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Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
DATED AS OF JANUARY 31, 1998
BETWEEN ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ AND THE TJX COMPANIES, INC.
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INDEX
Page
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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. -3-
6. VOLUNTARY TERMINATION; TERMINATION FOR CAUSE;
VIOLATION OF CERTAIN AGREEMENTS -8-
7. BENEFITS UPON CHANGE OF CONTROL -8-
8. AGREEMENT NOT TO SOLICIT OR COMPETE -8-
9. ASSIGNMENT -10-
10. NOTICES -10-
11. WITHHOLDING -10-
12. GOVERNING LAW -10-
13. ARBITRATION -10-
14. ENTIRE AGREEMENT 10
EXHIBIT A A-1
EXHIBIT B B-1
EXHIBIT C C-1
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EMPLOYMENT AGREEMENT
This Amended and Restated Agreement dated as of January 31, 1998 amends
and restates the Agreement dated as of February 1, 1995, as amended (the "Prior
Agreement"), between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Executive") and The TJX Companies,
Inc., a Delaware corporation, whose principal office is in ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (the "Company").
RECITALS
Executive has for a number of years been employed by the Company, and
has served in a number of capacities with the Company. The Company and Executive
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:
I. EFFECTIVE DATE; TERM OF AGREEMENT. This amended and restated agreement
("Agreement") shall become effective as of January 31, 1998 (the "Effective
Date"). The employment shall continue on the terms provided herein until January
27, 2001 and thereafter until terminated by either Executive or the Company,
subject to earlier termination as provided herein (such period of employment
hereinafter called the "Employment Period").
II. SCOPE OF EMPLOYMENT.
A. NATURE OF SERVICES. Executive shall diligently perform the duties and
assume the responsibilities of Executive Vice President-Finance and Chief
Financial Officer of the Company and such additional Executive duties and
responsibilities as shall from time to time be assigned to him by the President
or the Board.
B. EXTENT OF SERVICES. Except for illnesses and vacation periods,
Executive shall devote substantially all his working time and attention and his
best efforts to the performance of his duties and responsibilities under this
Agreement. However, Executive may (a) make any passive investments where he is
not obligated or required to, and shall not in fact, devote-any managerial
efforts or (b) serve as a director on the boards of other companies or
participate in charitable or community activities or in trade or professional
organizations, except only that the President or the Board shall have the right
to limit such services as a director or such participation whenever the
President or the
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Board shall believe that the time spent on such activities infringes upon the
time required by Executive for the performance of his duties under this
Agreement or is otherwise incompatible with those duties.
III. COMPENSATION AND BENEFITS.
A. BASE SALARY. Executive shall be paid a base salary at a rate not less
than $560,000 per year (or any increased Base Salary), subject to annual review.
Base Salary shall be payable in such manner and at such times as the Company
shall pay base salary to other Executive employees.
B. LRPIP. During the Employment Period, Executive will be entitled to
participate in annual grants made under the Company's Long Range Performance
Incentive Plan (LRPIP) at a level commensurate with his position in the Company.
To the extent provided in Section 162(m) of the Code, the terms of such awards
shall be established by the Committee.
C. MIP. During the Employment Period, Executive shall be eligible to
receive annual awards under the Company's Management Incentive Plan (MIP). To
the extent provided in Section 162(m) of the Code, the goals, scope and
conditions of any award shall be established annually by the Committee. Subject
to the foregoing, Executive shall be entitled to earn up to 45% of his Base
Salary if the target established by the Committee is met and up to 90% of his
Base Salary if such target is exceeded, with the payment potential ranging from
0% to 90% of Executive's Base Salary as established by the terms of the award.
