a director or manager of, be engaged in any employment, consulting, or
fees-for-services relationship or arrangement with, or advise with respect to the organization or
conduct of, or any investment in, any “competitive business” as hereinafter defined or any Person
that engages in any “competitive business” as hereinafter defined, nor shall Executive undertake
any planning to engage in any such activities. The term “competitive business” (i) shall mean any
business (however organized or conducted) that competes with a business in which the Company or any
of its Subsidiaries was engaged, or in which the Company or any Subsidiary was planning to engage,
at any time during the 12-month period immediately preceding the date on which the Employment
Period ends, and (ii) shall conclusively be presumed to include, but shall not be limited to,
(A) any business specified on Exhibit D to this Agreement, and (B) any other off-price,
promotional, or warehouse-club-type retail business, however organized or conducted, that sells
apparel, footwear, home fashions, home furnishings, jewelry, accessories, or any other category of
merchandise sold by the Company or any of its Subsidiaries at the termination of the Employment
Period. For purposes of this subsection (b), a “Person” means an individual, a corporation, a
limited liability company, an association, a partnership, an estate, a trust and any other entity
or organization, other than the Company or its Subsidiaries, and reference to any Person (the
“first Person”) shall be deemed to include any other Person that controls, is controlled by or is
under common control with the first Person. If, at any time, pursuant to action of any court,
administrative, arbitral or governmental body or other tribunal, the operation of any part of this
subsection shall be determined to be unlawful or otherwise unenforceable, then the coverage of this
subsection shall be deemed to be reformed and restricted as to substantive reach, duration,
geographic scope or otherwise, as the case may be, to the extent, and only to the extent, necessary
to make this paragraph lawful and enforceable to the greatest extent possible in the particular
jurisdiction in which such determination is made.
(c) Executive shall never use or disclose any confidential or proprietary information of the
Company or its Subsidiaries other than as required by applicable law or during the Employment
Period for the proper performance of Executive’s duties and responsibilities to the Company and its
Subsidiaries. This restriction shall continue to apply after Executive’s employment terminates,
regardless of the reason for such termination. All documents, records and files, in any media,
relating to the business, present or otherwise, of the Company and its Subsidiaries and any copies
(“Documents”), whether or not prepared by Executive, are the exclusive property of the Company and
its Subsidiaries. Executive must diligently safeguard all Documents, and must surrender to the
Company at such time or times as the Company may specify all Documents then in Executive’s
possession or control. In addition, upon termination
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of employment for any reason other than the death of Executive, Executive shall immediately
return all Documents, and shall execute a certificate representing and warranting that she has
returned all such Documents in Executive’s possession or under his control.
(d) If, during the Employment Period or at any time following termination of the Employment
Period, regardless of the reason for such termination, Executive breaches any provision of this
Section 8, the Company’s obligation, if any, to pay benefits under Section 5 hereof shall forthwith
cease and Executive shall immediately forfeit and disgorge to the Company, with interest at the
prime rate in effect at Bank of America, or its successor, all of the following: (i) any benefits
theretofore paid to Executive under Section 5; (ii) any unexercised stock options and stock
appreciation rights held by Executive; (iii) if any other stock-based award vested in connection
with termination of the Employment Period, whether occurring prior to, simultaneously with, or
following such breach, or subsequent to such breach and prior to termination of the Employment
Period, the value of such stock-based award at time of vesting plus any additional gain realized on
a subsequent sale or disposition of the award or the underlying stock; and (iv) in respect of each
stock option or stock appreciation right exercised by Executive within six (6) months prior to any
such breach or subsequent thereto and prior to the forfeiture and disgorgement required by this
Section 8(d), the excess over the exercise price (or base value, in the case of a stock
appreciation right) of the greater of (A) the fair market value at time of exercise of the shares
of stock subject to the award, or (B) the number of shares of stock subject to such award
multiplied by the per-share proceeds of any sale of such stock by Executive.
