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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
/X/Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
or
/ /Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
January 29, 1994 1-4908
The TJX Companies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-2207613
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
770 Cochituate Road
Framingham, Massachusetts 01701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 390-1000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par value $1.00 New York Stock Exchange
Series C Cumulative Convertible Preferred
Stock, par value $1.00 New York Stock Exchange
9-1/2% Sinking Fund Debentures due
May 1, 2016 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X. NO.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant on March 15, 1994 was $1,956,256,898.
There were 73,449,736 shares of the Registrant's Common Stock, $1 par
value, outstanding as of March 15, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the fiscal year ended
January 29, 1994 (certain parts as indicated herein) (Parts I and II).
Portions of the Proxy Statement for the Annual Meeting of Stockholders
to be held on June 7, 1994 (Part III).
ITEM 1. Business
The Company is the largest off-price specialty apparel retailer in North
America, comprised of the T.J. Maxx and Winners family apparel chains, the
Hit or Miss chain of women's specialty stores and Chadwick's of Boston mail-
order catalog. T.J. Maxx, Hit or Miss and Chadwick's of Boston operate in
the United States and Winners operates in Canada. The Company is also
developing HomeGoods which operates home fashions stores in the United States
and T.K. Maxx, a new venture in the United Kingdom, which will be a T.J.
Maxx-like business.
The Company strives to provide value to its customers by delivering
brand names, fashion, quality and price. During the fiscal year ended
January 29, 1994 ("fiscal 1994"), the Company's stores derived 30.9% of its
sales from the Northeast, 24.3% from the Midwest, 28.0% from the South, 1.6%
from the Central States, 12.5% from the West and 2.7% from Canada.
The greatest share of sales volume is done through the Company's T.J.
Maxx chain, which operates 512 stores in 47 states, with an average store
size of 27,000 gross square feet. T.J. Maxx sells a broad range of brand
name family apparel, accessories, women's shoes, domestics, giftware and
jewelry at prices generally 20% to 60% below department and specialty store
regular prices. Hit or Miss, with 493 stores averaging 4,000 square feet in
34 states, is a chain of off-price women's specialty apparel stores featuring
women's brand name and private label fashions including both wear-to-work and
weekend wear. Chadwick's of Boston sells, through a mail-order catalog,
women's career and casual fashion apparel priced significantly below
department store regular prices. Winners Apparel Ltd., which was acquired by
the Company in fiscal 1991, is a Canadian off-price family apparel retailer,
which operates 27 stores in Canada. HomeGoods, a new business the Company
began testing in fiscal 1993, sells domestics, giftware and other home
fashions and operates a total of 10 stores. T.K. Maxx anticipates opening
its first two stores in the United Kingdom in the spring of 1994. Unless
otherwise indicated, all figures herein relating to numbers of stores are as
of January 29, 1994.
In common with the business of apparel retailers generally, the
Company's business is subject to seasonal influences, with higher levels of
sales and income generally realized in the second half of the year.
Set forth in the following table are the locations of stores operated by
the Company's United States operations as of January 29, 1994:
T.J. Maxx Hit or Miss
Alabama................................ 9 3
Arizona................................ 7 1
Arkansas............................... 2 -
California............................. 44 38
Colorado............................... 8 4
Connecticut............................ 18 21
Delaware............................... 2 1
District of Columbia................... - 3
Florida................................ 38 41
Georgia................................ 15 9
Idaho.................................. 1 -
Illinois............................... 36 33
Indiana................................ 8 5
Iowa................................... 3 1
Kansas................................. 3 2
Kentucky............................... 4 3
Louisiana.............................. 5 7
Maine.................................. 4 2
Maryland............................... 9 12
Massachusetts.......................... 35 39
Michigan............................... 22 23
Minnesota.............................. 12 6
Mississippi............................ 1 -
Missouri............................... 9 10
Montana................................ 1 -
Nebraska............................... 2 -
Nevada................................. 2 -
New Hampshire.......................... 8 5
New Jersey............................. 14 48
New Mexico............................. 1 -
New York............................... 33 30
North Carolina......................... 13 11
North Dakota........................... 2 -
Ohio................................... 29 22
Oklahoma............................... 2 2
Oregon................................. 3 -
Pennsylvania........................... 26 32
Rhode Island........................... 3 10
South Carolina......................... 8 4
South Dakota........................... 1 -
Tennessee.............................. 8 10
Texas.................................. 22 28
Utah................................... 3 -
Vermont................................ 1 1
Virginia............................... 19 15
Washington............................. 7 -
West Virginia.......................... 1 -
Wisconsin.............................. 8 11
Total Stores..................... 512 493
Winners Apparel Ltd. operates 27 stores in Canada: 2 in Alberta, 1 in
Manitoba and 24 in Ontario.
HomeGoods operates a total of 10 stores: 4 in New England, 3 in the
Cincinnati, Ohio area, and 3 in the Milwaukee, Wisconsin area.
T.J. MAXX
T.J. Maxx is the largest off-price family apparel chain in the United
States, selling brand name family apparel and accessories, women's shoes,
domestics, jewelry and giftware. T.J. Maxx's target customers are women
between the ages 25 to 50, who typically have families with middle and upper-
middle incomes and generally fit the profile of a department store shopper.
Over 95% of T.J. Maxx's merchandise is first quality, and the balance
consists of irregulars, samples and department or specialty store over-
stocks. The chain uses a number of opportunistic buying strategies to
purchase large quantities of merchandise at significant discounts from
initial wholesale prices. Its strategies include special situation
purchases, closeouts of current season fashions and out-of-season purchases
of basic seasonal items for warehousing until the appropriate selling season.
Pricing and markdown decisions and store replenishment requirements are
determined centrally, using information provided by electronic point-of-sale
computer terminals. T.J. Maxx employs a disciplined markdown policy to
ensure that substantially all merchandise is sold within targeted selling
periods.
T.J. Maxx stores are generally located in suburban strip shopping
centers, in close proximity to population centers, and average approximately
27,000 gross square feet. In recent years, T.J. Maxx has enlarged a number
of stores to a larger prototype format, typically 30,000-40,000 square feet
in size, and plans to enlarge highly successful stores where adjacent real
estate is available. This larger format allows T.J. Maxx to expand all of
its departments, with particular emphasis on its highly successful giftware
and housewares departments.
In fiscal 1994, 38 stores were opened, including 20 of the new larger
prototype, and 5 were closed. In addition, 17 existing stores were expanded
to the larger format bringing the total of T.J. Maxx stores in the larger
format to 128. In fiscal 1995, approximately 45 new stores are planned, of
which approximately 25 are expected to be larger stores, along with the
planned expansion of 25-30 existing locations. During the past five years,
T.J. Maxx has opened 211 new stores and closed 7. T.J. Maxx has increased
its presence in the metropolitan New York market with the addition of stores
on Long Island and in New Jersey. In addition, in fiscal 1994 T.J. Maxx
opened a new distribution center in Charlotte, North Carolina, to help
support its store growth.
HIT OR MISS
Hit or Miss sells first quality current season women's apparel, and
targets working women 20 to 45 years old who desire up-to-date fashion and
brand name quality merchandise at affordable prices. Hit or Miss sells
nationally recognized brand name merchandise, purchased directly from
manufacturers at prices below initial wholesale prices, and also sells
private label merchandise, a large percentage of which is imported, in lines
where quality, price and fashion are more important to customers than brand
names. An aggressive markdown policy is pursued to achieve the turnover
necessary to offer up-to-date fashionable merchandise. All purchasing,
stocking, replenishment, initial pricing and markdowns are determined
centrally rather than at the store level.
A majority of Hit or Miss stores are located in suburban strip shopping
centers, with the balance located in downtown areas, town centers and
regional malls. Hit or Miss stores average approximately 4,000 gross square
feet with an average of approximately 3,100 square feet of selling space.
During fiscal 1994, Hit or Miss opened 18 stores and closed 30 stores as
it continued with its real estate repositioning strategy initiated in fiscal
1993. The short average remaining lease life of the Hit or Miss stores
provides the Company the opportunity to close additional stores, if
warranted, in a cost effective manner. In the past five years, Hit or Miss
has opened 161 new stores, and has closed 174 stores. Hit or Miss expects to
open 35 new stores in fiscal 1995, and anticipates closing approximately 15
stores depending upon management's review of lease terms and store
performance.
CHADWICK'S OF BOSTON
The Chadwick's of Boston catalog features first quality, current fashion
and classic merchandise, including career sportswear, casual wear, dresses,
suits and accessories, with a mix of brand name and private label merchandise
priced significantly below department store regular prices. Through
marketing efforts, Chadwick's continues to refine the look of its catalogs.
In the short term, Chadwick's will concentrate on its existing apparel lines,
expanding large and petite sizes, and including menswear. Chadwick's target
customers are 20 to 45 year old women interested in moderate to upper
moderate priced merchandise and include both homemakers and working women.
Chadwick's is continuing to invest in its infrastructure to support its
growth. During fiscal 1993, Chadwick's completed a major addition to its
fulfillment center and installed a state-of-the-art telephone order system
and an upgraded order processing system. Further expansion of its
fulfillment center, started in fiscal 1994, is currently near completion.
WINNERS APPAREL LTD.
Winners Apparel Ltd., acquired by the Company in fiscal 1991, is a
Canadian off-price family apparel retailer offering top brands and designer
names at substantial savings. Winners emphasizes off-price designer and
brand name misses sportswear, dresses and accessories as well as menswear and
clothing for children and infants and toddlers. In addition, during the year
Winners rolled-out giftware departments in all of its stores. In fiscal
1994, Winners opened 12 new stores and now operates a total of 27 stores.
Winners entered new markets in the western provinces with stores in Calgary,
Edmonton and Winnipeg. Winners expects to open 10 new stores in fiscal 1995
and to expand further into new Canadian markets. In support of its store
growth, Winners moved into a new distribution facility during the year.
HOMEGOODS
The Company continues to test its new HomeGoods stores, designed to
expand the Company's off-price presence in the home fashions market. Based
on the continuing success of T.J. Maxx's domestics and giftware categories,
the Company believes an opportunity exists for a chain of large off-price
stores focusing exclusively on home fashions. HomeGoods offers a broad and
deep range of home fashion products, including domestics, cookware, bath
accessories, and giftware in a no-frills, multi-department store format.
Still in the developmental stage, the Company has refined HomeGoods'
merchandise mix and softened the look of its store layout. The stores
currently average approximately 50,000 square feet, but the Company intends
to move to a smaller 35,000 square foot prototype with future openings and
has plans to downsize existing locations. The Company opened 4 HomeGoods
stores in fiscal 1994 and expects to open 3-4 new stores in fiscal 1995.
The first 6 stores were opened in former Ames locations for which the
Company has assumed lease liability, enabling the Company to test this new
concept at relatively low cost.
T.K. MAXX
During fiscal 1995, the Company will open its first T.K. Maxx stores in
the United Kingdom, and begin testing the off-price family apparel concept
overseas. This concept will be similar to T.J. Maxx and Winners, with 2
store openings planned for the spring and possibly 3-4 more in the fall.
EMPLOYEES
At January 29, 1994, the Company had approximately 36,000 employees,
many of whom work less than 40 hours per week. In addition, temporary
employees are hired during the peak back-to-school and holiday seasons. The
Company has several collective bargaining agreements with the International
Ladies Garment Workers Union ("ILGWU"), covering approximately 3,400
employees in its distribution facilities in Stoughton, West Bridgewater and
Worcester, Massachusetts; Evansville, Indiana; Las Vegas, Nevada and
Charlotte, North Carolina. Agreements for the three New England distribution
facilities and the Las Vegas facility expire December 31, 1994, and it is
expected that negotiations for new agreements will commence in October 1994.
The Company considers its labor/management relations and overall employee
relations to be good.
COMPETITION
The retail apparel business is highly competitive. The Company
generally competes for customers with a variety of conventional and other
retail stores, including national, regional and local independent department
and specialty stores, as well as with catalog operations, factory outlet
stores and other off-price stores. Competitive factors important to the
Company's customers include fashion, value, merchandise selection, brand name
recognition and, to a lesser degree, store location. In addition, because
the Company purchases much of its inventory opportunistically, the Company
competes for merchandise with other national and regional off-price apparel
retailers.
Many of the Company's competitors handle identical or similar lines of
merchandise and have comparable locations, and some have greater financial
resources than the Company. The Company has relied and will continue to rely
on a strong focus on consistently executing its mission of delivering
exceptional fashion value to its target customers as a means of
distinguishing itself from its competitors.
CREDIT
The Company's stores operate primarily on a cash-and-carry basis. Each
chain accepts credit sales through programs offered by banks and others.
BUYING AND DISTRIBUTION
Each of the Company's chains is serviced through its own centralized
buying and distribution network. Each T.J. Maxx store is serviced by one of
the chain's four distribution centers in Worcester, Massachusetts,
Evansville, Indiana, Las Vegas, Nevada and Charlotte, North Carolina. T.J.
Maxx's Charlotte distribution center of 600,000 square feet became
operational in September 1993. Shipments are made twice a week by contract
carrier to each store. All Hit or Miss stores are serviced by its warehouse
facility in Stoughton, Massachusetts. Chadwick's of Boston's customers are
serviced from its fulfillment center in West Bridgewater, Massachusetts,
which was expanded in fiscal 1993, with further expansion currently near
completion. Winners Apparel Ltd. stores are serviced from a new distribution
center in Mississaugau, Ontario, which was opened in fiscal 1994.
ITEM 2. Properties
T.J. Maxx, Hit or Miss and Winners lease virtually all of their store
locations. Leases are generally for 10 years with options to extend for one
or more 5 year periods. The Company has the right to terminate certain
leases before the expiration date under certain circumstances and for a
specified payment.
The approximate average size of a T.J. Maxx store is 27,000 square feet,
Hit or Miss stores average approximately 4,000 square feet, Winners stores
are approximately 21,000 square feet on average and HomeGoods stores
currently average approximately 50,000 square feet. The Company owns four
T.J. Maxx distribution facilities - a 500,000 square foot facility in
Worcester, Massachusetts, a 980,000 square foot facility in Evansville,
Indiana, a 400,000 square foot facility in Las Vegas, Nevada, and a 600,000
square foot facility in Charlotte, North Carolina. Hit or Miss leases its
334,000 square foot warehouse and office facility in Stoughton, Massachusetts
under a lease expiring in September 1999, with renewal options extending to
2019. Chadwick's owns a 443,000 square foot fulfillment center and office
facility in West Bridgewater, Massachusetts, with 110,000 square feet of
additional expansion currently near completion. Chadwick's is also leasing a
nearby 126,000 square foot warehouse and office facility. Winners leases
257,000 square feet of warehouse and office space in Mississaugau, Ontario.
HomeGoods leases a 30,000 square foot processing center in Milford,
Massachusetts as well as 50,000 square feet of the Hit or Miss distribution
facility. In anticipation of its T.K. Maxx venture in the United Kingdom,
the Company has leased a 62,000 square foot office and distribution facility
in Yeading, England. The Company's, T.J. Maxx's and HomeGoods' executive and
administrative offices are located in a 517,000 square foot office facility,
which the Company leases in Framingham, Massachusetts.
The table below indicates the approximate gross square footage of stores
and distribution centers, by division, in operation as of January 29, 1994.
(In Thousands)
Stores Distribution Centers
Leased Owned
T.J. Maxx 13,807 - 2,466
Winners 574 230
Hit or Miss 1,964 214 -
HomeGoods 494 80 -
Chadwick's N/A 84 330
Total 16,839 608 2,796
ITEM 3. Legal Proceedings
The Company is a defendant in a class action lawsuit, In Re TJX
Companies, Inc., Consolidated Civil Action No. 10514, in the Court of
Chancery of the State of Delaware. The former The TJX Companies, Inc. ("old
TJX"), formerly an 83%-owned subsidiary of the Company, and the directors of
old TJX are also named as defendants in this lawsuit. The lawsuit alleges
that certain actions of the defendants in respect of the merger in 1989 of
old TJX into The TJX Operating Companies, Inc., a wholly-owned subsidiary
subsequently merged into the Company, constituted self-dealing, deception,
unfair dealing, overreaching and a breach of fiduciary duties owed by the
defendants to the then public stockholders of old TJX. In particular, the
amended complaint alleges that the terms of the merger were unfair and
offered inadequate consideration to the then public stockholders of old TJX.
The suit seeks to recover unspecified monetary damages. The defendants have
filed answers denying any wrongdoing. The Company believes that the
substantive allegations of the case are without merit and that the case will
not have a material effect on the Company's financial position.
ITEM 4. Submission of Matters to a Vote of Security Holders
There was no matter submitted to a vote of the Company's security
holders during the fourth quarter of fiscal 1994.
ITEM 4A. Executive Officers of the Registrant
The following persons are the executive officers of the Company as of
the date hereof:
Office and Employment
Name Age During Last Five Years
Bernard Cammarata 54 President, Chief Executive Officer and
Director since 1989 and Chairman of the T.J.
Maxx Division since 1986. Executive Vice
President of the Company from 1986 to 1989.
President, Chief Executive Officer and
Director of the Company's former TJX
subsidiary from 1987 to 1989; President of
T.J. Maxx, 1976 to 1986.
Donald G. Campbell 42 Senior Vice President - Finance since 1989.
Senior Financial Executive of the Company,
1988 to 1989; Senior Vice President - Finance
and Administration Zayre Stores Division
1987-1988; Vice President and Corporate
Controller of the Company prior to 1987.
Sumner L. Feldberg 69 Chairman of the Board of Directors since
1989. Chairman of the Executive Committee of
the Board of Directors since 1987; Chairman
of the Board of Directors prior to 1987.
Richard Lesser 59 Executive Vice President of the Company since
1991, Senior Vice President of the Company
1989-1991 and President of the T.J. Maxx
Division since 1986. Senior Executive Vice
President - Merchandising and Distribution
1986. Executive Vice President - General
Merchandise Manager 1984 to 1986; Senior Vice
President - General Merchandise Manager 1981
to 1984.
The foregoing were elected to their current Company offices by the Board
of Directors in June 1993. All officers hold office until the next annual
meeting of the Board in June 1994 and until their successors are elected and
qualified.
PART II
ITEM 5. Market for the Registrant's Common
Stock and Related Security Holder Matters
The information required by this Item is incorporated herein by
reference from page 34 of the Annual Report, under the caption "Price Range
of Common Stock," and from inside the back cover of the Annual Report, under
the caption "Shareholder Information."
ITEM 6. Selected Financial Data
The information required by this Item is incorporated herein by
reference from page 27 of the Annual Report, under the caption "Selected
Financial Data."
ITEM 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The information required by this Item is incorporated herein by
reference from pages 29 through 31 of the Annual Report, under the caption
"Management's Discussion and Analysis of Results of Operations and Financial
Condition."
ITEM 8. Financial Statements and Supplementary Data
The information required by this Item and not filed with this report as
Financial Statement Schedules is incorporated herein by reference from
pages 14 through 27 of the Annual Report, under the captions; "Consolidated
Statements of Income," "Consolidated Balance Sheets," "Consolidated
Statements of Cash Flows," "Consolidated Statements of Shareholders' Equity,"
"Selected Information by Major Business Segment" and "Notes to Consolidated
Financial Statements."
ITEM 9. Disagreements on Accounting and
Financial Disclosure
Not applicable.
PART III
ITEM 10. Directors and Executive Officers of the Registrant
The Company will file with the Securities and Exchange Commission a
definitive Proxy Statement no later than 120 days after the close of its
fiscal year ended January 29, 1994 (the "Proxy Statement"). The information
required by this Item and not given in Item 4A, Executive Officers of the
Registrant, is incorporated by reference to the Proxy Statement. However,
information under the captions "Executive Compensation Committee Report" and
"Performance Graph" in the Proxy Statement is not so incorporated.
ITEM 11. Executive Compensation
The information required by this Item is incorporated by reference to
the Proxy Statement.
ITEM 12. Security Ownership of Certain
Beneficial Owners and Management
The information required by this Item is incorporated by reference to
the Proxy Statement.
ITEM 13. Certain Relationships and
Related Transactions
The information required by this Item is incorporated by reference to
the Proxy Statement.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
A. The Financial Statements and Financial Statement Schedules filed as part
of this report are listed and indexed at Page F-1.
Listed below are all Exhibits filed as part of this report. Certain
Exhibits are incorporated by reference to documents previously filed by the
Registrant with the Securities and Exchange Commission pursuant to Rule 12b-
32 under the Securities Exchange Act of 1934, as amended.
(3i) Articles of Incorporation.
(a) Second Restated Certificate of Incorporation filed June 5, 1985 is
incorporated by reference to Exhibit 3(a) to the Form 10-K filed
for the fiscal year ended January 30, 1988.
(b) Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 3, 1986 is incorporated by reference to
Exhibit 3(a) to the Form 10-K for the fiscal year ended January 30,
1988.
(c) Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 2, 1987 is incorporated by reference to
Exhibit 3(a) to the Form 10-K for the fiscal year ended January 30,
1988.
(d) Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 20, 1989 is incorporated by reference to
Exhibit 8 to the Company's Current Report on Form 8-K dated June
21, 1989.
(e) Certificate of Designation, Preferences and Rights of Series B
Junior Participating Preferred Stock of the Company filed May 3,
1988 is incorporated by reference to Exhibit 2 of the Company's
Current Report on Form 8-K dated April 29, 1988.
(f) Certificate of Designations, Preferences and Rights of New Series A
Cumulative Convertible Preferred Stock of the Company is
incorporated by reference to Exhibit 4.6 to the Pre-Effective
Amendment No. 2 to the Company's Registration Statement on Form S-3
(Registration No. 33-50330).
(g) Certificate of Designations, Preferences and Rights of $3.125
Series C Cumulative Convertible Preferred Stock of the Company is
incorporated by reference to Exhibit 19.2 to the Form 10-Q filed
for the quarter ended July 25, 1992.
