Exhibit 10.3

 

Herbert J Zarkin

Name of Employee

 

BJ’S WHOLESALE CLUB, INC.

1997 STOCK INCENTIVE PLAN

 

Notification of Grant

 

This is to advise you that the Executive Compensation Committee of BJ’s
Wholesale Club, Inc. (the “Company”) has voted to grant you, effective August 9,
2004, one hundred thousand (100,000) restricted shares of Common Stock of the
Company pursuant to the 1997 Stock Incentive Plan (the “1997 Plan”). Enclosed is
a copy of the 1997 Plan and a copy of the prospectus describing the 1997 Plan.
The restrictions on the shares acquired by you under the grant will lapse on the
earlier of (i) May 15, 2007 and (ii) the date of the Company’s 2007 Annual
Meeting of Stockholders, it being understood that the Restricted Stock shall
become fully vested on May 15, 2007 in the event of your death or if you are
terminated by the Company without cause; provided, however, that upon the
occurrence of a Change of Control (as defined in the 1997 Plan) while you are so
employed, all such restrictions shall automatically be deemed waived.

 

In order to accept the shares issued pursuant to this grant, you must sign both
copies of the enclosed Restricted Stock Award Agreement and return one copy to
Frank Forward, Executive Vice President, Chief Financial Officer (Rt. 22).

 

If so requested by you (which request may be made once at any time that is at
least one year prior to the vesting date of the restricted stock covered by this
Award), the Board or the ECC will permit you to exchange some or all of the
unvested restricted stock for an instrument evidencing the right to future
delivery of common stock at such time or times after the scheduled vesting date
as you shall request; provided however, that the Board or the ECC may deny such
request if in good faith it determines that honoring the request would have an
adverse financial or accounting impact on the Company or is not permitted by the
terms of the Plan or applicable law.

 

The stock certificates evidencing your shares will be held by the Company until
such time as the restrictions lapse. The certificates will initially bear a
legend which makes them non-transferable for any purpose. You will not be able
to sell, pledge, make a gift, or otherwise dispose of the certificates bearing
this legend. On the date upon which restrictions lapse or upon a Change of
Control (as defined in the 1997 Plan) before all shares have become free of
restrictions (assuming in either case that you are then an employee of the
Company or a Subsidiary), you will be entitled to receive a new certificate, not
bearing any legend, for the number of shares that have become free of
restrictions.

 

Sincerely,

/s/    Michael T. Wedge         Michael T. Wedge President and CEO

 

August 9, 2004

 

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Herbert J Zarkin

Name of Employee

 

BJ’S WHOLESALE CLUB, INC.

1997 STOCK INCENTIVE PLAN

 

Restricted Stock Award Agreement

 

BJ’s Wholesale Club, Inc.

Natick, MA 01760

Attention: Treasurer

 

Dear Sir:

 

I acknowledge receipt of (i) a Notification of Grant (the “Award”) to me of
Restricted Stock of BJ’s Wholesale Club, Inc. (the “Company”) dated August 9,
2004; (ii) a copy of the BJ’s Wholesale Club, Inc. 1997 Stock Incentive Plan
(the “1997 Plan”); (iii) a copy of a Prospectus describing the 1997 Plan; and
(iv) a copy of the Company’s 2003 Annual Report.

 

In consideration of the Award, I hereby agree with the Company as follows:

 

1. Restrictions on Transfer. During the period of time that the shares granted
under the Award are restricted as set forth in the Award, and thereafter, if an
event requiring me to forfeit said shares to BJ’s Wholesale Club, Inc. shall
have occurred, the shares of Common Stock acquired by me pursuant to this
Restricted Stock Award Agreement shall not, whether voluntarily or
involuntarily, be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, by operation of law or otherwise, except as specifically
provided in this Agreement.

 

2. Forfeiture of Shares. In the event (i) I voluntarily terminate my employment
with the Company or (ii) the Company terminates my employment for “cause” (as
such term is defined in that certain employment agreement between the Company
and me, dated July 28, 1997, as amended from time to time (“Employment
Agreement”), in either case prior to the earlier of (x) May 15, 2007 and (y) the
date of the Company’s 2007 Annual Meeting of Stockholders, I or my legal
representative shall immediately forfeit and deliver to the Company all the
shares subject to this Award. In such event, if I or my legal representative
nevertheless fail or refuse to deliver such shares to the Company, I (on my own
behalf and on behalf of my legal representative) agree that such shares shall
nevertheless be deemed to have been forfeited pursuant to the 1997 Plan and all
of my or my representative’s rights as a shareholder with respect to such shares
shall terminate. This Section 2 shall cease to apply upon the date of
consummation of a Change of Control of the Company (as defined in the 1997 Plan)
while I am employed by the Company, at which time all restrictions on the shares
of Common Stock acquired by me pursuant to this Restricted Stock Award Agreement
shall be deemed waived.

