Exhibit 10.1


 


Bed Bath
& Beyond Inc.


 


Corporate Office


650 Liberty Avenue


Union, New Jersey 07083


908/688-0888


 


January 11,
2006


 


Mr. Steven
H. Temares

Chief Executive Officer

Bed Bath & Beyond Inc.

650 Liberty Avenue

Union, New Jersey 07083


 


Re:          Supplemental Executive
Retirement Benefit


 


Dear Mr. Temares:


 


This letter
agreement (the “Agreement”) sets forth the terms and conditions of the
supplemental retirement benefit which will be payable to you or on your behalf
by Bed Bath & Beyond Inc. (the “Company”):


 


1.                                       If
you remain employed by the Company on and through June 12, 2012 (i.e., the twentieth anniversary of the
date of your commencement of employment with the Company) or the earlier occurrence
of a Change of Control of the Company (as such term is defined in Section 2(g) below)
(the earliest of such dates being herein referred to as “Vesting Date”), you
will be entitled to receive a supplemental retirement benefit upon your
retirement or other separation from service from the Company thereafter (the “Retirement
Benefit”), subject to the terms and conditions of this Agreement.  The Retirement Benefit shall be an annual amount
equal to 50% of your annual base salary rate on the date of your retirement or
other separation from service from the Company for a period of 10 years, which,
except as provided in Section 2 below, shall be paid in accordance with
the Company’s normal payroll practices over the 10-year period commencing on
the date of your retirement or other separation from service from the Company.  Notwithstanding anything to the contrary
herein or in your December 1, 1994 employment agreement with the Company,
as amended May 28, 1999 and as further amended May 1, 2004 (the “Employment
Agreement”), you may, at any time after the Vesting Date, upon 90 days’ prior written
notice given to the Company, elect to retire from the Company and commence
receipt of the Retirement Benefit. 
Notwithstanding the foregoing, any amount due prior to the date six
months after your


 





















 


retirement or other separation from service from
the Company shall (except as provided in Section 2 below) be deferred and
paid to you in a lump sum on the date six months from the date of such
retirement or other separation from service from the Company in the amount that
would have been paid during such six-month period.


 


2.                                       (a) 
If your employment with the Company is terminated (i) prior to the Vesting
Date by reason of your voluntary termination of employment or (ii) prior
to or on or after the Vesting Date by reason of your voluntary termination of
employment where cause (as defined in your Employment Agreement (“Cause”))
exists or by the Company for Cause, you will forfeit any right or entitlement
to the Retirement Benefit.


 


(b)  If your employment with the Company
is terminated by the Company without Cause (whether prior to or on or after the
Vesting Date), you will receive, on the date six months following such
termination, a lump sum payment equal to the present value of the Retirement
Benefit payable for 10 years from the date of termination, using as the
discount rate the Applicable Federal Rate for short-term Treasury obligations
as published by the Internal Revenue Service for the month in which the
termination of employment occurs (the “Discount Rate”).


 


(c)  If your employment with the Company
is terminated as a result of your death or by the Company as a result of your
Disability (whether prior to or on or after the Vesting Date, but prior to your
retirement), you or your beneficiary(ies) designated pursuant to the
beneficiary designation form provided to you by the Company or, if no
beneficiary has been designated, your estate, will receive a lump sum payment
equal to the present value of the annual Retirement Benefit payable for 10
years from the date of termination, calculated using the Discount Rate.  If such termination is as a result of your
Disability, payment of the Retirement Benefit under this Section 2(c) shall
be made on the date six months following such termination; if such termination
is as a result of your death, payment of the Retirement Benefit under this Section 2(c) shall
be made as promptly as reasonably practicable after the date of death.  For purposes of this Agreement, “Disability”
shall mean your inability substantially to perform your duties and responsibilities
under the Employment Agreement for a period of 180 consecutive days as a result
of physical or mental disability.


 


(d)  In the event of your death during
the payment of the Retirement Benefit under Section 1 above, your beneficiary(ies)
designated pursuant to the beneficiary designation form provided to you by the
Company or, if no beneficiary has been designated, your estate, will receive,
as promptly as reasonably practicable after the date of death, a lump sum
payment equal to the present value of the portion of the annual Retirement
Benefit due to be paid after the date of death, calculated using the Discount Rate.


 


(e)  Upon your retirement or other
separation from service from the Company within 12 months after a Change of
Control of the Company, in lieu of annual payment of the Retirement Benefit, you
will receive six months after such retirement or other separation from service from
the Company a lump sum payment equal to the present value of the annual
Retirement Benefit for 10 years from the date of such retirement or other
separation from service from the Company, calculated using the Discount Rate.


 


(f)  In the event of a Change of Control
of the Company during the payment of the Retirement Benefit under Section 1
above, you will receive six months after such Change of


 


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Control a lump sum payment equal to the
present value of the portion of the annual Retirement Benefit due to be paid
after the date of the Change of Control, calculated using the Discount Rate.