(3ii) By-laws.
(a) The by-laws of the Company, as amended, are incorporated by
reference to Exhibit 3(f) to the Form 10-K for the fiscal year
ended January 27, 1990.
(4) Instruments defining the rights of security holders,
including indentures.
(a) Common and Preferred Stock: See the Second Restated Certificate of
Incorporation, as amended (Exhibit (3i)(a)-(g) hereto).
(b) A composite copy of the Share Purchase Agreements dated as of April
15, 1992 regarding Series A Cumulative Convertible Preferred Stock
is incorporated by reference to Exhibit 4(c) to the Form 10-K filed
for the fiscal year ended January 25, 1992.
(c) Exchange Agreement dated as of August 6, 1992 between the Company
and the holders of Series A Cumulative Convertible Preferred Stock
is incorporated by reference to Exhibit 19.1 to the Form 10-Q filed
for the quarter ended July 25, 1992.
Each other instrument relates to securities the total amount of
which does not exceed 10% of the total assets of the Company and its
subsidiaries on a consolidated basis. The Company agrees to furnish to
the Securities and Exchange Commission copies of each such instrument
not otherwise filed herewith or incorporated herein by reference.
(10) Material Contracts.
(a) The Amended and Restated Employment Agreement dated as of April 26,
1988 with Stanley Feldberg is incorporated herein by reference to
Exhibit 10(a) to the Form 10-K filed for the fiscal year ended
January 30, 1988. The First Amendment to the 1988 Amended and
Restated Employment Agreement of Stanley Feldberg dated June 8,
1993 is filed herewith. *
(b) The Amended and Restated Employment Agreement dated as of June 1,
1989 with Sumner L. Feldberg is incorporated herein by reference to
Exhibit 10(b) to the Form 10-K filed for the fiscal year ended
January 27, 1990. The First Amendment dated as of December 9, 1992
to Sumner L. Feldberg's Amended and Restated Employment Agreement
is incorporated herein by reference to Exhibit 10(b) to the Form
10-K for the fiscal year ended January 30, 1993. *
(c) The Employment Agreement dated as of June 1, 1989 with Arthur F.
Loewy is incorporated herein by reference to Exhibit 10(c) to the
Form 10-K filed for the fiscal year ended January 27, 1990. The
Amendment dated as of January 26, 1991 to Arthur F. Loewy's
Employment Agreement is incorporated herein by reference to Exhibit
10(c) to the Form 10-K filed for the fiscal year ended January 26,
1991. Amendment No. 2 dated as of January 25, 1992 to Arthur F.
Loewy's Employment Agreement is incorporated herein by reference to
Exhibit 10(c) to the Form 10-K filed for the fiscal year ended
January 25, 1992. Amendment No. 3 dated as of January 30, 1993 to
Arthur F. Loewy's Employment Agreement is incorporated herein by
reference to Exhibit 10(c) to the Form 10-K filed for the fiscal
year ended January 30, 1993. Amendment No. 4, dated as of January
29, 1994, to Arthur F. Loewy's Employment Agreement is filed
herewith. *
(d) The Employment Agreement dated as of June 1, 1989 with Bernard
Cammarata is incorporated herein by reference to Exhibit 10(d) to
the Form 10-K filed for the fiscal year ended January 27, 1990.
The Amendment to Employment Agreement with Bernard Cammarata dated
as of February 1, 1992 is incorporated herein by reference to
Exhibit 10(d) to the Form 10-K filed for the fiscal year ended
January 30, 1993. *
(e) The Amended and Restated Employment Agreement dated as of February
1, 1992 with Richard Lesser is incorporated herein by reference to
Exhibit 10(e) to the Form 10-K filed for the fiscal year ended
January 30, 1993. The Amendment to Richard Lesser's Employment
Agreement dated as of January 31, 1994 is filed herewith. *
(f) The Amended and Restated Employment Agreement dated as of February
1, 1992 with Donald G. Campbell is incorporated herein by reference
to Exhibit 10(f) to the Form 10-K filed for the fiscal year ended
January 30, 1993. The Amendment to Donald G. Campbell's
Employment Agreement dated as of January 31, 1994 is filed
herewith. *
(g) The Management Incentive Plan, as amended, is filed herewith. *
(h) The 1982 Long Range Management Incentive Plan, as amended, is filed
herewith. *
(i) The 1986 Stock Incentive Plan, as amended, is filed herewith. *
(j) The TJX Companies, Inc. Long Range Performance Incentive Plan, as
amended, is filed herewith. *
(k) The General Deferred Compensation Plan, as amended, is incorporated
herein by reference to Exhibit 10(n) to the Form 10-K filed for the
fiscal year ended January 27, 1990. *
(l) The Supplemental Executive Retirement Plan, as amended, is
incorporated herein by reference to Exhibit 10(l) to the Form 10-K
filed for the fiscal year ended January 25, 1992. *
(m) The 1993 Stock Option Plan for Non-Employee Directors is
incorporated herein by reference to Exhibit 10.1 to the Form 10-Q
filed for the quarter ended May 1, 1993. *
(n) The Retirement Plan for Directors, as amended, is incorporated
herein by reference to Exhibit 10.2 to the Form 10-Q filed for the
quarter ended May 1, 1993. *
(o) The form of Indemnification Agreement between the Company and each
of its officers and directors is incorporated herein by reference
to Exhibit 10(r) to the Form 10-K filed for the fiscal year ended
January 27, 1990. *
(p) The Trust Agreement dated as of April 8, 1988 between the Company
and State Street Bank and Trust Company is incorporated herein by
reference to Exhibit 10(y) to the Form 10-K filed for the fiscal
year ended January 30, 1988. *
(q) The Trust Agreement dated as of April 8, 1988 between the Company
and Shawmut Bank of Boston, N.A. is incorporated herein by
reference to Exhibit 10(z) to the Form 10-K filed for the fiscal
year ended January 30, 1988. *
(r) The Distribution Agreement dated as of May 1, 1989 between the
Company and Waban Inc. is incorporated herein by reference to
Exhibit 3 to the Company's Current Report on Form 8-K dated June
21, 1989.
(s) The Services Agreement between the Company and Waban Inc. dated as
of May 1, 1989 is incorporated herein by reference to Exhibit 4 to
the Company's Current Report on Form 8-K dated June 21, 1989.
Correspondence related to the Services Agreement is incorporated
herein by reference to Exhibit 10(dd) to the Form 10-K filed for
fiscal year ended January 27, 1990. Correspondence related to the
Services Agreement is incorporated herein by reference to Exhibit
10(z) to the Form 10-K filed for fiscal year ended January 26,
1991. Correspondence related to the Services Agreement is
incorporated herein by reference to Exhibit 10(x) to the Form 10-K
filed for the fiscal year ended January 25, 1992. Correspondence
related to the Services Agreement is incorporated herein by
reference to Exhibit 10(s) to the Form 10-K filed for fiscal year
ended January 30, 1993. Correspondence related to the Services
Agreement is filed herewith.
(t) The Executive Services Agreement between the Company and Waban Inc.
dated as of June 1, 1989, with respect to the services of Sumner L.
Feldberg is incorporated herein by reference to Exhibit 10(ff) to
the Form 10-K filed for the fiscal year ended January 27, 1990.
(u) The Executive Services Agreement between the Company and Waban Inc.
dated as of June 1, 1989, with respect to the services of Arthur F.
Loewy is incorporated herein by reference to Exhibit 10(gg) to the
Form 10-K filed for the fiscal year ended January 27, 1990.
Amendment dated as of January 26, 1991 to Executive Services
Agreement between the Company and Waban Inc. with respect to the
services of Arthur F. Loewy is incorporated herein by reference to
Exhibit 10(cc) to Form 10-K filed for the fiscal year ended January
26, 1991. Amendment No. 2 dated as of January 25, 1992 to
Executive Services Agreement between the Company and Waban Inc.
with respect to the services of Arthur F. Loewy is incorporated
herein by reference to Exhibit 10(aa) to the Form 10-K filed for
the fiscal year ended January 25, 1992. Amendment No. 3 dated as
of January 30, 1993 to Executive Services Agreement between the
Company and Waban Inc. with respect to the services of Arthur F.
Loewy is incorporated herein by reference to Exhibit 10(u) to Form
10-K filed for the fiscal year ended January 30, 1993. Amendment
No. 4 dated as of January 29, 1994 to Executive Services Agreement
between the Company and Waban Inc. with respect to the services of
Arthur F. Loewy is filed herewith.
(v) The Agreement dated as of July 5, 1989 between the Company and
Waban Inc. is incorporated herein by reference to Exhibit 10(hh) to
the Form 10-K filed for the fiscal year ended January 27, 1990.
(11) Statement re computation of per share earnings.
This statement is filed herewith.
(13) Annual Report to security holders.
Portions of the Annual Report to Stockholders for the fiscal year ended
January 29, 1994 are filed herewith.
(21) Subsidiaries.
A list of the Registrant's subsidiaries is filed herewith.
(23) Consents of experts and counsel.
The Consent of Coopers & Lybrand is contained on Page F-2 of the
Financial Statements filed herewith.
(24) Power of Attorney.
The Power of Attorney given by the Directors and certain Executive
Officers of the Company is filed herewith.
* Management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
THE TJX COMPANIES, INC.
Dated: April 22, 1994
/s/ Donald G. Campbell
Donald G. Campbell
Senior Vice President - Finance
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
/s/ BERNARD CAMMARATA /s/ DONALD G. CAMPBELL
Bernard Cammarata, President Donald G. Campbell, Senior
and Principal Executive Officer Vice President - Finance,
and Director Principal Financial and
Accounting Officer
JOHN M. NELSON*
Michael H. Davis, Director John M. Nelson, Director
PHYLLIS B. DAVIS* ROBERT F. SHAPIRO*
Phyllis B. Davis, Director Robert F. Shapiro, Director
STANLEY H. FELDBERG* BURTON S. STERN*
Stanley H. Feldberg, Director Burton S. Stern, Director
SUMNER L. FELDBERG* FLETCHER H. WILEY*
Sumner L. Feldberg, Director Fletcher H. Wiley, Director
ARTHUR F. LOEWY* ABRAHAM ZALEZNIK*
Arthur F. Loewy, Director Abraham Zaleznik, Director
Dated: April 22, 1994
*By /s/ DONALD G. CAMPBELL
Donald G. Campbell
as attorney-in-fact
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
THE TJX COMPANIES, INC.
FORM 10-K
ANNUAL REPORT
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND
FINANCIAL STATEMENT SCHEDULES
For the Fiscal Years Ended
January 29, 1994, January 30, 1993
and January 25, 1992
THE TJX COMPANIES, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
For Fiscal Years Ended January 29, 1994, January 30, 1993 and
January 25, 1992
Report of Independent Accountants 28*
Consent and Report of Independent Accountants F-2
Selected Quarterly Financial Data (Unaudited) 34*
Consolidated Financial Statements:
Consolidated Statements of Income for the fiscal
years ended January 29, 1994, January 30, 1993 and
January 25, 1992 14*
Consolidated Balance Sheets as of January 29, 1994
and January 30, 1993 15*
Consolidated Statements of Cash Flows for the fiscal
years ended January 29, 1994, January 30, 1993 and
January 25, 1992 16*
Consolidated Statements of Shareholders' Equity for
the fiscal years ended January 29, 1994, January 30,
1993 and January 25, 1992 17*
Notes to Consolidated Financial Statements 19-27*
Schedules:
V Property, Plant and Equipment F-3
VI Accumulated Depreciation and Amortization of
Property, Plant and Equipment F-4
IX Short-Term Borrowings F-5
X Supplementary Income Statement Information F-6
* Refers to page numbers in the Company's Annual Report to
Stockholders for the fiscal year ended January 29, 1994,
certain portions of which pages are incorporated by
reference in Part II, Item 8 of this report as indicated.
F-1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
Registration Statements of The TJX Companies, Inc. on Form S-3
(File No. 33-50259) and on Forms S-8 (File Nos. 2-79089
and 33-12220) of (1) our report dated March 2, 1994 on our
audits of the consolidated financial statements of The TJX
Companies, Inc. as of January 29, 1994 and January 30, 1993
and for the years ended January 29, 1994, January 30, 1993
and January 25, 1992, which report is included in the 1993
Annual Report to Shareholders of The TJX Companies, Inc.
and (2) our report dated March 2, 1994 on our audits of the
financial statement schedules of The TJX Companies, Inc. as
of January 29, 1994 and January 30, 1993, and for the years
ended January 29, 1994, January 30, 1993 and January 25,
1992, which report is included in this Annual Report on Form
10-K.
Boston, Massachusetts
April 19, 1994 Coopers & Lybrand
REPORT OF INDEPENDENT ACCOUNTANTS
Our report on the consolidated financial statements of
The TJX Companies, Inc. has been incorporated by reference
in this Form 10-K from page 28 of the 1993 Annual Report to
Shareholders of The TJX Companies, Inc. In connection with
our audits of such financial statements, we have also
audited the related financial statement schedules listed in the
index on page F-1 of this Form 10-K.
In our opinion, the financial statement schedules
referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all
material respects, the information required to be included
therein.
Boston, Massachusetts
March 2, 1994 Coopers & Lybrand
F-2
EXHIBIT INDEX
(3i) Articles of Incorporation.
(a) Second Restated Certificate of Incorporation filed June 5, 1985
is incorporated by reference to Exhibit 3(a) to the Form 10-K
filed for the fiscal year ended January 30, 1988.
(b) Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 3, 1986 is incorporated by reference to
Exhibit 3(a) to the Form 10-K for the fiscal year ended January
30, 1988.
(c) Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 2, 1987 is incorporated by reference to
Exhibit 3(a) to the Form 10-K for the fiscal year ended January
30, 1988.
(d) Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 20, 1989 is incorporated by reference to
Exhibit 8 to the Company's Current Report on Form 8-K dated June
21, 1989.
(e) Certificate of Designation, Preferences and Rights of Series B
Junior Participating Preferred Stock of the Company filed May 3,
1988 is incorporated by reference to Exhibit 2 of the Company's
Current Report on Form 8-K dated April 29, 1988.
(f) Certificate of Designations, Preferences and Rights of New Series
A Cumulative Convertible Preferred Stock of the Company is
incorporated by reference to Exhibit 4.6 to the Pre-Effective
Amendment No. 2 to the Company's Registration Statement on Form
S-3 (Registration No. 33-50330).
(g) Certificate of Designations, Preferences and Rights of $3.125
Series C Cumulative Convertible Preferred Stock of the Company is
incorporated by reference to Exhibit 19.2 to the Form 10-Q filed
for the quarter ended July 25, 1992.
(3ii) By-laws.
(a) The by-laws of the Company, as amended, are incorporated by
reference to Exhibit 3(f) to the Form 10-K for the fiscal year
ended January 27, 1990.
(4) Instruments defining the rights of security holders,
including indentures.
(a) Common and Preferred Stock: See the Second Restated Certificate
of Incorporation, as amended (Exhibit (3i)(a)-(g) hereto).
(b) A composite copy of the Share Purchase Agreements dated as of
April 15, 1992 regarding Series A Cumulative Convertible
Preferred Stock is incorporated by reference to Exhibit 4(c) to
the Form 10-K filed for the fiscal year ended January 25, 1992.
(c) Exchange Agreement dated as of August 6, 1992 between the Company
and the holders of Series A Cumulative Convertible Preferred
Stock is incorporated by reference to Exhibit 19.1 to the Form
10-Q filed for the quarter ended July 25, 1992.
Each other instrument relates to securities the total amount of
which does not exceed 10% of the total assets of the Company and its
subsidiaries on a consolidated basis. The Company agrees to furnish
to the Securities and Exchange Commission copies of each such
instrument not otherwise filed herewith or incorporated herein by
reference.
(10) Material Contracts.
(a) The Amended and Restated Employment Agreement dated as of April
26, 1988 with Stanley Feldberg is incorporated herein by
reference to Exhibit 10(a) to the Form 10-K filed for the fiscal
year ended January 30, 1988. The First Amendment to the 1988
Amended and Restated Employment Agreement of Stanley Feldberg
dated June 8, 1993 is filed herewith. *
(b) The Amended and Restated Employment Agreement dated as of June 1,
1989 with Sumner L. Feldberg is incorporated herein by reference
to Exhibit 10(b) to the Form 10-K filed for the fiscal year ended
January 27, 1990. The First Amendment dated as of December 9,
1992 to Sumner L. Feldberg's Amended and Restated Employment
Agreement is incorporated herein by reference to Exhibit 10(b) to
the Form 10-K for the fiscal year ended January 30, 1993. *
(c) The Employment Agreement dated as of June 1, 1989 with Arthur F.
Loewy is incorporated herein by reference to Exhibit 10(c) to the
Form 10-K filed for the fiscal year ended January 27, 1990. The
Amendment dated as of January 26, 1991 to Arthur F. Loewy's
Employment Agreement is incorporated herein by reference to
Exhibit 10(c) to the Form 10-K filed for the fiscal year ended
January 26, 1991. Amendment No. 2 dated as of January 25, 1992
to Arthur F. Loewy's Employment Agreement is incorporated herein
by reference to Exhibit 10(c) to the Form 10-K filed for the
fiscal year ended January 25, 1992. Amendment No. 3 dated as of
January 30, 1993 to Arthur F. Loewy's Employment Agreement is
incorporated herein by reference to Exhibit 10(c) to the Form 10-
K filed for the fiscal year ended January 30, 1993. Amendment
No. 4, dated as of January 29, 1994, to Arthur F. Loewy's
Employment Agreement is filed herewith. *
(d) The Employment Agreement dated as of June 1, 1989 with Bernard
Cammarata is incorporated herein by reference to Exhibit 10(d) to
the Form 10-K filed for the fiscal year ended January 27, 1990.
The Amendment to Employment Agreement with Bernard Cammarata
dated as of February 1, 1992 is incorporated herein by reference
to Exhibit 10(d) to the Form 10-K filed for the fiscal year ended
January 30, 1993. *
(e) The Amended and Restated Employment Agreement dated as of
February 1, 1992 with Richard Lesser is incorporated herein by
reference to Exhibit 10(e) to the Form 10-K filed for the fiscal
year ended January 30, 1993. The Amendment to Richard Lesser's
Employment Agreement dated as of January 31, 1994 is filed
herewith. *
(f) The Amended and Restated Employment Agreement dated as of
February 1, 1992 with Donald G. Campbell is incorporated herein
by reference to Exhibit 10(f) to the Form 10-K filed for the
fiscal year ended January 30, 1993. The Amendment to Donald G.
Campbell's Employment Agreement dated as of January 31, 1994 is
filed herewith. *
(g) The Management Incentive Plan, as amended, is filed herewith. *
(h) The 1982 Long Range Management Incentive Plan, as amended through
September 8, 1993 is filed herewith.
(i) The 1986 Stock Incentive Plan, as amended, is filed herewith. *
(j) The TJX Companies, Inc. Long Range Performance Incentive Plan, as
amended, is filed herewith. *
(k) The General Deferred Compensation Plan, as amended, is
incorporated herein by reference to Exhibit 10(n) to the Form 10-
K filed for the fiscal year ended January 27, 1990. *
(l) The Supplemental Executive Retirement Plan, as amended, is
incorporated herein by reference to Exhibit 10(l) to the Form 10-
K filed for the fiscal year ended January 25, 1992. *
(m) The 1993 Stock Option Plan for Non-Employee Directors is
incorporated herein by reference to Exhibit 10.1 to the Form 10-Q
filed for the quarter ended May 1, 1993.
(n) The Retirement Plan for Directors, as amended, effective April 8,
1993 and June 8, 1993, is incorporated herein by reference to
Exhibit 10.2 to the Form 10-Q filed for the quarter ended May 1,
1993.
(o) The form of Indemnification Agreement between the Company and
each of its officers and directors is incorporated herein by
reference to Exhibit 10(r) to the Form 10-K filed for the fiscal
year ended January 27, 1990. *
(p) The Trust Agreement dated as of April 8, 1988 between the Company
and State Street Bank and Trust Company is incorporated herein by
reference to Exhibit 10(y) to the Form 10-K filed for the fiscal
year ended January 30, 1988. *
(q) The Trust Agreement dated as of April 8, 1988 between the Company
and Shawmut Bank of Boston, N.A. is incorporated herein by
reference to Exhibit 10(z) to the Form 10-K filed for the fiscal
year ended January 30, 1988. *
(r) The Distribution Agreement dated as of May 1, 1989 between the
Company and Waban Inc. is incorporated herein by reference to
Exhibit 3 to the Company's Current Report on Form 8-K dated June
21, 1989.
(s) The Services Agreement between the Company and Waban Inc. dated
as of May 1, 1989 is incorporated herein by reference to Exhibit
4 to the Company's Current Report on Form 8-K dated June 21,
1989. Correspondence related to the Services Agreement is
incorporated herein by reference to Exhibit 10(dd) to the Form
10-K filed for fiscal year ended January 27, 1990.
Correspondence related to the Services Agreement is incorporated
herein by reference to Exhibit 10(z) to the Form 10-K filed for
fiscal year ended January 26, 1991. Correspondence related to
the Services Agreement is incorporated herein by reference to
Exhibit 10(x) to the Form 10-K filed for the fiscal year ended
January 25, 1992. Correspondence related to the Services
Agreement is incorporated herein by reference to Exhibit 10(s) to
the Form 10-K filed for fiscal year ended January 30, 1993.
Correspondence related to the Services Agreement is filed
herewith.
(t) The Executive Services Agreement between the Company and Waban
Inc. dated as of June 1, 1989, with respect to the services of
Sumner L. Feldberg is incorporated herein by reference to Exhibit
10(ff) to the Form 10-K filed for the fiscal year ended January
27, 1990.
