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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
DATED AS OF APRIL 17, 2000
BETWEEN ▇▇▇▇▇▇ ▇. ENGLISH 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.........................................................................4
5. BENEFITS UPON NON-VOLUNTARY TERMINATION OF EMPLOYMENT OR UPON EXPIRATION OF THE AGREEMENT.....................4
6. OTHER TERMINATION; VIOLATION OF CERTAIN AGREEMENTS............................................................7
7. BENEFITS UPON CHANGE IN CONTROL...............................................................................7
8. AGREEMENT NOT TO SOLICIT OR COMPETE...........................................................................7
9. ASSIGNMENT....................................................................................................9
10. NOTICES......................................................................................................9
11. CERTAIN EXPENSES.............................................................................................9
12. WITHHOLDING..................................................................................................9
13. GOVERNING LAW.................................................................................................9
14. ARBITRATION...................................................................................................9
15. ENTIRE AGREEMENT.............................................................................................10
EXHIBIT A CERTAIN DEFINITIONS...................................................................................A-1
EXHIBIT B DEFINITION OF "CHANGE OF CONTROL".....................................................................B-1
EXHIBIT C CHANGE OF CONTROL BENEFITS............................................................................C-1
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▇▇▇▇▇▇ ▇. ENGLISH
EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 17, 2000 between ▇▇▇▇▇▇ ▇. ENGLISH of ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Executive") and The TJX Companies, Inc., a
Delaware corporation whose principal office is in ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
RECITALS
The TJX Companies, Inc. (the "Company") and Executive intend that
Executive shall serve the Company as President and Chief Executive Officer 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 April 17, 2000 (the "Effective Date"). Executive's employment
shall continue on the terms provided herein until the date of the annual meeting
of stockholders of the Company occurring in 2003 (the "2003 meeting date"),
subject to earlier termination as provided herein (such period of employment
hereinafter called the "Employment Period").
2. SCOPE OF EMPLOYMENT.
(a) NATURE OF SERVICES. Executive shall diligently perform the duties
and assume the responsibilities of President and Chief Executive Officer of the
Company and such additional executive duties and responsibilities as shall from
time to time be assigned to him by 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 (i) make any passive investments where he is
not obligated or required to, and shall not in fact, devote any managerial
efforts, (ii) participate in charitable or community activities or in trade or
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organizations, or (iii) subject to Board approval (which approval shall not be
unreasonably withheld or withdrawn), hold directorships in public companies,
except only that the Board shall have the right to limit such services as a
director or such participation whenever the Board shall believe that the time
spent on such activities infringes in any material respect upon the time
required by Executive for the performance of his duties under this Agreement or
is otherwise incompatible with those duties.
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 $800,000 per
year or such other rate (not less than $800,000 per year) as the Board may
determine after Board review not less frequently than annually.
(b) EXISTING AWARDS UNDER 1986 STOCK INCENTIVE PLAN (INCLUDING LRPIP).
Reference is made to the following awards previously made to Executive under the
Company's 1986 Stock Incentive Plan (including any successor, the "1986 Plan"),
including awards under the Long Range Performance Incentive Plan:
(i) EXISTING OPTIONS: Grant Nos. 86-49, 86-53, 86-55 and
86-56; and
(ii) EXISTING RESTRICTED STOCK: 16,667 shares of Restricted
Stock awarded in September 1999 and scheduled to vest in accordance
with the terms of that award in September 2000; and
(iii) LRPIP: Awards made prior to the date of this Agreement
under the terms of LRPIP.
Each of the above-referenced awards 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 and shall not be affected by the
terms of this Agreement except as otherwise expressly provided herein. Except
for the 16,667 shares of Restricted Stock referenced at clause (ii) above,
Executive will relinquish the award of Restricted Stock made to him in September
1999, effective as of the date of execution of this Agreement.