(e) Executive shall notify the Company immediately upon securing employment or becoming
self-employed at any time within the Noncompetition Period or the Nonsolicitation Period, and shall
provide to the Company such details concerning such employment or self-employment as it may
reasonably request in order to ensure compliance with the terms hereof.
(f) Executive hereby advises the Company that Executive has carefully read and considered all
the terms and conditions of this Agreement, including the restraints imposed on Executive under
this Section 8, and agrees without reservation that each of the restraints contained herein is
necessary for the reasonable and proper protection of the good will, confidential information and
other legitimate business interests of the Company and its Subsidiaries, that each and every one of
those restraints is reasonable in respect to subject matter, length of time and geographic area;
and that these restraints will not prevent Executive from obtaining other suitable employment
during the period in which Executive is bound by them. Executive agrees that Executive will never
assert, or permit to be asserted on his behalf, in any forum, any position contrary to the
foregoing. Executive also acknowledges and agrees that, were Executive to breach any of the
provisions of this Section 8, the harm to the Company and its Subsidiaries would be irreparable.
Executive therefore agrees that, in the event of such a breach or threatened breach, the Company
shall, in addition to any other remedies available to it, have the right to obtain preliminary and
permanent injunctive relief against any such breach or threatened breach without having to post
bond, and will additionally be entitled to an award of attorney’s fees incurred in connection with
enforcing its rights hereunder. Executive further agrees that, in the event that any provision of
this Agreement shall be determined by any court of competent jurisdiction to be unenforceable by
reason of its being extended over too great a time, too large a geographic area or too great a
range of activities, such provision shall be deemed to
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be modified to permit its enforcement to the maximum extent permitted by law. Finally,
Executive agrees that the Noncompetition Period and the Nonsolicitation Period shall be tolled, and
shall not run, during any period of time in which Executive is in violation of any of the terms of
this Section 8, in order that the Company shall have the agreed-upon temporal protection recited
herein.
(g) Executive agrees that if any of the restrictions in this Section 8 is held to be void or
ineffective for any reason but would be held to be valid and effective if part of its wording were
deleted, that restriction shall apply with such deletions as may be necessary to make it valid and
effective. Executive further agrees that the restrictions contained in each subsection of this
Section 8 shall be construed as separate and individual restrictions and shall each be capable of
being severed without prejudice to the other restrictions or to the remaining provisions.
(h) Executive expressly consents to be bound by the provisions of this Agreement for the
benefit of the Company and its Subsidiaries, and any successor or permitted assign to whose employ
Executive may be transferred, without the necessity that this Agreement be re-signed at the time of
such transfer. Executive further agrees that no changes in the nature or scope of his employment
with the Company will operate to extinguish the terms and conditions set forth in Section 8, or
otherwise require the parties to re-sign this Agreement.
(i) The provisions of this Section 8 shall survive the termination of the Employment Period
and the termination of this Agreement, regardless of the reason or reasons therefor, and shall be
binding on Executive regardless of any breach by the Company of any other provision of this
Agreement.
9. ASSIGNMENT. The rights and obligations of the Company shall inure to the benefit of and
shall be binding upon the successors and assigns of the Company. The rights and obligations of
Executive are not assignable except only that payments payable to him after his death shall be made
to his estate except as otherwise provided by the applicable plan or award documentation, if any.
10. NOTICES. All notices and other communications required hereunder shall be in writing
and shall be given by mailing the same by certified or registered mail, return receipt requested,
postage prepaid. If sent to the Company the same shall be mailed to the Company at 000 Xxxxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Chairman of the Executive Compensation
Committee, or other such address as the Company may hereafter designate by notice to Executive; and
if sent to Executive, the same shall be mailed to Executive at his address as set forth in the
records of the Company or at such other address as Executive may hereafter designate by notice to
the Company.