(u) The Executive Services Agreement between the Company and Waban
Inc. dated as of June 1, 1989, with respect to the services of
Arthur F. Loewy is incorporated herein by reference to Exhibit
10(gg) to the Form 10-K filed for the fiscal year ended January
27, 1990. Amendment dated as of January 26, 1991 to Executive
Services Agreement between the Company and Waban Inc. with
respect to the services of Arthur F. Loewy is incorporated herein
by reference to Exhibit 10(cc) to Form 10-K filed for the fiscal
year ended January 26, 1991. Amendment No. 2 dated as of January
25, 1992 to Executive Services Agreement between the Company and
Waban Inc. with respect to the services of Arthur F. Loewy is
incorporated
herein by reference to Exhibit 10(aa) to the Form 10-K filed for
the fiscal year ended January 25, 1992. Amendment No. 3 dated as
of January 30, 1993 to Executive Services Agreement between the
Company and Waban Inc. with respect to the services of Arthur F.
Loewy is incorporated herein by reference to Exhibit 10(u) to
Form 10-K filed for the fiscal year ended January 30, 1993.
Amendment No. 4 dated as of January 29, 1994 to Executive
Services Agreement between the Company and Waban Inc. with
respect to the services of Arthur F. Loewy is filed herewith.
(v) The Agreement dated as of July 5, 1989 between the Company and
Waban Inc. is incorporated herein by reference to Exhibit 10(hh)
to the Form 10-K filed for the fiscal year ended January 27,
1990.
(11) Statement re computation of per share earnings.
This statement is filed herewith.
(13) Annual Report to security holders.
Portions of the Annual Report to Stockholders for the fiscal year
ended January 29, 1994 are filed herewith.
(21) Subsidiaries.
A list of the Registrant's subsidiaries is filed herewith.
(23) Consents of experts and counsel.
The Consent of Coopers & Lybrand is contained on Page F-2 of the
Financial Statements filed herewith.
(24) Power of Attorney.
The Power of Attorney given by the Directors and certain Executive
Officers of the Company is filed herewith.
* Management contract or compensatory plan or arrangement.
1988 AMENDED AND RESTATED EMPLOYMENT AGREEMENT
First Amendment
This Agreement dated June 8, 1993 amends the employment
agreement between The TJX Companies, Inc. (the "Employer") and
Stanley H. Feldberg (the "Employee").
RECITALS
The Employer (including its predecessor Zayre Corp.) and the
Employee are parties to an employment agreement originally dated
February 1, 1977, which agreement was last amended and restated
as of April 26, 1988 (as so amended and restated, the "Employment
Agreement").
The Employer and the Employee desire further to amend the
Employment Agreement to reflect changes in the Employer's
Supplemental Executive Retirement Plan ("SERP"), to update
certain cross-references, and to make certain other changes.
AGREEMENT
The Employer and the Employee agree that the Employment
Agreement is hereby amended as follows, effective as of the date
of this Agreement (except that the amendment made by paragraph 1
below shall be effective as if contained in the April 26, 1988
amended and restated Employment Agreement):
1. The first paragraph of Section 1 of the Employment
Agreement is amended to read in its entirety as follows:
From and after the date of this Agreement until
death or permanent disability, the Employee shall
render such services, if any, as shall be mutually
agreed upon by the Employee and the Employer. During
such period of limited employment or retirement the
Employee shall receive remuneration hereunder at an
annual rate equal to the "Contract ERISA Maximum." For
each year or portion thereof which ends prior to
January 1, 1991 the Contract ERISA Maximum shall be
computed on January 1 of such year and shall be an
amount equal to $136,425 multiplied by a fraction, the
numerator of which is the Consumer Price Index for
Urban Wage Earners and Clerical Workers (revised,
1967=100) as published by the United States Department
of Labor as of September 30 of the preceding year and
the denominator of which is 279.1 (at September 1, 1981
this fraction was 279.1/279.1 or 1.0); provided,
however, that in no event shall the Contract ERISA
Maximum be reduced to an amount less than that in
effect immediately prior to such determination. For
each year or portion thereof which ends after December
31, 1990 the Contract ERISA Maximum shall be an amount
equal to the Contract ERISA Maximum as at December 31,
1990.
2. The second paragraph of Section 2.1 of the Employment
Agreement is amended by deleting the words "ZEBA Plan I" and
substituting therefor the words "Flex Plus".
3. Paragraphs (i) and (ii) of Section 2.2 of the
Employment Agreement are each amended by deleting the words "ZEBA
Plan I" and substituting therefor the words "Flex Plus".
4. Paragraphs (iii) and (iv) of Section 2.2 of the
Employment Agreement are each amended by deleting the words "the
Zayre Retired Associates Medical Program" and substituting
therefor the words "The TJX Companies, Inc. Retired Associates
Medical Program".
5. Paragraph 2.3 of the Employment Agreement is amended by
deleting the words "the Zayre Corp. Travel Accident Plan, the
Financial Counseling Program" and substituting therefor the words
"The TJX Companies, Inc. Travel Accident Plan, The TJX Companies,
Inc. Financial Counseling Program".
6. Paragraph 2.4 of the Employment Agreement is amended by
deleting the words "the programs ZEBA Plan I and Zayre Corp.
Travel Accident Plan" and substituting therefor the words "the
programs Flex Plus and The TJX Companies Travel Accident Plan".
7. Paragraph 2.4 of the Employment Agreement is further
amended by deleting the words "the Zayre Corp. "supra" life
insurance plan" and substituting therefor the words "The TJX
Companies, Inc.'s supra" life insurance plan".
8. Paragraph 3 of the Employment Agreement is amended by
adding at the end the following sentences:
If, prior to death, the Employee receives or
irrevocably elects to receive his SERP benefit in the
form of a lump sum payment, no amount shall be payable
under paragraph (b) above. If any balance of such lump
sum amount remains unpaid at the Employee's death, it
shall be paid to the Employee's estate or otherwise in
accordance with SERP.
9. The first paragraph of Section 4 of the Employment
Agreement is amended by deleting the words "the Zayre Corp.
Retirement Plan" wherever those words appear and substituting
therefor the words "The TJX Companies, Inc. Retirement Plan".
10. The first paragraph of Section 4 of the Employment
Agreement is further amended by deleting clauses (b) and (c)
thereof and substituting the following:
(b) the benefits payable to the Employee under The TJX
Companies, Inc. Retirement Plan, such benefits being
valued as a single life annuity regardless of the
actual form of payment under The TJX Companies, Inc.
Retirement Plan; and (c) the benefits payable to the
Employee under SERP, such benefits being valued as a
single life annuity regardless of the actual form of
payment under SERP (including any lump sum payment or
other settlement form).
11. Paragraph (ii) of Section 4 of the Employment Agreement
is amended to read in its entirety as follows:
(ii) Death payments under Section 3, if any, with Standard
Retirement Benefits calculated for this purpose on
actual payments, if any, made to the Employee's wife.
12. The last paragraph of Section 6 of the Employment
Agreement is amended by deleting the words "the Zayre Corp.
Retirement Plan" and substituting therefor the words "The TJX
Companies, Inc. Retirement Plan".
IN WITNESS WHEREOF, The TJX Companies, Inc. has caused this
Agreement to be executed by its duly authorized officer and the
Employee has hereunto set his hand, all as of the date first
above written.
/s/ Stanley H. Feldberg
Stanley H. Feldberg
THE TJX COMPANIES, INC.
By: /s/ Bernard Cammarata
Bernard Cammarata, President
and Chief Executive Officer
AMENDMENT NO. 4 DATED AS OF JANUARY 29, 1994
TO ARTHUR LOEWY'S EMPLOYMENT AGREEMENT
AGREEMENT dated as of January 29, 1994 between ARTHUR LOEWY of 273
Prospect Street, Framingham, MA 01701 (the "Executive") and The TJX
Companies, Inc., a Delaware corporation whose principal office is in
Framingham, MA 01701 (the "Company").
The Executive and the Company entered into an Employment Agreement
dated as of June 1, 1989, as amended by Amendment dated as of January 26,
1991, by Amendment No. 2 dated as of January 25, 1992, and by Amendment No.
3 dated as of January 30, 1993, (the "Employment Agreement") which by its
terms expires on January 29, 1994. The parties desire to extend the term
of the Employment Agreement until January 28, 1995.
In consideration of the premises and for other valuable consideration,
receipt of which is hereby acknowledged, the parties agree as follows:
1. Section 2 of the Employment Agreement is hereby amended by
deleting the date "January 29, 1994" from the fourth line thereof and
substituting therefor the date January 28, 1995.
2. Section 3(b) of the Employment Agreement is hereby amended by
adding the words "and Fiscal 1995" after the words "Fiscal 1991, Fiscal
1992, Fiscal 1993, and Fiscal 1994" on the seventh and ninth lines thereof.
3. Section 6(a) of the Employment Agreement is hereby amended by
deleting the words "Fiscal 1994" from the seventh and tenth lines thereof
and substituting therefor the words "Fiscal 1995".
4. Section 6(b) of the Employment Agreement is hereby amended by
deleting the words "Fiscal 1994" from the sixth line thereof and
substituting therefor the words "Fiscal 1995".
5. Section 8 of the Employment Agreement is hereby amended by
deleting the date "January 29, 1994" from the second line thereof and
substituting therefor the date "January 28, 1995".
6. Section 2(a) of Schedule C to the Employment Agreement is hereby
amended by adding the words "or Fiscal 1995" after the words "Fiscal 1991,
Fiscal 1992, Fiscal 1993, or Fiscal 1994" on the fourth line thereof.
7. Section 2(b)(A) of Schedule C to the Employment Agreement is
hereby amended by adding the following sentence at the end thereof:
"If the Change of Control occurs during Fiscal 1995, Executive's
Years of Service for purposes of SERP shall be deemed to include
all of Fiscal 1995".
8. Section 2(c) of Schedule C to the Employment
Agreement is hereby amended by adding the words "or Fiscal
1995" after the words "Fiscal 1991,
Fiscal 1992, Fiscal 1993, or Fiscal 1994" on the fourth line thereof.
9. Section 2(d) of Schedule C to the Employment Agreement is hereby
amended by adding the words "or Fiscal 1995" after the words "Fiscal 1991,
Fiscal 1992, Fiscal 1993, or Fiscal 1994" on the fourth line thereof.
10. Section 2(f) of Schedule C to the Employment Agreement is hereby
amended by adding the words "or Fiscal 1995" after the words "Fiscal 1991,
Fiscal 1992, Fiscal 1993 or Fiscal 1994" on the third line thereof.
Except to the extent specifically amended hereby, the provisions of
the Employment Agreement shall remain unmodified, and the Employment
Agreement as amended hereby is hereby confirmed as being in full force and
effect.
WITNESS the due execution by the parties hereto.
/s/ A. F. Loewy
Arthur Loewy
THE TJX COMPANIES, INC.
By: /s/ Bernard Cammarata
Bernard Cammarata
EMPLOYMENT AGREEMENT AMENDMENT
This Amendment dated as of January 31, 1994 amends the
Amended and Restated Employment Agreement dated as of February 1,
1992 (the "Agreement") between RICHARD LESSER and The TJX
Companies, Inc., a Delaware corporation, whose principal office
is in Framingham, Massachusetts 01701.
The parties hereto, in consideration of the mutual
agreements contained in the Agreement, agree that, effective
January 31, 1994, the Agreement is amended by deleting Section
3(f) thereof and substituting the following new Section 3(f)
therefor:
"(f) MIP Awards. Executive shall be eligible to receive
awards under the Company's Management Incentive Plan ("MIP")
applicable to Executive. The scope and conditions of any award
shall be established annually by mutual agreement between
Executive and the Committee. For fiscal year's 1993 and 1994,
Executive shall be entitled to earn up to 40% of his Base Salary
as a Target Award or up to 70% of his Base Salary as a Maximum
Award, as the case may be. For fiscal year 1995 and thereafter,
unless subsequently modified by mutual agreement between
Executive and the Committee, Executive shall be entitled to earn
up to 40% of his Base Salary as a Target Award or up to 80% of
his Base Salary as a Maximum Award, as the case may be."
/s/ Richard Lesser
Executive - Richard Lesser
THE TJX COMPANIES, INC.
By: /s/ Bernard Cammarata
Bernard Cammarata
President and
Chief Executive Officer
EMPLOYMENT AGREEMENT AMENDMENT
This Amendment dated as of January 31, 1994 amends the
Amended and Restated Employment Agreement dated as of February 1,
1992 (the "Agreement") between DONALD G. CAMPBELL and The TJX
Companies, Inc., a Delaware corporation, whose principal office
is in Framingham, Massachusetts 01701.
The parties hereto, in consideration of the mutual
agreements contained in the Agreement, agree that, effective
January 31, 1994, the Agreement is amended by deleting Section
3(f) thereof and substituting the following new Section 3(f)
therefor:
"(f) MIP Awards. Executive shall be eligible to receive
awards under the Company's Management Incentive Plan ("MIP")
applicable to Executive. The scope and conditions of any award
shall be established annually by mutual agreement between
Executive and the Committee. For fiscal year's 1993 and 1994,
Executive shall be entitled to earn up to 30% of his Base Salary
as a Target Award or up to 60% of his Base Salary as a Maximum
Award, as the case may be. For fiscal year 1995 and thereafter,
unless subsequently modified by mutual agreement between
Executive and the Committee, Executive shall be entitled to earn
up to 35% of his Base Salary as a Target Award or up to 70% of
his Base Salary as a Maximum Award, as the case may be."
/s/ Donald G. Campbell
Executive - Donald G. Campbell
THE TJX COMPANIES, INC.
By: /s/ Bernard Cammarata
Bernard Cammarata
President and
Chief Executive Officer
THE TJX COMPANIES, INC.
MANAGEMENT INCENTIVE PLAN
(as amended through January 30, 1994)
THE TJX COMPANIES, INC. MANAGEMENT INCENTIVE PLAN
Section Title Page
1 Purpose 1
2 Definitions 1
3 Effective Date 2
4 Administration 2
5 Eligibility 2
6 Description of Awards 2
7 Determination of Awards 3
8 Payment of Awards 5
9 Deferral of Awards 5
10 Designation of Beneficiary 5
11 Notices 6
12 Rights of Participants 6
13 No Employment Rights 6
14 Certain Payments Upon a
Change of Control 6
15 Nonalienation of Award 7
16 Withholding Taxes 7
17 Termination, Amendment,
and Modification 7
18 Headings and Captions 7
19 Controlling Law 7
20 Miscellaneous Provisions 7
21 Awards to Certain Officers 8
THE TJX COMPANIES, INC.
MANAGEMENT INCENTIVE PLAN
1. Purpose
The purpose of The TJX Companies, Inc. ("TJX") Management
Incentive Plan (the "Plan") is to provide officers and other
employees who are key to the annual growth and profitability
of TJX with reward opportunities commensurate with their
performance relative to annual objectives.
2. Definitions
Unless the context requires otherwise, the following
expressions as used in the Plan shall have the meanings
ascribed to each below, it being understood that masculine,
feminine, and neuter pronouns are used interchangeably, and
that each comprehends the others.
(a) "Company" shall mean TJX and its subsidiaries.
(b) "E.C.C." shall mean the Executive Compensation
Committee of the Board of Directors of TJX. A member
of the E.C.C. shall not be eligible to participate in
the Plan while serving as a member of the E.C.C. or one
year prior to becoming a member of the E.C.C.
(c) "Fiscal Year" shall mean the fifty-two or fifty-three
week period ending on the last Saturday in January, and
commencing on the Sunday following the last Saturday in
January of the preceding calendar year.
(d) "Participant" shall mean any officer or other employee
of TJX or any subsidiary of TJX who is designated a
Participant pursuant to Section 5 below.
(e) "Performance Criteria" shall mean the standards of
measurement of performance by the Company, performance
by any division or subsidiary of the Company, and/or
individual performance for each Performance Period as
established by the E.C.C. pursuant to paragraph (a) of
Section 6 below.
(f) "Performance Goal" shall mean the level of performance
with respect to each Performance Criterion at which
awards are payable pursuant to this Plan. Performance
Goals are established by the E.C.C. pursuant to
paragraph (b) of Section 6 below.
(g) "Performance Period" shall mean one Fiscal Year.
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3. Effective Date
The effective date of the Plan shall be January 28, 1979.
The effective date of this amendment and restatement of the
Plan shall be January 30, 1994.
4. Administration
This Plan shall be administered by the E.C.C. The E.C.C.
shall have full authority to interpret the Plan; to
establish, amend, and rescind rules for carrying out the
Plan; to administer the Plan; to determine the terms and
provisions of any agreements pertaining to the Plan; and to
make all other determinations necessary or advisable for its
administration. The E.C.C. shall not be bound to any
standards of uniformity or similarity of action,
interpretation, or conduct in the discharge of its duties
hereunder, regardless of the apparent similarity of the
matters coming before it. Its determination shall be
binding on all parties.
Members of the E.C.C. who are Participants in the Plan may
not act with respect to matters related to their own awards.
No member or former member of the E.C.C. or the Board of
Directors of TJX shall be liable for any action or
determination made in good faith with respect to the Plan or
any award or payment made under the Plan.
5. Eligibility
For each Performance Period, the E.C.C. shall designate
those Participants who may be entitled to receive annual
management incentive awards, subject to the terms and
conditions of the Plan.
6. Description of Awards
(a) Designation of Performance Criteria
At the commencement of each Performance Period, the
E.C.C. shall determine the Performance Criteria for
said Performance Period and the relative weight to be
given to each Performance Criterion. Performance
Criteria and the weighing thereof may vary by
Participant and may be different for different
Performance Periods. Such Performance Criteria may
include, but shall not be limited to, measures such as
pre-tax income, pre-tax income as a percentage of
sales, return on investment, or other measures specific
to a Participant's annual performance objectives.
These criteria may be based on Company, divisional,
subsidiary and/or individual performance as designated
by the E.C.C.
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(b) Performance Goals
At the commencement of each Performance Period, the
E.C.C. shall determine a range of Performance Goals
from minimum to target to maximum for each Performance
Criterion for said Performance Period, based upon the
Company, divisional or subsidiary Business Plan for
said Fiscal Year. Performance Goals are subject to the
approval of the President of TJX. Performance Goals
may vary by Participant and may be different for
different Performance Periods.
At any time designated by the E.C.C. during a
Performance Period or thereafter, but prior to award
payment, appropriate adjustments in the Performance
Goals may be made to avoid undue windfalls or hardships
due to external conditions outside the control of
management, changes in method of accounting,
nonrecurring or abnormal items, or other matters as the
E.C.C. shall, in its sole discretion, determine.
(c) Award Opportunity
At the commencement of each Performance Period, the
E.C.C. shall assign to each Participant the minimum,
target and maximum opportunity to be earned for said
Performance Period, based upon the Participant's
position and ability to impact annual performance
relative to goals during the Performance Period. Award
opportunity may be expressed as a fixed amount or as a
percentage of the Participant's actual base salary
earned for the Performance Period.
From time to time, discretionary awards, in addition to
the annual management incentive awards, may be made by
the E.C.C. to any Participant due to outstanding
performance or extraordinary circumstances which occur
during the Performance Period. Recommendations of
Participants to receive discretionary awards shall be
made by the President of TJX.
7. Determination of Awards
(a) Upon completion of each Performance Period and
certification of the Company's financial statements by
the Company's independent public accountants for the
Fiscal Year included in such Performance Period, the
E.C.C. shall review performance relative to Performance
Goals, as adjusted from time to time in accordance with
paragraph (b) of Section 6 above, and determine the
value of the awards for each Performance Period,
subject to the approval of the President of TJX and/or
the Chairman of the Board of TJX.
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Achievement of Performance Goals shall result in
payment of the target award. Failure to achieve
Performance Goals will result in a decrease or
elimination of the Participant's award. Exceeding
Performance Goals will result in an increased award.
Performance Goal awards may be adjusted upward or
downward by the E.C.C. due to special circumstances or
individual performance review. Without limiting the
generality of the foregoing, the Committee may reduce
or eliminate awards to Participants receiving "Needs
Improvement" performance ratings.
(b) If an employee becomes a Participant after the
beginning of a Performance Period, the award payable to
him shall be prorated in accordance with the portion of
the Performance Period in which he is a Participant.
(c) In the event of termination of employment of a
Participant for any reason prior to the last day of the
Performance Period, a Participant thereafter shall have
no further rights under the Plan and shall not be
entitled to payment of any award.
If termination of employment occurs (i) by reason of
death, (ii) due to normal retirement under a retirement
plan of the Company, or earlier retirement after age 55
with the consent of the Company, or (iii) with the
consent of the Company, the E.C.C. may, in its sole
discretion, value and direct that all or some portion
of the award be deemed earned and payable, taking into
account the duration of employment during the
Performance Period, the Participant's performance, and
other matters as the E.C.C. shall deem appropriate. In
the event of termination of employment for cause, as
defined and determined by the E.C.C. in its sole
discretion, no payment shall be made with regard to any
prior or current Performance Period.
(d) If a Participant shall be actively employed by the
Company less than a full Performance Period because of
an accident or illness but completes 26 weeks of active
employment during said Performance Period, the award
otherwise payable to said Participant for said
Performance Period shall not be reduced because of a
failure of active employment due to such accident or
illness.
If a Participant shall be actively employed by the
Company less than a full Performance Period because of
an accident or illness and does not complete 26 weeks
of active employment during said Performance Period,
said Participant shall receive such award, if any, for
said Performance Period as the E.C.C. shall determine.
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Any time for which a Participant receives sick leave
and/or vacation payments shall be deemed active
employment time. Any time for which a Participant
receives short-term income protection, short-term
disability and/or long-term disability payments shall
not be deemed active employment time.
The provisions in this Section 7 are subject to the
terms of any employment agreement, severance agreement
or severance plan applicable to any one or more
participants and in the event of any conflict, such
terms shall control payment.
8. Payment of Awards
As soon as practicable after valuation of the award for each
Performance Period, payment shall be made in cash with
respect to the award earned by each Participant.