 

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3. Legends. All stock certificates evidencing shares of Common Stock of the
Company issued pursuant to the Award and this Agreement shall bear a restrictive
legend as follows:

 

THE REGISTERED OWNER OF THE SHARES OF COMMON STOCK REPRESENTED BY THE WITHIN
CERTIFICATE HAS AGREED NOT TO, WHETHER VOLUNTARILY OR INVOLUNTARILY, SELL,
ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF SUCH SHARES, BY
OPERATION OF LAW OR OTHERWISE, EXCEPT AS SPECIFICALLY PROVIDED IN THE RESTRICTED
STOCK AWARD AGREEMENT EXECUTED IN CONNECTION WITH THE AWARD OF SAID SHARES, A
COPY OF WHICH IS ON FILE AT THE OFFICE OF THE SECRETARY OF THE COMPANY. UNDER
CERTAIN CONDITIONS SET FORTH IN SAID AGREEMENT, THE REGISTERED OWNER OF THE
SHARES REPRESENTED BY THE WITHIN CERTIFICATE IS OBLIGATED TO FORFEIT SUCH SHARES
TO THE COMPANY. THE FOREGOING RESTRICTIONS SHALL LAPSE AS TO SHARES NOT SO
FORFEITED, AT THE TIMES AND IN THE MANNER PROVIDED IN THE AGREEMENT.

 

4. Certificate for Shares. I understand that the shares of Common Stock acquired
pursuant to this Restricted Stock Award Agreement may be evidenced by one or
more certificates. Each certificate evidencing shares of Restricted Stock shall
remain in the possession of the Company until such shares are free of all
restrictions.

 

5. Registration of Shares. I understand that the Company has on file with the
Securities and Exchange Commission an effective Registration Statement under the
Securities Act of 1933. I understand that once shares have become free of
restrictions, new certificates will be issued by the Company’s Transfer Agent
without the legend provided for in Section 3 hereof, and that I will be free to
sell the shares of Common Stock evidenced by such certificates, subject to
applicable requirements of federal and state securities laws.

 

6. Conversion to Deferred Stock Units.

 

(a) Grant of Deferred Stock Units. If prior to May 15, 2006 and at a time when I
am not aware of material nonpublic information concerning the Company, I have
requested, and the Company has agreed to such request, the restricted shares
shall be converted, subject to the terms and conditions set forth in the Award,
this Agreement and in the 1997 Plan, into 100,000 Deferred Stock Units of the
Company (the “Units”), representing the right to receive shares of the Company’s
Common Stock under the terms and conditions set forth in the Award, this
Agreement and the 1997 Plan. The Units shall vest on the same terms as the
vesting of the restricted shares. I agree that the Units shall be subject to the
restrictions on transfer set forth in Section 6(c) of this Agreement. Upon such
conversion, I shall deliver the restricted shares to the Company and all of my
rights as a shareholder with respect to such shares shall terminate.

 

(b) Dividend Equivalent Rights. With respect to declared dividends, if any, with
record dates that occur prior to the settlement of any Units, I will be credited
with additional Units having a value equal to that which I would have been
entitled if my unsettled Units had been actual shares of stock, based on the
fair market value of a share of stock on the applicable dividend payment date.
Any such additional Units shall be considered Units under this Agreement and
shall also be credited with additional Units as dividends, if any, are declared,
and

 

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shall be subject to the same restrictions and conditions as Units with respect
to which they were credited.

 

(c) Restrictions on Transfer. I shall not, whether voluntarily or involuntarily,
sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by
operation of law or otherwise, (collectively “transfer”) any Units, or any
interest therein, except as provided in this Agreement or the 1997 Plan. Any
transfer of my Units made, or any attachment, execution, garnishment, or lien
issued against or placed upon Units, other than as so permitted, shall be void.

 

(d) Settlement of Deferred Stock Units

 

  (i) Settlement Election Date. Each Unit that has vested will be settled by the
delivery of one share of stock to me as soon as administratively practicable
following the date on which the Units have become vested, or, if applicable, the
date I have elected on the attached Deferred Settlement Election Form (any such
date, the “Deferred Settlement Election Date”).

 

  (ii) Termination Upon Death. Notwithstanding Section 6(d)(i), if my employment
with the Company is terminated by reason of my death, all Units shall be
automatically settled by delivery of shares of stock to my designated
beneficiary 30 days after the date of my death, but in no event prior to May 15,
2007.

 

  (iii) Change of Control. Notwithstanding anything to the contrary in this
Agreement, upon a Change of Control of the Company (as defined in the 1997 Plan)
while I am employed by the Company, all Units shall be settled by delivery of
shares of stock to me upon the date of consummation of the Change of Control.

 

  (iv) Forfeiture of Units. In the event (i) I voluntarily terminate my
employment with the Company or (ii) the Company terminates my employment for
“cause” (as such term is defined in the Employment Agreement), in either case
prior to the earlier of (x) May 15, 2007 and (y) the date of the Company’s 2007
Annual Meeting of Stockholders, all Units will be automatically and immediately
forfeited.

