EXHIBIT (10)(e)
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
DATED AS OF FEBRUARY 1, 1995
BETWEEN RICHARD LESSER AND THE TJX COMPANIES, INC.
INDEX
PAGE
1. EFFECTIVE DATE; TERM OF AGREEMENT 1
2. SCOPE OF EMPLOYMENT 1
3. COMPENSATION AND BENEFITS 2-3
4. TERMINATION OF EMPLOYMENT; IN GENERAL 3
5. BENEFITS UPON NON-VOLUNTARY TERMINATION
OF EMPLOYMENT 3-7
6. VOLUNTARY TERMINATION; TERMINATION FOR CAUSE;
VIOLATION OF CERTAIN AGREEMENTS 7
7. BENEFITS UPON CHANGE OF CONTROL 7
8. AGREEMENT NOT TO SOLICIT OR COMPETE 8-9
9. ASSIGNMENT 9
10. NOTICES 9
11 WITHHOLDING 9
12. GOVERNING LAW 9
13. ARBITRATION 10
14. ENTIRE AGREEMENT 10
EXHIBITS
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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EMPLOYMENT AGREEMENT
This Amended and Restated Agreement dated as of February 1,
1995 amends and restates the Agreement dated as of February 1,
1992, as amended (the "Prior Agreement"), between RICHARD LESSER
("Executive") and The TJX Companies, Inc., a Delaware
corporation, whose principal office is in Framingham,
Massachusetts, 01701 ("the Company").
RECITALS
Executive has for a number of years been employed by the
Company or a subsidiary of the Company and has served in a number
of capacities with the Company and such subsidiary. 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:
1. EFFECTIVE DATE; TERM OF AGREEMENT. This amended and
restated agreement ("Agreement") shall become effective as of
February 1, 1995 (the "Effective Date"). The employment shall
continue on the terms provided herein until January 31, 1999 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").
2. SCOPE OF EMPLOYMENT.
(a) Nature of Services. Executive shall diligently perform
the duties and assume the responsibilities of Executive Vice
President and Chief Operating 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 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.
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3. COMPENSATION AND BENEFITS.
(a) Base Salary. Executive shall be paid a base salary at
a rate not less than $635,000 per year, with any subsequent
increases to be effective on March 1, 1996, June 1, 1997 and
September 1, 1998, respectively. 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 LRPIP at a
level commensurate with his position in the Company. 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 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) New Stock Options. The Committee has determined to
grant annually to Executive during the Employment Period non-
statutory 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 31, 1999 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, 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. Executive is fully vested in his accrued
benefit under the Company's Supplemental Executive Retirement
Plan ("SERP"). As of July 7, 1994, Executive had 20 years of
service credited under SERP.
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(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).
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 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.
5. BENEFITS UPON NON-VOLUNTARY TERMINATION OF EMPLOYMENT.
(a) Termination for Death, Disability or Incapacity or by
the Company Other Than for Cause on or Prior to January 31, 1999.
If the Employment Period shall have terminated on or prior to
January 31, 1999 by reason of death, Disability or Incapacity of
Executive or by termination by the Company for any reason other
than Cause, all compensation and benefits for Executive shall be
as follows:
(i) (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, for the longer of 12 months
after such termination or until January 31, 1999, the
Company will pay to Executive continued Base Salary at the
rate in effect at 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
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be reduced by such compensation received from other
employment or self-employment.
(ii) Until the expiration of the applicable period of
Base Salary payments described in (i) immediately above or
until Executive shall commence other employment or self-
employment, whichever shall first occur, the Company will
provide such medical and hospital insurance, term life
insurance and long-term disability insurance to the extent
such long-term disability insurance is available at no
additional cost under the Company's present group and any
individual LTD policies 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.
(iii) 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 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.
(iv) Executive shall be entitled to the benefits
described in Sections 3(d) (New 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
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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 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.
(v) 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 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.
(b) Termination for Death, Disability or Incapacity or by
the Company other than for Cause after January 31, 1999. If
the Employment Period shall have terminated after January 31,
1999 by reason of death, Disability or Incapacity of Executive or
by termination by the Company for any reason other than Cause,
all compensation and benefits for Executive shall be as follows:
(i) 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.
(ii) 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.
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Second, an amount 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.