9. Deferral of Awards
Participants who are designated by the E.C.C. as being
eligible to participate in the TJX General Deferred
Compensation Plan may elect to defer all or a portion of
their awards in accordance with the terms of such General
Deferred Compensation Plan.
10. Designation of Beneficiary
(a) Subject to applicable law, each Participant shall have
the right to file with the E.C.C., to the attention of
the Vice President, Human Services Director, TJX, a
written designation of one or more persons as the
beneficiary(ies) who shall be entitled to receive the
amount, if any, payable under the Plan upon his death.
A Participant may from time to time revoke or change
his beneficiary by filing a new designation with the
E.C.C. The last such designation received by the
E.C.C. shall be controlling, provided, however, that no
designation change or revocation thereof, shall be
effective unless received by the E.C.C. prior to the
Participant's death, and in no event shall it be
effective as of a date prior to receipt.
(b) If no such beneficiary designation is in effect at the
time of a Participant's death, or if no designated
beneficiary survives the Participant, or if such
designation conflicts with law, the payment of the
amount, if any, payable under the Plan upon his death
shall be made to the Participant's estate. If the
E.C.C. is in doubt as to the right of any person to
receive any amount, the E.C.C. may retain such amount,
without liability for any interest thereon, until the
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rights thereto are determined, or the E.C.C. may pay
such amount into any court of appropriate jurisdiction,
and such payment shall be a complete discharge of the
liability of the Plan, the Company, and the E.C.C.
therefor.
11. Notices
Each Participant whose employment relationship with the
Company has terminated, either voluntarily or involuntarily,
shall be responsible for furnishing the Vice President,
Human Services Director, TJX, with the current and proper
address for the mailing of notices and the delivery of
agreements and payments. Any notice required or permitted
to be given shall be deemed given if directed to the person
to whom addressed at such address and mailed by regular
United States mail, first-class and prepaid. If any item
mailed to such address is returned as undeliverable to the
addressee, mailing shall be suspended until the Participant
furnishes the proper address.
12. Rights of Participants
Nothing contained in the Plan and no action taken pursuant
to the Plan shall create or be construed to create a trust
of any kind, or a fiduciary relationship between the Company
and any Participant or his legal representative or
designated beneficiary, or other persons.
If and to the extent that any Participant or his legal
representative or designated beneficiary, as the case may
be, acquires a right to receive any payment from the Company
pursuant to the Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company.
13. No Employment Rights
Nothing in this Plan or any other document describing or
referring to this Plan shall be deemed to confer on any
Participant the right to continue in the employ of the
Company or his respective employer or affect the right of
such employer to terminate the employment of any such person
with or without cause.
14. Certain Payments Upon a Change of Control
If, upon a Change of Control (as defined in Exhibit A
hereto) of TJX, amounts payable or that would or might be
payable in respect of an individual under the Plan instead
are paid to such individual or his estate or beneficiary
pursuant to any change of control severance plan or
agreement, or any similar plan, agreement or arrangement, to
which the Company is a party, payments in respect of such
individual hereunder shall be reduced pro tanto.
-6-
15. Nonalienation of Award
No amounts or other rights under the Plan shall be sold,
transferred, assigned, pledged, or otherwise disposed of or
encumbered by a Participant, except as provided herein, and
shall not be subject to attachment, garnishment, execution,
or other creditor's processes.
16. Withholding Taxes
The Company shall have the right to deduct withholding taxes
from any payments made pursuant to the Plan, or make such
other provisions as it deems necessary or appropriate to
satisfy its obligations to withhold federal, state, or local
income or other taxes incurred by reason of payments
pursuant to the Plan.
17. Termination, Amendment and Modification
The E.C.C. or the Board of Directors of TJX may from time to
time amend, modify, or discontinue the Plan or any provision
hereof. No amendment to or discontinuance or termination of
the Plan, shall, without the written consent of the
Participant, adversely affect any rights of such Participant
that have vested. This Plan shall continue until terminated
by the E.C.C. or the Board of Directors of TJX.
18. Headings and Captions
The headings and captions herein are provided for reference
and convenience only, shall not be considered part of the
Plan, and shall not be employed in the construction of the
Plan.
19. Controlling Law
This Plan shall be construed and enforced according to the
laws of the Commonwealth of Massachusetts, to the extent not
preempted by Federal law, which shall otherwise control.
20. Miscellaneous Provisions
(a) All costs and expenses involved in administering the
Plan as provided herein, or incident thereto, shall be
borne by the Company.
(b) The E.C.C. may, in its sole discretion, reduce or
eliminate awards granted or money payable to any
Participant or all Participants if it determines that
such awards or payment may cause the Company to violate
any applicable law, regulation, controls, or
guidelines. Such reduction or elimination may be made
notwithstanding that the possible violation might be
eliminated by reducing or not increasing compensation
-7-
or benefits of other associates, it being the intent of
the Plan not to inhibit the discretion of the Company
to provide such forms and amounts of compensation and
benefits to employees as it deems advisable.
21. Awards to Certain Officers
The provisions of this Section 21 shall apply,
notwithstanding any other provision of the Plan to the
contrary, in the case of any award made to a person expected
to be described in Section 162(m)(3) of the Internal Revenue
Code at the time the award is to be paid, as determined by
the E.C.C. at the time of the award. In the case of any
such award: (a) Performance Criteria shall be based on
divisional pre-tax earnings (excluding inventory
capitalization costs) of one or more divisions, which may be
weighted by division, determined in accordance with GAAP
consistently applied; (b) the specific Performance Criteria
established by the E.C.C. with respect to any award shall be
subject to mandatory adjustment for any change in law
(including tax laws and statutory rates), regulations and
interpretations occurring after the grant date affecting
such divisional pre-tax earnings by more than one (1%)
percent; (c) the maximum amount payable under any Plan award
to any such individual shall be $1,300,000; and (d) those
provisions of the Plan generally applicable to awards
hereunder which give to the E.C.C. or any other person
discretion to modify the award after the establishment and
grant of the award shall be deemed inapplicable to the
extent (but only to the extent) the retention of such
discretion by such person would be deemed inconsistent with
qualification of the award as performance-based within the
meaning of Section 162(m)(4)(C) of the Internal Revenue
Code.
-8-
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 TJX
Companies, Inc. ("TJX") 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 no transaction
shall be deemed to be a Change of Control as to a
Participant (i) if the person or each member of a group
of persons acquiring control is excluded from the
definition of the term "Person" hereunder or (ii)
unless the Executive Compensation Committee (the
"Committee") shall otherwise determine prior to such
occurrence, if the Participant or a Participant Related
Party is the Person or a member of a group constituting
the Person acquiring control; or
(b) any Person other than TJX, any wholly-owned
subsidiary of TJX, or any employee benefit plan of TJX
or such a subsidiary becomes the owner of 20% or more
of TJX's Common Stock and thereafter individuals who
were not directors of TJX 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 TJX'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 TJX's Board of Directors and thereafter
individuals who were not directors of TJX 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 TJX's Board of Directors; or
-1-
(d) TJX 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 TJX shall be owned, leased or
otherwise controlled by another Person and (ii)
individuals who are directors of TJX 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 TJX 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 TJX 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
TJX'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 TJX 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 TJX shall expressly so determine
in any future transaction or transactions.
-2-
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; provided, however,
that the term "Person" shall not include (a) any individuals who
are descendants of Max Feldberg or Morris Feldberg, the founders
of the Company, (b) any relatives of the fourth degree of
consanguinity or closer of such descendants or (c) custodians,
trustees or legal representatives of such persons.
A "Participant Related Party" shall mean, with respect to a
Participant, any affiliate or associate of the Participant other
than TJX or a Subsidiary of TJX. 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, TJX).
"Participant" means a participant in the Plan.
THE TJX COMPANIES, INC.
1982 LONG RANGE MANAGEMENT
INCENTIVE PLAN
(as amended through September 8, 1993)
THE TJX COMPANIES, INC.
1982 LONG RANGE MANAGEMENT
INCENTIVE PLAN
SECTION TITLE PAGE
1 Purpose 1
2 Definitions 1
3 Effective Date 2
4 Administration 2
5 Eligibility 2
6 Description of Awards 3
7 Payment of Awards 4
8 Deferral of Awards 4
9 Termination of Employment 4
10 Disability 5
11 Designation of Beneficiary 5
12 Notices 6
13 Rights of Participants 6
14 Certain Payments Upon a Change of Control 6
15 No Employment Rights 7
16 Nonalienation of Award 7
17 Withholding Taxes 7
18 Termination, Amendment, and Modification 7
19 Headings and Captions 7
20 Controlling Law 8
21 Miscellaneous Provision 8
THE TJX COMPANIES, INC.
1982 LONG RANGE MANAGEMENT
INCENTIVE PLAN
1. Purpose
The purpose of the 1982 Long Range Management Incentive
Plan (the "Plan") is to advance the interests of The TJX
Companies, Inc. ("TJX") and its shareholders by providing
competitive incentive compensation to those officers and
key employees of TJX and its subsidiaries (collectively
the "Company"), upon whose judgment, initiative, and
efforts the Company depends for its profitable growth. It
is expected that this Plan will enable the Company to
attract, retain, motivate, and reward the best qualified
executives.
2. Definitions
Unless the context requires otherwise, the following words
as used in the Plan shall have the meanings ascribed to
each below, it being understood that masculine, feminine,
and neuter pronouns are used interchangeably, and that
each comprehends the others.
(a) "Award Period" shall mean a period of
three consecutive Fiscal Years, specified
by the E.C.C. Award Periods may overlap
and employees may participate
simultaneously with respect to more than
one Award Period.
(b) "E.C.C." shall mean the Executive Compensation
Committee of the Board of Directors of TJX.
A member of the E.C.C. shall not be
eligible to participate in the Plan while
serving as a member of the E.C.C. or one
year prior to becoming a member of the
E.C.C.
(c) "Fiscal Year" shall mean the fifty-two or
fifty-three week period ending on the last
Saturday in January, and commencing on the
Sunday following the last Saturday in
January of the preceding calendar year.
(d) "Participant" shall mean any officer or other
key employee of TJX or any subsidiary of
TJX who is designated a Participant by the
E.C.C. pursuant to the Plan.
(e) "Performance Criteria" shall mean the standards
of measurement of performance by the Company, or
performance by any division or subsidiary of the
Company for each Award Period established by the
E.C.C. for awards under the Plan, based upon
objectives selected by the E.C.C. from the long-range
plans and strategic goals of the Company, division or
subsidiary, as the case may be.
(f) "Performance Goal" for any Participant with respect
to any Performance Criterion shall mean the level of
performance at which maximum award is payable
pursuant to this Plan. Performance Goals are
established by the E.C.C. pursuant to paragraph (b)
of Section 6 below.
3. Effective Date
The effective date of the Plan shall be January 31, 1982.
The effective date of this amendment and restatement of
the Plan shall be September 8, 1993.
4. Administration
This Plan shall be administered by the E.C.C. The E.C.C.
shall have full authority to interpret the Plan; to
establish, amend, and rescind rules for carrying out the
Plan; to determine the terms and provisions of any
agreements pertaining to the Plan, and to make all other
determinations necessary or advisable for its
administration. The E.C.C. shall not be bound to any
standards of uniformity or similarity of action,
interpretation, or conduct in the discharge of its duties
hereunder, regardless of the apparent similarity of the
matters coming before it. Its determination shall be
binding on all parties.
No member or former member of the E.C.C. or the Board of
Directors of TJX shall be liable for any action or
determination made in good faith with respect to the Plan
or any award or payment made under the Plan.
5. Eligibility
At the commencement of each Award Period, the E.C.C. shall
designate Participants subject to the terms and conditions
of the Plan. The E.C.C. may, in special circumstances,
designate additional Participants for any Award Period
subsequent to the commencement of said Award Period.
-2-
The E.C.C. will consider, but shall have no obligation to
follow, recommendations from the President and Chief
Executive Officer of TJX as to the designation of
Participants.
6. Description of Awards
(a) Designation of Performance Criteria
At the commencement of each Award Period, the E.C.C.
shall determine one or more Performance Criteria for
each Award Period and the relative weight to be given
to each Performance Criterion. Performance Criteria
and the weighting thereof may vary by Participant and
may be different for different Award Periods. Such
Performance Criteria may include, but shall not be
limited to, measures such as pre-tax income, return
on sales, and return on shareholders equity.
(b) Performance Goals
At the commencement of each Award Period, the E.C.C.
shall establish a range of Performance Goals from
minimum to maximum for each Performance Criteria for
said Award Period. Performance Goals may vary by
Participant and may be different for different Award
Periods.
At any time designated by the E.C.C. during an Award
Period or thereafter, but prior to award payment,
appropriate adjustments in the goals may be made by
the E.C.C. to avoid undue windfalls or hardships due
to external conditions outside the control of
management, changes in method of accounting,
nonrecurring or abnormal items, or other matters as
the E.C.C. shall, in its sole discretion, determine.
(c) Award Opportunity
Upon the designation of each Participant, the E.C.C.
shall designate the maximum award, expressed in
dollars or a percent of average base salary, payable
to each Participant upon attainment of all
Performance Goals for said Participant, and the
reduction in maximum award upon attainment of less
than the Performance Goal for any Criterion. Failure
to achieve a Performance Goal will result in a
decrease in value, thereby eliminating or
substantially reducing the Participant's award. In
making each grant, the E.C.C. shall consider the
Participant's salary, position, and ability to impact
the performance against goals during the Award
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Period. Upon completion of each Award Period and
certification of the Company's financial statements
by the Company's independent public accountants for
the last Fiscal Year included in each Award Period,
the E.C.C. shall review performance against goals, as
adjusted from time to time in accordance with
subsection 6(b) hereof, and determine the award
payable to each.
7. Payment of Awards
As soon as practicable after E.C.C. determination of
awards for each Award Period, payment shall be made in
cash to each Participant.
8. Deferral of Awards
Participants who are designated by the E.C.C. as being
eligible to participate in The TJX Companies, Inc. General
Deferred Compensation Plan may elect to defer all or a
portion of their awards in accordance with the terms of
such General Deferred Compensation Plan. In the absence
of such election, the E.C.C., in its sole discretion, in
consideration of a Participant's request, may defer all or
a portion of an award in accordance with the terms of such
General Deferred Compensation Plan.
9. Termination of Employment
In the event of termination of employment for any reason
prior to the last day of an Award Period, a Participant
thereafter shall have no further rights under the Plan and
shall not be entitled to payment of any award.
In the event of termination of employment for cause, as
defined and determined by the E.C.C., in its sole
discretion, no payment shall be made with regard to any
prior or current Award Period.
If termination of employment occurs (i) by reason of
death, (ii) due to normal retirement under a retirement
plan of the Company, or earlier retirement after age 55
with the consent of the Company, or (iii) with the consent
of the Company, the E.C.C. may, in its sole discretion,
value and direct that all or a portion of a Participant's
award be deemed earned and payable, taking into account
the duration of employment during the Award Period, the
Participant's performance, and such other matters as the
E.C.C. shall deem appropriate.
In the event of death, payment, if any, shall be made as
soon as practicable following the end of the Fiscal Year
in which such event occurred. In the event of other
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termination, payment, if any shall be made after
completion of the applicable Award Period(s) in accordance
with Section 7.
The provisions in this Section 9 are subject to the terms
of any employment agreement, severance agreement or
severance plan applicable to any one or more participants,
and in the event of conflict such terms shall control
payment.
10. Disability
If a Participant shall be actively employed less than a
full Award Period because of an accident or illness but
shall be actively employed at least twenty-six weeks
within each Fiscal Year included within said Award Period,
the award payable to said Participant for said Award
Period shall not be reduced because of a failure of active
employment because of such disability. If a Participant
shall be actively employed less than a full Award Period
because of an accident or illness and shall not be
actively employed at least twenty-six weeks within each
Fiscal Year included within said Award Period, said
Participant shall earn such portion of the award payable
to him for said Award Period as the E.C.C. shall
determine. The time during which a Participant shall be
receiving sick leave and/or vacation payment shall be
deemed active employment time. Time during which a
Participant shall be receiving short-term income
protection, short-term disability, and/or long-term
disability payments shall not be deemed active employment
time. The provisions in this Section 10 are subject to
the terms of any employment agreement, severance agreement
or severance plan applicable to any one or more
participants, and in the event of any conflict such terms
shall control payment.
11. Designation of Beneficiary
(a) Subject to applicable law, each Participant shall
have the right to file with the Company, to the
attention of the E.C.C. or such person as may be
designated by the E.C.C., a written designation of
one or more persons as the beneficiary(ies) who shall
be entitled to receive the amount, if any, payable
under the Plan upon his death. Person as used herein
shall mean a natural person, a trust, a partnership,
a corporation, or any other legal entity. A
Participant may, from time to time, revoke or change
his beneficiary by filing a new designation with the
E.C.C. The last such designation received by the
E.C.C. shall be controlling, provided, however, that
no designation change or revocation thereof shall be
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effective unless received by the E.C.C. prior to the
Participant's death, and in no event shall it be
effective as of a date prior to receipt.
(b) If no such beneficiary designation is in effect at
the time of a Participant's death, or if no
designated beneficiary survives that Participant, or
if such designation conflicts with law, the payment
of the amount, if any, payable under the Plan upon
his death shall be made to the Participant's estate.
If the E.C.C. is in doubt as to the right of any
person to receive any amount, the E.C.C. may retain
such amount, without liability for any interest
thereon, until the rights thereto are determined, or
the E.C.C. may pay such amount into any court of
appropriate jurisdiction, and such payment shall be a
complete discharge of liability of the Plan, the
Company and the E.C.C. therefor.
12. Notices
Each Participant whose employment relationship with the
Company has terminated, either voluntarily or
involuntarily, shall be responsible for furnishing the
E.C.C. with the current and proper address for the mailing
of notices and the delivery of agreements and payments.
Any notice required or permitted to be given shall be
deemed given if directed to the person to whom addressed
at such address and mailed by regular United States mail,
first-class and prepaid. If any item mailed to such
address is returned as undeliverable to the addressee,
mailing will be suspended until the Participant furnishes
the proper address.
13. Rights of Participants
Nothing contained in the Plan and no action taken pursuant
to the Plan shall create or be construed to create a trust
of any kind, or a fiduciary relationship between the
Company and any Participant or his legal representative or
designated beneficiary, or other persons.
If and to the extent that any Participant or his legal
representative or designated beneficiary, as the case may
be, acquires a right to receive any payment from the
Company pursuant to the Plan, such right shall be no
greater than the right of an unsecured general creditor of
the Company.
14. Certain Payments Upon a Change of Control
If, upon a Change of Control (as defined in Exhibit A
hereto) of TJX, amounts payable or that would or might be
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payable in respect of an individual under the Plan instead
are paid to such individual or his estate or beneficiary
pursuant to any change of control severance plan or
agreement, or any similar plan, agreement or arrangement,
to which the Company is a party, payments in respect of
such individual hereunder shall be reduced pro tanto.
15. No Employment Rights
Nothing in this Plan or any other document describing or
referring to this Plan shall be deemed to confer on any
Participant the right to continue in the employ of the
Company or his respective employer or affect the right of
such employer to terminate the employment of any such
person with or without cause.
16. Nonalienation of Award
No amounts payable or other rights under the Plan shall be
sold, transferred, assigned, pledged, or otherwise
disposed of or encumbered by a Participant, except as
provided herein, and shall not be subject to attachment,
garnishment, execution, or other creditor's processes.
17. Withholding Taxes
The Company shall have the right to deduct withholding
taxes from any payments made pursuant to the Plan, or make
such other provisions as it deems necessary or appropriate
to satisfy its obligations for withholding federal, state
or local income or other taxes incurred by reason of
payments pursuant to the Plan.
18. Termination, Amendment, and Modification
The E.C.C. or the Board of Directors of TJX may from time
to time amend, modify, or discontinue the Plan or any
provision hereof. No amendment to, or discontinuance, or
termination of the Plan shall, without the written consent
of the Participant, adversely affect any rights of such
Participants that have vested. This Plan shall continue
until terminated by the E.C.C. or the Board of Directors
of TJX.
19. Headings and Captions
The headings and captions herein are provided for
reference and convenience only, shall not be considered
part of the Plan, and shall not be employed in the
construction of the Plan.
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20. Controlling Law
This Plan shall be construed and enforced according to the
laws of the Commonwealth of Massachusetts, to the extent
not preempted by Federal law, which shall otherwise
control.
21. Miscellaneous Provision
(a) All costs and expenses involved in administering the
Plan as provided herein, or incident thereto, shall
be borne by the Company.
(b) Participation in this Plan shall not preclude an
employee from participation in any other TJX plans or
benefits.
(c) The E.C.C. may, in its sole discretion, reduce or
eliminate awards granted or money payable to any
Participant or all Participants if it determines that
such awards or payments may cause the Company to
violate any applicable law, regulation, controls, or
guidelines. Such reduction or elimination may be
made notwithstanding that the possible violation
might be eliminated by reducing or not increasing
compensation or benefits of other associates, it
being the intent of the Plan not to inhibit the
discretion of the Company to provide such forms and
amounts of compensation and benefits to employees as
it deems advisable.
(d) In the event of the merger, sale, consolidation,
dissolution, liquidation, or change of control of
TJX, the E.C.C. may, in its sole discretion, value
and cause to be paid all or any portion of the unpaid
award for any prior or current Award Period.
