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THE TJX COMPANIES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Addendum or Modifications

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TJX COMPANIES, INC

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Title: THE TJX COMPANIES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Governing Law: Massachusetts     Date: 3/31/2009
Industry: Retail (Apparel)     Sector: Services

THE TJX COMPANIES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, Parties: tjx companies  inc
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Exhibit 10.18

THE TJX COMPANIES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(2008 Restatement)

 


 

Article 1. — Introduction

     1.1. In General . The Supplemental Executive Retirement Plan, established in 1981, was amended and restated in 1984 and 1992 and was subsequently further amended and restated in 2005 inter alia to conform the Plan to the requirements of Section 409A, including the transition rules and exemptive relief provisions thereunder. The amendment and restatement of the Plan set forth herein is effective as of January 1, 2008 and is intended inter alia to conform the Plan to the final regulations issued under Section 409A and shall be construed consistent with that intent. The terms of the Plan as so amended and restated shall apply to all benefits that become payable to a Key Employee under the Plan on or after January 1, 2008. Benefits that became payable to an Key Employee under the Plan on or after January 1, 2005 and on or before December 31, 2007 shall be determined and administered consistent with the provisions of the Plan as amended and restated in 2005, consistent with a good faith, reasonable interpretation of Section 409A, its legislative history and then-existing guidance. Notwithstanding the foregoing, neither the Company nor any of its officers or directors, nor any other person charged with administrative responsibilities under the Plan, shall be liable to any employee or former employee of the Company, or to any spouse or other beneficiary of any such employee or former employee, by reason of the failure of any benefit hereunder to comply with the requirements of Section 409A.

     For the avoidance of doubt, in the case of any Key Employee who as of December 31, 2008 is party to an employment agreement with the Company or any subsidiary thereof that provides for the payment of such Key Executive’s vested benefit in the form of a lump sum following a separation from service following a separation from service following a change in control, payment of the Key Employee’s vested benefit in such circumstances shall be so

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determined and paid (whether or not the employment agreement remains in effect) unless the form and timing thereof is changed consistent with the rules prescribed under Section 409A of the Code.

     1.2. Purpose . The purpose of the amended and restated Plan set forth herein is to provide certain designated employees with retirement benefits supplemental to those payable under the Company’s tax-qualified retirement plans.

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Article 2. — Definitions

     2.1. “Average Compensation” shall mean the average of the Key Employee’s Compensation over the five (5) full calendar years yielding the highest such average and occurring during the last ten (10) calendar years prior to the earlier of the Key Employee’s attainment of age 65 or separation from service with the Company. In the case of a Key Employee who becomes disabled as defined in the Company’s long-term disability plan, Average Compensation shall be determined on the basis of the five (5) full calendar years yielding the highest such average and occurring during the last ten (10) calendar years of the Key Employee’s employment with the Company prior to commencement of benefits under the Company’s long-term disability plan. If the Key Employee has not completed five full calendar years of employment prior to the commencement of benefits under the Company’s long-term disability plan, Average Compensation shall be based on the number of full calendar years he or she was employed by the Company prior to the commencement of such benefits.

     2.2. “Beneficiary” shall mean a beneficiary entitled to receive certain death benefits under the Plan who has been designated as such by the Key Employee in writing in a form and manner acceptable to the Committee.

     2.3. “Code” shall mean the Internal Revenue Code of 1986, as the same presently exists and as the same may hereafter be amended, or any successor statute of similar purpose. References to specific sections of the Code shall be considered references to identifiable similar provisions of successor statutes.

     2.4. “Committee” shall mean the Executive Compensation Committee of the Board of Directors of The TJX Companies, Inc.

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     2.5. “Company” shall mean The TJX Companies, Inc. and any wholly-owned subsidiaries; provided, in determining whether an individual has separated from the service of the Company, “Company” shall include The TJX Companies, Inc. and all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of such Treasury Regulations and “separation from service” shall mean a “separation from service” (as that term is defined at Section 1.409A-1(h) of the Treasury Regulations under Section 409A). The Committee may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed part of the Plan.

