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Exhibit 10.1
(As amended through September 9, 1999)
THE TJX COMPANIES, INC.
1986 STOCK INCENTIVE PLAN
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INDEX
Page
SECTION 1. GENERAL PURPOSE OF THE PLAN.......................................1
SECTION 2. PLAN ADMINISTRATION...............................................1
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS;
SUBSTITUTION................................................2
SECTION 4. ELIGIBILITY.......................................................3
SECTION 5. LIMITATIONS ON TERM AND DATES OF AWARDS...........................4
SECTION 6. STOCK OPTIONS.....................................................4
SECTION 7. STOCK APPRECIATION RIGHTS;
DISCRETIONARY PAYMENTS......................................7
SECTION 8. RESTRICTED STOCK; UNRESTRICTED STOCK..............................9
SECTION 9. DEFERRED STOCK AWARDS............................................11
SECTION 10. PERFORMANCE AWARDS...............................................12
SECTION 11. OTHER STOCK-BASED AWARDS.........................................13
SECTION 12. TRANSFER, LEAVE OF ABSENCE.......................................14
SECTION 13. AMENDMENTS AND TERMINATION.......................................15
SECTION 14. STATUS OF PLAN...................................................15
SECTION 15. CHANGE OF CONTROL PROVISIONS.....................................15
SECTION 16. GENERAL PROVISIONS...............................................16
SECTION 17. DEFINITIONS.....................................................17
DEFINITION OF "CHANGE OF CONTROL"............................................20
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THE TJX COMPANIES, INC.
1986 STOCK INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN.
The name of the plan is The TJX Companies, Inc. 1986 Stock Incentive
Plan (the "Plan"). The purpose of the Plan is to secure for The TJX Companies,
Inc. (the "Company") and its stockholders the benefit of the incentives inherent
in Common Stock ownership and the receipt of incentive awards by selected key
employees of the Company and its Subsidiaries who contribute to and will be
responsible for its continued long term growth. The Plan is intended to
stimulate the efforts of such key employees by providing an opportunity for
capital appreciation and giving suitable recognition for services which
contribute materially to the success of the Company.
SECTION 2. PLAN ADMINISTRATION.
The Plan shall be administered by a Committee of not less than two
Non-Employee Directors, who shall be appointed by the Board and who shall serve
at the pleasure of the Board.
The Committee shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and authority:
(i) to select the officers and other key employees of the Company
and its Subsidiaries to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the extent, if
any, of Incentive Stock Options, Non-Qualified Stock Options,
Stock Appreciation Rights, Restricted Stock, Unrestricted
Stock, Deferred Stock, Performance Awards and any Other
Stock-based Awards, or any combination of the foregoing,
granted to any one or more participants;
(iii) to determine the number of shares to be covered by any Award;
(iv) to determine the terms and conditions, including restrictions,
not inconsistent with the terms of the Plan, of any Award,
which terms and conditions may differ among individual Awards
and participants;
(v) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to
an Award shall be deferred either automatically or at the
election of the participant and whether and to what extent the
Company shall pay or credit amounts equal to interest (at
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rates determined by the Committee) or dividends or deemed
dividends on such deferrals; and
(vi) to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts
and proceedings as it shall deem advisable; to interpret the
terms and provisions of the Plan and any Award (including
related Award Agreements); to make all determinations it deems
advisable for the administration of the Plan; to decide all
disputes arising in connection with the Plan; and to otherwise
supervise the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION.
(a) SHARES ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 42,000,000(1), including shares
issued in lieu of or upon reinvestment of dividends arising from Awards. For
purposes of this limitation, Awards and Stock which are forfeited, reacquired by
the Company or satisfied without the issuance of Stock shall not be counted and
such limitation shall apply only to shares which have become free of any
restrictions under the Plan, except that shares of Restricted Stock reacquired
by the Company, and shares withheld by the Company to satisfy tax withholding
requirements shall be counted to the extent required under Rule 16b-3 under the
Act or any successor rule. The maximum number of shares of Stock which may be
issued pursuant to awards of Restricted Stock or Performance Awards on or after
June 3, 1997 shall not exceed an aggregate of 6,300,000(2) shares. Subject to
the foregoing limitations in this paragraph (a), shares may be issued up to such
maximums pursuant to any type or types of Award, including Incentive Stock
Options. Shares issued under the Plan may be authorized but unissued shares or
shares reacquired by the Company.
The number of Stock Options, Stock Appreciation Rights or Performance
Awards that shall be awarded to any Participant during any consecutive
three-year period
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(1) Reflects adjustments under Section 3(b) through February 2, 1999.