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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 TJX
Companies, Inc. ("TJX") 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 no transaction
shall be deemed to be a Change of Control as to a
Participant (i) if the person or each member of a
group of persons acquiring control is excluded from
the definition of the term "Person" hereunder or (ii)
unless the Executive Compensation Committee (the
"Committee") shall otherwise determine prior to such
occurrence, if the Participant or a Participant
Related Party is the Person or a member of a group
constituting the Person acquiring control; or
(b) any Person other than TJX, any wholly-owned
subsidiary of TJX, or any employee benefit plan of
TJX or such a subsidiary becomes the owner of 20% or
more of TJX's Common Stock and thereafter individuals
who were not directors of TJX 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 TJX'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 TJX's Board of Directors and
thereafter individuals who were not directors of TJX
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 TJX's Board of Directors;
or
(d) TJX 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 TJX shall be owned, leased or
otherwise controlled by another Person and (ii)
individuals who are directors of TJX 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 TJX 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 TJX 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 TJX'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 TJX 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 TJX shall expressly so determine in any
future transaction or transactions.
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; provided,
however, that the term "Person" shall not include (a) any
individuals who are descendants of Max Feldberg or Morris
Feldberg, the founders of the Company, (b) any relatives of the
fourth degree of consanguinity or closer of such descendants or
(c) custodians, trustees or legal representatives of such
persons.
A "Participant Related Party" shall mean, with respect to
a Participant, any affiliate or associate of the Participant
other than TJX or a Subsidiary of TJX. 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, TJX).
"Participant" means a participant in the Plan.
(As amended on September 11, 1986,
December 16, 1986, June 1, 1987,
October 22, 1987, September 14, 1988,
February 9, 1989, April 6, 1989,
June 20, 1989, April 8, 1993,
May 11, 1993 and September 8, 1993)
THE TJX COMPANIES, INC.
1986 STOCK INCENTIVE PLAN
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.......... 3
SECTION 6. STOCK OPTIONS.................................... 3
SECTION 7. STOCK APPRECIATION RIGHTS; DISCRETIONARY
PAYMENTS........................................ 6
SECTION 8. RESTRICTED STOCK; UNRESTRICTED STOCK.............. 7
SECTION 9. DEFERRED STOCK AWARDS............................. 9
SECTION 10. PERFORMANCE UNIT AWARDS........................... 9
SECTION 11. OTHER STOCK-BASED AWARDS; SUPPLEMENTAL GRANTS.... 10
SECTION 12. TRANSFER, LEAVE OF ABSENCE....................... 12
SECTION 13. AMENDMENTS AND TERMINATION....................... 13
SECTION 14. STATUS OF PLAN................................... 13
SECTION 15. CHANGE OF CONTROL PROVISIONS..................... 13
SECTION 16. GENERAL PROVISIONS............................... 14
SECTION 17. DEFINITIONS...................................... 14
DEFINITION OF "CHANGE OF CONTROL"............................ 17
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 three
Disinterested Persons, 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 Units 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 rates determined by the Committee) or dividends or
deemed dividends on such deferrals; and
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(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 6,000,000, 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 (i)
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,
and (ii) Awards and Stock subject to Awards outstanding as of the Company's
1993 fiscal year end (January 30, 1993) shall be counted even if forfeited,
reacquired by the Company, or satisfied without the issuance of Stock.
Subject to such overall limitation, shares may be issued up to such maximum
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.
No Stock Option or Stock Options shall be awarded in any calendar year
to any one "covered associate" (as that term is defined in Section 162(m)
of the Code, as amended by the Revenue Reconciliation Act of 1993) covering
shares, in the aggregate for such year, in excess of the applicable limit.
For purposes of the preceding sentence, the term "applicable limit" shall
mean (a) for any calendar year ending on or prior to December 31, 1993,
300,000 shares, and (b) for any calendar year beginning on or after January
1, 1994, the number of shares available generally for awards under the
Plan, determined under the first paragraph of this Section 3(a) as of the
close of the immediately preceding year, or such smaller number of shares
as the Committee may determine consistent with Section 162(m) of the Code.
(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
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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) only to the extent that the substitute Awards are both
(i) granted to persons whose relationship to the Company does not make (and
is not expected to make) them subject to Section 16(b) of the Act and (ii)
are granted in substitution for awards issued under a plan approved, to the
extent then required under Rule 16b-3 (or any successor rule under the Act)
by the stockholders of the entity which issued such predecessor awards.
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 Company or a
subsidiary (within the meaning of Section 422 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 7, 2003,
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.
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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. If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or
any Subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price shall be not less than 110% of
Fair Market Value on the grant date.
(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. If an employee owns or is deemed to own (by reason
of the attribution rules of Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation and an Incentive Stock Option is granted
to such employee, the term of such option shall be no more than five years
from the date of grant.
(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 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
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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.
(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 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) 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, or for
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Cause, any Stock Option held by such optionee may thereafter be exercised
to the extent 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.
(k) Incentive Stock Options. Notwithstanding any other provision of
the Plan, the aggregate Fair Market Value (determined as of the time of
grant) of the Stock with respect to which "incentive stock options" granted
after December 31, 1986 are exercisable for the first time by an employee
during any calendar year (under the Plan and all other stock option plans
of the Company or its Subsidiaries or any parent corporation) shall not
exceed $100,000. The provisions of this subsection (k) shall be construed
and applied in accordance with Section 422(d) of the Code and the
regulations, if any, promulgated thereunder.
(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
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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.
(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.
(iv) A Stock Appreciation Right granted in tandem with an
Incentive Stock Option may be exercised only when the market
price of the Stock subject to the Incentive Stock Option
exceeds the exercise price of such option.
(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
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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 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.
(f) Rules Relating to Exercise. In the case of a participant subject
to the restrictions of Section 16(b) of the Act no stock appreciation right
(as referred to in Rule 16b-3(e) or any successor Rule under the Act) shall
be exercised (and no request or payment under paragraph (d) above shall be
honored or made) except in compliance with any applicable requirements of
Rule 16b-3(e) or any successor rule. Notwithstanding paragraph (a) above,
in the event of such exercise (or request and payment) during the exercise
period currently prescribed by such rule, the Committee may prescribe, by
rule of general application, such other measure of value as it may
determine but not in excess of the highest per share closing sale price of
the Common Stock reported on the New York Stock Exchange Composite
Transactions Index during such period and, where a Stock Appreciation Right
relates to an Incentive Stock Option, not in excess of an amount consistent
with the qualification of such Stock Option as an "incentive stock option"
under Section 422 of the Code.
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) equal to or less than their par value, 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,
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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.
(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 equal annual installments
each of one-third of such shares, and (iii) future shares of
Restricted Stock may be granted which specify any vesting
date provided that on a cumulative basis such shares, when
no longer subject to restrictions under the Plan, do not
exceed 200,000 shares. The Committee at any time may
accelerate such date or dates and otherwise waive or,
subject to Section 13, or 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 at a purchase price not to exceed par value per share) 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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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 payable on the Deferred
Stock had such Stock been outstanding, all as determined by the Committee
in its sole discretion.
SECTION 10. PERFORMANCE UNIT AWARDS.
(a) Nature of Performance Units. A Performance Unit 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
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goals. The Committee in its sole discretion shall determine whether and to
whom Performance Unit Awards shall be made, 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
awarded Performance Unit. Performance Units may be awarded independently
of or in connection with the granting of any other Award under the Plan.
(b) Award Agreement. Unless the Committee shall otherwise determine,
a participant shall have no rights with respect to a Performance Unit 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 Unit Award Agreement.
(c) Restrictions on Transfer. Performance Unit Awards and all rights
with respect to such Awards may not be sold, assigned, transferred, pledged
or otherwise encumbered, and if exercisable over a specified period, 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 Performance
Unit 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 Unit Award only upon
satisfaction of all conditions therefor specified in the Performance Unit
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 Performance Unit 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 by the Company and its Subsidiaries, the
Committee may in its sole discretion accelerate, waive or, subject to
Section 13, amend any or all of the goals, restrictions or conditions
imposed under any Performance Unit Award.
(g) Exercise. The Committee in its sole discretion shall establish
procedures to be followed in exercising any Performance Unit, which
procedures shall be set forth in the Performance Unit Award Agreement. The
Committee may at any time provide that payment under a Performance Unit
shall be made, upon satisfaction of the applicable performance goals,
without exercise by the participant. Except as otherwise specified by the
Committee, (i) a Performance Unit granted in tandem with a Stock Option may
be exercised only while the Stock Option is exercisable, and (ii) the
exercise of a Performance Unit granted in tandem with any Award shall
reduce the number of shares subject to the related Award on such basis as
is specified in the Performance Unit Award Agreement.
SECTION 11. OTHER STOCK-BASED AWARDS; SUPPLEMENTAL GRANTS.
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(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"). Such awards may include, without limitation, securities
(including shares of Preferred Stock not exceeding in the aggregate 150,000
shares) convertible into or exchangeable for shares of Stock upon such
conditions, including attainment of performance goals, as the Committee
shall determine. Subject to the purchase price limitations in
paragraph (b) below, such convertible or exchangeable securities may have
such terms and conditions as the Committee may determine at the time of
grant. However, no convertible or exchangeable debt or preferred stock
shall be issued unless the Committee shall have provided (by Company right
of repurchase, right to require conversion or exchange or other means
deemed appropriate by the Committee) a means of avoiding any right of the
holders of such debt or Preferred Stock to prevent a Company transaction by
reason of covenants in such debt or voting rights in such Preferred Stock.
(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, subject to the following conditions. No equity security
other than Stock may be issued pursuant to an Other Stock-based Award
unless (i) issued at no cost to the recipient (or for a purchase price not
in excess of the par value of any preferred stock so issued) or (ii) sold
by the Company and the Company shall have received payment for such equity
security equal to at least 50% of its Fair Market Value on the grant or
issuance date, as determined in good faith by the Committee. In addition,
no shares of Stock (whether acquired by purchase, conversion or exchange or
otherwise) shall be issued unless (i) issued at no cost to the recipient
(or for a purchase price not in excess of the par value of the Stock) or
(ii) sold, converted or exchanged by the Company, and the Company shall
have received payment for such Stock or securities so exchanged or
converted equal to at least 50% of Fair Market Value of the Stock on the
grant or effective date, or the exchange or conversion date, under the
Award, as specified by the Committee. 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).
(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.
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(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.
(h) Supplemental Grants. The Company may in its sole discretion make
a loan to the recipient of an Award hereunder, either on or after the date
of grant of such Award. Such loans may be made either in connection with
the exercise of a Stock Option, a Stock Appreciation Right, or an Other
Stock-based Award, in connection with the purchase of shares under any
Award, or in connection with the payment of any federal income tax in
respect of income recognized under an Award. The Committee shall have full
authority to decide whether to make a loan hereunder and to determine the
amount, term and provisions of any such loan, including the interest rate
(which may be zero) charged in respect of any such loan, whether the loan
is to be secured or unsecured or with or without recourse against the
borrower, the terms on which the loan is to be repaid and the conditions,
if any, under which it may be forgiven. However, no loan hereunder shall
have a term (including extensions) exceeding ten years in duration or be in
an amount exceeding the total exercise or purchase price paid by the
borrower under an Award under the Plan plus an amount equal to the cash
payment permitted in the following paragraph.
The Committee may at any time authorize a cash payment, in respect of
the grant or exercise of an Award under the Plan or the lapse or waiver of
restrictions under an Award, which shall not exceed the amount which would
be required in order to pay in full the federal income tax due as a result
of ordinary income recognized by the recipient under both the Award and
such cash payment, in each case assuming that such income is taxed at the
regular maximum marginal rate applicable to individuals under the Code as
in effect at the time such income is includable in the recipient's income.
Subject to the foregoing, the Committee shall have complete authority to
decide whether to make such cash payments in any case, to make provision
for such payments either simultaneously with or after the grant of the
associated Award, and to determine the amount of each such payment.
SECTION 12. TRANSFER, LEAVE OF ABSENCE.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
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(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 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 (or provide
substitute Awards at the same or reduced exercise or purchase price or with
no exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it
were then initially granted under this Plan) 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, unless approved by stockholders,
shall be effective if it would 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.
(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
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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 or
Preferred 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 (or
Preferred Stock) not then subject to restrictions under any Company plan or
(ii) have the Company hold back from the transfer or vesting Stock (or
Preferred Stock) having a value calculated to satisfy such withholding
obligation. Notwithstanding the foregoing, in the case of a participant
subject to the restrictions of Section 16(b) of the Act, no such election
shall be effective unless made in compliance with any applicable
requirements of Rule 16b-3 or any successor rule under the Act.
SECTION 17. DEFINITIONS.
The following terms shall be defined as set forth below:
(a) "Act" means the Securities Exchange Act of 1934.
(b) "Award" or "Awards" except where referring to a particular
category of grant under the Plan shall include Incentive
Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Unrestricted
Stock Awards, Deferred Stock Awards, Performance Unit Awards
and Other Stock-based Awards.
(c) "Board" means the Board of Directors of the Company.
(d) "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.
(e) "Code" means the Internal Revenue Code of 1986, as amended,
and any successor Code, and related rules, regulations and
interpretations.
(f) "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.
(g) "Deferred Stock Award" is defined in Section 9(a).
(h) "Disability" means disability as determined in accordance
with standards and procedures similar to those used under
the Company's long term disability program.
(i) "Disinterested Person" shall have the meaning set forth in
Rule 16b-3(d)(3) promulgated under the Act, or any successor
definition under the Act.
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(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-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(m) "Normal Retirement" means retirement from active employment
with the Company and its Subsidiaries on or after the normal
retirement date specified in The TJX Companies, Inc.
Retirement Plan.
(n) "Other Stock-based Award" is defined in Section 11(a).
(o) "Performance Unit Award" is defined in Section 10(a).
(p) "Restricted Stock Award" is defined in Section 8(a).
(q) "Stock" means the Common Stock, $1.00 par value, of the
Company, subject to adjustments pursuant to Section 3.
(r) "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.
(s) "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 6.
(t) "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.
(u) "Unrestricted Stock Award" is defined in Section 8(b).
-18-
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 no transaction
shall be deemed to be a Change of Control as to a Participant (i) if
the person or each member of a group of persons acquiring control is
excluded from the definition of the term "Person" hereunder or (ii)
unless the Committee shall otherwise determine prior to such
occurrence, if the Participant or a Participant Related Party is the
Person or a member of a group constituting the Person acquiring
control; 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
(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
-19-
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.
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; provided, however, that the term
-20-
"Person" shall not include (a) any individuals who are descendants of Max
Feldberg or Morris Feldberg, the founders of the Company, (b) any relatives
of the fourth degree of consanguinity or closer of such descendants or (c)
custodians, trustees or legal representatives of such persons.
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.
THE TJX COMPANIES, INC.
LONG RANGE PERFORMANCE INCENTIVE PLAN
(as amended through January 30, 1994)
1. Purpose
The purpose of The TJX Companies, Inc. Long Range
Performance Incentive Plan (the "Plan") is to promote the
long-term success of The TJX Companies, Inc. (the "Company")
and its shareholders by providing competitive incentive
compensation to those officers and selected employees upon
whose judgment, initiative, and efforts the Company depends
for its profitable growth.
2. 1986 Stock Incentive Plan
Since shares of Common Stock of the Company ("Common Stock")
may be issued under this Plan, this Plan shall be subject to
the terms of the Company's 1986 Stock Incentive Plan
("Incentive Plan") and any shares so issued shall be issued
under the Incentive Plan.
3. Term
The Plan shall be effective as of January 25, 1992 (the
start of fiscal year 1993), and the Plan shall remain in
effect until terminated by the Company's Board of Directors
(the "Board") or until termination of the Incentive Plan, if
earlier.
4. Plan Administration
The Plan shall be administered by the same Committee that
administers the Incentive Plan. The Committee shall have
full and exclusive power to interpret the Plan and to adopt
such rules, regulations and guidelines for carrying out the
Plan as it may deem necessary or proper, consistent with the
Incentive Plan.
5. Eligibility and Target Award
Any key employee (an "Employee") of the Company or any of
its Subsidiaries who could receive an award under the
Incentive Plan shall be eligible to receive awards under the
Plan.
At the commencement of each three-year performance cycle
(the "Performance Cycle"), the Committee shall designate
those who will participate in the Plan (the "Participants")
and their target awards (the "Awards"). Subsequent to the
commencement of a Performance Cycle, the Committee may, in
special circumstances, designate additional Participants and
their target awards for such Performance Cycle.
-1-
6. Award Goals
At the commencement of each Performance Cycle, the Committee
shall set one or more performance goals (the "Performance
Goals") for such Performance Cycle, the relative weight to
be given to each Performance Goal, and a schedule for
determining payments if actual performance is above or below
the goal. For the Performance Cycles for fiscal years 1993-
1995 and 1994-1996, the Committee shall specify a minimum
(which shall be 50% irrespective of any attainment of
Performance Goals) and a maximum (not to exceed 150%) of the
Award which may be earned. For the Performance Cycles for
fiscal years 1995-1997 and thereafter, Awards shall not
provide for any minimum payment; however, the Committee for
each such Cycle shall establish a maximum (not to exceed
150%) of the Award which may be earned.
At any time designated by the Committee during a Performance
Cycle or thereafter, but prior to Award payment, appropriate
adjustments in the goals may be made by the Committee to
avoid undue windfalls or hardships due to external
conditions outside the control of management, nonrecurring
or abnormal items, or other matters as the Committee shall,
in its sole discretion, determine appropriate to avoid undue
windfalls or hardships.
As soon as practicable after the end of the Performance
Cycle, the Committee shall determine what portion of each
Award has been earned. Fifty percent of the Award payment
shall be paid in cash and the remaining 50% shall be paid in
an equivalent value of Common Stock, cash or any combination
thereof as the Committee in its sole discretion shall
determine. For this purpose, the value of Common Stock
shall be the closing price, regular way, on the New York
Stock Exchange on the trading day preceding the date of the
Committee meeting at which Award payments for the applicable
Performance Cycle are determined.
A participant shall have the right to defer the receipt of
any cash payment of any Award in accordance with the
provisions of the Company's General Deferred Compensation
Plan. The provisions of the Company's General Deferred
Compensation Plan notwithstanding, upon the request of a
Participant, The Committee, in its sole discretion, may (i)
modify any election by a Participant as aforesaid or (ii) in
the absence of such an election, change the scheduled time
for payment.
7. Termination
Awards are forfeited at termination of employment. However,
if termination of employment occurs by reason of (i) death,
(ii) disability (as determined under the Incentive Plan),
(iii) normal retirement under a retirement plan of the
-2-
Company, or earlier retirement after age 55 with the
consent of the Company, or (iv) with the consent of the Company, the
Committee may, in its sole discretion, direct that all or a
portion of a Participant's Award be paid, taking into
account the duration of employment during the Performance
Cycle, the Participant's performance, and such other matters
as the Committee shall deem appropriate. This Section 7
shall not apply to the extent the rights of a Participant in
such circumstances are governed by another agreement.
8. Transferability
Awards under the Plan will be nontransferable and shall not
be assignable, alienable, saleable or otherwise transferable
by the Participant other than by will or the laws of descent
and distribution.
9. Change of Control; Mergers, etc.
a. In the event the Company undergoes a Change of Control
as defined in the Incentive Plan, this Plan shall
automatically terminate and within 30 days following
such Change of Control, whether or not a Participant's
employment has been terminated, the Company shall pay
to the Participant the following in a lump sum in full
payment of his Award:
An amount with respect to each Performance Cycle for
which the Participant has been designated as a Plan
Participant equal to 50 percent of the product of (i)
the maximum Award for the Participant for such
Performance Cycle and (ii) a fraction, the denominator
of which is the total number of fiscal years in the
Performance Cycle and the numerator of which is the
number of fiscal years which have elapsed in such
Performance Cycle prior to the Change of Control (for
purposes of this fraction, if the Change of Control
occurs during the first quarter of a fiscal year, then
one-quarter of the fiscal year shall be deemed to have
lapsed prior to the Change of Control, and if the
Change of Control occurs after the first quarter of the
fiscal year, then the full fiscal year shall be deemed
to have elapsed prior to the Change of Control). For
purposes of this paragraph (a), the Valuation Date
shall be the day preceding the date of the Change of
Control. This paragraph (a) shall not apply to any
Participant whose rights under this Plan upon a Change
of Control are governed by another agreement or plan.
b. In the event of a merger or consolidation with another
company or in the event of a liquidation or
reorganization of the Company, other than any merger,
consolidation, reorganization or other event that
constitutes a Change of Control, the Committee may in
-3-
its sole discretion determine whether to provide for
adjustments and settlements of Awards. The Committee
may make such determination at the time of the Award or
at a subsequent date.
10. Amendment and Modification
The Board may from time to time amend, modify, or
discontinue the Plan or any provision hereof. No such
amendment to, or discontinuance, or termination of the Plan
shall, without the written consent of a Participant,
adversely affect any rights of such Participant under an
outstanding Award.
11. Withholding Taxes
The Company shall have the right to deduct withholding taxes
from any payments made pursuant to the Plan, or make such
other provisions as it deems necessary or appropriate to
satisfy its obligations for withholding federal, state, or
local income or other taxes incurred by reason of payments
pursuant to the Plan.
Participants may elect in a writing furnished to the
Committee prior to the Valuation Date to satisfy their
federal tax obligations with respect to any shares paid
hereunder by directing the Company to withhold an equivalent
value of shares.
12. Future Rights
No person shall have any claim or rights to be granted an
Award under the Plan, and no Participant shall have any
rights under the Plan to be retained in the employ of the
Company.
13. Awards to Certain Officers
The provisions of this Section 13 shall apply,
notwithstanding any other provision of the Plan to the
contrary, in the case of any Award made to a person expected
to be described in Section 162(m)(3) of the Internal Revenue
Code at the time the Award is to be paid, as determined by
the Committee at the time of the Award. In the case of any
such Award: (a) Performance Goals shall be based on
divisional pre-tax earnings (excluding inventory
capitalization costs) of one or more divisions, which may be
weighted by division, determined in accordance with GAAP
consistently applied; (b) the specific Performance Goals
established by the Committee with respect to any Award shall
be subject to mandatory adjustment for any change in law
(including tax laws and statutory rates), regulations and
interpretations occurring after the grant date affecting
such divisional pre-tax earnings by more than one (1%)
-4-
percent; (c) the maximum amount payable under any Plan
Award to any such individual shall be $1,300,000; and (d) those
provisions of the Plan generally applicable to Awards
hereunder which give to the Committee or any other person
discretion to modify the Award after the establishment and
grant of the Award shall be deemed inapplicable to the
extent (but only to the extent) the retention of such
discretion by such person would be deemed inconsistent with
qualification of the Award as performance-based within the
meaning of Section 162(m)(4)(C) of the Internal Revenue
Code."