D. STOCK OPTIONS. The Committee has determined to grant annually to
Executive during the Employment Period nonstatutory stock options under the 1986
Plan, (the "Options"). Such awards and grants will be subject to the discretion
of the Committee. If on or prior to January 27, 2001 Executive dies or becomes
Disabled or a Change of Control occurs while Executive is employed by the
Company, then all Executive's Options then outstanding shall be immediately
vested (exercisable). If Executive dies or becomes Disabled while employed by
the Company, all his Options shall remain exercisable for a period of three
years, but in no event beyond their original term. Upon the expiration of such
three-year term, the options shall terminate. In the event Executive retires
under the terms of the 1986 Plan, all his Options shall remain exercisable (to
the extent they were exercisable immediately prior to such retirement) for a
period of three years or, if less, the remainder of the original option term,
and then shall terminate. Upon any other termination of employment, the Options
shall remain exercisable (to the extent they were exercisable immediately prior
to such termination, taking into account any applicable accelerated vesting as
described above) for a period equal to the lesser of (i) three months (six
months, in the case of Options granted after
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March 31, 1998), or (ii) the remainder of their original term, and then shall
terminate. However, if Executive is terminated for Cause all options shall
immediately terminate.
E. SERP. Except as provided in Exhibit C ("Change of Control Benefits"),
Executive will be entitled to the greater of Category B or C benefits determined
and made payable in accordance with the generally applicable provisions of the
Company's Supplemental Executive Retirement Plan ("SERP"), including vesting
requirements.
F. QUALIFIED PLANS. Executive shall be entitled during the Employment
Period to participate in the Company's tax qualified retirement and profit-
sharing plans in accordance with the terms of those plans.
G. POLICIES AND FRINGE BENEFITS. Executive shall be subject to Company
policies applicable to its Executives generally and Executive shall be entitled
to receive all such fringe benefits as the Company shall from time to time make
available to other Executives generally (subject to the terms of any applicable
fringe benefit plan).
IV. 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. The Employment Period shall terminate when Executive becomes Disabled.
In addition, if by reason of Incapacity Executive is unable to perform his
duties for at least six months in any 12-month period, upon written notice by
the Company to Executive, the Employment Period will be terminated for
Incapacity.
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.
V. BENEFITS UPON NON-VOLUNTARY TERMINATION OF EMPLOYMENT.
A. TERMINATION FOR DEATH, DISABILITY OR INCAPACITY, TERMINATION BY THE
COMPANY OTHER THAN FOR CAUSE OR A TERMINATION DESCRIBED IN SECTION 5 (a) (i) (C)
ON OR PRIOR TO JANUARY 27, 2001. If the Employment Period shall have terminated
on or prior to January 27, 2001 by reason of death, Disability or Incapacity of
Executive, by termination by the Company for any reason other than Cause, or a
termination described in clause (i) (C) below, all compensation and benefits for
Executive shall be as follows:
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1. (A) In the case of termination by reason of death, Disability or
Incapacity, for a period of 12 months after such termination, the Company will
pay to Executive or his legal representative continued Base Salary at the rate
in effect at termination of employment, without reduction for compensation
earned from other employment or self-employment.
(B) In the case of termination by the Company for any reason other
than Cause, other than a termination described in paragraph (C) below, for the
longer of 12 months after such termination or until January 27, 2001, the
Company will pay to Executive continued Base Salary at the rate in effect at the
termination of employment. Base Salary shall be paid for the first twelve months
of the period without reduction for compensation earned from other employment or
self-employment, and shall thereafter be reduced by such compensation received
from other employment or self-employment.
(C) In the case of a termination described in this paragraph (C),
for the longer of 24 months after such termination or until January 27, 2001,
the Company will pay to Executive continued Base Salary at the rate in effect at
the termination of employment. Base Salary shall be paid for the first twelve
months of the period without reduction for compensation earned from other
employment or self-employment, and shall thereafter be reduced by such
compensation received from other employment or self-employment. Executive shall
be deemed to have suffered a termination of employment described in this
paragraph (C) only if, upon or following the appointment of a new Chief
Executive Officer of the Company, (1) Executive is terminated by the Company
other than for Cause, or (2) Executive terminates his employment with the
Company by reason of a change in reporting relationship to the Chief Executive
Officer or a change in duties resulting in Executive's ceasing to have the
responsibilities and authority of a Chief Financial officer.
If termination occurs by reason of Incapacity or Disability, Executive shall
also be entitled to such compensation, if any, as is payable pursuant to the
Company's group and any individual long-term disability plan or any successor
Company disability plan. Any payments made to Executive under any long-term
disability plan of the Company with respect to the salary continuation period in
clause (i) above shall be offset against such salary continuation payments and
to the extent not so offset, Executive shall promptly make reimbursement
payments to the Company of such disability payments.