(2) Reflects adjustments under Section 3(b) through February 2, 1999.
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commencing after June 3, 1997 shall be limited to 4,000,000(3) shares calculated
separately for each of Stock Options, Stock Appreciation Rights and Performance
Awards.
(b) STOCK DIVIDENDS, MERGERS, ETC. In the event of a stock dividend,
stock split or similar change in capitalization, or extraordinary dividend or
distribution or restructuring transaction affecting the Stock, the Committee
shall make appropriate adjustments in the number and kind of shares of stock or
securities on which Awards may thereafter be granted and shall make such
adjustments in the number and kind of shares remaining subject to outstanding
Awards, and the option or purchase price in respect of such shares as it may
deem appropriate with a view toward preserving the value of outstanding awards.
In the event of any merger, consolidation, dissolution or liquidation of the
Company, the Committee in its sole discretion may, as to any outstanding Awards,
make such substitution or adjustment in the aggregate number of shares reserved
for issuance under the Plan and in the number and purchase price (if any) of
shares subject to such Awards as it may determine, or accelerate, amend or
terminate such Awards upon such terms and conditions as it shall provide (which,
in the case of the termination of the vested portion of any Award, shall require
payment or other consideration which the Committee deems equitable in the
circumstances), subject, however, to the provisions of Section 15.
(c) SUBSTITUTE AWARDS. The Company may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances. The shares which may be delivered
under such substitute Awards shall be in addition to the maximum number of
shares provided for in Section 3(a).
SECTION 4. ELIGIBILITY.
Participants in the Plan will be such full or part time officers and
other key employees of the Company and its Subsidiaries (excluding any director
who is not a full time employee) who are responsible for or contribute to the
management, growth or profitability of the Company and its Subsidiaries and who
are selected from time to time by the Committee, in its sole discretion. Persons
who are not employees of the
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(3) Reflects adjustments under Section 3(b) through February 2, 1999.
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Company or a subsidiary (within the meaning of Section 424 of the Code) shall
not be eligible to receive grants of Incentive Stock Options.
SECTION 5. LIMITATIONS ON TERM AND DATES OF AWARDS.
(a) DURATION OF AWARDS. Subject to Sections 16(a) and 16(c) below, no
restrictions or limitations on Awards shall extend beyond 10 years (or 10 years
and one day in the case of Non-Qualified Stock Options) from the grant date,
except that deferrals elected by participants of the receipt of Stock or other
benefits under the Plan may extend beyond such date.
(b) LATEST GRANT DATE. No Award shall be granted after April 8, 2007,
but then outstanding Awards may extend beyond such date.
SECTION 6. STOCK OPTIONS.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. To the extent that any option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted to the Committee under
the Plan be so exercised, so as to disqualify the Plan or, without the consent
of the optionee, any Incentive Stock Option under Section 422 of the Code.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) OPTION PRICE. The option price per share of Stock purchasable under
a Stock Option shall be determined by the Committee at the time of grant but
shall be not less than 100% of Fair Market Value on the date of grant.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted and no Non-Qualified Stock Option
shall be exercisable more than ten years and one day after the date the option
is granted.
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(c) EXERCISABILITY. Stock Options shall be exercisable at such future
time or times, whether or not in installments, as shall be determined by the
Committee at or after the grant date. The Committee may at any time accelerate
the exercisability of all or any portion of any Stock Option.
(d) Intentionally omitted.
(e) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company specifying the number
of shares to be purchased. Such notice shall be accompanied by payment in full
of the purchase price, either by certified or bank check or other instrument or
means acceptable to the Committee or by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price. As determined by the Committee, in
its discretion, at (or, in the case of Non-Qualified Stock Options, after)
grant, payment in full or in part of the exercise price or to pay withholding
taxes (as provided in Section 16(c)) may also be made in the form of shares of
Stock not then subject to restrictions under any Company plan. An optionee shall
have the rights of a shareholder only as to shares acquired upon the exercise of
a Stock Option and not as to unexercised Stock Options. Notwithstanding anything
to the contrary contained herein, this Plan does not permit the exercise of an
option in successive stages (pyramiding) using as payment at each stage shares
which have been acquired under the option in preceding stages.
(f) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
(g) TERMINATION BY DEATH. If an optionee's employment by the Company
and its Subsidiaries terminates by reason of death, the Stock Option may
thereafter be exercised, to the extent then exercisable (or on such accelerated
basis as the Committee shall at any time determine prior to death), by the legal
representative or legatee of the optionee, for a period of three years (or such
shorter period as the Committee shall specify at time of grant) from the date of
death or until the expiration of the stated term of the option, if earlier.