-5-
Consolidated Statements of Income The TJX Companies, Inc.
January 29, January 30,January 25,
Fiscal Year Ended 1994 1993 1992
(53 Weeks)
Dollars in Thousands Except Per Share Amounts
Net sales $3,626,604 $3,261,240 $2,757,715
Cost of sales, including buying and
occupancy costs 2,722,826 2,467,935 2,117,555
Selling, general and administrative
expenses 674,055 593,889 491,647
Interest on debt and capital leases 19,041 26,298 27,289
Income from continuing operations
before income taxes, extraordinary
item and cumulative effect of
accounting changes 210,682 173,118 121,224
Provision for income taxes 83,636 69,074 51,110
Income from continuing operations before
extraordinary item and cumulative
effect of accounting changes 127,046 104,044 70,114
(Loss) on the disposal of discontinued
operations, net of income taxes - - (50,000)
Extraordinary (loss), net of income taxes - (1,198) -
Cumulative effect of accounting changes,
net of income taxes (2,667) - -
Net income 124,379 102,846 20,114
Preferred stock dividends (7,156) (3,939) -
Net income available to common
shareholders $ 117,223 $ 98,907 $ 20,114
Number of common shares for primary
and fully diluted earnings per
share computations 74,192,358 73,873,276 70,050,835
Primary and fully diluted earnings
per common share:
Continuing operations $1.62 $1.40 $1.00
Discontinued operations - - (.71)
Extraordinary (loss) - (.02) -
Cumulative effect of accounting
changes (.04) - -
Net income $1.58 $1.38 $ .29
Cash dividends per common share $ .50 $ .46 $ .46
The accompanying notes are an integral part of the financial statements.
1
Consolidated Balance Sheets The TJX Companies, Inc.
January 29, January 30,
1994 1993
In Thousands
Assets
Current assets:
Cash and cash equivalents $ 58,102 $ 106,691
Accounts receivable 30,639 24,121
Merchandise inventories 772,324 672,354
Prepaid expenses 20,791 17,893
Total current assets 881,856 821,059
Property at cost:
Land and buildings 110,793 86,952
Leasehold costs and improvements 256,929 222,665
Furniture, fixtures and equipment 398,106 347,558
765,828 657,175
Less accumulated depreciation and amortization 326,685 277,550
439,143 379,625
Other assets 13,744 9,070
Goodwill, net of amortization 92,627 95,342
Total Assets $1,427,370 $1,305,096
Liabilities
Current liabilities:
Current installments of long-term debt $ 5,936 $ 4,204
Accounts payable 340,578 325,778
Accrued expenses and other current liabilities 245,139 245,765
Total current liabilities 591,653 575,747
Long-term debt, exclusive of current installments 210,854 179,787
Deferred income taxes 33,963 44,378
Shareholders' Equity
Preferred stock at face value, authorized
5,000,000 shares, par value $1, issued
and outstanding cumulative convertible
stock of:
- 250,000 shares of 8% Series A 25,000 25,000
- 1,650,000 shares of 6.25% Series C 82,500 82,500
Common stock, par value $1, authorized
150,000,000 shares, issued and
outstanding 73,430,615 and 73,221,635 shares 73,431 73,222
Additional paid-in capital 284,744 279,800
Retained earnings 125,225 44,662
Total shareholders' equity 590,900 505,184
Total Liabilities and Shareholders' Equity $1,427,370 $1,305,096
The accompanying notes are an integral part of the financial statements.
2
Consolidated Statements of Shareholders' Equity The TJX Companies, Inc.
Preferred Common Additional Retained
Stock, Stock, Par Paid-in Earnings
Face Value Value $1 Capital (Deficit) Total
In Thousands
Balance, January 26, 1991 $ - $69,723 $259,040 $(58,256) $270,507
Net income - - - 20,114 20,114
Cash dividends - - (32,093) - (32,093)
Sale and issuance of
common stock, net
of shares repurchased,
under stock
incentive plans - 80 1,180 - 1,260
Other - - 729 - 729
Balance, January 25, 1992 - 69,803 228,856 (38,142) 260,517
Net income - - - 102,846 102,846
Cash dividends:
Preferred stock - - - (3,939) (3,939)
Common stock - - (16,070) (16,103) (32,173)
Sale and issuance of
cumulative convertible
preferred stock:
Series A 25,000 - (850) - 24,150
Series C 82,500 - (2,221) - 80,279
Sale and issuance of
common stock, net
of shares repurchased,
under stock
incentive plans - 310 3,157 - 3,467
Conversion of 7 1/4%
convertible subordinated
debentures, net - 3,109 65,474 - 68,583
Other - - 1,454 - 1,454
Balance, January 30, 1993 107,500 73,222 279,800 44,662 505,184
Net income - - - 124,379 124,379
Cash dividends:
Preferred stock - - - (7,156) (7,156)
Common stock - - - (36,660) (36,660)
Sale and issuance of
common stock, net
of shares repurchased,
under stock
incentive plans - 209 4,563 - 4,772
Other - - 381 - 381
Balance,January 29, 1994 $107,500 $73,431 $284,744 $125,225 $590,900
The accompanying notes are an integral part of the financial statements.
3
Consolidated Statements of Cash Flows The TJX Companies, Inc.
January 29, January 30, January 25,
Fiscal Year Ended 1994 1993 1992
(53 Weeks)
In Thousands
Cash flows from operating activities:
Income from continuing operations
before extraordinary item and
cumulative effect of accounting changes $127,046 $104,044 $ 70,114
Adjustments to reconcile income from
continuing operations before
extraordinary item and cumulative
effect of accounting changes to net
cash provided by operating activities:
Depreciation and amortization 67,544 62,933 56,782
Loss on property disposals 1,714 9,527 1,793
Other, net (277) 5,518 (1,213)
Changes in assets and liabilities:
(Increase) in accounts receivable (6,518) (2,292) (955)
(Increase) in merchandise
inventories (99,970) (119,888) (38,553)
(Increase) in prepaid expenses (2,898) (3,189) (1,500)
Increase in accounts payable 14,800 64,001 27,262
Increase (decrease) in accrued
expenses and other current
liabilities (13,993) 25,536 56,431
(Decrease) in deferred income taxes (3,000) (7,559) (14,595)
Net cash provided by operating
activities of:
Continuing operations 84,448 138,631 155,566
Discontinued operations - - (50,000)
Net cash provided by operating activities 84,448 138,631 105,566
Cash flows from investing activities:
Property additions (125,848) (107,881) (89,532)
Net cash (used in) investing activities (125,848) (107,881) (89,532)
Cash flows from financing activities:
Proceeds from borrowings of
long-term debt 37,000 - 5,500
Principal payments on long-term debt (4,201) (10,392) (6,628)
Defeasance of 8 1/8% promissory notes - (51,897) -
Proceeds from sale and issuance of
Series A and Series C preferred
stock, net - 104,429 -
Proceeds from sale and issuance of
common stock, net 3,828 3,081 1,155
Cash dividends paid (43,816) (36,112) (32,091)
Other - (462) -
Net cash provided by (used in) financing
activities (7,189) 8,647 (32,064)
4
Net increase (decrease) in cash and
cash equivalents (48,589) 39,397 (16,030)
Cash and cash equivalents at beginning
of year 106,691 67,294 83,324
Cash and cash equivalents at end of year $ 58,102 $106,691 $ 67,294
The accompanying notes are an integral part of the financial statements.
5
Selected Information By Major Business Segment The TJX Companies, Inc.
January 29, January 30, January 25,
Fiscal Year Ended 1994 1993 1992
(53 Weeks)
In Thousands
Net sales:
Off-price family apparel stores $2,832,070 $2,588,603 $2,207,232
Off-price women's specialty stores 373,133 381,979 377,109
Off-price catalog operation 421,401 290,658 173,374
$3,626,604 $3,261,240 $2,757,715
Operating income (loss):
Off-price family apparel stores $ 236,988 $ 216,726 $ 180,937
Off-price women's specialty stores 5,013 (5,548) (26,451)
Off-price catalog operation 24,651 22,967 13,366
266,652 234,145 167,852
General corporate expense* 34,312 32,108 16,715
Goodwill amortization 2,617 2,621 2,624
Interest expense 19,041 26,298 27,289
Income from continuing operations
before income taxes, extraordinary
item and cumulative effect of
accounting changes $ 210,682 $ 173,118 $ 121,224
Identifiable assets:
Off-price family apparel stores $ 963,750 $ 848,987 $ 747,785
Off-price women's specialty stores 98,351 97,956 103,853
Off-price catalog operation 162,424 126,842 73,711
Corporate, primarily cash and goodwill 202,845 231,311 179,970
$1,427,370 $1,305,096 $1,105,319
Capital expenditures excluding
capitalized leases:
Off-price family apparel stores $ 91,723 $ 68,504 $ 60,008
Off-price women's specialty stores 7,902 6,258 11,916
Off-price catalog operation 16,676 19,350 15,413
Corporate 9,547 13,769 2,195
$ 125,848 $ 107,881 $ 89,532
Depreciation and amortization:
Off-price family apparel stores $ 47,369 $ 44,237 $ 39,982
Off-price women's specialty stores 10,726 11,535 11,544
Off-price catalog operation 5,055 3,665 2,389
Corporate, including goodwill 4,394 3,496 2,867
$ 67,544 $ 62,933 $ 56,782
* The fiscal year ended January 29, 1994 includes start-up costs of the
Company's United Kingdom venture. The fiscal years ended January 29, 1994
and January 30, 1993 include the net operating results of HomeGoods and
Value Mart. The fiscal year ended January 30, 1993 also includes reserves
for closing most Value Mart locations. The fiscal years ended January 30,
1993 and January 25, 1992 include reserves for the Hit or Miss real estate
repositioning.
6
Notes to Consolidated Financial Statements The TJX Companies, Inc.
Summary of Accounting Policies
Fiscal Year: The Company's fiscal year ends on the last Saturday in January.
The fiscal years ended January 29, 1994 and January 25, 1992 each included 52
weeks. The fiscal year ended January 30, 1993 included 53 weeks.
Basis of Presentation: The consolidated financial statements of The TJX
Companies, Inc. include the financial statements of all the Company's wholly-
owned subsidiaries, including its foreign owned subsidiaries.
Accounting Changes: Effective January 31, 1993, the Company adopted Statement
of Financial Accounting Standards (SFAS) No. 106 "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and recorded a one-time
implementation charge of $6,145,000, net of taxes of $3,937,000, as a
cumulative effect of accounting change. See Note E for further information.
In addition, effective January 31, 1993, the Company also implemented
Statement of Financial Accounting Standards (SFAS) No. 109 "Accounting for
Income Taxes" which resulted in an after-tax gain of $3,478,000 which was also
recorded as a cumulative effect of accounting change. See Note D for further
information.
Cash Equivalents: The Company generally considers highly liquid investments
with an initial maturity of three months or less to be cash equivalents. The
Company's investments are primarily high grade commercial paper or time
deposits with major banks. Fair value of cash equivalents approximates
carrying value.
Merchandise Inventories: Inventories are stated at the lower of cost or
market. The Company primarily uses the retail method for valuing inventories
on the first-in first-out basis.
Depreciation and Amortization: For financial reporting purposes, the Company
provides for depreciation and amortization of property principally by the use
of the straight-line method, over the estimated useful lives of the assets.
Leasehold costs and improvements are generally amortized over the lease term
or their estimated useful life, whichever is shorter. Maintenance and repairs
are charged to expense as incurred. Upon retirement or sale, the cost of
disposed assets and the related depreciation are eliminated and any gain or
loss is included in net income. Debt discount and related issue expenses are
amortized over the lives of the related debt issues. Pre-opening costs are
charged to operations within the fiscal year that a new store or facility
opens.
Goodwill: Goodwill is primarily the excess of the purchase price incurred
over the carrying value of the minority interest in the Company's former 83%-
owned subsidiary. The minority interest was acquired pursuant to the
Company's fiscal 1990 restructuring. In addition, goodwill includes the
excess of cost over the estimated fair market value of the net assets of
Winners Apparel Ltd., acquired by the Company effective May 31, 1990.
Goodwill is being amortized over 40 years. Annual amortization of goodwill
was $2.6 million in fiscal years 1994, 1993 and 1992. Cumulative amortization
7
as of January 29, 1994 and January 30, 1993 was $12.0 million and $9.4
million, respectively.
Capitalized Interest: The Company capitalizes interest related to the
development of real estate locations. Interest in the amount of $171,000,
$317,000 and $36,000 was capitalized in fiscal years 1994, 1993 and 1992,
respectively.
Net Income Per Common Share: Primary and fully diluted net income per common
share is based upon the weighted average number of common and common
equivalent shares and other dilutive securities outstanding in each year after
adjusting net income for preferred stock dividends of $7.2 million and $3.9
million in fiscal 1994 and 1993, respectively.
Foreign Currency Translation: The assets and liabilities of the Company's
foreign operations are translated at the year-end exchange rate, and the
income statement items are translated at the average exchange rates prevailing
during the year. Cumulative foreign currency translation losses of $1.6
million and $.5 million for the fiscal years 1994 and 1993, respectively, are
recorded as a component of additional paid-in capital.
Other: Certain amounts in prior years' financial statements have been
reclassified for comparative purposes.
8
A. Long-Term Debt and Credit Lines
At January 29, 1994 and January 30, 1993, long-term debt, exclusive of current
installments, consisted of the following (information as to interest rates and
maturity dates as of January 29, 1994 only):
January 29, January 30,
1994 1993
In Thousands
Real estate mortgages, interest at 8.25% to
10.4% maturing February 1, 1997 to
November 1, 1998 $ 42,823 $ 47,252
Equipment notes, interest at 11% to 11.25%
maturing December 12, 2000 to
December 30, 2001 6,031 7,535
General corporate debt:
9 1/2% sinking fund debentures, maturing
May 1, 2016 with $4,400,000 annual sinking
fund requirement beginning May 1, 1997 100,000 100,000
9.2% senior unsecured notes, maturing
November 30, 1995 25,000 25,000
Medium term notes, interest at 4.53% to
5.87%, maturing October 21, 1996 to
October 21, 2003 37,000 -
Total general corporate debt 162,000 125,000
Long-term debt, exclusive of current installments $210,854 $179,787
The aggregate maturities of long-term debt, exclusive of current installments,
outstanding at January 29, 1994 are as follows:
Real Estate General
Mortgages and Corporate
Fiscal Year Equipment Notes Debt Total
In Thousands
1996 $ 6,304 $ 25,000 $ 31,304
1997 6,673 22,000 28,673
1998 6,079 4,400 10,479
1999 28,671 4,400 33,071
Later years 1,127 106,200 107,327
Aggregate maturities
of long-term debt $48,854 $162,000 $210,854
Real estate mortgages are collateralized by land and buildings. While the
parent company is not directly obligated with respect to the real estate
mortgages, it or a wholly-owned subsidiary has guaranteed the leases which
have been assigned as collateral for such debt.
On October 14, 1993, the Company placed several series of notes totalling $37
million under its Medium Term Note (MTN) program.
9
Principal Term Interest Rate
Series 1 $15 Million 10 Years 5.87%
Series 2 12 Million 3 Years 4.53%
Series 3 10 Million 3 Years 4.55%
The borrowings under this program are to support the Company's international
and domestic new business development and capital expenditures. To hedge the
Company's investment in its foreign subsidiaries, it entered into foreign
currency swap agreements in both Canadian dollars and British pounds sterling,
in amounts equivalent to the MTN borrowings. The interest rate payable on the
foreign currency is slightly higher than the interest received on the currency
exchanged. This resulted in a deferred charge of $3.5 million which is being
amortized to interest expense over the related terms of the swap agreements.
Since the swap agreements are accounted for as a hedge against the Company's
investment in foreign subsidiaries, foreign exchange gains and losses on the
agreements are recognized in shareholders' equity, offsetting translation
adjustments associated with the Company's investment in foreign operations.
The swap agreements contain rights of offset designed to reduce the Company's
exposure to credit loss in the event of nonperformance by one of the
counterparties. The counterparties to these agreements consist of a limited
number of credit-worthy international financial institutions.
In May 1992, the Company completed an "in-substance defeasance" of its
outstanding $50 million 8 1/8% promissory notes due May 1, 1993. The net
proceeds of the Series A preferred stock offering (see Note C) were applied
towards the purchase of $51.9 million of U. S. Treasury Bonds which were
placed in trust. The U. S. Treasury Bonds had scheduled maturities sufficient
to fund the Company's interest and principal payments due on the promissory
notes from May 1, 1992 through the final maturity date of May 1, 1993. The
Company incurred an after-tax extraordinary loss of $1.2 million, or $.02 per
common share, for the early extinguishment of this debt.
On December 30, 1992, the Company called for the redemption its 7 1/4%
convertible subordinated debentures, pursuant to a standby agreement with an
underwriter. As a result, virtually all of the $69.8 million of outstanding
debentures were converted into common stock with the balance redeemed. This
transaction resulted in the issuance of 3,108,755 shares of common stock and
increased shareholders' equity by $68.6 million. The standby fee paid to the
underwriter as well as other expenses associated with the transaction were
charged to additional paid-in capital.
As of January 29, 1994, the Company had unsecured committed lines of credit
with its banks in the amount of $200 million with interest payable at rates
equal to or less than prime. Actual short-term borrowings during the fiscal
year ended January 29, 1994 were at rates below prime. These lines are used
as backup to the Company's commercial paper program. At January 29, 1994, the
entire $200 million of committed lines were available for use. The Company
does not have any compensating balance requirements under these arrangements
but is required to pay a fee on the available credit lines and must maintain a
minimum net worth.
Pursuant to SFAS No. 107 "Disclosures About Fair Value of Financial
Instruments," the Company has estimated the fair value of its long-term debt,
including current installments. The fair value of the Company's long-term
debt was estimated by using the quoted market price, if available, or by using
discounted cash flow analysis based upon the Company's current incremental
borrowing rates for similar types of borrowing arrangements. The fair value
of long-term debt, including current installments at January 29, 1994 is
10
estimated to be $230.9 million versus a carrying value of $216.8 million.
These estimates do not necessarily reflect certain provisions or restrictions
in the various debt agreements which might affect the Company's ability to
settle these obligations.
B. Commitments
The Company is committed under long-term leases for its continuing operations
for the rental of real estate and fixtures and equipment, some of which meet
the SFAS No. 13 definition of capital leases. Leases are generally for a 10
year initial term with options to extend for one or more 5 year periods. In
addition, the Company is generally required to pay insurance, real estate
taxes and other operating expenses and in some cases rentals based on a
percentage of sales.
The following is a schedule of future minimum lease payments for continuing
operations as of January 29, 1994:
Capital Operating
Fiscal Years Leases Leases
In Thousands
1995 $ 1,050 $135,970
1996 1,050 130,898
1997 997 121,345
1998 117 109,241
1999 - 95,728
Later years - 315,643
Total minimum lease payments 3,214 $908,825
Less estimated executory costs (3)
Less amount representing interest (401)
Present value of net minimum capital
lease payments $2,810
The present value of net minimum capital lease payments is included in accrued
expenses and other current liabilities and property under capital leases is
included in furniture, fixtures and equipment on the balance sheets.
The rental expense under operating leases for continuing operations amounted
to $126.3 million, $112.4 million and $100.7 million for fiscal years 1994,
1993 and 1992, respectively. The present value of the Company's operating
lease obligations is $622.7 million as of January 29, 1994, including $78.0
million payable in fiscal 1995.
In fiscal 1990, the Company distributed to shareholders the common stock of
Waban Inc., its former warehouse club division. Subsequent to the
distribution, the Company continued to provide Waban with certain services,
primarily data processing for an agreed upon fee. Waban has elected to
continue data processing services only through July 1995. In addition, the
Company is contingently liable on a number of Waban leases. The Company
believes that in view of the nature of the leases and the fact that Waban is
primarily liable, the Company's contingent liability on the Waban leases will
not have a material effect on the Company's financial condition. For
information on leases acquired by Ames Department Stores, Inc., see Note H.
C. Stock Options, Stock Purchase Plans and Capital Stock
Under its stock option plan the Company has granted certain officers and key
employees options for the purchase of common stock generally within ten years
from the grant date at option prices of 100% of market price on the grant
11
date. Most options outstanding are exercisable at various percentages
starting one year after the grant, while certain options are exercisable in
their entirety three years after the grant date. There were approximately
1,005,000 shares exercisable under the option plans as of January 29, 1994.
During June 1993, the Company amended its 1986 stock option plan to increase
shares issuable under the plan by 3,000,000 and to extend the period during
which awards may be made under the plan through April 7, 2003.
On April 8, 1993, the Company adopted a stock option plan for non-employee
directors. Pursuant to the plan, each continuing or newly elected director
who is not a present or former employee of the Company will receive an option
to purchase 1,000 shares of common stock. On the date of each subsequent
annual meeting, each continuing non-employee director will be granted an
option to acquire an additional 500 shares of common stock and newly elected
directors will each receive an option to purchase 1,000 shares of common
stock. The exercise price of the options will be the fair market value of the
common stock on the date of grant. The option will expire ten years after the
date of grant and will become fully exercisable one year after the date of
grant. The plan will expire after five years, but options outstanding will
continue in effect according to their terms. A total of 50,000 shares have
been reserved for issuance under this plan subject to adjustment by stock
split and similar events.