2. Until the expiration of the applicable Base Salary continuation period
under clause (i) and subject to such minimum coverage- continuation requirements
as may be required by law, the Company will provide
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(except to the extent that Executive shall obtain no less favorable coverage
from another employer or from self-employment) such medical and hospital
insurance, long term disability insurance and group life insurance (excluding
life insurance for which a waiver for Executive is in effect) for Executive and
his family, comparable to the insurance provided for executives generally, as
the Company shall determine, and upon the same terms and conditions as the same
shall be provided for other Company executives generally; provided, however,
that in no event shall such benefits or the terms and conditions thereof be less
favorable to Executive than those afforded to him as of the date of termination.
3. The Company will pay to Executive, without offset for compensation
earned from other employment or self-employment, the following amounts under the
Company's MIP applicable to Executive:
First, if not already paid, any amounts to which Executive is entitled
under MIP for the fiscal year of the Company ended immediately prior to
Executive's termination of employment. These amounts will be paid at
the same time as other awards for such prior year are paid.
Second, an amount in the nature of severance equal to Executive's MIP
Target Award for the year of termination, prorated for Executive's
period of service during such year prior to termination. This amount
will be paid at the same time as other MIP awards for the year of
termination are paid.
Third, in addition, but only in case of termination by reason of death,
Disability or Incapacity, an amount equal to Executive's MIP Target
Award for the year of termination, without proration. This amount will
be paid at the same time as the amount payable under the preceding
paragraph.
In addition, the Company will also pay to Executive or his legal
representative such amounts as Executive shall have deferred (but not
received) under the Company's General Deferred Compensation Plan in
accordance with the provisions of that Plan.
4. Executive shall be entitled to the benefits described in Sections 3(d)
(Stock Options), 3(e) (SERP), and 3(f) (Qualified Plans), in each case to the
extent, if any, provided in the provisions of the relevant plan or award
agreement (including the pertinent provisions of this Agreement). In addition,
with respect to each three-year performance cycle not completed prior to
termination, the Company will pay to Executive an amount in the nature of
severance equal to 1/36 of his LRPIP Target Award for each month in such cycle
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prior to termination. Such amounts will be paid at the same time as
other LRPIP awards payable for the cycle first ending after termination
are paid. Executive will also be entitled to payment (at the same time
as other LRPIP awards for the applicable cycle are paid) of any unpaid
amounts owing with respect to cycles completed prior to termination.
Executive will also be entitled to such rights, if any, under any stock
option and other grants not specifically referred to in Section 3 of
this Agreement as shall be provided by the terms of such options and
other grants.
B. TERMINATION FOR DEATH, DISABILITY OR INCAPACITY, TERMINATION BY THE
COMPANY OTHER THAN FOR CAUSE OR A TERMINATION DESCRIBED IN SECTION 5(b)(i)(B)
AFTER JANUARY 27, 2001. If the Employment Period shall have terminated after
January 27, 2001 by reason of death, Disability or Incapacity of Executive, by
termination by the Company for any reason other than Cause, or a termination
described in clause (i)(B) below, all compensation and benefits for Executive
shall be as follows:
1. (A) In the case of termination by reason of death, Disability
or Incapacity or termination of Executive by the Company for any reason
other than Cause, other than a termination described in paragraph (B)
below, the Company will pay to Executive (or his legal representative
in the case of death, Disability or Incapacity) his then Base Salary
for a period of twelve months from the Date of Termination, which Base
Salary shall be reduced after six months for compensation earned from
other employment or self-employment.
(i) (B) In the case of a termination after January 27,
2001 described in this paragraph (B), the Company will pay to Executive
his then Base Salary for the period commencing with the Date of
Termination and ending a) twenty-four months after the Date of
Termination, if termination occurs less than six months after a new
Chief Executive Officer is appointed, or b) eighteen months after the
Date of Termination, if termination occurs six to twelve months after a
new Chief Executive Officer is appointed, or c) twelve months after the
Date of Termination, if termination occurs more than twelve months
after a new Chief Executive Officer is appointed. Base Salary payments
under this paragraph (B) shall be reduced after six months for
compensation earned from other employment or self- employment.