(h) TERMINATION BY REASON OF DISABILITY. Any Stock Option held by an
optionee whose employment by the Company and its Subsidiaries has terminated, or
who has been designated an inactive employee, by reason of Disability may
thereafter be exercised to the extent it was exercisable at the time of the
earlier of such termination or such designation (or on such accelerated basis as
the Committee shall at any time determine prior to such termination or
designation) for a period of three years (or such shorter
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period as the Committee shall specify at time of grant) from the date of such
termination of employment or designation or until the expiration of the stated
term of the option, if earlier. Except as otherwise provided by the Committee at
the time of grant, the death of an optionee during the final year of such
exercise period shall extend such period for one year following death, subject
to termination on the expiration of the stated term of the option, if earlier.
The Committee shall have the authority to determine whether a participant has
been terminated or designated an inactive employee by reason of Disability.
(i) TERMINATION BY REASON OF NORMAL RETIREMENT. If an optionee's
employment by the Company and its Subsidiaries terminates by reason of Normal
Retirement, any Stock Option held by such optionee may thereafter be exercised
to the extent that it was then exercisable (or on such accelerated basis as the
Committee shall at any time determine) for a period of three years (or such
shorter period as the Committee shall specify at time of grant) from the date of
Normal Retirement or until the expiration of the stated term of the option, if
earlier. Except as otherwise provided by the Committee at the time of grant, the
death of an optionee during the final year of such exercise period shall extend
such period for one year following death, subject to earlier termination on the
expiration of the stated term of the option, if earlier.
(j) TERMINATION BY REASON OF SPECIAL SERVICE RETIREMENT. If an
optionee's employment by the Company and its Subsidiaries terminates by reason
of a Special Service Retirement, any Stock Option granted on or after February
2, 1999 that is held by the optionee may thereafter be exercised (to the extent
exercisable from time to time during the extended exercise period as hereinafter
determined) for a period of three years (or such shorter period as the Committee
shall specify at time of grant) from the date of the Special Service Retirement
or until the expiration of the stated term of the option, if earlier. Except as
otherwise provided by the Committee at the time of grant, the death of an
optionee during the final year of such exercise period shall extend such period
for one year following death, subject to earlier termination on the expiration
of the stated term of the option, if earlier. For purposes of the first sentence
of this subsection (j), a Stock Option granted on or after February 2, 1999 that
is held by an optionee at the optionee's Special Service Retirement and that is
not then fully exercisable shall continue to become exercisable during the
post-retirement exercise period as though the optionee had remained employed by
the Company and its Subsidiaries during such period, or on such accelerated
basis as the Committee shall at any time determine.
(k) OTHER TERMINATION. Unless otherwise determined by the Committee, if
an optionee's employment by the Company and its Subsidiaries terminates for any
reason other than death, Disability, Normal Retirement, Special Service
Retirement or for Cause, any Stock Option held by such optionee may thereafter
be exercised to the extent
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it was exercisable on the date of termination of employment (or on such
accelerated basis as the Committee shall determine at or after grant) for a
period of three months (or such longer period up to three years as the Committee
shall specify at or after grant) from the date of termination of employment or
until the expiration of the stated term of the option, if earlier. If an
optionee's employment terminates for Cause, the unexercised portion of any Stock
Option then held by the optionee shall immediately terminate.
(l) FORM OF SETTLEMENT. Subject to Section 16(a) and Section 16(c)
below, shares of Stock issued upon exercise of a Stock Option shall be free of
all restrictions under the Plan, except as provided in the following sentence.
The Committee may provide at time of grant that the shares to be issued upon the
exercise of a Stock Option shall be in the form of Restricted Stock or Deferred
Stock, or may reserve the right to so provide after time of grant.
SECTION 7. STOCK APPRECIATION RIGHTS; DISCRETIONARY PAYMENTS.
(a) NATURE OF STOCK APPRECIATION RIGHT. A Stock Appreciation Right is
an Award entitling the recipient to receive an amount in cash or shares of Stock
(or in a form of payment permitted under paragraph (e) below) or a combination
thereof having a value equal to (or if the Committee shall so determine at time
of grant, less than) the excess of the Fair Market Value of a share of Stock on
the date of exercise over the Fair Market Value of a share of Stock on the date
of grant (or over the option exercise price, if the Stock Appreciation Right was
granted in tandem with a Stock Option) multiplied by the number of shares with
respect to which the Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.
(b) GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights may be granted in tandem with, or independently of, any Stock Option
granted under the Plan. In the case of a Stock Appreciation Right granted in
tandem with a Non-Qualified Stock Option, such Right may be granted either at or
after the time of the grant of such option. In the case of a Stock Appreciation
Right granted in tandem with an Incentive Stock Option, such Right may be
granted only at the time of the grant of the option.