(c) NEW STOCK AWARDS. Consistent with the terms of the 1986 Plan,
Executive will be entitled to awards of stock options under the 1986 Plan at
levels commensurate with his position but not less than 100,000 stock options
annually, beginning in calendar 2000. In addition, the Committee has determined
to award Executive, as a Performance Award under the 1986 Plan and subject to
satisfaction of the performance goals applicable to such award, 125,000 shares
of Restricted Stock (the "New Restricted Stock"). The date of grant of the New
Restricted Stock shall be the date in 2001 on which the Committee certifies that
the performance goals applicable
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to the award have been met. The New Restricted Stock shall be subject to the
following vesting schedule during the Employment Period: 25,000 shares would be
fully vested upon the 2001 date of grant, and one third of the remaining 100,000
shares would vest on September 8 of each of 2001, 2002 and 2003; provided, that
if this Agreement is not renewed or extended and the Employment Period ends on
the 2003 meeting date, the portion of such award that is scheduled to vest on
September 8, 2003 shall vest immediately prior to the end of the Employment
Period. Executive shall be entitled to tender vested shares in satisfaction of
required tax withholding with respect to vesting under the New Restricted Stock
award.
(d) LRPIP. During the Employment Period, Executive will be eligible to
participate in annual grants under LRPIP. To the extent provided in Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), the terms
of any such award shall be established by the Committee. Subject to the
foregoing, Executive shall be entitled with respect to each award cycle
(beginning with the FYE 2000 to FYE 2002 cycle) to earn up to 55% of his Base
Salary as in effect at the beginning of the cycle if the target established by
the Committee is met and up to 82.50% of such Base Salary if such target is
exceeded, with the payment potential ranging from 0% to 82.50% of Executive's
Base Salary as established by the terms of the award. To the extent the material
terms of LRPIP are required to be approved by stockholders, Executive's
eligibility to receive awards under LRPIP for any cycle to which such
stockholder vote pertains shall be subject to such stockholder approval.
(e) 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 60% of his Base
Salary if the target established by the Committee is met and up to 120% of his
Base Salary if such target is exceeded, with the payment potential ranging from
0% to 120% of Executive's Base Salary as established by the terms of the award.
To the extent the material terms of MIP are required to be approved by
stockholders, Executive's eligibility to receive annual awards under MIP for any
year to which such stockholder vote pertains shall be subject to such
stockholder approval.
(f) SERP. Except as provided in Exhibit C ("Change of Control
Benefits") and this subsection (f), Executive is entitled to Category B benefits
determined and made payable in accordance with the generally applicable
provisions of the Company's Supplemental Executive Retirement Plan; provided,
that Executive shall at all times have a fully vested right to his accrued
benefit, including any future accruals, under SERP based on his actual years of
service.
(g) 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.
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(h) POLICIES AND FRINGE BENEFITS. Executive shall be subject to Company
policies applicable to its executives generally and 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).
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) 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 continuous months, 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, including any position on the Board.
5. BENEFITS UPON NON-VOLUNTARY TERMINATION OF EMPLOYMENT OR UPON
EXPIRATION OF THE AGREEMENT.
(a) CERTAIN TERMINATIONS PRIOR TO THE 2003 MEETING DATE. If the
Employment Period shall have terminated prior to the 2003 meeting date by reason
of (i) death, Disability or Incapacity of Executive, (ii) termination by the
Company for any reason other than Cause or (iii) termination by Executive in the
event that either (A) Executive shall be removed from or fail to be reelected to
the offices of Chief Executive Officer, a Director and a member of any Executive
Committee of the Board, or (B) Executive is relocated more than 40 miles from
the current corporate headquarters of the Company, in either case without his
prior written consent (a "Constructive Termination"), then all compensation and
benefits for Executive shall be as follows:
(i) For the longer of twelve (12) months after such
termination or until the 2003 meeting date (the "termination period"),
the Company will pay to Executive or his legal representative continued
Base Salary at the rate in effect at termination of employment, subject
to the following:
(A) If Executive is eligible for long-term disability
compensation benefits under the Company's long-term disability
plan or any successor Company long-term disability plan, the
amount payable under this clause shall be paid at a rate equal
to the excess of (I) the rate of Base Salary in effect at
termination of employment, over (II) the long-term disability
compensation benefits for which Executive is eligible under
such plan.