     2.6. “Compensation” shall mean, for any calendar year, a Key Employees actual base salary earned and any short-term incentives awarded during the calendar year (before taking into account any reduction in base salary or short-term incentives pursuant to a salary reduction agreement under Section 401(k) or Section 125 of the Code). Any base salary or short-term incentives that are deferred under The TJX Companies, Inc. General Deferred Compensation Plan or The TJX Companies, Inc. Executive Savings Plan shall be included as “Compensation” for the calendar year in which the salary is earned or short-term incentives are awarded but not included for the calendar year in which such deferred compensation is paid. By way of example and not by way of limitation, Compensation shall not include employer contributions to The TJX Companies, Inc. Retirement Plan, Matching Contributions under The TJX Companies, Inc. General Savings/Profit Sharing Plan, or any amounts credited to the Employer Credit Account under The TJX Companies, Inc. Executive Savings Plan; income or gains resulting from the

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receipt, sale, exchange, exercise or other disposition of stock or stock options, awards and benefits, including stock appreciation rights, under The TJX Companies, Inc. Stock Incentive Plan or any other long-term incentive plan of the Company; expense reimbursements or payments in lieu of expense reimbursement; auto allowances, financial counseling fees, tuition reimbursements or the value of other fringe benefits provided by the Company or any other employer (even if wholly or partially currently taxable as income to the Key Employee); or employer contributions to Social Security made by the Company or another employer on behalf of the Key Employee.

     2.7. “Deferred Compensation Amount” shall mean any income deferred under The TJX Companies, Inc. General Deferred Compensation Plan or the TJX Companies, Inc. Executive Savings Plan which (i) but for the deferral would be included in the definition of “Compensation” under The TJX Companies, Inc. Retirement Plan (without regard to the limitations described in Code Section 401(a) (17)) and (ii) is paid to the Key Employee after he or she retires or terminates. For the avoidance of doubt, “Deferred Compensation Amounts” shall be disregarded to the extent (as determined by the Committee in its sole discretion) the reduction in the Article 7 formula benefit under The TJX Companies, Inc. Retirement Plan attributable to the non-inclusion in “Compensation” described in clause (i) above of such Amounts is offset by any benefit under The TJX Companies, Inc. Retirement Plan that is supplemental to the formula benefit described in Article 7 thereof.

     2.8. “Disability” means a medically determinable physical or mental impairment that (i) can be expected either to result in death or to last for a continuous period of not less than six months and (ii) causes a Key Employee to be unable to perform the duties of his or her position

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of employment or any substantially similar position of employment to the reasonable satisfaction of the Committee.

     2.9. “Executive Savings Plan Benefit” shall mean an annual benefit computed by converting the value of the Key Employee’s Employer Credit Account under The TJX Companies, Inc. Executive Savings Plan to a life annuity commencing at age 65. The Committee shall determine the actuarial factors used in converting the Employer Credit Account to a life annuity.

     2.10. “Interest Rate” shall mean the “Interest Rate” as in effect at the relevant time under The TJX Companies, Inc. General Deferred Compensation Plan (or, if at such time there is no such rate in effect under The TJX Companies, Inc. General Deferred Compensation Plan, the rate then used under The TJX Companies, Inc. Retirement Plan for determining lump-sum actuarial equivalency). If at the relevant determination date The TJX Companies, Inc. Retirement Plan no longer exists or no longer provides for lump sum actuarial equivalency determinations, the Committee shall apply a reasonable interest rate consistent with Section 1-409A-1(o) of the Treasury Regulations.

     2.11. “Key Employee” shall mean a Category A Key Employee, Category B Key Employee or Category C Key Employee as determined pursuant to Article 3.

     2.12. “Plan” shall mean The TJX Companies, Inc. Supplemental Executive Retirement Plan (2008 Restatement) as set forth in this document, including any and all amendments hereto and restatements hereof.

     2.13. “Primary Social Security Benefit” shall mean the annual primary insurance amount to which the Key Employee 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 Key

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Employee’s termination date assuming that the Key Employee will have no income after termination which would be treated as wages for purposes of the Social Security Act.

     2.14. “Retirement Agreement” shall mean an individual agreement between a Category A Key Employee and the Company providing for supplemental executive retirement benefits.

     2.15. “Retirement Plan Benefit” shall mean the annual benefit payable at age 65 under The TJX Companies, Inc. Retirement Plan on a life annuity basis.

     2.16. “Savings/Profit Sharing Plan Benefit” shall mean an annual benefit computed by converting the value of the Key Employee’s Matching Contribution Account payable under The TJX Companies, Inc. General Savings/Profit Sharing Plan to a life annuity commencing at age 65. The Committee shall determine the actuarial factors used in converting the Matching Contribution Account to a life annuity.