A Stock Appreciation Right or applicable portion thereof granted in
tandem with a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that a
Stock Appreciation Right granted with respect to less than the full number of
shares covered by a related Stock Option shall not be reduced until the exercise
or termination of the related Stock Option exceeds the number of shares not
covered by the Stock Appreciation Right.
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(c) TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock
Appreciation Rights shall be subject to such terms and conditions as shall be
determined from time to time by the Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem with Stock Options
shall be exercisable only at such time or times and to the
extent that the related Stock Options shall be exercisable.
(ii) Upon the exercise of a Stock Appreciation Right, the
applicable portion of any related Stock Option shall be
surrendered.
(iii) Stock Appreciation Rights granted in tandem with a Stock
Option shall be transferable only with such Stock Option.
Other Stock Appreciation Rights shall not be transferable
otherwise than by will or the laws of descent and
distribution. All Stock Appreciation Rights shall be
exercisable during the participant's lifetime only by the
participant or the participant's legal representative.
(d) DISCRETIONARY PAYMENTS. Notwithstanding that a Stock Option at the
time of exercise shall not be accompanied by a related Stock Appreciation Right,
if the market price of the shares subject to such Stock Option exceeds the
exercise price of such Stock Option at the time of its exercise, the Committee
may, in its discretion, cancel such Stock Option, in which event the Company
shall pay to the person exercising such Stock Option an amount equal to the
difference between the Fair Market Value of the Stock to have been purchased
pursuant to such exercise of such Stock Option (determined on the date the Stock
Option is cancelled) and the aggregate consideration to have been paid by such
person upon such exercise. Such payment shall be by check, bank draft or in
Stock (or in a form of payment permitted under paragraph (e) below) having a
Fair Market Value (determined on the date the payment is to be made) equal to
the amount of such payments or any combination thereof, as determined by the
Committee. The Committee may exercise its discretion under the first sentence of
this paragraph (d) only in the event of a written request of the person
exercising the option, which request shall not be binding on the Committee.
(e) SETTLEMENT IN THE FORM OF RESTRICTED SHARES OR RIGHTS TO RECEIVE
DEFERRED STOCK. Subject to Sections 16(a) and 16(c) below, shares of Stock
issued upon exercise of a Stock Appreciation Right or as a Discretionary Payment
shall be free of all restrictions under the Plan, except as provided in the
following sentence. The Committee may provide at the time of grant in the case
of a Stock Appreciation Right (and at the time of payment in the case of a
Discretionary Payment) that such shares shall be in the form of shares of
Restricted Stock or rights to acquire Deferred Stock, or in the
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case of a Stock Appreciation Right may reserve the right to so provide at any
time after the time of grant. Any such shares and any shares subject to rights
to acquire Deferred Stock shall be valued at Fair Market Value on the date of
exercise of the Stock Appreciation Right or the date the Stock Option is
cancelled in the case of Discretionary Payments.
SECTION 8. RESTRICTED STOCK; UNRESTRICTED STOCK.
(a) NATURE OF RESTRICTED STOCK AWARD. A Restricted Stock Award is an
Award entitling the recipient to acquire shares of Stock for a purchase price
(which may be zero), subject to such conditions, including a Company right
during a specified period or periods to repurchase such shares at their original
purchase price (or to require forfeiture of such shares, if the purchase price
was zero) upon participant's termination of employment, as the Committee may
determine at the time of grant.
(b) AWARD AGREEMENT. Unless the Committee shall otherwise determine, a
participant who is granted a Restricted Stock Award shall have no rights with
respect to such Award unless the participant shall have accepted the Award
within 60 days (or such shorter date as the Committee may specify) following the
award date by making payment to the Company by certified or bank check or other
instrument acceptable to the Committee in an amount equal to the specified
purchase price, if any, of the shares covered by the Award and by executing and
delivering to the Company a Restricted Stock Award Agreement in such form as the
Committee shall determine.
(c) RIGHTS AS A SHAREHOLDER. Upon complying with paragraph (b) above, a
participant shall have all the rights of a shareholder with respect to the
Restricted Stock including voting and dividend rights, subject to
nontransferability restrictions and Company repurchase or forfeiture rights
described in this Section and subject to any other conditions contained in the
Award Agreement. Unless the Committee shall otherwise determine, certificates
evidencing shares of Restricted Stock shall remain in the possession of the
Company until such shares are free of any restrictions under the Plan.