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(B) Payments pursuant to this clause (a)(i) shall be
paid for the first twelve months of the termination period
without reduction for compensation earned from other
employment or self-employment, and shall thereafter be reduced
by such compensation received by Executive from other
employment or self-employment.
(ii) Until the expiration of the termination period as defined
at (a)(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 the same from another
employer or from self-employment) such medical and hospital insurance,
long-term disability insurance and term life insurance 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.
(iii) The Company will pay to Executive or his legal
representative, without offset for compensation earned from other
employment or self-employment, (A) 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, plus (B) any unpaid
amounts owing with respect to LRPIP cycles in which Executive
participated and which were completed prior to termination. These
amounts will be paid at the same time as other awards for such prior
year or cycle are paid.
(iv) The Company will pay to Executive or his legal
representative, without offset for compensation earned from other
employment or self-employment, an amount in the nature of severance
equal to the sum of (A) Executive's MIP Target Award, if any, for the
year of termination, multiplied by a fraction, the numerator of which
is three hundred and sixty-five (365) plus the number of days during
such year prior to termination, and the denominator of which is seven
hundred and thirty (730), plus (B) with respect to each LRPIP cycle in
which Executive participated and which had not ended prior to
termination of employment, 1/36 of an amount equal to Executive's LRPIP
Target Award for such cycle multiplied by the number of full months in
such cycle completed prior to termination of employment. The severance
component described in clause (a)(iv)(A) above will be paid not later
than MIP awards for the year of termination are paid. The severance
component described in clause (a)(iv)(B) above, to the extent measured
by the LRPIP Target Award for any cycle, will be paid not later than
the date on which LRPIP awards for such cycle are paid or would have
been paid. In no event shall the severance described in this paragraph
be treated as paid under MIP or LRPIP.
(v) In addition, the Company will pay to Executive or his
legal representative such vested amounts as shall have been deferred
for Executive's account (but not
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received) under GDCP in accordance with its terms plus such amounts, if
any, as shall then remain credited to Executive's account under ESP.
(vi) Executive or his legal representative shall be entitled
to the benefits described in Sections 3(b)(i) (Existing Options),
Section 3(c) (New Stock Awards), 3(f) (SERP), and 3(g) (Qualified
Plans).
(vii) If termination occurs by reason of Incapacity or
Disability, Executive shall be entitled to such compensation, if any,
as is payable pursuant to the Company's long-term disability plan or
any successor Company disability 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 (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 (a)(i) above (determined without regard to paragraph (A)
thereof), 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.
(b) TERMINATIONS ON OR AFTER THE 2003 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 2003 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 entitled upon such
termination to receive, for the one-year period following such termination,
continuation of Base Salary at the rate in effect at termination of employment
plus medical, dental, life-insurance and disability coverage (but not including
continued participation in the Company's retirement or 401(k) plan(s) or
continued participation in SERP or any other fringe benefit, other than a
Company-provided automobile or automobile allowance) comparable to the benefits
of such type to which he was entitled at time of termination; provided, that to
the extent it is impossible or impracticable to provide any such benefits to
Executive under the Company's then existing employee benefit plans or
arrangements, the Company shall arrange for alternative comparable coverage or,
if such alternative coverage is not available, shall pay to Executive the cost
of such coverage, all as reasonably determined by the Committee. 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 (other than
for Valid Reason) on the 2003 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 as Chief
Executive Officer of the Company or service in such other position, if any, as
may be acceptable to Executive.
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6. OTHER TERMINATION; VIOLATION OF CERTAIN AGREEMENTS.