Executive shall be deemed to have suffered a termination of employment
described in this paragraph (B) only if, upon or following the
appointment of a new Chief Executive Officer of the Company, (1)
Executive is terminated by the Company other than for Cause, or (2)
Executive terminates his employment with the Company by reason of a
change in reporting relationship to the Chief Executive Officer or a
change in his duties resulting in Executive's ceasing to have the
responsibilities and authority of a Chief Financial Officer.
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If termination occurs by reason of Incapacity or Disability, Executive
shall also be entitled to such compensation, if any, as is payable
pursuant to the Company's group and any individual long-term disability
plan or any successor Company disability plan. Any payments made to
Executive under any long-term disability plan of the Company with
respect to the salary continuation period in clause (i) above shall be
offset against such salary continuation payments and to the extent not
so offset, Executive shall promptly make reimbursement payments to the
Company of such disability payments.
2. The Company will pay to Executive, without offset for
compensation earned from other employment or self-employment. the
following amounts under the Company's MIP applicable to Executive:
First, if not already paid, any amount to which Executive is
entitled under MIP for the fiscal year of the Company ended
immediately prior to Executive's termination of employment.
These amounts will be paid at the same time as other awards
for such prior year are paid.
Second, an amount in the nature of severance equal to
Executive's MIP Target Award for the year of termination,
prorated for Executive's period of service during such year
prior to termination. This amount will be paid at the same
time as other MIP awards for the year of termination are paid.
Third, in addition, but only in the case of termination by
reason of death, Disability or Incapacity, an amount equal to
Executive's MIP Target Award for the year of termination,
without proration. This amount will be paid at the same time
as the amount payable under the preceding paragraph.
In addition, the company will also pay to Executive or his
legal representative such amounts as Executive shall have
deferred (but not received) under the Company's General
Deferred Compensation Plan in accordance with the provisions
of that Plan.
3. Until the expiration of the applicable Base Salary
continuation period under Clause (i) above and subject to such minimum
coverage-continuation requirements as may be required by law, the
Company will provide (except to the extent that Executive shall obtain
no less favorable coverage from another employer or from
self-employment) such medical and hospital insurance, long-term
disability insurance and group life insurance (excluding life insurance
for which a waiver for Executive is in effect) for Executive and his
family, comparable to the insurance provided for executives
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generally, as the Company shall determine, and upon the same terms and
conditions as the same shall be provided for other Company executives
generally; provided, however, that in no event shall such benefits or
the terms and conditions thereof be less favorable to Executive than
those afforded to him as of the date of termination.
4. Executive shall be entitled to the benefits described in
Sections 3(d) (Stock Options), 3(e) (SERP), and 3(f) (Qualified Plans),
in each case to the extent, if any, provided in the provisions of the
relevant plan or award agreement (including the pertinent provisions of
this Agreement). In addition, with respect to each three-year
Performance Cycle not completed prior to termination, the Company will
pay to Executive an amount in the nature of severance equal to 1/36 of
his LRPIP Target Award for each month in such cycle prior to
termination. Such amounts will be paid at the same time as other LRPIP
awards payable for the cycle first ending after termination are paid.
Executive will also be entitled to payment (at the same time as other
LRPIP awards for the applicable cycle are paid) of any unpaid amounts
owing with respect to cycles completed prior to termination. Executive
will also be entitled to such rights, if any, under any stock option
and other grants not specifically referred to in Section 3 of this
Agreement as shall be provided by the terms of such options and other
grants.
C. EMPLOYMENT PERIOD NOT EXTENDED. If the Company determines not to extend
the Employment Period beyond its original term (January 27, 2001) or any
extension thereof, or offers to extend the Employment Period on terms less
favorable to Executive than those set forth herein, and Executive declines, it
shall be deemed a termination of the Employment Period by the Company pursuant
to (b) above. If Executive should choose not to continue his employment beyond
January 27, 2001 or any extension of the Employment Period, other than in
response to an offer by the Company to extend the Employment Period on terms
less favorable to Executive than those set forth herein, it shall be deemed a
voluntary termination by Executive and the provisions of Section 6 shall apply.
VI. VOLUNTARY TERMINATION; TERMINATION FOR CAUSE; VIOLATION OF CERTAIN
AGREEMENTS.