11. WITHHOLDING; CERTAIN TAX MATTERS. Anything to the contrary notwithstanding, (a) all
payments required to be made by the Company hereunder to Executive shall be subject to the
withholding of such amounts, if any, relating to tax and other payroll deductions as the Company
may reasonably determine it should withhold pursuant to any applicable law or regulation, and (b)
to the extent any payment hereunder that is payable by reason of termination of Executive’s
employment constitutes “nonqualified deferred compensation” subject to Section 409A and would
otherwise have been required to be paid
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during the six (6)-month period following such termination of employment, it shall instead (unless
at the relevant time Executive is no longer a Specified Employee) be delayed and paid, without
interest, in a lump sum on the date that is six (6) months and one day after Executive’s
termination (or, if earlier, the date of Executive’s death). The parties hereto acknowledge that
in addition to any delay required under Section 11, it may be desirable, in view of regulations or
other guidance issued under Section 409A, to amend provisions of the Agreement to avoid the
acceleration of tax or the imposition of additional tax under Section 409A and that the Company
will not unreasonably withhold its consent to any such amendments which in its determination are
(i) feasible and necessary to avoid adverse tax consequences under Section 409A for Executive, and
(ii) not adverse to the interests of the Company. Executive acknowledges and agrees that except
for the gross-up entitlement described in Section 5(a)(ii) of this Agreement, the Company shall not
be liable to make Executive whole for any taxes that may become due or payable by reason of this
Agreement or any payment, benefit or entitlement hereunder.
12. GOVERNING LAW. This Agreement and the rights and obligations of the parties hereunder
shall be governed by the laws of the Commonwealth of Massachusetts.
13. ARBITRATION. In the event that there is any claim or dispute arising out of or
relating to this Agreement, or the breach thereof, and the parties hereto shall not have resolved
such claim or dispute within sixty (60) days after written notice from one party to the other
setting forth the nature of such claim or dispute, then such claim or dispute shall be settled
exclusively by binding arbitration in Boston, Massachusetts in accordance with the Rules Governing
Resolutions of Employment Disputes of the American Arbitration Association by an arbitrator
mutually agreed upon by the parties hereto or, in the absence of such agreement, by an arbitrator
selected according to such Rules. Notwithstanding the foregoing, if either the Company or
Executive shall request, such arbitration shall be conducted by a panel of three arbitrators, one
selected by the Company, one selected by Executive and the third selected by agreement of the first
two, or, in the absence of such agreement, in accordance with such Rules. Judgment upon the award
rendered by such arbitrator(s) shall be entered in any Court having jurisdiction thereof upon the
application of either party.
14. TERMINATION OF EMPLOYMENT AND SEPARATION FROM SERVICE. All references in the Agreement
to termination of employment, a termination of the Employment Period, or separation from service,
and correlative terms, that result in the payment or vesting of any amounts or benefits that
constitute “nonqualified deferred compensation” within the meaning of Section 409A shall be
construed to require a Separation from Service, and the Date of Termination in any such case shall
be construed to mean the date of the Separation from Service.
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15. ENTIRE AGREEMENT. This Agreement, including Exhibits, represents the entire agreement
between the parties relating to the terms of Executive’s employment by the Company and supersedes
all prior written or oral agreements between them, except to the extent provided herein; provided,
that this Agreement shall not be construed as superseding or modifying the Restoration Agreement
dated December 31, 2002 between the Company and Executive and the letter agreement dated
December 31, 2002 relating to certain tax matters.
| /s/ Xxxxxxx Xxxxxxxxx | ||||
| Executive | ||||
| THE TJX COMPANIES, INC. |
||||
| By | /s/ Xxxxx Xxxxxxxxx | |||
| President and Chief Executive Officer | ||||
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EXHIBIT A
Certain Definitions
In this Agreement, the following terms shall have the following meanings:
(a) “Base Salary” means, for any period, the amount described in Section 3(a).
(b) “Board” means the Board of Directors of the Company.
(c) “Cause” means dishonesty by Executive in the performance of his duties, conviction of a
felony (other than a conviction arising solely under a statutory provision imposing criminal
liability upon Executive on a per se basis due to the Company offices held by Executive, so long as
any act or omission of Executive with respect to such matter was not taken or omitted in
contravention of any applicable policy or directive of the Board), gross neglect of duties (other
than as a result of Disability or death), or conflict of interest which conflict shall continue for
thirty (30) days after the Company gives written notice to Executive requesting the cessation of
such conflict.