(d) RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment with the
Company and its subsidiaries for any reason such shares shall be resold to the
Company at their purchase price, or forfeited to the Company if the purchase
price was zero, except as set forth below.
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(i) The Committee at the time of grant shall specify the date or
dates (which may depend upon or be related to the attainment
of performance goals and other conditions) on which the
nontransferability of the Restricted Stock and the obligation
to resell such shares to the Company shall lapse. However, no
grants of Restricted Stock made after September 8, 1993 shall
specify such a date which is less than three years from the
date of grant, except that (i) such a date may be one year or
greater in the case of Restricted Stock granted subject to the
attainment of performance goals, (ii) future shares of
Restricted Stock may be granted which specify full vesting in
no less than three years and partial vesting at a rate no
faster than one-third of such shares each year, and (iii)
shares of Restricted Stock may be granted which specify any
vesting date provided that on a cumulative basis such shares
granted after September 8, 1993, when no longer subject to
restrictions under the Plan, do not exceed 800,000(4) shares.
The Committee at any time may accelerate such date or dates
and otherwise waive or, subject to Section 13, amend any
conditions of the Award.
(ii) Except as may otherwise be provided in the Award Agreement, in
the event of termination of employment by the Company and its
Subsidiaries for any reason (including death), a participant
or the participant's legal representative shall offer to
resell to the Company, at the price paid therefor, all
Restricted Stock, and the Company shall have the right to
purchase the same at such price, or if the price was zero to
require forfeiture of the same, provided that except as
provided in the Award Agreement, the Company must exercise
such right of repurchase or forfeiture not later than the 60th
day following such termination of employment.
(e) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The Restricted
Stock Award Agreement may require or permit the immediate payment, waiver,
deferral or investment of dividends paid on the Restricted Stock.
(f) UNRESTRICTED STOCK. The Committee may, in its sole discretion,
grant or sell to any participant shares of Stock free of restrictions under the
Plan ("Unrestricted Stock"). Shares of Unrestricted Stock may be granted or sold
as described in the preceding sentence in respect of past services or other
valid consideration.
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(4) Reflects adjustments under Section 3(b) through February 2, 1999.
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SECTION 9. DEFERRED STOCK AWARDS.
(a) NATURE OF DEFERRED STOCK AWARD. A Deferred Stock Award is an award
entitling the recipient to acquire shares of Stock without payment in one or
more installments at a future date or dates, all as determined by the Committee.
The Committee may also condition such acquisition on the attainment of specified
performance goals.
(b) AWARD AGREEMENT. Unless the Committee shall otherwise determine, a
participant who is granted a Deferred Stock Award shall have no rights with
respect to such Award unless within 60 days of the grant of such Award or such
shorter period as the Committee may specify, the participant shall have accepted
the Award by executing and delivering to the Company a Deferred Stock Award
Agreement.
(c) RESTRICTIONS ON TRANSFER. Deferred Stock Awards and all rights with
respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered. Rights with respect to such Awards shall be exercisable
during the participant's lifetime only by the participant or the participant's
legal representative.
(d) RIGHTS AS A SHAREHOLDER. A participant receiving a Deferred Stock
Award will have rights of a shareholder only as to shares actually received by
the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate for shares of Deferred Stock only upon
satisfaction of all conditions therefor specified in the Deferred Stock Award
Agreement.
(e) TERMINATION. Except as may otherwise be provided by the Committee
at any time prior to termination of employment, a participant's rights in all
Deferred Stock Awards shall automatically terminate upon the participant's
termination of employment by the Company and its Subsidiaries for any reason
(including death).
(f) ACCELERATION, WAIVER, ETC. At any time prior to the participant's
termination of employment the Committee may in its discretion accelerate, waive,
or, subject to Section 13, amend any or all of the restrictions or conditions
imposed under any Deferred Stock Award.
(g) PAYMENTS IN RESPECT OF DEFERRED STOCK. Without limiting the right
of the Committee to specify different terms, the Deferred Stock Award Agreement
may either make no provisions for, or may require or permit the immediate
payment, deferral or investment of amounts equal to, or less than, any cash
dividends which would have been
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payable on the Deferred Stock had such Stock been outstanding, all as determined
by the Committee in its sole discretion.
SECTION 10. PERFORMANCE AWARDS.
(a) NATURE OF PERFORMANCE AWARDS. A Performance Award is an award
entitling the recipient to acquire cash or shares of Stock, or a combination of
cash and Stock, upon the attainment of specified performance goals. If the
grant, vesting, or exercisability of a Stock Option, SAR, Restricted Stock,
Deferred Stock or Other Stock-Based Award is conditioned upon attainment of a
specified performance goal or goals, it shall be treated as a Performance Award
for purposes of this Section and shall be subject to the provisions of this
Section in addition to the provisions of the Plan applicable to such form of
Award.
