EXHIBIT 10.13
DESCRIPTION OF DIRECTOR COMPENSATION ARRANGEMENTS
Compensation of Directors who are Employees of TJX or its Subsidiaries
Employees of TJX and its Subsidiaries are not paid for their service as
directors of TJX.
Compensation of Non-Employee Directors
TJX currently compensates its non-employee directors each year as follows:
- An annual retainer of $35,000.
- An annual retainer of $7,500 for each Committee chair.
- An annual retainer of $105,000 for the Lead Director.
- Fees of $1,500 per meeting for attendance at Board meetings ($4,500
for attendance at the annual three-day Board meeting).
- Fees of $1,250 per meeting for attendance at committee meetings
(other than the Executive Committee).
- A deferred share award under the Deferred Stock Program for
Non-Employee Directors, as described below.
- A stock option grant under the Stock Incentive Plan, as described
below.
- Reimbursement for customary expenses for attending Board and
committee meetings.
Directors are not paid fees for attendance at Board and committee meetings that
are short in duration, and directors may participate in TJX's General Deferred
Compensation Plan. TJX does not provide retirement benefits or insurance for
non-employee directors.
Under the Stock Incentive Plan, each non-employee director receives an annual
stock option grant in the amount determined by the ECC (12,000 shares each in
fiscal 2005) at fair market value on the date of grant. Each option expires
after ten years and becomes fully exercisable after one year. If a director dies
or otherwise ceases to be a director prior to the date the option becomes
exercisable, the option immediately expires. Vested options remain exercisable
for varying periods of up to five years following termination of service as a
director. In some circumstances, options continue to vest during the exercise
period following retirement. Unvested options will become immediately
exercisable prior to, and will terminate upon the consummation of, various
corporate transactions.
The Deferred Stock Program for Non-Employee Directors (the "Deferred Stock
Program") under the Stock Incentive Plan provides for annual awards to
non-employee directors as follows:
- - Each Participant's Account under the Deferred Stock Plan as of the date
the Deferred Stock Program was adopted shall be treated for purposes of
the Stock Incentive Plan as an Other Stock-based Award (an "Assumed
Award") under the Deferred Stock Program pursuant to Section 7 of the
Stock Incentive Plan that entitles the recipient of such Assumed Award,
without payment, to the future delivery, payable in accordance with the
terms described below, of the number of shares of TJX's Common Stock
("Stock") equal
to the number of share units credited to such Participant's Account on the
date the Deferred Stock Program was adopted, subject to adjustment in
accordance with the Stock Incentive Plan; and
- - On the date of each annual meeting of stockholders of TJX, there shall be
granted pursuant to Section 7 of the Stock Incentive Plan to each person
who is elected a director at (or if previously elected, continues as a
director after) such annual meeting (excluding any individual who is an
employee of TJX or any Subsidiary) (an "Eligible Director") an Other
Stock-based Award that entitles the recipient, without payment, to the
future delivery of Stock (an "Ongoing Award");
- - The number of shares of Stock represented by each Ongoing Award shall be
equal to (a)(i) $30,000 for each Eligible Director, plus, in each case,
(ii)(A) an amount equal to the aggregate dividends for which there has
been a record date after the date of the previous annual meeting through
and including the date of such annual meeting on the number of shares of
Stock represented by all outstanding Assumed Awards, if any, and Ongoing
Awards, if any, previously made to such director minus (B) in the case of
the Ongoing Award granted at the annual meeting of stockholders to be held
in June 2003, the aggregate amount of the dividends for which the record
date was August 8, 2002 and November 7, 2002 on the number of shares of
Stock represented by all outstanding Assumed Awards, divided by (b) the
closing price of a share of Stock on the date of such annual meeting,
rounded to the nearest share; and
- - Immediately prior to a Change of Control (as defined in the Stock
Incentive Plan as from time to time amended) or, if earlier, as soon as
practicable following a termination for any reason (including death) of
the recipient's service as a director of TJX (the date of such Change of
Control or of such termination being the "Distribution Date"), TJX shall
deliver to the recipient (or in the event of the recipient's death, to any
beneficiary designated by the recipient in writing in such form, and
delivered prior to his or her death to such person at TJX, as specified by
TJX or in the absence of such a designation, to the recipient's estate)
the number of shares of Stock represented by (a) each Assumed Award, if
any, and each Ongoing Award, if any, held by the recipient and (b)(i)(A)
an amount equal to the aggregate dividends for which there has been a
record date after the date of the last annual meeting at which the
recipient received an Ongoing Award and prior to the time at which the
shares of Stock represented by the recipient's Assumed Awards, Ongoing
Awards and aggregate dividends, if any, were issued to the recipient on
the number of shares of Stock represented by all outstanding Assumed
Awards, if any, and Ongoing Awards, if any, previously made to the
recipient, minus (B) in the event of a Distribution Date prior to the
annual meeting of stockholders in June 2003, the aggregate amount of the
dividends for which the record date was August 8, 2002 and November 7,
2002 on the number of shares of Stock represented by all outstanding
Assumed Awards, divided by (ii) the closing price of a share of Stock at
the close of business immediately prior to the Distribution Date, rounded
to the nearest share.
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