12
Option activity during the past three fiscal years was as follows:
Shares Reserved for
Options Future
Option Prices Granted Grants
Outstanding at January 26, 1991 $10.250-$29.000 1,372,088 1,390,733
Options or other stock awards
granted 15.375- 17.625 488,650 (509,150)
Options exercised 10.250- 16.980 (80,735) -
Cancellations 10.250- 29.000 (78,968) 81,232
Outstanding at January 25, 1992 10.250- 29.000 1,701,035 962,815
Options or other stock awards
granted 16.750- 21.250 512,650 (641,583)
Options exercised 10.250- 18.875 (215,612) -
Cancellations 10.250- 29.000 (85,608) 85,960
Outstanding at January 30, 1993 10.250- 29.000 1,912,465 407,192
Additional options authorized
under 1986 plan - 3,000,000
Authorized under 1993 stock
option plan for non-employee
directors - 50,000
Options or other stock awards
granted 25.250- 32.875 566,790 (569,290)
Options exercised 10.250- 24.500 (249,719) -
Cancellations 10.250- 28.000 (46,568) 3,300
Outstanding at January 29, 1994 10.250- 32.875 2,182,968 2,891,202
The shares reserved for future grants have been reduced by restricted stock
awards issued under the 1986 Stock Incentive Plan, net of certain shares
forfeited, which are returned to the Company. Through fiscal 1994, there have
been a total of 486,001 shares issued and 80,625 shares forfeited. The shares
were issued at par value, or at no cost, and have restrictions which generally
lapse over three to five years from date of grant, with the exception of
performance accelerated shares. These shares have restrictions which
generally lapse equally over four to eight years, with a provision for
accelerated vesting depending upon the Company's earnings, or other specified
criteria. The market price in excess of cost is charged to income ratably
over the period during which the restrictions lapse. Such pre-tax charges
amounted to $1.7 million, $1.9 million and $.9 million in fiscal years 1994,
1993 and 1992, respectively.
In April 1992, the Company issued 250,000 shares of Series A cumulative
convertible preferred stock in a private offering. The shares have a face
value of $100 per share and are convertible into common stock at a price per
common share of $21. There are 1,190,476 common shares reserved for the
conversion of the Series A preferred stock. The net proceeds of $24.1 million
were applied towards the Company's defeasance of its $50 million 8 1/8%
promissory notes (see Note A). The Series A stock is not redeemable prior to
April 1, 1995. Starting April 1, 1995, the Company may redeem the stock for a
price of $104.80 per share, declining by $.80 per share each April 1
thereafter to $100 per share on April 1, 2001. The liquidation preference for
Series A preferred stock is currently $106.40 per share and also declines $.80
per share each April 1 to $100 per share on April 1, 2001.
13
In August 1992, the Company issued 1,650,000 shares of Series C cumulative
convertible preferred stock in a public offering. The shares have a face
value of $50 per share and are convertible into common stock at a price per
common share of $25.9375. There are 3,180,723 common shares reserved for the
conversion of the Series C preferred stock. The net proceeds of $80.3 million
were used to support the Company's capital expenditure program and for other
general corporate purposes. The Series C preferred stock is not redeemable
prior to September 1, 1995. Starting September 1, 1995, the Company may
redeem the stock for $52.1875 per share declining by $.3125 per share each
September 1 thereafter to $50 per share on September 1, 2002. The liquidation
preference for the Series C preferred stock is $50 per share.
Dividends on both the Series A and Series C preferred stock are payable
quarterly on the first business day of each calendar quarter and accrue from
date of issuance. The Company accrues the dividends evenly throughout the
year. In fiscal 1994, the Company recorded $2.0 million of dividends on the
Series A preferred and $5.2 million on the Series C preferred. In fiscal
1993, the Company recorded $1.6 million of dividends on Series A preferred and
$2.3 million on the Series C preferred. The preferred dividends reduce net
income to arrive at net income available to common shareholders.
The Series A and Series C preferred stock rank in parity with each other and
both are senior to all other capital stock of the Company with respect to
payment of dividends and upon liquidation. There are no voting rights for
either preferred stock unless dividends are in arrears for a specified number
of periods.
The Company's shareholder rights plan was redeemed subsequent to January 29,
1994 at a price of $.01 per common share. This redemption cost of $.7 million
will be charged directly to shareholders' equity in fiscal 1995.
D. Income Taxes
The provisions for income taxes were calculated according to SFAS No. 109 in
fiscal 1994 and according to Accounting Principles Board Opinion No. 11 in
fiscal 1993 and 1992. The retroactive impact of implementing SFAS No. 109 as
of January 31, 1993 reduced deferred income taxes by $3,478,000 which was
recorded as a gain due to the cumulative effect of an accounting change.
14
The provision for income taxes includes the following:
Fiscal Year Ended January 1994 1993 1992
In Thousands
Current:
Federal $70,523 $58,582 $25,325
State 16,632 18,647 11,319
Foreign 90 - -
Deferred:
Federal (2,870) (4,820) 11,459
State (739) (3,335) 3,007
Foreign - - -
Provision for income taxes $83,636 $69,074 $51,110
The fiscal 1994 deferred provision above reflects a $1.1 million benefit from
a Canadian net operating loss carryforward as well as a charge of $.4 million
for the adjustment of the Company's net deferred tax liability due to the
increase in the statutory federal income tax rate enacted during the year.
As of January 29, 1994, the Company had a net deferred tax liability as
follows:
In Thousands
Deferred tax assets:
- - Capital loss carryforward $49,568
- - Foreign net operating loss carryforwards 2,075
- - Reserves for discontinued operations 8,877
- - Insurance costs not currently deductible
for tax purposes 15,025
- - Pension, postretirement and employee benefits 15,427
- - Leases 4,318
- - Other 12,159
- - Valuation allowance (51,241)
Total deferred tax assets 56,208
Deferred tax liabilities:
- - Property, plant and equipment 27,337
- - Safe harbor leases 54,817
- - Other 8,017
Total deferred tax liabilities 90,171
Net deferred tax liability $33,963
The capital loss carryforward tax asset relates to the surrendering of the
Ames preferred stock upon consummation of the Ames reorganization plan.
Utilization of this pre-tax capital loss of $141.6 million is available
against future capital gains and thus this deferred tax asset is fully
reserved for in the valuation allowance.
The valuation allowance at the date of adoption was $50.6 million. The change
during the year is the result of changes in foreign net operating loss
carryforwards, utilization of a portion of the capital loss carryforward, and
revaluing the capital loss carryforward at the new federal income tax rate of
35%.
15
The Company has an available Canadian net operating loss carryforward of $2.4
million for tax purposes which has been fully recognized for financial
reporting purposes. The Company also has a United Kingdom net operating loss
carryforward of approximately $3 million for both tax and financial reporting
purposes. Future utilization of these operating loss carryforwards is
dependent upon future earnings of the Company's foreign subsidiaries. The
Canadian operating loss expires for tax purposes in fiscal 1999.
During fiscal 1993 and 1992, deferred income taxes were provided for
significant timing differences in the recognition of income and expenses for
income tax and financial reporting purposes. The following is a summary of
the major items comprising the federal and state deferred income tax provision
in those years:
Fiscal Year Ended January 1993 1992
In Thousands
Depreciation $(1,242) $(2,086)
Safe harbor leases (1,924) (1,280)
Alternative minimum tax - 1,682
Discontinued operations 8,731 17,620
Insurance costs not currently deductible (6,107) (1,501)
Other (7,613) 31
Federal and state deferred
income tax provision $(8,155) $14,466
The deferred income taxes related to safe harbor leasing transactions resulted
in a corresponding offset of the current tax provision. The investment in tax
leases amounted to $4.5 million at January 29, 1994, including a $.6 million
adjustment associated with the Federal tax rate increase, and $4.2 million at
January 30, 1993, and is included in other assets on the balance sheets.
The deferred income taxes associated with discontinued operations also
resulted in a corresponding offset to the current tax provision. This item
relates to the reversal of timing differences related to the loss on disposal
of discontinued operations. See Note H for further information.
The Company's worldwide effective tax rate was 40% for the fiscal years ended
January 29, 1994 and January 30, 1993 and 42% for the fiscal year ended
January 25, 1992. These effective rates differ from the statutory federal
income tax rate of 35% in fiscal 1994 and 34% in fiscal 1993 and 1992, by the
effective state income tax rate, net of federal tax benefit, of 5% in fiscal
1994, 6% in fiscal 1993, and 8% in fiscal 1992. The fiscal 1994 worldwide
effective rate includes the benefit of the Canadian net operating loss
carryforward offset by the impact of the Company's entry into the United
Kingdom. The higher effective rate for the fiscal year ended January 25, 1992
is primarily due to a limitation on state and foreign tax benefits for certain
divisions' operating losses in that year.
E. Pension Plans and Other Retirement Benefits
The Company has a non-contributory defined benefit retirement plan covering
the majority of full-time employees. Employees who have attained twenty-one
years of age and have completed one year of service are covered under the
plan. Benefits are based on compensation earned in each year of service. The
Company also has an unfunded supplemental retirement plan which covers certain
key employees of the Company and provides additional retirement benefits based
on average compensation.
16
Net periodic pension cost of the Company's plans includes the following
components:
Fiscal Year Ended January 1994 1993 1992
In Thousands
Service cost $ 3,375 $ 2,650 $ 2,171
Interest cost on projected benefit
obligation 5,995 5,466 4,984
Actual return on assets (12,188) (10,828) (10,856)
Net amortization and deferrals 5,760 5,031 5,660
Net periodic pension cost $ 2,942 $ 2,319 $ 1,959
The following table sets forth the funded status of the Company's pension
plans and the amounts recognized in the Company's statements of financial
position:
January 29, January 30,
1994 1993
In Thousands
Accumulated benefit obligation, including
vested benefits of $78,588 and $65,109 $84,049 $68,620
Projected benefit obligation $90,092 $72,045
Plan assets at fair market value 75,378 67,125
Projected benefit obligation in excess of
plan assets 14,714 4,920
Unrecognized net gain (loss) from past experience
different from that assumed and
effects of changes in assumptions (4,584) 2,131
Prior service cost not yet recognized in net
periodic pension cost (1,218) (984)
Unrecognized net asset (obligation) as of initial
date of application of SFAS No. 87 (138) 292
Accrued pension cost included in accrued expenses $ 8,774 $ 6,359
The projected benefit obligation in excess of plan assets is primarily
attributable to the Company's unfunded supplemental retirement plan.
The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligation was 7.0% and 8.0% for fiscal years
1994 and 1993, respectively. The rate of increase on future compensation
levels was 5% in fiscal years 1994 and 1993 and the expected long-term rate of
return on assets was 9.5% in fiscal years 1994 and 1993. The Company's
funding policy is to contribute annually an amount allowable for federal
income tax purposes. Pension plan assets consist primarily of fixed income
and equity securities.
Effective January 31, 1993, the Company adopted the Statement of Financial
Accounting Standards No. 106 "Employers' Accounting for Postretirement
Benefits Other Than Pensions." This standard requires accrual for the cost of
postretirement health care and life insurance benefits during the years that
an employee provides services to the Company. The Company has elected to
recognize the transition obligation in full as of January 31, 1993, and
accordingly has recorded a one-time implementation charge of $6,145,000, net
of a tax benefit of $3,937,000, as a cumulative effect of an accounting
change. The Company's cash flows are not impacted by the new accounting.
17
The Company's postretirement benefit plan is unfunded and provides limited
postretirement medical and life insurance benefits to associates who
participate in the Company's retirement plan and who retire at age 55 or older
with 10 years or more of service.
Net periodic postretirement benefit cost for fiscal 1994 totals $1.3 million
including $5 million of service cost and $.8 million of interest cost on
projected benefit obligation.
The components of the accumulated postretirement benefit obligation and the
amount recognized in the Company's statements of financial position at January
29, 1994 are as follows:
In Thousands
Accumulated postretirement obligation:
Retired associates $ 7,038
Fully eligible active associates 302
Other active associates 4,565
Accumulated postretirement obligation 11,905
Unrecognized net gain (loss) due to change in assumptions (1,140)
Accrued postretirement benefits included in accrued expense $10,765
Assumptions used in determining the actuarial present value of the accumulated
postretirement obligation include a discount rate of 7.0% at January 29, 1994
and 8.0% at January 31, 1993 and a medical inflation rate of 5% in both
periods. Due to the nature of the plan, the Company's exposure to medical
inflation is primarily limited to increases in the Medicare deductible.
The Company sponsors an employee savings plan under Section 401(k) of the
Internal Revenue Code for eligible employees. Employees may contribute up to
15% of eligible pay. The Company matches employee contributions up to 5% of
eligible pay at rates ranging from 25% to 50% based upon Company performance.
The Company contributed $2.2 million in fiscal 1994, $1.9 million in fiscal
1993 and $1.1 million in fiscal 1992.
Statement of Financial Accounting Standards No. 112 (SFAS No. 112) "Employers'
Accounting for Postemployment Benefits" was issued in November 1992 and
requires the recognition of an obligation for all benefits provided after
employment but before retirement to former or inactive employees.
Implementation of SFAS No. 112 is required for fiscal years beginning after
December 15, 1993. The Company has determined that the impact of SFAS No. 112
will be immaterial.
F. Accrued Expenses and Other Current Liabilities
The major components of accrued expenses and other current liabilities are as
follows:
January 29, January 30,
1994 1993
In Thousands
Employee compensation and benefits $ 59,296 $ 42,673
Reserves associated with discontinued
operations 17,618 45,944
Insurance, rent, utilities, advertising
and other 168,225 157,148
18
Accrued expenses and other current liabilities $245,139 $245,765
G. Supplemental Cash Flow Information
The Company's cash payments for interest expense and income taxes, including
discontinued operations, and its non-cash investing and financing activities
for the past three years are as follows:
January 29, January 30, January 25,
Fiscal Year Ended 1994 1993 1992
In Thousands
Cash paid for:
Interest, net of amounts
capitalized $18,573 $28,166 $27,328
Income taxes 94,580 65,040 37,955
Non-cash investing and financing
activities:
Conversion of 7 1/4% convertible
debentures into common stock - $69,031 -
Capital lease additions - 4,069 -
H. Investment in Ames Department Stores, Inc. and Contingent Liabilities
In October 1988, the Company completed the sale of its former Zayre Stores
division to Ames Department Stores, Inc. ("Ames"). The Company received
$431.4 million in cash, a 12%-16% ten-year $200 million increasing rate note
receivable (the "Ames Note"), which was paid on May 24, 1989, and 400,000
shares of 6% cumulative convertible senior preferred stock of Ames then valued
at $140 million.
In its results for the fiscal year ended January 27, 1990, the Company
provided a $185 million ($172.1 million after-tax) reserve against its
preferred stock investment in Ames Department Stores, Inc., and for contingent
lease and other liabilities associated with the sale of the former Zayre
Stores division to Ames in fiscal 1989. On April 25, 1990, Ames filed for
protection under Chapter 11 of the Federal Bankruptcy Code.
The Company continued to monitor the adequacy of its reserves since the April
1990 bankruptcy filing of Ames and in the fourth quarter of the fiscal year
ended January 25, 1992 increased its reserves by recording a charge of $50
million, net of tax benefits of $27 million, to discontinued operations.
On December 30, 1992, Ames emerged from bankruptcy via its Third Amended and
Restated Plan of Reorganization. Upon consummation of the plan, the Company
received $23 million in cash, 4% of the voting stock of the new Ames and the
right to receive up to an additional $7 million in cash based on Ames
exceeding its cash flow projections for future years by varying amounts. The
Company also surrendered the Ames preferred stock it received in the sale of
the Zayre Stores division. Ames also released all claims (including any
fraudulent conveyance and preference claim) that it might have had against the
Company. The Company is liable for certain amounts to be distributed under
the plan for certain unassigned landlord claims under certain former Zayre
19
store leases on which Zayre Corp. was liable as of the date of acquisition and
which Ames has rejected.
As of January 29, 1994, the Company has available reserves of $17.6 million
for lease and other contingent liabilities associated with the sale of the
Zayre stores to Ames and believes these reserves should be adequate to cover
all reasonably expected liabilities that it may incur as a result of the Ames
bankruptcy.
The Company remains contingently liable for the leases of most of the former
Zayre stores still operated by Ames. The Company also has the potential of
recognizing tax benefits, subject to federal income tax considerations,
related to the $141.6 million capital loss carryforward created by
surrendering the Ames preferred stock.
I. Segment Information
For data on industry segments for fiscal 1994, 1993 and 1992 see page 18.
20
Selected Financial Data (Continuing Operations)
Fiscal Year Ended January 1994 1993 1992 1991 1990
Dollars in Thousands Except Per Common Share Amounts
Income statement and
per common share data:
Net sales $3,626,604 $3,261,240 $2,757,715 $2,446,279 $2,148,735
Income from
continuing
operations
before extra-
ordinary item and
cumulative effect
of accounting
changes 127,046 104,044 70,114 74,128 75,685*
Number of common
shares for
primary and fully
diluted earnings
per common share
computations 74,192,358 73,873,276 70,050,835 72,924,288 68,083,045*
Earnings per common
share from continuing
operations before
extraordinary item
and cumulative effect
of accounting changes $1.62 $1.40 $1.00 $1.06 $1.16*
Dividends per common
share .50 .46 .46 .46 .40
Balance sheet data:
Working capital $ 290,203 $ 245,312 $ 171,611 $ 230,444 $ 193,631
Total assets 1,427,370 1,305,096 1,105,319 1,047,301 949,098
Capital expenditures,
excluding
capitalized
leases 125,848 107,881 89,532 79,019 67,464
Long-term debt 210,854 179,787 307,385 308,593 295,361
Shareholders' equity 590,900 505,184 260,517 270,507 228,451
Stores in operation end
of year:
T.J. Maxx 512 479 437 393 352
Hit or Miss 493 505 576 574 546
Winners 27 15 9 5 -
HomeGoods 10 6 - - -
* Effected by the fiscal 1990 restructuring and thus not comparable to
subsequent years.
21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF The TJX Companies, Inc.
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF CONTINUING OPERATIONS
Income from Continuing Operations Before Extraordinary Item and Cumulative
Effect of Accounting Changes: Income from continuing operations before
extraordinary item and cumulative effect of accounting changes was $127.0
million for fiscal 1994 versus $104.0 million and $70.1 million in fiscal 1993
and fiscal 1992, respectively. On a fully diluted earnings per common share
basis, income from continuing operations before extraordinary item and
cumulative effect of accounting changes was $1.62 in fiscal 1994 versus $1.40
in fiscal 1993 and $1.00 in fiscal 1992. These results are prior to a net
after-tax charge for the cumulative effect of accounting changes of $2.7
million, or $.04 per common share, in fiscal 1994, an extraordinary charge of
$1.2 million, or $.02 per common share, for the defeasance of the Company's 8
1/8% promissory notes in fiscal 1993, and a $50 million after-tax charge, or
$.71 per common share, for discontinued operations in fiscal 1992.
The Company's operating income of its three major segments increased 13.9% in
fiscal 1994 and 39.5% in fiscal 1993. The off-price family apparel store
segment, comprised of T.J. Maxx and Winners, achieved increases in operating
income of 9.3% in fiscal 1994 and 19.8% in fiscal 1993. The Company's off-
price women's specialty stores, comprised of the Company's Hit or Miss
division, recorded operating income of $5.0 million in fiscal 1994 against
losses of $5.5 million in fiscal 1993 and $26.4 million in fiscal 1992. The
Company's off-price catalog operation, Chadwick's of Boston, achieved
operating income increases of 7.3% in fiscal 1994 and 71.8% in fiscal 1993.
Certain factors contributing to these results by segment are highlighted in
the discussion that follows.
Net Sales: Net sales for fiscal 1994 increased 11.2% to $3.63 billion from
$3.26 billion in fiscal 1993. Fiscal 1993 net sales increased 18.3% over
sales of $2.76 billion in fiscal 1992. Fiscal 1993 was a 53 week year versus
52 weeks for fiscal 1994 and 1992. On a comparable 52 week basis, net sales
increased 12.5% in fiscal 1994 and 16.7% in fiscal 1993. Same store sales,
presented on a comparable 52 week basis, increased 2% on a consolidated basis
for fiscal 1994 versus an increase of 5% in fiscal 1993. Difficult weather
conditions in many geographic areas during fiscal 1994 affected sales results.
T.J. Maxx achieved same store sales increases of 2% in fiscal 1994 and 5% in
fiscal 1993. During fiscal 1994, T.J. Maxx performed best in regions where
weather was more seasonal such as the West coast, Southwest and Southeast.
Winners achieved same store sales increases of 7% in fiscal 1994 and 24% in
fiscal 1993. Hit or Miss achieved a 4% same store sales increase in fiscal
1994 and a 6% same store sales increase in fiscal 1993. Hit or Miss' total
sales declined slightly in fiscal 1994 and experienced only a modest increase
in total sales in fiscal 1993 due to a net reduction in the number of stores
operated by the chain as a result of its real estate repositioning program.
Chadwick's sales increased 45% in fiscal 1994, despite several catalogs that
performed below expectations, versus a sales increase of 68% in fiscal 1993.
Chadwick's contribution to consolidated sales reached 11.6% in fiscal 1994
versus 8.9% in fiscal 1993 and 6.3% in fiscal 1992.
22
[A pie chart is included in the discussion of Net Sales entitled "Divisional
Net Sales" and includes the following data:]
Divisional Net Sales
$ in Millions FYE 1/94
T.J. Maxx $2,745
Chadwick's 421
Hit or Miss 373
Winners 87
Cost of Sales, Including Buying and Occupancy Costs: The cost of sales,
including buying and occupancy costs, as a percentage of net sales was 75.1%,
75.7% and 76.8% in fiscal 1994, 1993 and 1992, respectively. The off-price
family apparel segment had a slight improvement in its gross margin in both
fiscal 1994 and 1993 through its continued combination of increases in same
store sales and tight inventory control. Hit or Miss experienced a gross
margin increase in both fiscal 1994 and fiscal 1993. Chadwick's experienced a
decline in its gross margin, especially in fiscal 1994, as it absorbed costs
to liquidate residual inventory from several of its catalogs. Chadwick's
operates at a higher gross margin than do the Company's store divisions, thus
the continuing increase in Chadwick's contribution to the Company's
consolidated results had the net effect of improving gross margin on a
consolidated basis.