(b) QUALIFYING AND NONQUALIFYING PERFORMANCE AWARDS. Performance Awards
may include Awards intended to qualify for the performance-based compensation
exception under Section 162(m)(4)(C) of the Code ("Qualifying Awards") and
Awards not intended so to qualify ("Nonqualifying Awards").
(c) TERMS OF PERFORMANCE AWARDS. The Committee in its sole discretion
shall determine whether and to whom Performance Awards are to be granted, the
performance goals applicable under each such Award, the periods during which
performance is to be measured, and all other limitations and conditions
applicable to the Award. Performance Awards may be granted independently or in
connection with the granting of other Awards. In the case of a Qualifying Award
(other than a Stock Option or SAR), the following special rules shall apply: (i)
the Committee shall preestablish the performance goals and other material terms
of the Award not later than the latest date permitted under Section 162(m) of
the Code; (ii) the performance goal or goals fixed by the Committee in
connection with the Award shall be based exclusively on one or more Approved
Performance Criteria; (iii) no payment (including, for this purpose, vesting or
exercisability where vesting or exercisability, rather than the grant of the
award, is linked to satisfaction of performance goals) shall be made unless the
preestablished performance goals have been satisfied and the Committee has
certified (pursuant to Section 162(m) of the Code) that they have been
satisfied; (iv) no payment shall be made in lieu or in substitution for the
Award if the preestablished performance goals are not satisfied (but this clause
shall not limit the ability of the Committee or the Company to provide other
remuneration to the affected Participant, whether or not under the Plan, so long
as the payment of such remuneration would not cause the Award to fail to be
treated as having been contingent on the preestablished performance goals) and
(v) in all other respects the Award shall be construed and administered
consistent with the intent that any
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compensation under the Award be treated as performance-based compensation under
Section 162(m)(4)(C) of the Code.
(d) AWARD AGREEMENT. Unless the Committee shall otherwise determine, a
participant shall have no rights with respect to a Performance Award unless
within 60 days of the grant of such Award or such shorter period as the
Committee may specify, the participant shall have accepted the Award by
executing and delivering to the Company a Performance Award Agreement.
(e) RIGHTS AS A SHAREHOLDER. A participant receiving a Performance
Award will have rights of a shareholder only as to shares actually received by
the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate evidencing the acquisition of shares of
Stock under a Performance Award (to the extent the Award provides for the
delivery of shares of Stock) only upon satisfaction of all conditions therefor
specified in the Performance Award Agreement.
(f) TERMINATION. Except as may otherwise be provided by the Committee
(consistent with Section 162(m), in the case of a Qualifying Award) at any time
prior to termination of employment, a participant's rights in all Performance
Awards shall automatically terminate upon the participant's termination of
employment by the Company and its Subsidiaries for any reason (including death).
(g) ACCELERATION, WAIVER, ETC.. At any time prior to the participant's
termination of employment by the Company and its Subsidiaries, the Committee may
in its sole discretion (but subject to Section 162(m), in the case of a
Qualifying Award) accelerate, waive or, subject to Section 13, amend any or all
of the goals, restrictions or conditions imposed under any Performance Award.
SECTION 11. OTHER STOCK-BASED AWARDS.
(a) NATURE OF AWARDS. The Committee may grant other Awards under which
Stock is or may in the future be acquired ("Other Stock-based Awards").
(b) PURCHASE PRICE; FORM OF PAYMENT. The Committee may determine the
consideration, if any, payable upon the issuance or exercise of an Other
Stock-based Award. The Committee may permit payment by certified check or bank
check or other instrument acceptable to the Committee or by surrender of other
shares of Stock (excluding shares then subject to restrictions under the Plan).
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(c) FORFEITURE OF AWARDS; REPURCHASE OF STOCK; ACCELERATION OR WAIVER
OF RESTRICTIONS. The Committee may determine the conditions under which an Other
Stock-based Award shall be forfeited or, in the case of an Award involving a
payment by the recipient, the conditions under which the Company may or must
repurchase such Award or related Stock. At any time the Committee may in its
sole discretion accelerate, waive or, subject to Section 13, amend any or all of
the limitations or conditions imposed under any Other Stock-based Award.
(d) AWARD AGREEMENTS. Unless the Committee shall otherwise determine, a
participant shall have no rights with respect to any Other Stock-based Award
unless within 60 days after the grant of such Award (or such shorter period as
the Committee may specify) the participant shall have accepted the Award by
executing and delivering to the Company an Other Stock-based Award Agreement.