In respect of any termination during a Standstill Period, Executive shall not be deemed to
have been terminated for Cause until the later to occur of (i) the 30th day after notice of
termination is given and (ii) the delivery to Executive of a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the Company’s directors at a meeting called and
held for that purpose (after reasonable notice to Executive), and at which Executive together with
his counsel was given an opportunity to be heard, finding that Executive was guilty of conduct
described in the definition of “Cause” above, and specifying the particulars thereof in detail;
provided, however, that the Company may suspend Executive and withhold payment of his Base Salary
from the date that notice of termination is given until the earliest to occur of (A) termination of
Executive for Cause effected in accordance with the foregoing procedures (in which case Executive
shall not be entitled to his Base Salary for such period), (B) a determination by a majority of the
Company’s directors that Executive was not guilty of the conduct described in the definition of
“Cause” effected in accordance with the foregoing procedures (in which case Executive shall be
reinstated and paid any of his previously unpaid Base Salary for such period), or (C) ninety (90)
days after notice of termination is given (in which case Executive shall then be reinstated and
paid any of his previously unpaid Base Salary for such period). If Base Salary is withheld and
then paid pursuant to clause (B) or (C) of the preceding sentence, the amount thereof shall be
accompanied by simple interest, calculated on a daily basis, at a rate per annum equal to the prime
or base lending rate, as in effect at the time, of the Company’s principal commercial bank. The
Company shall exercise its discretion under this paragraph consistent with the requirements of
Section 409A or the requirements for exemption from Section 409A.
(d) “Change in Control Event” means a “change in control event” (as that term is defined in
section 1.409A-3(i)(5) of the Treasury Regulations under Section 409A) with respect to the Company.
(e) “Change of Control” has the meaning given it in Exhibit B.
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(f) “Change of Control Termination” means the termination of Executive’s employment during a
Standstill Period (1) by the Company other than for Cause, or (2) by Executive for good reason, or
(3) by reason of death or Disability.
For purposes of this definition, termination for “good reason” shall mean the voluntary
termination by Executive of his employment within one hundred and twenty (120) days after the
occurrence without Executive’s express written consent of any one of the events described below,
provided, that Executive gives notice to the Company within sixty (60) days of the first occurrence
of any such event or condition, requesting that the pertinent event or condition described therein
be remedied, and the situation remains unremedied upon expiration of the thirty (30)-day period
commencing upon receipt by the Company of such notice:
| (I) | the assignment to him of any duties inconsistent with his positions, duties, responsibilities, and status with the Company immediately prior to the Change of Control, or any removal of Executive from or any failure to reelect him to such positions, except in connection with the termination of Executive’s employment by the Company for Cause or by Executive other than for good reason, or any other action by the Company which results in a diminishment in such position, authority, duties or responsibilities; or | ||
| (II) | if Executive’s rate of Base Salary for any fiscal year is less than 100% of the rate of Base Salary paid to Executive in the completed fiscal year immediately preceding the Change of Control or if Executive’s total cash compensation opportunities, including salary and incentives, for any fiscal year are less than 100% of the total cash compensation opportunities made available to Executive in the completed fiscal year immediately preceding the Change of Control; or | ||
| (III) | the failure of the Company to continue in effect any benefits or perquisites, or any pension, life insurance, medical insurance or disability plan in which Executive was participating immediately prior to the Change of Control unless the Company provides Executive with a plan or plans that provide substantially similar benefits, or the taking of any action by the Company that would adversely affect Executive’s participation in or materially reduce Executive’s benefits under any of such plans or deprive Executive of any material fringe benefit enjoyed by Executive immediately prior to the Change of Control; or | ||
| (IV) | any purported termination of Executive’s employment by the Company for Cause during a Standstill Period which is not effected in compliance with paragraph (c) above; or | ||
| (V) | any relocation of Executive of more than forty (40) miles from the place where Executive was located at the time of the Change of Control; or | ||
| (VI) | any other breach by the Company of any provision of this Agreement; or | ||
| (VII) | the Company sells or otherwise disposes of, in one transaction or a series of related transactions, assets or earning power aggregating more than 30% of the assets (taken at asset value as stated on the books of the Company determined in |
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| accordance with generally accepted accounting principles consistently applied) or earning power of the Company (on an individual basis) or the Company and its Subsidiaries (on a consolidated basis) to any other Person or Persons (as those terms are defined in Exhibit B). |
(g) “Code” means the Internal Revenue Code of 1986, as amended.