If Executive should end his employment voluntarily (other than in the
case of a termination described at Section 5 (a) (i) (C) or Section 5(b) (i)
(B)) or if the Company should end Executive's employment for Cause, or,
notwithstanding (a) or (b) of Section 5 above, if Executive should violate the
protected persons or noncompetition provisions of Section 8, all compensation
and benefits otherwise payable pursuant to this Agreement
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shall cease, other than (x) such amounts as Executive shall have deferred (but
not received) under the Company's General Deferred Compensation Plan in
accordance with the provisions of that Plan and (y) any benefits to which
Executive may be entitled under Sections 3(d) (Stock Options), 3(e) (SERP) and
3(f) (Qualified Plans). Executive will also be entitled to such rights, if any,
under stock options and other grants not specifically referred to in Section 3
of this Agreement as shall be provided by the terms of such other options and
other grants. In addition, the Company will pay to Executive such amounts as
Executive shall have deferred (but not received) under the Company's General
Deferred Compensation Plan in accordance with the provisions of that Plan. The
Company does not waive any rights it may have for damages or for injunctive
relief.
VII. 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.
VIII. AGREEMENT NOT TO SOLICIT OR COMPETE.
A. Upon the termination of employment at any time, then for a period of
two years after the termination of the Employment Period, Executive shall not
under any circumstances employ, solicit the employment of, or accept unsolicited
the services of, any "protected person" or recommend the employment of any
"protected person" to any other business organization. A "protected person"
shall be a person known by Executive to be employed by the Company or its
Subsidiaries or to have been employed by Company or its Subsidiaries within six
months prior to the commencement of conversations with such person with respect
to employment.
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, (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) are deemed to be separate and independent
agreements and in the event of unenforceability of any such agreement, such
unenforceable agreement shall be deemed automatically deleted from the
provisions hereof and such 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 many
trade secrets of the company and will have access to confidential information
and business plans for the Company. Therefore, if Executive should end his
employment
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voluntarily at any time, including by reason of retirement or disability, or if
the Company should end Executive's employment at any time for Cause, then for a
period of two years thereafter, Executive will not engage, either as a
principal, employee, partner, consultant or investor (other than a less-than-1%
equity interest in an entity), in a business which is a competitor of the
Company. A business shall be deemed a competitor of the Company if it shall then
be so regarded by retailers generally or if it shall operate a promotional
off-price family apparel store (such as T.J. Maxx or Marshalls) within ten miles
of any "then existing T.J. Maxx or Marshalls store". The term "then existing" in
the previous sentence Company or under lease for operation as aforesaid. Nothing
herein shall restrict the right of Executive to engage in a business that
operates a conventional or full ▇▇▇▇-up department store. Executive agrees that
if, at any time, pursuant to action of any court, administrative or governmental
body or other arbitral tribunal, the operation of any part of this paragraph
shall be determined to be unlawful or otherwise unenforceable, then the coverage
of this paragraph shall be deemed to be restricted as to duration, geographical
scope or otherwise, as the case may be, to the extent, and only to the extent,
necessary to make this paragraph lawful and enforceable in the particular
jurisdiction in which such determination is made.
C. If the Employment Period terminates, Executive agrees to (i) notify the
Company immediately upon his securing employment or becoming self-employed
during any period when Executive's compensation from the Company shall be
subject to reduction or his benefits provided by the Company shall be subject to
termination as provided in Section 5 and (ii) furnish to the Company written
evidence of his compensation earned from any such employment or self-employment
as the Company shall from time to time request. In addition, upon termination of
the Employment Period for any reason other than the death of Executive,
Executive shall immediately return all written trade secrets, confidential
information and business plans of the Company and shall execute a certificate
certifying that he has returned all such items in his possession or under his
control.
IX. ASSIGNMENT. The rights and obligations of the Company shall enure 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 by devise or descent.
X. 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 ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel, or such other address as the
Company may hereafter designate by notice to Executive; and if sent to
Executive, the same shall be mailed to Executive at ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ or at such other address as Executive may hereafter
designate by notice to the Company.
XI. WITHHOLDING. Anything to the contrary notwithstanding, 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.
XII. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be governed by the laws of the Commonwealth of
Massachusetts.
