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EXHIBIT 10.1
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
This Settlement Agreement and Mutual General Release ("Agreement")
is
made and entered into as of March 29, 2007 (the "Effective Date")
by and between
Alexander W. Smith ("Smith") and The TJX Companies, Inc.
("TJX").
WHEREAS, Smith was formerly employed at TJX as Senior Executive
Vice
President, Group President pursuant to a written employment
agreement dated as
of April 5, 2005 (the "Employment Agreement") and resigned such
employment
effective January 29, 2007; and
WHEREAS, the Employment Agreement contains certain restrictive
covenants; and
WHEREAS, Smith is currently employed as the President and Chief
Executive Officer of Pier 1 Imports, Inc. ("Pier 1"); and
WHEREAS, TJX contends that Smith's employment with Pier 1
constitutes a
violation of the restrictive covenants of the Employment Agreement,
and has
refused to pay certain amounts of Smith's compensation as a result;
and
WHEREAS Smith denies that his employment with Pier 1 constitutes
a
violation of the restrictive covenants of the Employment Agreement;
and
WHEREAS, Smith and TJX desire to resolve, without further
litigation or
adjudication, all asserted and potential claims arising out of or
relating in
any way to Smith's former employment with TJX and Smith's current
employment
with Pier 1;
THEREFORE, in consideration of the mutual promises, conditions,
representations and agreements set forth herein and other good and
valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged,
Smith and TJX agree as follows:
1.
Definitions.
(a) Any
reference in this Agreement to "Smith" shall at all times
unless otherwise specified include, and this Agreement shall
cover, Alexander W. Smith, his heirs, administrators,
representatives, executors, legatees, successors, attorneys,
agents, and assigns, as well as anyone claiming by or through
him.
(b) Any
reference in this Agreement to "TJX," including but not
limited to the reference to TJX in the General Release below,
shall at all times unless otherwise specified include, and
this Agreement shall cover, The TJX Companies, Inc., a
Delaware corporation with its principal place of business in
Framingham, Massachusetts, all of its parents, subsidiaries,
affiliates, predecessors, successors, assigns, all other legal
entities describing its organization or through which it
conducts business, and all of its current directors, officers,
employees, representatives, trustees, attorneys, agents,
insurers and assigns.
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(c) Any
reference in this Agreement to "Pier 1" shall at all times
unless otherwise specified include Pier 1 Imports, Inc., a
Delaware corporation with its principal place of business in
Fort Worth, Texas, and all of its parents, subsidiaries,
affiliates, predecessors, successors, assigns, all other legal
entities describing its organization or through which it
conducts business, and all of its current directors, officers,
employees,
representatives, trustees, attorneys, agents,
insurers and assigns.
2.
Monetary Payments from TJX.
(a)
Acknowledgements. Smith and TJX acknowledge and agree that,
during his employment with TJX, Smith participated in TJX's
Management Incentive Plan ("MIP"), TJX's Long Range
Performance Incentive Plan ("LRPIP") and TJX's Supplemental
Executive Retirement Plan ("SERP"). Smith and TJX further
acknowledge and agree that, as of the date of his resignation
from TJX, Smith had accrued the following unpaid benefits
under those plans:
(i) MIP --
$697,566.30
(ii)
LRPIP -- $373,746.24
(iii) SERP
-- $1,266,000.00
(b) Payment to
Smith. Provided that Smith first executes this
Agreement, and subject to his full compliance with the terms
hereof, TJX agrees to pay Smith the gross amount of $175,000
less applicable withholding taxes (the "Settlement Payment"),
which Settlement Payment shall reflect payments to Smith as
follows:
(i) MIP --
$0
(ii)
LRPIP -- $0
(iii) SERP
-- $175,000
The Settlement Payment shall be paid in two installments. The
first installment shall be in the gross amount of $100,000,
and shall be paid on or within ten days following July 29,
2007. The second installment shall be in the gross amount of
$75,000, and shall be paid on or before July 29, 2008. Each
installment of the Settlement Payment shall be paid in the
form of an electronic deposit to Smith's account, if
available, and if not shall be in the form of a check made
payable to "Alexander Smith" and shall be sent or delivered to
an address that Smith shall designate.
(c) Forfeiture
of Additional Payments. Smith agrees and
acknowledges that the Settlement Payment shall represent full
and final satisfaction of any and all amounts that he may
claim are owed to him under the MIP, LRPIP and/or SERP, and
Smith fully and irrevocably forfeits any other or additional
amounts that he had
accrued under the MIP, LRPIP and/or SERP
as of the date of his resignation from TJX.
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(d) Tax
Treatment.
