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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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:
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(a)
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is
two and one-half percent (2 1 / 2 %) of the Key Employee’s
Average Compensation,
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(b)
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is
the number of Years of Service completed by the Key Employee, up to
a maximum of twenty (20) such Years,
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(c)
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is
the Key Employee’s annual Retirement Plan Benefit,
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(d)
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is
the Key Employee’s annual Savings/Profit Sharing Plan
Benefit,
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(e)
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is
the Key Employee’s annual Executive Savings Plan Benefit,
and
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(f)
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is
the Key Employee’s annual Primary Social Security
Benefit.
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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:
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(i)
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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.
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(ii)
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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)
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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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