XIII. 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 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 Commercial
Arbitration Rules 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, and judgment upon the award
rendered by the arbitrator shall be entered in any Court having jurisdiction
thereof upon the application of either party.
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XIV. 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.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
THE TJX COMPANIES, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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) "Committee" means the Executive Compensation Committee of the
Board.
(d) "Cause" means dishonesty, conviction of a felony, gross
neglect of duties (other than as a result of Disability or death), or conflict
of interest which conflict shall continue for 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"
above (in which case Executive shall be reinstated and paid any of his
previously unpaid Base Salary for such period), or (C) 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 clauses (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.
(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 by (1) the Company other than
for Cause, or (2) by Executive for good reason, or (3) by reason of death,
Incapacity or Disability.
For purposes of this definition, termination for "good reason" shall
mean the voluntary termination by Executive of his employment (1) within 120
days after the occurrence without Executive's express written consent of any one
of the events described in clauses (I), (II), (III), (IV), (V) or (VI) below,
provided that Executive gives notice to the Company at least 30 days in advance
requesting that the situation described in those clauses be remedied, and the
situation remains unremedied upon expiration of such 30- day period; (2) within
120 days after the occurrence without Executive's express written consent of the
event described in clauses (VII) or (VIII) below, provided that Executive gives
notice to the Company at least 30 days in advance; or (3) upon the occurrence of
the events described in clause (IX) below, provided that Executive gives notice
to the Company at least 30 days in advance:
(I) the assignment to him of any duties inconsistent with his
positions duties, responsibilities, reporting requirements, and status with the
company immediately prior to the Change of Control, or a substantive change in
Executive's titles or offices as in effect immediately prior to a Change of
Control, or any removal of Executive from or any failure to re-elect 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, other than an insubstantial and
inadvertent action which is remedied by the Company promptly after receipt of
notice thereof given by Executive; or
(II) if Executive's Base Salary for any fiscal year is less than
100 percent of the 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 percent of the total cash compensation
opportunities made available to Executive in the completed
fiscal year immediately preceding the Change of Control,
unless any such reduction represents an overall reduction in
the Base Salary paid or cash compensation opportunities made
available, as the case may be, to Executives in the same
organizational level (it being the Company's burden to
establish this fact); 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
17
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, unless the
elimination or reduction of any such benefit, perquisite or
plan affects all other Executives in the same organizational
level (it being the Company's burden to establish this fact);
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 (d) above; or
(V) any relocation of Executive of more than 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 percent of the assets (taken at asset
value as stated on the books of the Company determined in
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); or
(VIII) if Executive is employed by a subsidiary of the Company, such
Subsidiary either ceases to be a Subsidiary of the Company or
sells or otherwise disposes of, in one transaction or a series
of related transactions, assets or earning power aggregating
more than 30 percent of the assets (taken at asset value as
stated on the books of the Subsidiary determined in accordance
with generally accepted accounting principles consistently
applied) or earning power of such subsidiary (on an individual
basis) or such Subsidiary and its subsidiaries (on a
consolidated basis) to any other Person or Persons (as those
terms are defined in Exhibit B); or
(IX) the voluntary termination by Executive of his employment (i)
at any time within one year after the Change of Control or
(ii) at any time during the second year after the Change of
Control unless the Company offers Executive an employment
contract having a minimum two-year duration
18
which provides Executive with substantially the same title,
responsibilities, annual and long-range compensation, benefits
and perquisites that he had. immediately prior to the
Standstill Period. Notwithstanding the foregoing, the Board
may expressly waive the application of this clause (IX) if it
waives the applicability of substantially similar provisions
with respect to all persons with whom the Company has a
written severance agreement (or may condition its application
on any additional requirements or employee agreements which
the Board shall in its discretion deem appropriate in the
circumstances). The determination of whether to waive or
impose conditions on the application of this clause (IX) shall
be within the complete discretion of the Board, but shall be
made prior to the occurrence of a Change of Control.
(g) "Date of Termination" means the date on which Executive's
employment is terminated.
(h) "Disability" has the meaning given it in the Company's
long-term disability plan. Executive's employment shall be deemed to be
terminated for Disability on the date on which Executive is entitled to receive
long-term disability compensation pursuant to such long-term disability plan.