(a) VOLUNTARY TERMINATION OF EMPLOYMENT. If Executive
terminates his employment voluntarily, 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:
such vested amounts as are credited to Executive's account (but not
received) under GDCP and ESP and any benefits described in Sections
3(b)(i) (Existing Options), Section 3(c) (New Stock Awards), 3(f)
(SERP), and 3(g) (Qualified Plans). No other benefits shall be paid
under this Agreement upon a voluntary termination of employment.
(b) TERMINATION FOR CAUSE; VIOLATION OF CERTAIN AGREEMENTS. If
the Company should end Executive's employment for Cause, or,
notwithstanding Section 5 and Section 6(a) above, if Executive should
violate the protected persons or noncompetition provisions of Section
8, all compensation and benefits otherwise payable pursuant to this
Agreement shall cease, other than (x) such vested amounts as are
credited to Executive's account (but not received) under GDCP and ESP
in accordance with the terms of those programs; (y) any benefits to
which Executive may be entitled under SERP (provided, that if Executive
should end his employment voluntarily, such benefits shall be payable
only if Executive does not violate the provisions of Section 8), and
(z) benefits, if any, to which Executive may be entitled under Sections
3(b)(i) (Existing Options), 3(c) (New Stock Awards), and 3(g)
(Qualified Plans). The Company does not waive any rights it may have
for damages or for injunctive relief.
7. BENEFITS UPON CHANGE IN 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.
8. 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
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provisions set forth in this subsection (a) are deemed to be separate and
independent agreements and in the events 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, upon termination of
the Employment Period on the 2003 meeting date or if Executive should end his
employment voluntarily at any time, including by reason of retirement or
disability but not including a voluntary termination for Valid Reason, 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%
stock interest in a corporation), in a business which is a competitor of the
Company. A business shall be deemed a competitor of the Company if and only if
it shall then be so regarded by retailers generally or if it shall operate a
promotional off-price family apparel store within 10 miles of any "then existing
T.J. Maxx or Marshalls store." The term "then existing" in the previous sentence
shall refer to any such store that is, at the time of termination of the
Employment Period, operated by the Company or any wholly-owned subsidiary of the
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, 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 (i) to 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 6 and (ii) to 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.
9. 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.
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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 ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 the Executive, the same shall
be mailed to Executive at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at such
other address as Executive may hereafter designate by notice to the Company.
11. CERTAIN EXPENSES. The Company shall bear the reasonable fees and
costs of Executive's legal and financial advisors (not to exceed $6,000 in the
aggregate) incurred in negotiating this Agreement.
12. 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.
13. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be governed by the laws of the Commonwealth of
Massachusetts.
14. 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. 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.
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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.
/s/ ▇▇▇▇▇▇ ▇. English
------------------------------
Executive
THE TJX COMPANIES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
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EXHIBIT A
CERTAIN DEFINITIONS
(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 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 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 the
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 (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)
and (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 (1) by 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 (A) 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 pertinent situation described therein be remedied, and the
situation remains unremedied upon expiration of such 30-day period; (B) within
120 days after the occurrence without Executive's express written consent of the
event described in clause (VII), provided that Executive gives notice to the
Company at least 30 days in advance of his intent to terminate his employment in
respect of such event; or (C) under the circumstances described in clause (VIII)
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 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, 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 rate of Base Salary for any fiscal
year is less than 100 percent 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 percent 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 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
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(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) The voluntary termination by Executive of his
employment at any time within one year after the
Change of Control. Notwithstanding the foregoing, the
Board may expressly waive the application of this
clause (VIII) 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 (VIII) shall be within the complete discretion
of the Board but shall be made prior to the Change of
Control.
(g) "Date of Termination" means the date on which Executive's
employment terminates.
(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) "GDCP" means the Company's General Deferred Compensation Plan, or,
if the General Deferred Compensation Plan is no longer maintained by the
Company, a nonqualified deferred compensation plan or arrangement the terms of
which are not less favorable to Executive than the terms of the General Deferred
Compensation Plan as in effect on the Effective Date.
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(j) "ESP" means the Company's Executive Savings Plan.