(h) “Committee” means the Executive Compensation Committee of the Board.
(i) “Constructive Termination” means a termination of employment by Executive (I) occurring
within one hundred twenty (120) days of a requirement by the Company that Executive relocate,
without his prior written consent, more than forty (40) miles from the current corporate
headquarters of the Company, but only if (i) Executive shall have given to the Company notice of
intent to terminate within sixty (60) days following notice to Executive of such required
relocation and (ii) the Company shall have failed, within thirty (30) days thereafter, to withdraw
its notice requiring Executive to relocate, or (II) in the event that Executive is removed, fails
to be nominated to serve, or fails to be reelected, as a Director or as Chairman without his prior
written consent. For purposes of clause (I) above, the one hundred twenty (120) day period shall
commence upon the end of the thirty (30)-day cure period, if the Company fails to cure within such
period.
(j) “Date of Termination” means the date on which Executive’s employment terminates.
(k) “Disabled”/“Disability” means a medically determinable physical or mental impairment that
(i) can be expected either to result in death or to last for a continuous period of not less than
six months and (ii) causes Executive to be unable to perform the duties of his position of
employment or any substantially similar position of employment to the reasonable satisfaction of
the Committee.
(l) “Effective Date” has the meaning set forth in Section 1.
(m) “Employment Period” has the meaning set forth in Section 1.
(n) “ESP” means the Company’s Executive Savings Plan.
(o) “GDCP” means the Company’s General Deferred Compensation Plan or any successor plan.
(p) “Qualified Plans” has the meaning set forth in Section 3(d).
(q) “Section 409A” means Section 409A of the Code.
(r) “Separation from Service” shall mean a “separation from service” (as that term is defined
at Section 1.409A-1(h) of the Treasury Regulations under Section 409A) from the Company and from
all other corporations and trades or businesses, if any, that would be treated as a single “service
recipient” with the Company under Section 1.409A-1(h)(3) of such Treasury Regulations. The
Committee may, but need not, elect in writing, subject to the applicable
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limitations under Section 409A, any of the special elective rules prescribed in Section
1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from
service” has occurred. Any such written election shall be deemed part of the Agreement.
(s) “SERP” has the meaning set forth in Section 3(d)(iv).
(t) “Specified Employee” shall mean an individual determined by the Committee or its delegate
to be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A. The Committee
may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any
of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations for
purposes of determining “specified employee” status. Any such written election shall be deemed
part of the Agreement.
(u) “Standstill Period” means the period commencing on the date of a Change of Control and
continuing until the close of business on the earlier of the day immediately preceding the 2012
meeting date or the last business day of the 24th calendar month following such Change of Control.
(v) “Stock” means the common stock, $1.00 par value, of the Company.
(w) “Stock Incentive Plan” has the meaning set forth in Section 3(b).
(x) “Subsidiary” means any corporation in which the Company owns, directly or indirectly, 50%
or more of the total combined voting power of all classes of stock.
(y) “2012 meeting date” has the meaning set forth in Section 1.