(e) NONTRANSFERABILITY. Other Stock-based Awards may not be sold,
assigned, transferred, pledged or encumbered except as may be provided in the
Other Stock-based Award Agreement. However, in no event shall any Other
Stock-based Award be transferred other than by will or by the laws of descent
and distribution or be exercisable during the participant's lifetime by other
than the participant or the participant's legal representative.
(f) RIGHTS AS A SHAREHOLDER. A recipient of any Other Stock-based Award
will have rights of a shareholder only at the time and to the extent, if any,
specified by the Committee in the Other Stock-based Award Agreement.
(g) DEEMED DIVIDEND PAYMENTS; DEFERRALS. Without limiting the right of
the Committee to specify different terms at or after grant, an Other Stock-based
Award Agreement may require or permit the immediate payment, waiver, deferral or
investment of dividends or deemed dividends payable or deemed payable on Stock
subject to the Award.
SECTION 12. TRANSFER, LEAVE OF ABSENCE.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary
or from the Company to a Subsidiary, or from one Subsidiary to
another;
(b) an approved leave of absence for military service or sickness,
or for any other purpose approved by the Company, if the
employee's right to
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reemployment is guaranteed either by a statute or by contract
or under the policy pursuant to which the leave of absence was
granted or if the Committee otherwise so provides in writing.
For purposes of the Plan, the employees of a Subsidiary of the Company shall be
deemed to have terminated their employment on the date on which such Subsidiary
ceases to be a Subsidiary of the Company.
SECTION 13. AMENDMENTS AND TERMINATION.
The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award for the purpose
of satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. However, no such amendment shall be effective unless approved by
stockholders if it would (i) reduce the exercise price of any option previously
granted hereunder or (ii) cause the Plan to fail to satisfy the incentive stock
option requirements of the Code or the requirements of Rule 16b-3 or any
successor rule under the Act as in effect on the date of such amendment.
Notwithstanding any provision of this Plan, the Board or the Committee may at
any time adopt any subplan or otherwise grant Stock Options or other Awards
under this Plan having terms consistent with applicable foreign tax or other
foreign regulatory requirements or laws; provided, however, that no person
subject to the restrictions of Section 16(b) of the Act may be eligible for or
be granted any such Stock Options or other Awards if such eligibility or grant
would cause the Plan to fail to satisfy the requirements of Rule 16b-3 or any
successor rule under the Act as in effect on the applicable date.
SECTION 14. STATUS OF PLAN.
With respect to the portion of any Award which has not been exercised
and any payments in cash, stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.
SECTION 15. CHANGE OF CONTROL PROVISIONS.
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As used herein, a Change of Control and related definitions shall have
the meanings set forth in Exhibit A to this Plan.
Upon the occurrence of a Change of Control:
(i) Each Stock Option and Stock Appreciation Right shall
automatically become fully exercisable unless the Committee
shall otherwise expressly provide at the time of grant.
(ii) Restrictions and conditions on Restricted Stock, Deferred
Stock, Performance Units and Other Stock-based Awards shall
automatically be deemed waived only if and to the extent, if
any, specified (whether at or after time of grant) by the
Committee.
The Committee may at any time prior to or after a Change of Control accelerate
the exercisability of any Stock Options and Stock Appreciation Rights and may
waive restrictions, limitations and conditions on Restricted Stock, Deferred
Stock, Performance Units and Other Stock-based Awards to the extent it shall in
its sole discretion determine.
SECTION 16. GENERAL PROVISIONS.
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS, ETC. The
Committee may require each person acquiring shares pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.
(b) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board of Directors from adopting other
or additional compensation arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases. The adoption of the Plan does not confer
upon any employee any right to continued employment with the Company or a
Subsidiary, nor does it interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of any of its employees at any time.
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(c) TAX WITHHOLDING, ETC. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant. The Company may withhold or otherwise administer the Plan to comply
with tax obligations under any applicable foreign laws.
The Committee may provide, in respect of any transfer of Stock under an
Award, that if and to the extent withholding of any Federal, state or local tax
is required in respect of such transfer or vesting, the participant may elect,
at such time and in such manner as the Committee shall prescribe, to (i)
surrender to the Company Stock not then subject to restrictions under any
Company plan or (ii) have the Company hold back from the transfer or vesting
Stock having a value calculated to satisfy such withholding obligation. In no
event shall Stock be surrendered under clause (i) or held back by the Company
under clause (ii) in excess of the minimum amount required to be withheld for
Federal, state and local taxes.
(d) DEFERRAL OF AWARDS. Participants may elect to defer receipt of
Awards or vesting of Awards only in such cases and to the extent that the
Committee shall determine at or after the grant date.