 

(e) Claims Procedures. If I make an election to defer settlement of a Unit, the
following provisions shall apply:

 

  (i)

Presentation of Claim. I or, if I am deceased, my designated beneficiary,
(referred to below as a “Claimant”) may deliver to the Executive Compensation
Committee (the “Committee”) a written claim for a determination with respect to
the amounts distributable to such Claimant from this Agreement. If such a claim
relates to the contents of a notice received by the Claimant, the claim must be
made within 60 days after such notice was received by the Claimant. All other
claims must be made within 180 days of the date on which the event that caused
the claim to

 

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arise occurred. The claim must state with particularity the determination
desired by the Claimant.

 

  (ii) Notification of Decision. The Committee shall consider a Claimant’s claim
within a reasonable time, and shall notify the Claimant in writing:

 

  (A) that the Claimant’s requested determination has been made, and that the
claim has been allowed in full; or

 

  (B) that the Committee has reached a conclusion contrary, in whole or in part,
to the Claimant’s requested determination, in which case such notice must also
be set forth in a manner calculated to be understood by the Claimant:

 

  1. the specific reason(s) for the denial of the claim, or any part thereof;

 

  2. specific reference(s) to pertinent provisions of the Agreement upon which
such denial was based;

 

  3. a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary; and

 

  4. an explanation of the claim review procedure set forth in Section 6(e)(iii)
below.

 

  (iii) Review of a Denied Claim. Within 60 days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a Claimant (or
the Claimant’s duly authorized representative) may file with the Committee a
written request for a review of the denial of the claim. Thereafter, but not
later than 30 days after the review procedure began, the Claimant (or the
Claimant’s duly authorized representative):

 

  (A) may review pertinent documents;

 

  (B) may submit written comments or other documents; and/or

 

  (C) may request a hearing, which the Committee, in its sole discretion, may
grant.

 

  (iv)

Decision on Review. The Committee shall render its decision on review promptly,
and not later than 60 days after the filing of a written request for review of
the denial, unless a hearing is held or other special circumstances require
additional time, in which case the Committee’s

 

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decision must be rendered within 120 days after such date. Such decision must be
written in a manner calculated to be understood by the Claimant, and it must
contain:

 

  (A) specific reasons for the decision;

 

  (B) specific reference(s) to the pertinent provisions of this Agreement upon
which the decision was based; and

 

  (C) such other matters as the Committee deems relevant.

 

  (v) Legal Action. A Claimant’s compliance with the foregoing provisions of
this Section 6(e) is a mandatory prerequisite to a Claimant’s right to commence
any legal action with respect to any claim for benefits under this Agreement.

 

7. Governing Law. This Agreement will be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or stock
exchanges as may be required. Subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), this Agreement shall be
construed, interpreted and enforced in accordance with the internal laws of the
State of Delaware without regard to any applicable conflicts of laws.

 

Very truly yours,

/s/    Herbert J Zarkin         Herbert J Zarkin

 

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Deferred Stock Unit Deferred Settlement Election Form

 

This Deferred Settlement Election Form relates to the Deferred Stock Units
issued pursuant to the conversion of restricted shares under Section 6 of the
Restricted Stock Award Agreement dated August 9, 2004 (the “Agreement”) and the
terms of the 1997 Stock Incentive Plan (the “1997 Plan”). Capitalized terms
appearing herein and not otherwise defined shall have the meanings ascribed to
them in the Agreement:

 

PARTICIPANT: Herbert J Zarkin

DATE OF CONVERSION TO DEFERRED STOCK
UNITS:                                         

NUMBER OF DEFERRED STOCK UNITS: 100,000

INITIAL VESTING DATE: May 15, 2007

 

1. Deferred Settlement Election.

 

Subject to Section 2 below, I elect to have [all/             %] of the Units
that may hereinafter become vested under the Agreement to which this election
relates, settled by delivery of shares of Stock to me either:

 

(i) in a lump sum on                     , which date is (1) after May 15, 2007
and (2) at least one year following the date of this Deferred Settlement
Election Form, or

 

(ii) in              (no more than 3) annual installments to start on
                    , which date is (1) after May 15, 2007 and (2) at least one
year following the date of this Deferred Settlement Election Form.

 

I hereby confirm that, as of the date of this election, I am not aware of
material nonpublic information concerning the Company.

 

2. Automatic Settlement upon Death or Change in Control.

 

I hereby acknowledge that (a) upon my death the Units shall be settled 30 days
after the date of my death, but in no event prior to May 15, 2007; and (b) upon
a Change of Control (as defined in the 1997 Plan) while I am employed by the
Company, the Units shall be settled upon the date of consummation of the Change
of Control.

 

         Date      Herbert J Zarkin            

Approved:

                           

 

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