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EXHIBIT B
Definition of “Change of Control”
“Change of Control” shall mean the occurrence of any one of the following events:
(a) there occurs a change of control of the Company of a nature that would be required to be
reported in response to Item 5.01 of the Current Report on Form 8-K (as amended in 2004) pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) or in any other
filing under the Exchange Act; provided, however, that no transaction shall be deemed to be a
Change of Control (i) if the person or each member of a group of persons acquiring control is
excluded from the definition of the term “Person” hereunder or (ii) unless the Committee shall
otherwise determine prior to such occurrence, if Executive or an Executive Related Party is the
Person or a member of a group constituting the Person acquiring control; or
(b) any Person other than the Company, any wholly-owned subsidiary of the Company, or any
employee benefit plan of the Company or such a subsidiary becomes the owner of 20% or more of the
Company’s Common Stock and thereafter individuals who were not directors of the Company prior to
the date such Person became a 20% owner are elected as directors pursuant to an arrangement or
understanding with, or upon the request of or nomination by, such Person and constitute a majority
of the Company’s Board of Directors; provided, however, that unless the Committee shall otherwise
determine prior to the acquisition of such 20% ownership, such acquisition of ownership shall not
constitute a Change of Control if Executive or an Executive Related Party is the Person or a member
of a group constituting the Person acquiring such ownership; or
(c) there occurs any solicitation or series of solicitations of proxies by or on behalf of any
Person other than the Company’s Board of Directors and thereafter individuals who were not
directors of the Company prior to the commencement of such solicitation or series of solicitations
are elected as directors pursuant to an arrangement or understanding with, or upon the request of
or nomination by, such Person and constitute a majority of the Company’s Board of Directors; or
(d) the Company executes an agreement of acquisition, merger or consolidation which
contemplates that (i) after the effective date provided for in the agreement, all or substantially
all of the business and/or assets of the Company shall be owned, leased or otherwise controlled by
another Person and (ii) individuals who are directors of the Company when such agreement is
executed shall not constitute a majority of the board of directors of the survivor or successor
entity immediately after the effective date provided for in such agreement; provided, however, that
unless otherwise determined by the Committee, no transaction shall constitute a Change of Control
if, immediately after such transaction, Executive or any Executive Related Party shall own equity
securities of any surviving corporation (“Surviving Entity”) having a fair value as a percentage of
the fair value of the equity securities of such Surviving Entity greater than 125% of the fair
value of the equity securities of the Company owned by Executive and any Executive Related Party
immediately prior to such transaction, expressed as a percentage of the fair value of all equity
securities of the Company immediately prior to such transaction (for purposes of this paragraph
ownership of equity securities shall be determined in
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the same manner as ownership of Common Stock); and provided further, that, for purposes of
this paragraph (d), a Change of Control shall not be deemed to have taken place unless and until
the acquisition, merger or consolidation contemplated by such agreement is consummated (but
immediately prior to the consummation of such acquisition, merger or consolidation, a Change of
Control shall be deemed to have occurred on the date of execution of such agreement).
In addition, for purposes of this Exhibit B the following terms have the meanings set forth below:
“Common Stock” shall mean the then outstanding Common Stock of the Company plus, for purposes
of determining the stock ownership of any Person, the number of unissued shares of Common Stock
which such Person has the right to acquire (whether such right is exercisable immediately or only
after the passage of time) upon the exercise of conversion rights, exchange rights, warrants or
options or otherwise. Notwithstanding the foregoing, the term Common Stock shall not include
shares of Preferred Stock or convertible debt or options or warrants to acquire shares of Common
Stock (including any shares of Common Stock issued or issuable upon the conversion or exercise
thereof) to the extent that the Board of Directors of the Company shall expressly so determine in
any future transaction or transactions.
A Person shall be deemed to be the “owner” of any Common Stock:
(i) of which such Person would be the “beneficial owner,” as such term is defined in
Rule 13d-3 promulgated by the Securities and Exchange Commission (the “Commission”) under
the Exchange Act, as in effect on March 1, 1989; or
(ii) of which such Person would be the “beneficial owner” for purposes of Section 16 of
the Exchange Act and the rules of the Commission promulgated thereunder, as in effect on
March 1, 1989; or
(iii) which such Person or any of its affiliates or associates (as such terms are
defined in Rule 12b-2 promulgated by the Commission under the Exchange Act, as in effect on
March 1, 1989), has the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights, warrants or options or otherwise.
