Exhibit 10.16a
Laura J. Sen
CHANGE OF CONTROL SEVERANCE
AGREEMENT
THIS AGREEMENT between BJ’s
Wholesale Club, Inc., a Delaware corporation (the
“Company”), and Laura J. Sen (“Executive”),
dated as of February 1, 2009.
Executive is a key executive of the
Company or a Subsidiary and an integral part of its
management.
The Company recognizes that the
possibility of a Change of Control or Potential Change of Control
of the Company may result in the departure or distraction of
management to the detriment of the Company and its shareholders and
wishes to modify and restate the agreement previously applicable
under such circumstances.
The Company wishes to assure
Executive of fair severance should Executive’s employment
terminate in specified circumstances following a Change of Control
or Potential Change of Control of the Company and to assure
Executive of certain other benefits upon such event.
In consideration of
Executive’s continued employment with the Company or a
Subsidiary and other good and valuable consideration, the parties
agree as follows:
Benefits Upon Change of
Control .
In General
. Within 30 days following the
earlier of a Change of Control or Potential Change of Control (such
earlier event to be a “Control Event”) as long as this
Agreement had not been terminated under Section 8.6 at the
time of the Control Event, then whether or not Executive’s
employment has been terminated following the Control Event, the
Company shall pay to Executive the following in a lump
sum:
an amount equal to the product of
(i) the “Target Bonus” under the Company’s
Management Incentive Plan or any other annual incentive plan which
is applicable to Executive for the fiscal year in which the Control
Event occurs (or if the Target Bonus is reduced within 180 days
before the commencement of a Standstill Period, the “Target
Bonus” applicable to Executive for the fiscal year in which
such reduction occurred) and (ii) a fraction, the numerator of
which is the number of days in such fiscal year prior to the
Control Event and the denominator of which is 365; and
if Executive is a participant in a
performance-based long-range incentive plan at the time of a
Control Event, such amount as is required to be paid to Executive
upon a Control Event pursuant to the provisions of such plan;
provided, that if such incentive plan does not provide for an
automatic payment on the earlier of a Change of Control or a
Potential Change of Control, then any payment under such incentive
plan shall be made only as and when provided for in such incentive
plan even though the benefit under Section 1.1(a) above has
been paid previously.
Benefits Following Qualified
Termination of Employment . Executive shall be entitled to the following
benefits upon a Qualified Termination:
(a) Within 30 days following the
Date of Termination, the Company shall pay to Executive the
following in a lump sum:
(i) an amount equal to three times
Executive’s Base Salary for one year at the rate in effect
immediately prior to the Date of Termination or, if higher, the
Control Event (or if Executive’s Base Salary was reduced
within 180 days before the commencement of a Standstill Period, the
rate in effect immediately prior to such reduction), plus the
accrued and unpaid portion of Executive’s Base Salary through
the Date of Termination. Any payments made to Executive under any
long term disability plan of the Company with respect to the three
years following termination of employment shall be offset against
such three times Base Salary payment. Executive shall promptly make
reimbursement payments to the Company to the extent any such
disability payments are received by Executive after the Base Salary
payment;
(ii) an amount equal to three times
Executive’s automobile allowance for one year at the rate in
effect immediately prior to the Date of Termination or, if higher,
the Control Event (or if such automobile allowance was reduced
within 180 days before the commencement of a Standstill Period, the
rate in effect immediately prior to such reduction unless such
reduction was offset by an increase in Base Salary during such
180-day period), plus any portion of Executive’s automobile
allowance payable but unpaid through the Date of Termination;
and
(iii) an amount equal to three times
the Target Bonus amount, as defined and determined under
Section 1.1(a) above without any fractional
adjustment.
(b) For a period of thirty-six
(36) months after the Date of Termination, the Company shall
maintain in full force and effect for the continued benefit of
Executive and Executive’s family all life insurance and
medical insurance (other than long-term disability) plans and
programs in which Executive was entitled to participate immediately
prior to the Control Event (or if Executive’s title was
changed to a level below that of Executive’s Current Title
within 180 days before the commencement of a Standstill Period, all
such plans and programs in which Executive was entitled to
participate immediately prior to such change, if the benefits
thereunder are greater), provided that Executive’s continued
participation is possible under the general terms and provisions of
such plans and programs. In the event that participation in such
plans or programs is not available to Executive for any reason,
including termination of the plan, the Company shall arrange upon
comparable terms to provide Executive with benefits substantially
similar to those which Executive is entitled to receive under such
plans and programs. Notwithstanding the foregoing, the
Company’s obligations hereunder with respect to life
insurance or medical insurance plans and programs shall be deemed
satisfied to the extent (but only to the extent) of any such
insurance coverage or benefits provided by another
employer.
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(c) If Qualified Termination occurs
by reason of Disability, the Company shall maintain in full force
and effect for the continued benefit of Executive, disability
benefits and/or disability insurance at the same level to which
Executive was entitled immediately prior to the Qualified
Termination.
Coordination With Certain Tax
Rules .