Selling, General and Administrative Expenses: Selling, general and
administrative expenses as a percentage of net sales were 18.6%, 18.2% and
17.8% in fiscal 1994, 1993 and 1992, respectively. The off-price family
apparel stores segment maintained a relatively consistent expense ratio over
this time frame while Hit or Miss realized expense ratio decreases.
Chadwick's increased operating costs and its growth in contribution to
consolidated results increased the expense ratio on a consolidated basis as
its selling, general and administrative expenses as a percentage of net sales
is higher than that of the other divisions. This, along with the start-up
costs associated with the Company's United Kingdom and HomeGoods ventures, are
the prime reasons for the increase in this ratio for both fiscal 1994 and
1993. The Company will further test these ventures in fiscal 1995. The
increase in fiscal 1993 is also attributable to the reserves established for
the Hit or Miss real estate repositioning, the operating loss incurred by the
Value Mart operation and the reserve for the closing of most of the Value Mart
locations.
Interest Expense: Interest expense was $19.0 million in fiscal 1994, $26.3
million in fiscal 1993 and $27.3 million in fiscal 1992. Interest expense for
fiscal 1994 includes the interest on $37 million of Medium Term Notes issued
by the Company in October 1993. The overall decrease in interest for fiscal
1994 is due to lower borrowing rates, the conversion to equity of the
Company's 7 1/4% convertible subordinated debentures completed in December
1992 and interest income of $2.0 million, recorded in the fourth quarter,
associated with a federal tax refund. The decrease in interest expense in
fiscal 1993 is primarily attributable to the defeasance of the Company's 8
1/8% promissory notes completed in May 1992.
Income Taxes: The Company's worldwide effective income tax rate was 40% in
fiscal 1994 and fiscal 1993 and 42% in fiscal 1992. In fiscal 1994, increases
in the tax rate associated with the new U.S. tax law passed in August 1993, as
well as the impact of the Company's entry into the United Kingdom, were offset
by a lower effective state income tax rate and the benefit of a Canadian net
operating loss carryforward. The increase in the current tax provision for
fiscal 1994, due to the new U.S. tax law enacted in August 1993, reduced net
23
income by $.02 per common share. The higher rate in fiscal 1992 was primarily
due to a limitation on state and foreign tax benefits for certain divisions'
operating losses.
During the Company's first quarter period of fiscal 1994, the Company
implemented Statement of Financial Accounting Standards No. 109 (SFAS No. 109)
"Accounting for Income Taxes" which resulted in an after-tax gain of $3.5
million due to the cumulative effect of implementing this accounting change.
CAPITAL SOURCES AND LIQUIDITY
Operating Activities: Net cash provided by operating activities was $84.4
million, $138.6 million and $105.6 million in fiscal 1994, 1993 and 1992,
respectively. The decrease in cash provided by operating activities in fiscal
1994 reflects an increase in income taxes paid as well as a lower ratio of
consolidated accounts payable to merchandise inventories. In addition, all
years reflect payments against the discontinued operations reserve while
fiscal 1993 payments are offset by the cash settlement received by the Company
under the Ames bankruptcy reorganization plan.
Inventories as a percentage of net sales were 21.3% in fiscal 1994, 20.6% in
fiscal 1993 and 20.0% in fiscal 1992. The increase in the percentage in both
years reflects the growth in Chadwick's which maintains a higher inventory as
a percentage of net sales than the other divisions. In addition, the increase
in fiscal 1994 is effected by Winners as its ratio of inventory to net sales
moved closer to that of the T.J. Maxx division. Working capital was $290.2
million in fiscal 1994, $245.3 million in fiscal 1993 and $171.6 million in
fiscal 1992. The increase each fiscal year is primarily due to increased
inventory levels to support the growth in the Company's operations.
Investing Activities: The principal investing activities of the Company are
for capital expenditures. Total capital expenditures for the last two years
are set forth in the table below:
Fiscal Year Ended January 1994 1993
In Millions
New stores $ 45.8 $ 52.5
Store renovations and improvements 25.3 24.8
Office and distribution centers 54.7 30.6
Capital expenditures, excluding
capitalized leases $125.8 $107.9
The fiscal 1994 capital expenditures include the costs associated with T.J.
Maxx's new distribution center in Charlotte, N.C. Fiscal 1994 and 1993
capital expenditures include costs associated with the expansion of Chadwick's
fulfillment center.
The Company expects that capital expenditures will approximate $140 million
for fiscal 1995, including approximately $60 million for new stores, primarily
T.J. Maxx; $48 million for improvements to existing stores, primarily T.J.
Maxx; and approximately $32 million for office and distribution centers.
Financing Activities: During fiscal 1994, the Company filed a shelf
registration statement which allows the Company to issue up to $75 million of
Medium Term Notes. On October 14, 1993, the Company placed several series of
24
notes totalling $37 million under this program. The borrowings are to support
the Company's international and domestic new business development and capital
expenditures. To hedge the Company's investment in its foreign subsidiaries,
it entered into foreign currency swap agreements in both Canadian dollars and
British pounds sterling, in amounts equivalent to the Medium Term Note
borrowings. See Note A to the Financial Statements for further information.
During fiscal 1993, the Company entered into a series of financing
transactions which contributed to the increase in its shareholders' equity by
$244.7 million while reducing its long-term debt by $127.6 million. In April
1992, the Company issued 250,000 shares of Series A cumulative convertible
preferred stock in a private offering. The net proceeds of $24.1 million were
applied towards the defeasance of the Company's $50 million 8 1/8% promissory
notes due May 1, 1993, resulting in an extraordinary after-tax charge of $1.2
million. In August 1992, the Company completed a public offering of 1,650,000
shares of Series C cumulative convertible preferred stock. The net proceeds
of $80.3 million of this offering were used for the Company's capital
expenditure program and for other general corporate purposes. In December
1992, the Company called for redemption all of its outstanding 7 1/4%
convertible subordinated debentures. This call for redemption resulted in
virtually all of the outstanding debentures being converted into common stock
at a conversion price of $22.45 per share, with the balance of the bonds being
redeemed. This transaction reduced the Company's long-term debt by $69.8
million and increased shareholders' equity by $68.6 million, through the
issuance of 3,108,755 shares of common stock. As a result of these efforts,
equity as a percentage of long-term capital was 73.7% at the end of fiscal
1994 and 73.8% at the end of fiscal 1993, versus 45.9% at the end of fiscal
1992.
During fiscal 1992, the Company purchased the Chadwick's fulfillment center
and as part of the transaction assumed a $5.5 million, 9 5/8% real estate
mortgage, maturing June 1, 1998.
The Company declared quarterly dividends on its common stock of $.125 per
share in fiscal 1994 and $.115 per share in fiscal 1993. Annual dividends on
common stock totalled $36.7 million and $32.2 million in fiscal 1994 and 1993,
respectively. In addition, in fiscal 1993, the Company recorded dividends on
its Series A and Series C preferred stock, from date of issuance, of $3.9
million while fiscal year 1994 reflects a full year of dividends totalling
$2.0 million for the Series A preferred stock and $5.2 million for the Series
C preferred stock.
The Company has traditionally funded its seasonal merchandise requirements
through short-term bank borrowings and the issuance of short-term commercial
paper and has made it a practice to repay all such short-term borrowings prior
to year end. The Company has unsecured committed short-term credit lines
totalling $200 million, all of which were available for use as of January 29,
1994. These lines, when needed, are drawn upon or used as backup to the
Company's commercial paper program. The maximum amount of short-term
borrowings outstanding during fiscal 1994, 1993 and 1992 was $133.0 million,
$104.3 million and $26.5 million, respectively. Management believes that the
Company's internally generated funds along with available short-term credit
lines and ability to access external financing sources, are adequate to meet
its needs. For further information regarding the Company's long-term debt and
capital stock transactions, see Notes A and C to the consolidated financial
statements.
New Accounting Standards: Statement of Financial Accounting Standards No. 112
(SFAS No. 112) "Employers' Accounting for Postemployment Benefits" was issued
in November 1992 and requires the recognition of an obligation for all
25
benefits provided after employment but before retirement to former or inactive
employees. Implementation of SFAS No. 112 is required for fiscal years
beginning after December 15, 1993. The Company has determined that the impact
of SFAS No. 112 will be immaterial.
Ames Department Stores, Inc. and Related Contingent Liabilities: In October
1988, the Company completed the sale of its former Zayre Stores division to
Ames Department Stores, Inc. ("Ames"). The Company received $431.4 million in
cash, a 12%-16% ten-year $200 million increasing rate note receivable (the
"Ames Note"), which was paid on May 24, 1989, and 400,000 shares of 6%
cumulative convertible senior preferred stock of Ames then valued at $140
million.
In its results for the fiscal year ended January 27, 1990, the Company
provided a $185 million ($172.1 million after-tax) reserve against its
preferred stock investment in Ames and for contingent lease and other
liabilities associated with the sale of the former Zayre Stores division to
Ames in fiscal 1989. On April 25, 1990, Ames filed for protection under
Chapter 11 of the Federal Bankruptcy Code.
The Company continued to monitor the adequacy of its reserves since the April
1990 bankruptcy filing of Ames and in the fiscal year ended January 25, 1992
increased its reserves by recording a charge of $50 million, net of tax
benefits of $27 million, to discontinued operations.
On December 30, 1992, Ames emerged from bankruptcy via its Third Amended and
Restated Plan of Reorganization. Upon consummation of the plan, the Company
received $23 million in cash, 4% of the new voting stock of Ames and the right
to receive up to an additional $7 million in cash based on Ames exceeding its
cash flow projections for future years by varying amounts. The Company also
surrendered the preferred stock it received in the sale of the Zayre Stores
division. Ames also released all claims (including any fraudulent conveyance
and preference claim) that it might have had against the Company. The Company
is liable for certain amounts to be distributed under the plan on certain
unassigned landlord claims under certain former Zayre store leases on which
Zayre Corp. was liable as of the date of acquisition and which Ames has
rejected.
As of January 29, 1994, the Company has available reserves of $17.6 million
for lease and other contingent liabilities associated with the sale of the
Zayre stores to Ames and believes these reserves should be adequate to cover
all reasonably expected liabilities that it may incur as a result of the Ames
bankruptcy.
The Company remains contingently liable for the leases of most of the former
Zayre stores still operated by Ames. The Company also has the potential for
recognizing tax benefits, subject to federal income tax considerations,
related to the $141.6 million capital loss carryforward created by
surrendering the Ames preferred stock.
26
Report of Independent Accountants
COOPERS & LYBRAND
To the Board of Directors of The TJX Companies, Inc.:
We have audited the accompanying consolidated balance sheets of The TJX
Companies, Inc. and subsidiaries as of January 29, 1994 and January 30, 1993
and the related consolidated statements of income, shareholders' equity, and
cash flows for each of the three fiscal years in the period ended January 29,
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of The TJX
Companies, Inc. and subsidiaries as of January 29, 1994 and January 30, 1993
and the consolidated results of their operations and their cash flows for each
of the three fiscal years in the period ended January 29, 1994 in conformity
with generally accepted accounting principles.
Boston, Massachusetts
March 2, 1994 COOPERS & LYBRAND
27
Report of Management
The financial statements and related financial information in this annual
report have been prepared by management which is responsible for their
integrity, objectivity and consistency. The financial statements were
prepared in accordance with generally accepted accounting principles and
necessarily include amounts which are based upon judgments and estimates made
by management.
The Company maintains a system of internal controls designed to provide,
at appropriate cost, reasonable assurance that assets are safeguarded,
transactions are executed in accordance with management's authorization and
the accounting records may be relied upon for the preparation of financial
statements. The system of controls includes the careful selection and
training of associates, and the communication and application of formal
policies and procedures that are consistent with high standards of accounting
and administrative practices. The accounting and control systems are
continually reviewed, evaluated and where appropriate, modified to accommodate
changing business conditions and the recommendations of the Company's internal
auditors and the independent public accountants.
An Audit Committee, comprised of members of the Board of Directors who are
neither officers nor employees of the Company, meets periodically with
management, internal auditors and the independent public accountants to review
matters relating to the Company's financial reporting, the adequacy of
internal accounting controls and the scope and results of audit work. The
Committee is responsible for reporting the results of its activities and for
recommending the selection of independent auditors to the full Board of
Directors. The internal auditors and the independent public accountants have
free access to the Committee and the Board of Directors.
The financial statements have been examined by Coopers & Lybrand, whose
report appears separately. Their report expresses an opinion as to the fair
presentation of the consolidated financial statements and is based on an
independent examination performed in accordance with generally accepted
auditing standards.
Bernard Cammarata Donald G. Campbell
President and Chief Executive Officer Senior Vice President - Finance and
Chief Financial Officer
March 2, 1994
28
Selected Quarterly Financial Data (Unaudited) The TJX Companies, Inc.
First Second Third Fourth
Quarter Quarter Quarter Quarter
In Thousands Except Per Common Share Amounts
Fiscal year ended January 29, 1994
Net sales $785,637 $841,054 $959,683 $1,040,230
Gross earnings* 200,231 204,550 262,342 236,655
Income before extraordinary
item and cumulative effect
of accounting changes 22,657 25,985 47,721 30,683
Per common share, fully diluted .28 .33 .61 .39
Net income 19,990 25,985 47,721 30,683
Per common share, fully diluted .25 .33 .61 .39
Fiscal year ended January 30, 1993
Net sales $670,937 $753,622 $839,116 $ 997,565
Gross earnings* 163,087 177,057 224,412 228,749
Income before extraordinary item 15,146 19,033 40,514 29,351
Per common share, fully diluted .22 .26 .53 .38
Net income 13,948 19,033 40,514 29,351
Per common share, fully diluted .20 .26 .53 .38
* Gross earnings equals net sales less cost of sales, including buying and
occupancy costs.
Price Range of Common Stock
The common stock of the Company is listed on the New York Stock Exchange
(Symbol:TJX). The quarterly high and low stock prices for fiscal 1994 and
fiscal 1993 are as follows:
Fiscal 1994 Fiscal 1993
Quarter High Low High Low
First $33 1/4 $27 $20 $15 3/4
Second 34 1/4 26 19 1/2 15 3/8
Third 33 3/8 24 1/2 25 5/8 18 7/8
Fourth 34 1/4 25 3/8 29 25
The approximate number of common shareholders at January 29, 1994 was 28,000.
The Company declared four quarterly dividends of $.125 and $.115 per common
share for fiscal years 1994 and 1993, respectively.
29
Shareholder Information
Transfer Agent and Registrar,
Common and Series C Preferred Stock
State Street Bank and Trust Company
Boston, Massachusetts
1-800-426-5523
Trustees
Public Debentures and Notes
9 1/2% Sinking Fund Debentures
Chase Manhattan Bank
New York, New York
Auditors
Coopers & Lybrand
Independent Counsel
Ropes & Gray
Form 10-K
Information concerning the Company's operations and financial position is
provided in this report and in the Form 10-K Report filed with the Securities
and Exchange Commission. A copy of the 10-K Report may be obtained without
charge by writing or calling:
The TJX Companies, Inc.
Investor Relations
770 Cochituate Road
Framingham, Massachusetts 01701
(508)390-2323
Annual Meeting
The 1994 annual meeting will be held at 11:00 a.m. on Tuesday, June 7, 1994 in
the Enterprise Room, 5th Floor at State Street Bank, 225 Franklin Street,
Boston, Massachusetts.
Executive Offices
Framingham, Massachusetts 01701
October 8, 1993
HAND DELIVER
Mr. Donald G. Campbell
The TJX Companies, Inc.
770 Cochituate Road
Framingham, MA 01701
Dear Don:
In its letter to Waban Inc. ("Waban") dated August 31, 1993,
The TJX Companies, Inc. ("TJX") offered to provide to Waban, from
January 29, 1995 through January 27, 1996 (the Extension Period),
Computing Services pursuant to the revised terms of the Services
Agreement. A copy of the August 31, 1993 letter is attached.
This letter will confirm that (1) Waban hereby chooses not to
accept TJX's offer and (2) Waban hereby elects, pursuant to Section
1 of the Data Processing Annex to the Services Agreement, an
extension of the period during which TJX shall provide Computing
Services to Waban for an additional Tail Period of six months
beyond the current Firm Period. Such Tail Period shall commence on
January 29, 1995 and shall end on July 28, 1995.
Please indicate your acknowledgement of the foregoing by
signing both originals of this letter and returning one to me for
our files. Thank you.
Very truly yours,
WABAN INC.
By: /s/ Herbert J. Zarkin
Herbert J. Zarkin
President and Chief
Executive Officer
Acknowledged:
THE TJX COMPANIES, INC.
By: /s/ Donald G. Campbell
Donald G. Campbell
Senior Vice President
Chief Financial Officer
Attachment
cc: D. Garth, R. Laferriere, S. Gallivan, R. Hernandez
AMENDMENT NO. 4 DATED AS OF JANUARY 29, 1994
TO EXECUTIVE SERVICES AGREEMENT
AGREEMENT dated as of January 29, 1994 between WABAN INC. ("Waban")
and THE TJX COMPANIES, INC. ("TJX").
Waban and TJX entered into an Executive Services Agreement dated as of
June 1, 1989, as amended by Amendment dated as of January 26, 1991,
Amendment No. 2 dated as of January 25, 1992, and Amendment No. 3 dated as
of January 30, 1993, (the "Executive Services Agreement") with respect to
the services of Arthur Loewy (the "Executive"). The parties desire to
amend the Executive Services Agreement to reflect the amendment, dated as
of the date hereof, of the Employment Agreement dated as of June 1, 1989
between the Executive and TJX.
In consideration of the premises and for other valuable consideration,
receipt of which is hereby acknowledged, the parties agree as follows:
1. The first paragraph of the Executive Services Agreement is hereby
amended by adding the words "and January 29, 1994" after the words
"Agreement (as amended January 26, 1991, January 25, 1992 and January 30,
1993" on the first line thereof.
2. The second paragraph of the Executive Services Agreement is
hereby amended by deleting the date "January 29, 1994" from the tenth line
thereof and substituting therefor the date "January 28, 1995".
3. Section (d) of the Executive Services Agreement is hereby amended
by deleting the date "January 29, 1994" from the second and third lines
thereof and substituting therefor the date "January 28, 1995".
Except to the extent specifically amended hereby, the provisions of
the Executive Services Agreement shall remain unmodified, and the Executive
Services Agreement as amended hereby is hereby confirmed as being in full
force and effect.
WITNESS the due execution by the parties hereto.
WABAN INC.
By: /s/ Herbert Zarkin
Herbert Zarkin
THE TJX COMPANIES, INC.
By: /s/ Bernard Cammarata
Bernard Cammarata
EXHIBIT 21
SUBSIDIARIES
State or Jurisdiction Name Under Which
of Incorporation Does Business
Operating Subsidiaries or Organization (if Different)
Avon Trading Corp. Massachusetts
Hit or Miss Inc. Delaware
Chadwick's of Boston, Ltd. Massachusetts
Commonwealth Direct Marketing, Inc. Massachusetts
Newton Buying Corp. Delaware
NBC Distributors Inc. Massachusetts
NBC Merchants, Inc. Indiana
NBC Charlotte Merchants, Inc. North Carolina
NBC Nevada Merchants, Inc. Nevada
T.J. Maxx of Illinois, Inc. Illinois T.J. Maxx
T.J. Maxx of PA, Inc. Delaware T.J. Maxx
T.J. Maxx of Texas, Inc. Delaware T.J. Maxx
Winners Apparel Ltd. Ontario, Canada
Winners Investments Limited Ontario, Canada
Winners Merchants Ltd. Ontario, Canada
Strathmex Corp. Delaware
HomeGoods, Inc. Delaware
H.G. Merchants, Inc. Massachusetts
VM Merchants, Inc. Delaware
CDM Corp. Nevada
NBC Apparel, Inc. Delaware
NBC Apparel Limited United Kingdom T.K. Maxx
Leasing Subsidiaries
Cochituate Realty Corp. Massachusetts
NBC First Realty Corp. Indiana
NBC Second Realty Corp. Massachusetts
NBC Fourth Realty Corp. Nevada
NBC Fifth Realty Corp. Illinois
NBC Sixth Realty Corp. North Carolina
West Bridgewater Realty, Inc. Massachusetts
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Bernard
Cammarata, Donald G. Campbell and Sumner L. Feldberg and each of
them, his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all
capacities, to sign the Form 10-K to be filed by The TJX
Companies, Inc. for the fiscal year ended January 29, 1994 and
any or all amendments thereto and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
/s/ Bernard Cammarata /s/ Donald G. Campbell
Bernard Cammarata, President, Donald G. Campbell, Senior
Principal Executive Officer and Vice President - Finance,
Director Principal Financial and
Accounting Officer
/s/ Phyllis B. Davis /s/ Robert F. Shapiro
Phyllis B. Davis, Director Robert F. Shapiro, Director
/s/ Stanley H. Feldberg /s/ Burton S. Stern
Stanley H. Feldberg, Director Burton S. Stern, Director
/s/ Sumner L. Feldberg /s/ Fletcher H. Wiley
Sumner L. Feldberg, Director Fletcher H. Wiley, Director
/s/ Arthur F. Loewy /s/ Abraham Zaleznik
Arthur F. Loewy, Director Abraham Zaleznik, Director
/s/ John M. Nelson
John M. Nelson, Director
Dated: April 6, 1994