April 21, 2009 Mr. Jeffrey Naylor The TJX Companies, Inc. 770 Cochituate Road Framingham, MA 01701 Re: Amendment to Employment Agreement Dear Mr. Naylor:
Exhibit 10.2
April 21, 2009
Xx. Xxxxxxx Xxxxxx
The TJX Companies, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
The TJX Companies, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Re: Amendment to Employment Agreement
Dear Xx. Xxxxxx:
Reference is made to the employment agreement between you and The TJX Companies, Inc. dated as
of April 5, 2008 (as subsequently amended and in effect on the date hereof, the “Agreement”). The
following changes to the Agreement are hereby proposed:
1. In Section 5(a), replace the portion of the first sentence that precedes clause (i) with
the following: “Certain Terminations Prior to the End Date. If the Employment Period shall
have terminated prior to the End 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:”
2. In Section 5(a), revise clause (i) by replacing “a period of eighteen (18) months” with “a
period of twenty-four (24) months”.
3. In Section 5(a), revise clause (iv) to read in its entirety as follows:
“(iv) For any MIP performance period in which Executive participates that begins
before and ends after the Date of Termination, and at the same time as other MIP awards for
such performance period are paid, but in no event later than by the 15th day of the third
month following the close of the fiscal year to which such MIP award relates, the Company
will pay to Executive or his legal representative, without offset for compensation earned
from other employment or self-employment, an amount equal to (A) the MIP award, if any, that
Executive would have earned and been paid had he continued in office through the end of such
fiscal year, determined without regard to any adjustment for individual performance factors,
multiplied by (B) a fraction, the numerator of which is three hundred and sixty-five (365)
plus the number of days during such fiscal year prior to termination, and the denominator of
which is seven hundred and thirty (730); provided, however, that if Executive is a Specified
Employee at the relevant time, the amounts described in this clause (iv) shall be paid not
sooner than six (6) months and one day after termination.”
4. In Section 5(a), renumber existing clauses (v) et seq. as clauses (vi) et seq. and insert a
new clause (v) to read in its entirety as follows:
“(v) For each LRPIP cycle in which Executive participates that begins before and ends
after the Date of Termination, and at the same time as other LRPIP awards for such cycle are
paid, but in no event later than by the 15th day of the third month following the close of
the last of the Company’s fiscal years in such cycle, the Company will pay to Executive or
his legal representative, without offset for compensation earned from other employment or
self-
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employment, an amount equal to (A) the LRPIP award, if any, that Executive would have earned
and been paid had he continued in office through the end of such cycle, determined without
regard to any adjustment for individual performance factors, multiplied by (B) a fraction,
the numerator of which is the number of full months in such cycle completed prior to
termination of employment and the denominator of which is the number of full months in such
cycle; provided, that if Executive is a Specified Employee at the relevant time, the amounts
described in this clause (v) shall be paid not sooner than six (6) months and one day after
termination.”
5. In Section 5(a), revise clause (viii) (as previously redesignated pursuant to paragraph 4
above) by replacing “the amount payable under Section 5(a)(iv)(A) above” with “other MIP awards for
such performance period are paid”.
6. In Section 8, revise subsection (b) by replacing “a period of eighteen (18) months” with “a
period of twenty-four (24) months”.
7. In Exhibit A, revise the second sentence of subsection (f) by replacing the portion of the
sentence preceding clause (I) with the following:
“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:”
8. In Exhibit A, revise subsection (f) by removing the following from clause (I): “, other
than an insubstantial and inadvertent action which is remedied by the Company promptly after
receipt of notice thereof given by Executive”.
9. In Exhibit A, revise clause (IV) of subsection (f) by replacing “paragraph (d) above” with
“paragraph (c) above”.
10. In Exhibit A, revise subsection (f) by removing clause (VIII) and revising clause (VII) by
replacing “; or” with “.”.
11. In Exhibit A, renumber existing subsections (i) et seq. as subsections (j) et seq. and
insert a new clause (i) to read in its entirety as follows:
“(i) “Constructive Termination” means a termination of employment by Executive 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. For purposes of the preceding sentence, 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.”
12. In Exhibit A, remove subsection (o) (as previously redesignated pursuant to paragraph 11
above) in its entirety, renumber existing subsections (p) et seq. as subsections (o) et seq.,
remove
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“Incapacity,” from the two places where it appears in the first sentence of subsection (c),
and remove “,Incapacity” from the first sentence of subsection (f).
13. In Exhibit A, revise subsections (o), (p), and (v) (as previously redesignated pursuant to
paragraph 12 above) by replacing, in each case, “Section 3(c)” with “Section 3(b)”.
14. In Exhibit B, revise subsections (b) and (c) of the definition of “Change of Control” by
replacing, in both subsections, “at least 1/4 of the Company’s Board of Directors” with “a majority
of the Company’s Board of Directors”.
15. In Exhibit B, revise subsection (d) of the definition of “Change of Control” to read
entirely as follows:
“(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 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).”
16. In Exhibit C, revise the last sentence of Section C.1(a) to read in its entirety as
follows: “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), and in lieu of
the MIP and LRPIP benefits described in Section C.2, Executive shall be entitled to the MIP and
LRPIP benefits, if any, described in Section 5(a)(iv) and Section 5(a)(v) of the Agreement, payable
in accordance with such Sections.”
17. In Exhibit C, revise Section C.2 to read in its entirety as follows:
“C.2. Incentive Benefits Upon a Change of Control. Within thirty (30) days
following a Change of Control that is also a Change in Control Event, whether or not Executive’s
employment has terminated or been terminated, the Company shall pay to Executive, in a lump sum,
the sum of (i) and (ii), where:
(i) is the sum of (A) the “Target Award” under MIP or any other annual incentive plan
which is applicable to Executive for the fiscal year in which the Change of Control occurs,
plus
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(B) an amount equal to such Target Award prorated for the period of active employment
during such fiscal year through the Change of Control, plus (C) any unpaid amounts to which
Executive is entitled under MIP with respect to any fiscal year completed prior to the
Change of Control; and
(ii) the sum of (A) for Performance Cycles not completed prior to the Change of
Control, an amount with respect to each such cycle equal to the maximum Award under LRPIP
specified for Executive for such cycle, plus (B) any unpaid amounts owing with respect to
LRPIP cycles completed prior to the Change of Control.
If the Change of Control is not also a Change in Control Event, for the avoidance of doubt,
Executive shall continue to participate in MIP and LRPIP (or such other incentive plans, if any, in
which Executive was participating) in accordance with their terms, subject to Section C.1. above,
and shall not be entitled to the supplemental or accelerated payments described in Section C.2.(i)
and Section C.2.(ii) above.”
18. In Exhibit C, revise Section C.3 to read in its entirety as follows:
“C.3. Payment Adjustment. Payments under Section C.1. and Section C.2. 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. or Section C.2. 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. and Section C.2. 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 clause (A) of Section C.1(a) of this Exhibit, then against any benefits
payable under Section C.2. of this Exhibit, then against the vesting of any performance-based
restricted stock awards 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 finally 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.3. 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.”
19. In Exhibit C, revise Section C.4 by removing the following: “and C.3.,”.
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If the foregoing proposed changes to the Agreement are acceptable to you, please so indicate
in the space indicated below, whereupon the Agreement, as previously modified, will be deemed
amended,
effective February 1, 2009, to incorporate the changes set forth above and, except as so amended or
as previously modified, the Agreement will continue in effect in accordance with its terms.
| THE TJX COMPANIES, INC. |
||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Date: | 4/21/2009 | |||
Agreed:
/s/ Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx
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