(i) "Incapacity" means a disability (other than Disability within
the meaning of (h) above) or other impairment of health that renders Executive
unable to perform his duties to the satisfaction of the Committee.
(j) "Standstill Period" means the period commencing on the date of
a Change of Control and continuing until the close of business on the last
business day of the 24th calendar month following such Change of Control.
(k) "Stock" means the common stock, $1.00 par value, of the
Company.
(l) "Subsidiary" means any corporation in which the Company owns,
directly or indirectly, 50 percent or more of the total combined voting power of
all classes of stock.
19
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 1(a) of the Current
Report on Form 8-K 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 the 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 at least 1/4 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 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 at least 1/4 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 such an 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
20
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), if such agreement requires as
a condition precedent approval by the Company's shareholders of the agreement or
transaction, a Change of Control shall not be deemed to have taken place unless
and until such approval is secured (but upon any such approval, 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
21
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).
22
EXHIBIT C
CHANGE OF CONTROL BENEFITS
1. BENEFITS UPON A CHANGE OF CONTROL TERMINATION.
(a) The Company shall pay the following to Executive in a lump sum
within 30 days following a Change of Control Termination:
(i) 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 (or, if Executive's title was diminished within 180 days before the
commencement of the Standstill Period, the rate in effect immediately prior to
such change), whichever is highest, plus the accrued and unpaid portion of his
Base Salary through the Date of Termination. Any payments made to Executive
under any long term disability plan of the Company with respect to the two years
following termination of employment shall be offset against such two times Base
Salary payment. Executive shall promptly make reimbursement payments to the
Company to the extent any such disability payments are received after the Base
Salary payment.
(ii) in lieu of any other benefits under SERP, an amount equal to
the present value of the payments that Executive would have been entitled to
receive under SERP as a Category B or C participant, whichever is greater,
applying the following rules and assumptions:
(A) a credit equal to the number of Years of Service (as
that term is defined in SERP) that Executive has been employed
by the Company or a predecessor at the Date of Termination
shall be added to his Years of Service in determining
Executive's total Years of Service; PROVIDED, HOWEVER, that
the total Years of Service determined hereunder shall not
exceed the lesser of (x) 20 or (y) the Years of Service that
Executive would have had if he had retired at the age of 65;
(B) Executive's Average Compensation (as that term is
defined in SERP) shall be determined as of the Date of
Termination;
(C) Executive's Primary Social Security Benefit (as that
term is defined in SERP) shall mean the annual primary
insurance amount to which Executive is entitled or would, upon
application therefor, become entitled at age 65 under the
provisions of the Federal Social Security Act as in effect on
the Date of Termination assuming that Executive received
annual income at the rate of his Base Salary from the Date of
Termination until
23
his 65th birth date which would be treated as wages for
purposes of the Social Security Act;
(D) the monthly benefit under SERP determined using the
foregoing criteria shall be multiplied by 12 to determine an
annual benefit; and
(E) the present value of such annual benefit shall be
determined by multiplying the result in (D) by the appropriate
actuarial factor using the most recently published interest
and mortality rates published by the Pension Benefit Guaranty
Corporation and which are effective for plan terminations
occurring on the Date of Termination, using Executive's age to
the nearest year determined as of that date. If, as of the
Date of Termination, the Executive has previously satisfied
the eligibility requirements for Early Retirement under The
TJX companies, Inc. Retirement Plan, then the appropriate
factor shall be that based on the most recently published
"PBGC Actuarial Value of $1.00 Per Year Deferred to Age 60 And
Payable For Life Thereafter -- Healthy Lives," except that if
the Executives age to the nearest year is more than 60, then
such higher age shall be substituted for 60. If, as of the
Date of Termination, the Executive has not satisfied the
eligibility requirements for Early Retirement under The TJX
companies, Inc. Retirement Plan, then the appropriate factor
shall be based on the most recently published "PBGC Actuarial
Value of $1.00 Per Year Deferred to Age 65 And Payable For
Life Thereafter - Healthy Lives."