(k) "Incapacity" means a disability (other than Disability within the
meaning of (j) above) or other impairment of health that renders Executive
unable to perform his duties to the reasonable satisfaction of the Committee.
(l) "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 2003 meeting date or the last business day of
the 24th calendar month following such Change of Control.
(m) "Stock" means the common stock, $1.00 par value, of the Company.
(n) "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.
(o) "2000 meeting date" has the meaning set forth in Section 1 of the
Agreement.
(p) "Valid Reason" means the voluntary termination by Executive of his
employment (A) 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), or (V) below, provided that Executive gives notice to the Company at least
30 days in advance requesting that the pertinent situation described therein be
remedied, and the situation remains unremedied upon expiration of such 30-day
period; or (B) within 120 days after the occurrence without Executive's express
written consent of the event described in clause (VI) below:
(I) the assignment to him of any duties inconsistent with
his positions, duties, responsibilities, reporting
requirements, and status with the Company immediately
prior to such assignment, or a substantive change in
Executive's titles or offices as in effect
immediately prior to such assignment, 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 Valid
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) 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 such failure unless the Company provides Executive
with a plan or plans that
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provide substantially similar benefits, or the taking
of any action by the Company that would adversely
affect Executive's benefits under any of such plans
or deprive Executive of any material fringe benefit
enjoyed by Executive immediately prior to such
action, 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
(III) any purported termination of Executive's employment
by the Company for Cause which is not effected in
compliance with paragraph (d) above; or
(IV) any relocation of Executive of more than 40 miles
from the place where Executive was located at the
time of such relocation; or
(V) any other breach by the Company of any provision of
this Agreement; or
(VI) 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).
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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 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
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 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 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 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
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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 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.
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20
"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 the following to Executive in a lump sum
within 30 days following a Change of Control Termination:
(i) an amount equal to (A) 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) 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 or any successor Company 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 clause
(i), 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 clause (i)
(determined without regard to the second sentence of this clause (i)),
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.
(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 participant, applying
the following rules and assumptions:
(A) Executive's Primary Social Security Benefit (as
that term is defined in SERP) shall mean the annual primary
insurance amount to which the 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 his 65th birth date which would be treated
as wages for purposes of the Social Security Act;
(B) the monthly benefit under SERP determined using
the foregoing criteria shall be multiplied by 12 to determine
an annual benefit; and
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(C) the present value of such annual benefit shall be
determined by multiplying the result in (B) by the appropriate
actuarial factor, using the most recently published interest
and mortality rates published by the Pension Benefit Guaranty
Corporation 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 Executive's 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."
(D) the benefit determined under (C) above shall be
reduced by the value of any portion of Executive's SERP
benefit already paid or provided to him in cash or through the
transfer of an annuity contract.
(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, 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.
(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, 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).
C.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, in a lump
sum, the sum of (i) and (ii), where:
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(i) is the sum of (A) the "Target Award" under the Company's
Management Incentive Plan or any other annual incentive plan which is
applicable to Executive for the fiscal year in which the Change of
Control occurs, plus (B) 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) 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 cycles
completed prior to the Change of Control.
C.3. 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 to or for the benefit of Executive) would be limited or precluded
by Internal Revenue Code Section 280G 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 C.1. or Section C.2.,
amounts payable under Section C.1. and Section C.2. 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 C.1. or Section C.2. are required to be reduced in accordance with
the preceding sentence shall be made at the Company's expense by
PricewaterhouseCoopers LLC 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 C.1. or Section C.2., as determined by
PricewaterhouseCoopers LLC (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.
C.4. OTHER BENEFITS. In addition to the amounts described in Sections
C.1. and C.2., Executive shall be entitled to his benefits, if any, under
Sections 3(b)(i) (Existing Options), 3(c) (New Stock Awards), and 3(g)
(Qualified Plans).
C.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.
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(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
BankBoston, N.A. until paid in full.
(d) NOTICE OF TERMINATION. During a Standstill Period,
Executive's employment may be terminated by the Company only upon 30
days' written notice to Executive.
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