“Person” shall have the meaning used in Section 13(d) of the Exchange Act, as in effect on
March 1, 1989.
An “Executive Related Party” shall mean any affiliate or associate of Executive other than the
Company or a majority-owned subsidiary of the Company. The terms “affiliate” and “associate” shall
have the meanings ascribed thereto in Rule 12b-2 under the Exchange Act (the term “registrant” in
the definition of “associate” meaning, in this case, the Company).
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EXHIBIT C
Change Of Control Benefits
C.1. Benefits Upon a Change of Control Termination.
(a) The Company shall pay to Executive (A) as hereinafter provided an amount equal to two
times his Base Salary for one year at the rate in effect immediately prior to the Date of
Termination or the Change of Control, whichever is higher plus (B) within thirty (30) days
following the Change of Control Termination, the accrued and unpaid portion of his Base Salary
through the Date of Termination, subject to the following. If Executive is eligible for long-term
disability compensation benefits under the Company’s long-term disability plan, the amount payable
under (A) shall be reduced by the annual long-term disability compensation benefit for which
Executive is eligible under such plan for the two-year period over which the amount payable under
(A) is measured. If for any period Executive receives long-term disability compensation payments
under a long-term disability plan of the Company as well as payments under the first sentence of
this paragraph (a), and if the sum of such payments (the “combined Change of Control/disability
benefit”) exceeds the payment for such period to which Executive is entitled under the first
sentence of this paragraph (a) (determined without regard to the second sentence of this paragraph
(a)), he shall promptly pay such excess in reimbursement to the Company; provided, that in no event
shall application of this sentence result in reduction of Executive’s combined Change of
Control/disability benefit below the level of long-term disability compensation payments to which
Executive is entitled under the long-term disability plan or plans of the Company. If the Change of
Control Termination occurs in connection with a Change of Control that is also a Change in Control
Event, the amount described under (A) above shall be paid in a lump sum on the date that is six (6)
months and one day following the date of the Change of Control Termination (or, if earlier, the
date of Executive’s death), unless the Executive is not a Specified Employee on the relevant date,
in which case the amount described in this subsection (a) shall instead be paid thirty (30) days
following the date of the Change of Control Termination. If the Change of Control Termination
occurs in connection with a Change of Control that is not a Change in Control Event, the amount
described under (A) above shall be paid, except as otherwise required by Section 11 of the
Agreement, in the same manner as it would have been paid in the case of a termination by the
Company other than for Cause under Section 5(a).
(b) Until the second anniversary of the Date of Termination, the Company shall maintain in
full force and effect for the continued benefit of Executive and his family all life insurance and
medical insurance plans and programs in which Executive was entitled to participate immediately
prior to the Change of Control provided that Executive’s continued participation is possible under
the general terms and provisions of such plans and programs. In the event that Executive is
ineligible to participate in such plans or programs, the Company shall arrange upon comparable
terms to provide Executive with benefits substantially similar to those which he is entitled to
receive under such plans and programs. Notwithstanding the foregoing, the Company’s obligations
hereunder with respect to life or medical coverage or benefits shall be deemed satisfied to the
extent (but only to the extent) of any such coverage or benefits provided by another employer.
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(c) On the date that is six (6) months and one day following the date of the Change of Control
Termination (or, if earlier, the date of Executive’s death), the Company shall pay to Executive or
his estate, in lieu of any automobile allowance, the present value of the automobile allowance (at
the rate in effect prior to the Change of Control) it would have paid for the two years following
the Change of Control Termination (or until the earlier date of Executive’s death, if Executive
dies prior to the date of the payment under this Section C.1(c)); provided, that if the Change of
Control is not a Change of Control Event, such amount shall instead be paid in the same manner as
Executive’s automobile allowance would have been paid in the case of a termination by the Company
other than for Cause under Section 5(a); and further provided, that if Executive is not a Specified
Employee on the relevant date, any lump sum payable under this Section C.1(c) shall instead by paid
within thirty (30) days following the Change of Control Termination.