     2.17. “Section 409A” shall mean Section 409A of the Code.

     2.18. “Years of Service” shall mean the total completed years and months of a Key Employee’s uninterrupted service with the Company from the date that the Key Employee’s commences employment with the Company until the earliest of termination of employment, retirement or age 65. A leave of absence approved by the Company shall not constitute an interruption of service but the period of such absence shall be excluded from Years of Service for all purposes under the Plan.

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Article 3. — Key Employees

     3.1. Designation of Key Employees . An employee or retired former employee of the Company shall be a Key Employee if, and only if, designated as such by the Committee, except that designation as a Category C Key Employee shall be automatic (based on the application of specified limits as described in Section 3.4 below) except as the Committee may limit eligibility for such benefits. Subject to Section 409A, the most recent “Category” to which such Key Employee is assigned determines the nature of the benefits to which he or she may become entitled under this Plan.

     3.2. Category A Key Employee . Only the following shall be treated as having been designated as Category A Key Employees: (i) an executive employee of the Company who has a Retirement Agreement that refers directly to benefits payable under this Plan, or (ii) any other employee with a Retirement Agreement who is designated as a Category A Key Employee. For the avoidance of doubt, as of January 1, 2008, the Company did not have, and during calendar 2008 the Company did not become a party to, any Retirement Agreements with any employees, except insofar as the Company’s employment agreements with key officers (each, an “Employment Agreement”) could be construed as Retirement Agreements. For the avoidance of doubt, any executive employee of the Company who has an Employment Agreement with the Company and who is eligible for benefits under this Plan shall be considered a Category B Key Employee or a Category C Key Employee, as applicable, except as otherwise expressly provided in such Employment Agreement.

     3.3. Category B Key Employee . A Category B Key Employee is a key employee of the Company who has been designated by the Committee as eligible to receive the benefits provided under Article 5 of this Plan. If, however, at the time a Category B Key Employee

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retires or otherwise terminates employment, the benefit under Article 6 of this Plan would provide a greater benefit to such Key Employee than the benefit provided under Article 5 of this plan, then such Key Employee will be deemed designated a Category C Key Employee and will receive the benefit provided under Article 6 in lieu of that provided under Article 5.

     3.4. Category C Key Employee . A Category C Key Employee is an employee of the Company with a fully vested right to benefits under The TJX Companies, Inc. Retirement Plan whose benefits under that plan are limited by reason of (i) the operation of the limitation provisions of Section 401(a) (17) or Section 415 of the Code, and/or (ii) the deferral of certain income which, but for the deferral, would be included in the definition of “Compensation” under The TJX Companies, Inc. Retirement Plan.

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Article 4. — Category A Key Employee Benefit

     4.1. Category A Key Employee Benefit . Each present or future Category A Key Employee (and, where so provided in the individual Retirement Agreements between the Company and such Key Employee, the surviving spouse or other beneficiary(ies) of such Key Employee) shall receive the benefit provided under the Retirement Agreement with such Key Employee under the terms and subject to the limitations set forth in said Retirement Agreement, which, to the extent consistent with Section 409A, is incorporated herein by reference.

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Article 5. — Category B Key Employee Benefit

     5.1. Requirement for a Benefit . Each Category B Key Employee retiring at or after age 55 with 10 or more Years of Service shall be entitled to receive a supplemental retirement benefit under this Article 5.

     5.2. Benefit Formula . The benefit payable at age 65 to a Category B Key Employee who qualifies for a benefit under Sections 5.1 and who separates from the service of the Company at or prior to attaining age 65, when expressed as a monthly benefit payable as a life annuity for the life of the Category B Key Employee commencing at age 65 (the “tentative life annuity”), shall be one-twelfth (1/12) of the product of (a) and (b), such product offset (reduced) by the sum of (c), (d) , (e) and (f), where:

 

(a)

 

is two and one-half percent (2 1 / 2 %) of the Key Employee’s Average Compensation,

 

 

(b)

 

is the number of Years of Service completed by the Key Employee, up to a maximum of twenty (20) such Years,

 

 

(c)

 

is the Key Employee’s annual Retirement Plan Benefit,

 

 

(d)

 

is the Key Employee’s annual Savings/Profit Sharing Plan Benefit,

 

 

(e)

 

is the Key Employee’s annual Executive Savings Plan Benefit, and

 

 

(f)

 

is the Key Employee’s annual Primary Social Security Benefit.