Notwithstanding any other provision
of this Agreement, in the event that the Company undergoes a Change
in Ownership or Control (as defined below), the Company shall not
be obligated to provide to Executive a portion of any
“Contingent Compensation Payments” that Executive would
otherwise be entitled to receive to the extent necessary to
eliminate any “excess parachute payments” (as defined
in Section 280G(b)(1) of the Internal Revenue Code of 1986, as
amended (the “Code”)) for Executive. For purposes of
this Section 1.3, the Contingent Compensation Payments so
eliminated shall be referred to as the “Eliminated
Payments” and the aggregate amount (determined in accordance
with Proposed Treasury Regulation Section 1.280G-1, Q/A-30 or
any successor provision) of the Contingent Compensation Payments so
eliminated shall be referred to as the “Eliminated
Amount.”
For purposes of this
Section 1.3, the following terms shall have the following
respective meanings:
“Change in Ownership or
Control” shall mean a change in the ownership or effective
control of the Company or in the ownership of a substantial portion
of the assets of the Company determined in accordance with
Section 280G(b)(2) of the Code.
“Contingent Compensation
Payments” shall mean any payment (or benefit) in the nature
of compensation that is made or made available (under this
Agreement or otherwise) to a “disqualified individual”
(as defined in Section 280G(c) of the Code) and that is
contingent (within the meaning of Section 280G
(b) (2) (A) (i) of the Code) on a Change in
Ownership or Control of the Company.
Any payments or other benefits
otherwise due to the Executive following a Change in Ownership or
Control that could be characterized (as reasonably determined by
the Company) as Contingent Compensation Payments shall not be made
until the determination, pursuant to this Section 1.3(c), of
which Contingent Compensation Payments shall be treated as
Eliminated Payments. Within 30 days after each date on which the
Executive first becomes entitled to receive (whether or not then
due) a Contingent Compensation Payment relating to such Change in
Ownership or Control, the Company shall determine and notify
Executive (with reasonable detail regarding the basis for its
determinations) (i) which of such payments and benefits
constitute
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Contingent Compensation Payments and
(ii) the Eliminated Amount. Within 30 days after delivery of
such notice to Executive, Executive shall notify the Company which
Contingent Compensation Payments, or portions thereof (the
aggregate amount of which, determined in accordance with Proposed
Treasury Regulation Section 1.280G-1, Q/A-30 or any successor
provision, shall be equal to the Eliminated Amount), shall be
treated as Eliminated Payments. In the event that Executive fails
to notify the Company pursuant to the preceding sentence on or
before the required date, the Contingent Compensation Payments (or
portions thereof) that shall be treated as Eliminated Payments
shall be determined by the Company in its absolute
discretion.
The provisions of this
Section 1.3 are intended to apply to any and all payments or
benefits available to Executive under this Agreement or any other
agreement or plan of the Company under which Executive receives
Contingent Compensation Payments.
Definitions
. The terms defined in Exhibits A
and B hereto are used herein as so defined.
Noncompetition; No Mitigation of
Damages; Other Severance Payments; Withholding
.
Noncompetition
. Upon a Qualified Termination, any
agreement by Executive not to engage in competition with the
Company subsequent to the termination of Executive’s
employment, whether contained in an employment contract or other
agreement shall no longer be effective.
No Duty to Mitigate
Damages .
Executive’s benefits under this Agreement shall be considered
severance pay in consideration of Executive’s past service
and Executive’s continued service from the date of this
Agreement, and Executive’s entitlement thereto shall neither
be governed by any duty to mitigate Executive’s damages by
seeking further employment nor offset by any compensation which
Executive may receive from future employment.
Other Severance
Payments . In the event
that Executive has an employment contract or any other agreement
with the Company (or a Subsidiary) which entitles Executive to
severance payments upon the termination of Executive’s
employment with the Company, the amount of any such severance
payments shall be deducted from the payments to be made under this
Agreement.
2.4 Withholding . Anything to
the contrary notwithstanding, all payments required to be made by
the Company hereunder to Executive shall be subject to the
withholding of such amounts, if any, relating to tax and other
payroll deductions as the Company may reasonably determine it
should withhold pursuant to any applicable law or
regulation.
Arbitration
. Any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, shall
be settled exclusively by arbitration in Boston, Massachusetts in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
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Legal Fees and
Expenses . The Company
shall pay all legal fees and expenses, including, but not limited
to, counsel fees, stenographer fees, printing costs, etc.
reasonably incurred by Executive in contesting or disputing that
the termination of Executive’s employment during a Standstill
Period is for Cause or other than for good reason (as defined in
paragraph (k) of Exhibit A) or in obtaining any right or
benefit to which Executive is entitled under this Agreement. Any
amount payable under this Agreement that is not paid when due shall
accrue interest at the prime rate as from time to time in effect at
BankBoston, N.A., or its successor, until paid in full.
Notice of Termination
. During a Standstill Period,
Executive’s employment may be terminated by the Company (or a
Subsidiary) only upon 30 days’ written notice to
Executive.
Notices . All notices shall be in writing and shall be
deemed given five days after mailing in the continental United
States by registered or certified mail, or upon personal receipt
after delivery, telex, telecopy or telegram, to the party entitled
thereto at the address stated below or to such changed address as
the addressee may have given by a similar notice:
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To the
Company:
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BJ’s
Wholesale Club, Inc.
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One Mercer
Road
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Natick, MA
01760
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Attention:
President
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To
Executive:
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At
Executive’s home address, as last shown on the records of the
Company.
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Severability
. In the event tha