(iii) Until the expiration of the period of Base
Salary payments described in (i) immediately above or until
Executive shall commence other employment or self-
employment, the Company will provide such medical and
hospital insurance, term life insurance and long-term
disability insurance to the extent such long-term disability
insurance is available at no additional cost under the
Company's present group and any individual LTD policies, 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 Executives generally.
(iv) Executive shall be entitled to the benefits
described in Sections 3(d) (New 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 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 under any stock option, if any, 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.
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(v) 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 group and any individual long-term disability
plans or any successor Company disability plan. Any
payments made to Executive under any group and any
individual long-term disability plan provided by 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.
(c) Employment Period Not Extended. If the Company
determines not to extend the Employment Period beyond its
original term (January 31, 1999) or any extension thereof, 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 31, 1999 or any extension
of the Employment Period, it shall be deemed a voluntary
termination by Executive and the provisions of Section 6 shall
apply.
6. VOLUNTARY TERMINATION; TERMINATION FOR CAUSE; VIOLATION OF
CERTAIN AGREEMENTS.
If Executive should end his employment voluntarily 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 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) (New 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.
7. BENEFITS UPON CHANGE OF CONTROL.
Notwithstanding any other provisions 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.
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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 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
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 store" or an off-price women's apparel
specialty store (such as Hit or Miss) within five miles of any
"then existing Hit or Miss store" or if it shall at the
termination of the Employment Period operate a catalog business
dealing primarily in off-price women's apparel. 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 mark-up department
store. Executive agrees that if, at any time, pursuant to action
of any court, administrative or governmental body or other
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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
(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 5 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.
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 770 Cochituate Road, Framingham, Massachusetts,
01701, Attention: Chairman of the Board of Directors, 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 358 Cartwright Road, Wellesley, MA 02181 or at such
other address as Executive may hereafter designate by notice to
the Company.
11. 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.
12. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be governed by the
laws of the Commonwealth of Massachusetts.
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13. ARBITRATION. In the event that there is any claim or
dispute arising out of or relating to this Agreement, or the
breach thereof, and the parties hereto shall not have resolved
such claim or dispute within 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.
14. 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/ Richard Lesser
Richard Lesser
THE TJX COMPANIES, INC.
By /s/ Bernard Cammarata
Bernard Cammarata
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.
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(e) "Change of Control" has the meaning given it in
Exhibit B.
(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
clauses (IX) or (X) 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
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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 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
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(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) termination by Executive of his employment for
Retirement; or
(X) 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 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 (X)
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 (X)
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) "Retirement" shall mean voluntary termination by the
Executive of his employment in accordance with the Company's
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retirement plan or program generally applicable to its salaried
employees or in accordance with any retirement arrangement
established with the Executive's consent with respect to him.
(k) "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.
(l) "Stock" means the common stock, $1.00 par value, of the
Company.
(m) "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.
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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 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
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agreement is executed shall not constitute a majority of the
board of directors of the survivor or successor entity
immediately after the effective date provided for in such
agreement; provided, however, that unless otherwise determined by
the Committee, no transaction shall constitute a Change of
Control if, immediately after such transaction, Executive or any
Executive Related Party shall own equity securities of any
surviving corporation ("Surviving Entity") having a fair value as
a percentage of the fair value of the equity securities of such
Surviving Entity greater than 125% of the fair value of the
equity securities of the Company owned by Executive and any
Executive Related Party immediately prior to such transaction,
expressed as a percentage of the fair value of all equity
securities of the Company immediately prior to such transaction
(for purposes of this paragraph ownership of equity securities
shall be determined in the same manner as ownership of Common
Stock); and provided, further, that for purposes of this
paragraph (d), 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
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(iii) which such Person or any of its affiliates or
Associates (as such terms are defined in Rule 12b-2 promulgated
by the Commission under the Exchange Act, as in effect on March
1, 1989) has the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options or otherwise.
"Person" shall have the meaning used in Section 13(d) of the
Exchange Act, as in effect on March 1, 1989; provided, however,
that the term "Person" shall not include (a) any individuals who
are descendants of Max Feldberg and/or Morris Feldberg, the
founders of the Company, (b) any relative of the fourth degree of
consanguinity or closer of such descendants, or (c) custodians,
trustees or legal representatives or such persons.
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
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
participant, 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
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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;
(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 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."
(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
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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, 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 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 (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 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
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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 accordance with the preceding sentence shall be made
at the Company's expense by Coopers & Lybrand 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 & Lybrand (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) (New 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).
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(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 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.
C-5