C.2. Payment Adjustment. Payments under Section C.1. of this Exhibit shall be made
without regard to whether the deductibility of such payments (or any other payments or benefits to
or for the benefit of Executive) would be limited or precluded by Section 280G of the Code
(“Section 280G”) and without regard to whether such payments (or any other payments or benefits)
would subject Executive to the federal excise tax levied on certain “excess parachute payments”
under Section 4999 of the Code (the “Excise Tax”); provided, that if the total of all payments to
or for the benefit of Executive, after reduction for all federal taxes (including the excise tax
under Section 4999 of the Code) with respect to such payments (“Executive’s total after-tax
payments”), would be increased by the limitation or elimination of any payment under Section C.1.
of this Exhibit, or by an adjustment to the vesting of any equity-based awards that would otherwise
vest on an accelerated basis in connection with the Change of Control, amounts payable under
Section C.1. of this Exhibit shall be reduced and the vesting of equity-based awards shall be
adjusted to the extent, and only to the extent, necessary to maximize Executive’s total after-tax
payments. Any reduction in payments or adjustment of vesting required by the preceding sentence
shall be applied, first, against any benefits payable under Section C.1(a)(A) of this Exhibit, then
against the vesting of any award described in Section 3(c) (New Award) that would otherwise have
vested in connection with the Change of Control, then against the vesting of any other equity-based
awards, if any, that would otherwise have vested in connection with the Change of Control, and then
against all other payments, if any. The determination as to whether Executive’s payments and
benefits include “excess parachute payments” and, if so, the amount and ordering of any reductions
in payment required by the provisions of this Section C.2. shall be made at the Company’s expense
by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee
may designate prior to a Change of Control (the “accounting firm”). In the event of any
underpayment or overpayment hereunder, as determined by the accounting firm, the amount of such
underpayment or overpayment shall forthwith and in all events within thirty (30) days of such
determination be paid to Executive or refunded to the Company, as the case may be, with interest at
the applicable Federal rate provided for in Section 7872(f)(2) of the Code.
C.3. Other Benefits. In addition to the amounts described in Section C.1., Executive
or his legal representative shall be entitled to the benefits, if any, described at Section 3(b)
(Existing Awards Under Stock Incentive Plan) and Section 3(c) (New Award), and any other awards
under the Stock Incentive Plan, and to payment of any vested benefits under GDCP, ESP, and the
Qualified Plans.
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C.4. Noncompetition; No Mitigation of Damages; etc.
(a) Noncompetition. Upon a Change of Control, any agreement by Executive not to
engage in competition with the Company subsequent to the termination of his employment, whether
contained in an employment contract or other agreement, shall no longer be effective.
(b) No Duty to Mitigate Damages. Executive’s benefits under this Exhibit C shall be
considered severance pay in consideration of his past service and his continued service from the
date of this Agreement, and his entitlement thereto shall neither be governed by any duty to
mitigate his damages by seeking further employment nor offset by any compensation which he may
receive from future employment.
(c) Legal Fees and Expenses. The Company shall pay all legal fees and expenses,
including but not limited to counsel fees, stenographer fees, printing costs, etc. reasonably
incurred by Executive in contesting or disputing that the termination of his employment during a
Standstill Period is for Cause or other than for good reason (as defined in the definition of
Change of Control Termination) or obtaining any right or benefit to which Executive is entitled
under this Agreement following a Change of Control. Any amount payable under this Agreement that
is not paid when due shall accrue interest at the prime rate as from time to time in effect at Bank
of America, or its successor, until paid in full. All payments and reimbursements under this
Section shall be made consistent with the applicable requirements of Section 409A.
(d) Notice of Termination. During a Standstill Period, Executive’s employment may be
terminated by the Company only upon thirty (30) days’ written notice to Executive.
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