(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, medical insurance and disability
plans and programs in which Executive was entitled to participate immediately
prior to the Change of Control (or, if Executive's title was diminished within
180 days before the commencement of the Standstill Period, all such plans and
programs in which Executive was entitled to participate immediately prior to
such change, to the extent that such benefits thereunder are greater), 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, medical or disability 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.
24
(c) For a period of two years after the Date of Termination, the
company shall make available to Executive the use of any automobile that was
made available to Executive prior to the Date of Termination, including ordinary
replacement thereof in accordance with the Company's automobile policy in effect
immediately prior to the Change of Control, or, if Executive's title was
diminished within 180 days before the commencement of a Standstill Period, the
Company shall make available to the Executive the use of an automobile of a type
that was made available to him immediately prior to such change (or, in lieu of
making such automobile available, the company may at its option pay to Executive
the present value of its cost of providing such automobile).
2. INCENTIVE BENEFITS UPON A CHANGE OF CONTROL. Within 30 days following a
Change of Control, whether or not Executive's employment has terminated or been
terminated, the Company shall pay to the Executive the following in a lump sum:
(i) an amount equal to 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 (or, if Executive's title was diminished
within 180 days before the commencement of the standstill Period, the "Target
Bonus" applicable to Executive for the fiscal year in which such change occurred
as if he continued to hold such prior title, if such Target Bonus is higher). In
addition, the Company will pay to Executive an amount equal to such Target Award
prorated for the period of active employment during such fiscal year through the
Change of Control; and
(ii) 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, unless Executive shall
already have received payment of such amounts. Executive shall also be entitled
to payment of unpaid amounts owing with respect to cycles completed prior to the
Change of Control.
3. Payments under Section 1 and Section 2 of this Exhibit shall be made
without regard to whether the deductibility of such payments (or any other
payments to or for the benefit of Executive) would be limited or precluded by
Internal Revenue Code Section 28OG and without regard to whether such payments
(or any other payments) would subject Executive to the federal excise tax levied
on certain "excess parachute payments" under Internal Revenue Code Section 4999;
PROVIDED, that if the total of all payments to or for the benefit of Executive,
after reduction for all federal taxes (including the tax described in Internal
Revenue Code Section 4999, if applicable) with respect to such payments
("Executive's total after-tax payments"), would be increased by the limitation
or elimination of any payment under Section 1 or Section 2, amounts payable
under Section 1 and Section 2 above shall be reduced to the extent, and only to
the extent, necessary to maximize Executive's total after-tax payments. The
determination as to whether and to what extent payments under Section 1 or
Section 2 above are required to be reduced in
25
accordance with the preceding sentence shall be made at the Company's expense by
Coopers & ▇▇▇▇▇▇▇ or by such other certified public accounting firm as the
Committee may designate prior to a Change of Control. In the event of any
underpayment or overpayment under Section 1 or Section 2 above, as determined by
Coopers & ▇▇▇▇▇▇▇ (or such other firm as may have been designated in accordance
with the preceding sentence), the amount of such underpayment or overpayment
shall forthwith 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 Internal Revenue Code.
4. OTHER BENEFITS. In addition to the amounts described in Sections 1 and
2, Executive shall be entitled to his benefits, if any, under Sections 3(d)
(Stock Options) and 3(f) (Qualified Plans). Executive will also be entitled to
such rights under any stock options and other grants not specifically referred
to in Section 3 of this Agreement as shall be provided by the terms of such
other options and other grants.
5. 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 be neither (x) governed by
any duty to mitigate his damages by seeking further employment nor (y)
(except as expressly provided in this Exhibit C) offset by any
compensation which he may receive from future employment.
(c) OTHER SEVERANCE PAYMENTS. Benefits hereunder shall be
in lieu of any benefits to which Executive would otherwise be entitled
under any severance pay plan of the Company or its Subsidiaries, and
shall be reduced by any severance payments from the Company or its
Subsidiaries to which Executive is entitled under applicable federal or
state law (for example, under a so-called "tin parachute" or plant
closing law).
(d) 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
26
this Agreement following a Change of Control. Any amount payable under
this Agreement that is not paid when due shall accrue interest at the
base rate of interest as from time to time in effect at The First
National Bank of Boston, until paid in full.
(e) Notice of Termination. During a Standstill Period,
Executive's employment may be terminated by the Company only upon 30
days' written notice to Executive.