SECTION 17. DEFINITIONS.
The following terms shall be defined as set forth below:
(a) "Act" means the Securities Exchange Act of 1934.
(b) "Approved Performance Criteria" means criteria based on any
one or more of the following (on a consolidated, divisional,
line of business, geographical or area of executive's
responsibilities basis): one or more items of or within (i)
sales, revenues, assets or expenses; (ii) earnings, income or
margins, before or after deduction for all or any portion of
interest, taxes, depreciation, or amortization, whether or not
on a continuing operations and aggregate or per share basis;
(iii) return on investment, capital, assets, sales or
revenues; and (iv) stock price.
(c) "Award" or "Awards" except where referring to a particular
category of grant under the Plan shall include Incentive Stock
Options, Non-Qualified
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Stock Options, Stock Appreciation Rights, Restricted Stock
Awards, Unrestricted Stock Awards, Deferred Stock Awards,
Performance Awards and Other Stock-based Awards.
(d) "Board" means the Board of Directors of the Company.
(e) "Cause" means a felony conviction of a participant or the
failure of a participant to contest prosecution for a felony,
or a participant's willful misconduct or dishonesty, any of
which is directly harmful to the business or reputation of the
Company or any Subsidiary.
(f) "Code" means the Internal Revenue Code of 1986, as amended,
and any successor Code, and related rules, regulations and
interpretations.
(g) "Committee" means the Committee referred to in Section 2. If
at any time no Committee shall be in office, the functions of
the Committee shall be exercised by the Board.
(h) "Deferred Stock Award" is defined in Section 9(a).
(i) "Disability" means disability as determined in accordance with
standards and procedures similar to those used under the
Company's long term disability program.
(j) "Fair Market Value" on any given date means the last sale
price regular way at which Stock is traded on such date as
reflected in the New York Stock Exchange Composite
Transactions Index or, where applicable, the value of a share
of Stock as determined by the Committee in accordance with the
applicable provisions of the Code.
(k) "Incentive Stock Option" means any Stock Option intended to be
and designated as an "incentive stock option" as defined in
the Code.
(l) "Non-Employee Director" shall have the meaning set forth in
Rule 16b- 3(b)(3) promulgated under the Act, or any successor
definition under the Act.
(m) "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
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(n) "Normal Retirement" means retirement from active employment
with the Company and its Subsidiaries at or after age 65 with
at least five years of service for the Company and its
Subsidiaries as specified in The TJX Companies, Inc.
Retirement Plan.
(o) "Other Stock-based Award" is defined in Section 11(a).
(p) "Performance Award" is defined in Section 10(a).
(q) "Restricted Stock Award" is defined in Section 8(a).
(r) "Special Service Retirement" means retirement from active
employment with the Company and its Subsidiaries (i) at or
after age 60 with at least twenty years of service for the
Company and its Subsidiaries, or (ii) at or after age 65 with
at least ten years of service for the Company and its
Subsidiaries. The term "Special Service Retirement" applies
only to Stock Options granted on or after February 2, 1999.
(s) "Stock" means the Common Stock, $1.00 par value, of the
Company, subject to adjustments pursuant to Section 3.
(t) "Stock Appreciation Right" means a right described in Section
7(a) and granted, either independently of other Awards or in
tandem with the grant of a Stock Option.
(u) "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 6.
(v) "Subsidiary" means any corporation or other entity (other than
the Company) in an unbroken chain beginning with the Company
if each of the entities (other than the last entity in the
unbroken chain) owns stock or other interests possessing 50%
or more of the total combined voting power of all classes of
stock or other interest in one of the other corporations or
other entities in the chain.
(w) "Unrestricted Stock Award" is defined in Section 8(f).
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EXHIBIT A
---------
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 if the
Participant or a Participant Related Party is the Person or a member of
a group constituting the Person acquiring control, a transaction shall
not be deemed to be a Change of Control as to a Participant unless the
Committee shall otherwise determine prior to such occurrence; 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 as to a Participant if the Participant or a
Participant 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
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(d) the Company executes an agreement of acquisition, merger
or consolidation which contemplates that (i) after the effective date
provided for in such 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 as
to a Participant if, immediately after such transaction, the
Participant or any Participant 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 the Participant and any
Participant 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 A 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.
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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.
"Person" shall have the meaning used in Section 13(d) of the Exchange
Act, as in effect on March 1, 1989.
A "Participant Related Party" shall mean, with respect to a
Participant, any affiliate or associate of the Participant other than the
Company or a 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).
"Participant" means a participant in the Plan.
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