The lump-sum actuarial equivalent of such tentative life annuity (the “tentative lump sum amount”), determined in accordance with the rules prescribed in Section 7.2(c) as of the date the Category B Key Employee separates from service, shall be increased for six months’ worth of interest at the Interest Rate in effect at separation from service and thereafter, if payment is delayed pursuant to Section 5.3 or pursuant to Section 7.2(b)(iii) by reason of a change in

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payment election under Section 7.2(b)(ii), at the rate from time to time in effect until the applicable determination date for the benefit payable to the Category B Key Employee.

     5.3. Separation From Service After Age 65 . In the case of each Category B Key Employee who at age 65 has not yet separated from service with the Company, there shall be determined (consistent with the rules set forth in Section 7.2(c)), as of the date the Category B Key Employee attains age 65, an opening lump sum balance equal to the tentative lump sum amount that would have been determined under Section 5.2 had such Category B Key Employee separated from service at age 65. Between the date such Category B Key Employee attains age 65 and the date that follows the Category B Key Employee’s later separation from service by six (6) months (or any later payment date determined under Section 7.2(b)(iii)), the opening lump sum balance shall be adjusted for interest at the Interest Rate from time to time in effect during such period. The actuarial equivalent of such adjusted lump sum amount, expressed in the applicable form of payment, shall be paid as determined in accordance with Article 7.

     5.4. Death Benefit . Death benefits shall be payable only to the extent provided in this Section 5.4:

 

(i)

 

If a Category B Key Employee dies after having become entitled to a benefit as set forth in Section 5.1 and after separating from service, but prior to the payment or commencement of such benefit, there shall be paid to the Category B Key Employee’s Beneficiary, or if there is no Beneficiary surviving, to the Category B Key Employee’s surviving spouse, if any, or otherwise to the Category B Key Employee’s estate, in each case at or as soon as practicable after the decedent’s death, a lump sum equal to the lump sum benefit that would then have been payable to

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the Category B Key Employee had the Category B Key Employee been entitled to payment on such date.

 

(ii)

 

If a Category B Key Employee dies after having satisfied the age and service requirements set forth in Section 5.1 but before separating from service, his or her surviving spouse, if any, will be entitled to receive, as soon as practicable following the Category B Key Employee’s death, a lump sum payment that is the actuarial equivalent of the survivor benefit that would have been payable to the spouse on account of the Key Employee’s death if the Key Employee had separated from service and commenced receiving benefits on the day six months following his or her death in a 50% joint and survivor annuity form (that is, in a form under which the Key Employee would have received a reduced pension upon retirement and upon such Key Employee’s death one-half of such reduced benefit would have been payable to the Key Employee’s spouse). Actuarial equivalency for this purpose shall be determined using an interest assumption equal to the Interest Rate in effect at the time of the Category B Key Employee’s death and the same mortality assumption as is then used under The TJX Companies, Inc. Retirement Plan. If at the relevant determination date The TJX Companies, Inc. Retirement Plan no longer exists or no longer provides for lump sum actuarial equivalency determinations, the Committee shall apply reasonable actuarial assumptions consistent with Section 1-409A-1(o) of the Treasury Regulations.

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(iii)

 

If the Category B Key Employee survives until the commencement of benefit payments hereunder but dies before the completion of such payments, then (A) if the benefit was payable in five (5) annual installments, the Category B Key Employee’s Beneficiary, or if there is no Beneficiary surviving, the Category B Key Employee’s surviving spouse, if any, or otherwise the Category B Key Employee’s estate shall be paid, as soon as practicable following the Category B Key Employee’s death, a single lump sum equal to the present value (determined using the Interest Rate then in effect) of the remaining installments, and (B) if the benefit was payable as a joint and survivor annuity under which the Category B Key Employee’s spouse was the survivor annuitant, the Category B Key Employee’s surviving spouse, if any and if the same as the person to whom the Category B Key Employee was married at the time such annuity was determined, shall be paid, as soon as practicable following the Category B Key Employee’s death, a lump sum payment that is the actuarial equivalent of the survivo


 
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