(i) Tax
treatment. TJX shall withhold, report and remit
all required federal and state taxes from the
Settlement Payment, such that TJX will issue IRS
Forms W-2 to Smith reflecting the portion of the
Settlement Payment actually paid to Smith in a given
tax year (i.e., TJX will issue Smith a Form W-2 in
the amount of $100,000 for the tax year 2007, and TJX
will issue Smith a Form W-2 in the amount of $75,000
for the tax year 2008, provided that each of those
payments was made in those years). Each Form W-2 will
reflect applicable withholding taxes.
(ii)
No advice. Smith acknowledges that TJX has not
provided advice to him regarding the proper tax
treatment of the Settlement Payment or any payments
or benefits received by Smith in accordance with this
Agreement, and that he has been advised to consult
with his personal tax or financial advisor for such
advice.
(iii) TJX
may make all necessary tax-related filings. Smith
agrees that TJX shall be entitled to make any and all
filings regarding any payments or benefits made under
this Agreement with federal and/or state tax and
securities authorities which TJX, in its sole
discretion, determines are appropriate or required,
subject to the provisions of Paragraph 2(d)(i) above.
3.
Mutual General Releases.
(a) Except
with respect to any rights, obligations or duties
arising out of this Agreement, and except with respect to any
rights of indemnity, including under any TJX policy, practice,
insurance policy, indemnity contract, corporate law, bylaw,
article of incorporation or otherwise, and in consideration of
the
Settlement Payment as set forth in this Agreement and
other valuable consideration, Smith hereby releases and
discharges TJX and all of its present and former officers,
directors, partners, investors, stockholders, trustees,
attorneys, insurers, representatives, agents, employees and
employee benefit plans, and anyone acting for or on behalf of
any of the foregoing (collectively, the "TJX Releasees"), of
and from any and all complaints, charges, lawsuits and claims
for relief of any kind by Smith that he now has, ever had or
may have in the future against the TJX Releasees or any one of
them, whether known or unknown, arising out of any matter or
thing that has happened before the signing of this Agreement,
including but not limited to claims arising under common law
or statute, claims for breach of contract (including but not
limited to the Employment Agreement and any other contract,
agreement, plan, grant or other document relating to Smith's
former employment with TJX) and in tort (including but not
limited to claims for defamation, invasion of privacy,
intentional or negligent infliction of emotional distress and
claims for intentional interference with contractual or
advantageous relations), and claims arising under federal and
state labor laws, employment laws and laws prohibiting
discrimination on the basis of age, sex, race, national origin
or disability. The
laws referred to in the preceding
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sentence include but are not limited to Title VII of the Civil
Rights Act of 1964, the Employee Retirement Income Security
Act of 1974 ("ERISA"), the Equal Pay Act of 1963, the Age
Discrimination in Employment Act of 1967 ("ADEA"), the Fair
Labor Standards Act of 1938, the Americans with Disabilities
Act
of 1990, the Rehabilitation Act of 1973, the Family and
Medical Leave Act of 1993, Chapters 149 through 154 of the
Massachusetts General Laws, the Massachusetts Civil Rights Act
and the Massachusetts Equal Rights Law, all as amended. It is
further expressly agreed and understood by Smith that the
release contained herein is a GENERAL RELEASE.
(b) Except
with respect to any rights, obligations or duties
arising out of this Agreement and the Employment Agreement (as
modified by Sections 5 and 8 of this Agreement), and in
consideration of Smith's General Release to the TJX Releasees
and
other valuable consideration, TJX and anyone acting for or
on behalf of TJX, hereby release and discharge Smith of and
from any and all complaints, charges, lawsuits and claims for
relief of any kind that TJX now has, ever had or may have in
the future against Smith, whether known or unknown, arising
out of any matter or thing that has happened before the
signing of this Agreement, including but not limited to claims
arising out of Smith's former employment with TJX, Smith's
present employment with Pier 1, claims arising under common
law or statute, claims for breach of contract (including but
not limited to the Employment Agreement and any other
contract, agreement, plan, grant or other document relating to
Smith's former employment with TJX) and in tort (including but
not limited to claims
for defamation, invasion of privacy,
intentional or negligent infliction of emotional distress and
claims for intentional interference with contractual or
advantageous relations). It is further expressly agreed and
understood by TJX that the release contained herein is a
GENERAL RELEASE.
4.
Covenants Not to Sue.
(a) Smith
represents and warrants that he has not filed any
complaints, charges, demands for arbitration or mediation or
any other claims for relief (collectively, "Claims") against
the TJX Releasees, or any one of them, with any local, state
or federal court or administrative agency, any professional or
regulatory board, any arbitrator or mediator, or any other
agency or entity. To the extent of any such filing made by him
or purporting to have been made on his behalf, Smith agrees to
dismiss such Claims with prejudice and without costs. Smith
further warrants that he has not previously assigned or
transferred any Claims that are subject to the General Release
contained herein. Smith agrees and covenants not to sue or
bring any Claims against the TJX Releasees, or any one of
them, whether in court or in arbitration or mediation, with
r