 


(g)  For purposes of this Agreement, a “Change
of Control” shall mean the first to occur of the following:


 


(i)  any “person,”
as such term is used in sections 3(a)(9) and 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), becomes a “beneficial
owner,” as such term is used in Rule 13d-3 under the Exchange Act, of 50%
or more of the outstanding common stock of the Company, excluding a person that
is an affiliate (as such term is used under the Exchange Act) of the Company on
the date of this Agreement, or any affiliate of any such person;


 


(ii) the majority
of the board of directors of the Company (the “Board”) consists of individuals
other than “Incumbent Directors,” which term means the members of the Board on
the date of this agreement; provided that any person becoming a director
subsequent to such date whose election or nomination for election was supported
by two-thirds of the directors who then comprised the Incumbent Directors shall
be considered an Incumbent Director;


 


(iii)  the
Company adopts any plan of liquidation providing for the distribution of all or
substantially all its assets;


 


(iv)  all or
substantially all the assets or business of the Company are disposed of
pursuant to a merger, consolidation or other transaction (unless the
shareholders of the Company immediately prior to such merger, consolidation or
other transaction beneficially own, directly or indirectly, in substantially
the same proportion as they own the common stock of the Company, all the common
stock or other ownership interests of the entity or entities, if any, that
succeed to the business of the Company); or


 


(v)  the Company
combines with another company and is the surviving corporation, but,
immediately after the combination, the shareholders of the Company immediately
prior to the combination hold, directly or indirectly, 50% or less of the
common stock or other ownership interests of the combined company (there being
excluded from the number of shares held by such shareholders, but not from the
common stock or other ownership interests of the combined company, any shares
other ownership interests received by affiliates of such other company in
exchange for stock of such other company).


 


3.                                       Any
taxes required to be paid by you as a result of payments under this Agreement
shall be for your account and the Company may withhold such taxes from any
amounts due to you hereunder.


 


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4.                                       Payment
of the Retirement Benefit pursuant to this Agreement is contingent upon your
compliance with the restrictive covenant not to compete with the Company
described in Section 4 of your Employment Agreement for the period
therein, as well as for the period you are receiving payment of the Retirement
Benefit under Section 1 hereof.  In
the event that you breach the terms of the restrictive covenant of Section 4
of your Employment Agreement (or engage in activities during the period you are
receiving payment of the Retirement Benefit under Section 1 hereof which
would have been a breach of Section 4 of your Employment Agreement had
they taken place during the period specified in Section 4), any future payments
due under this Agreement shall immediately be forfeited, but no payments
previously made (including without limitation any Retirement Benefit that has
been previously paid in a lump sum) shall be returned or forfeited.  Nothing herein shall be deemed to require
compliance by you with the restrictive covenants set forth in Section 4 of
your Employment Agreement beyond the period specified therein; the only
consequence of engaging in activities after the period specified in Section 4
which would have been a breach of Section 4 had they occurred during such
period being the forfeiture of future payments of Retirement Benefits to the
extent provided in Section 4 of this Agreement.


 


5.                                       Notwithstanding
anything herein to the contrary, the Retirement Benefit will not be paid or
made available under the preceding provisions of this Agreement (excluding Retirement
Benefits paid as a result of death or Disability) unless: (a) you first
execute a release in a form reasonably prescribed by the Company, and (b) to
the extent any portion of such release is subject to any revocation period
prescribed by the Age Discrimination in Employment Act of 1967, as amended, or
any other revocation period in effect on the date of your retirement under any
federal or state law, such revocation period has expired without revocation of
the release.


 


6.                                       This
Agreement is an “unfunded” plan for purposes of providing retirement
compensation.  With respect to any
payments as to which you have a fixed and vested interest but that have not yet
made to you by the Company, nothing contained herein shall give you any rights
that are greater than those of a general unsecured creditor of the Company.


 


7.                                       Nothing
contained in this Agreement shall limit your eligibility to participate in or
receive benefits under any employee benefit plan sponsored or maintained by the
Company; provided that the Retirement Benefit shall not be considered or
included for purposes of calculating any benefit under any such employee
benefit plan of the Company.


 


8.                                       This
Agreement is not an agreement of employment. 
This Agreement does not guarantee that the Company will employ or
retain, or to continue to, employ or retain you during the entire, or any
portion of the, term of this Agreement, nor does it modify in any respect any
of your or the Company’s rights under your Employment Agreement, which shall
remain in full force and effect and unchanged by this Agreement.


 


9.                                       No
rights or obligations of the Company under this Agreement may be assigned or
transferred by the Company, except pursuant to a merger or consolidation, or
the sale or liquidation of all or substantially all the assets of the Company,
provided that, in the case of


 


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such a sale or liquidation, the assignee or
transferee assumes in writing the obligation to perform this Agreement (it
being understood, however, that no such assignment or transfer shall relieve
the Company of its liabilities or obligations under this agreement).


 


10.                                 This
Agreement is intended to comply with the applicable requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and shall be
limited, construed and interpreted in accordance with such intent.  Subject to the last sentence hereof, to the
extent that the Retirement Benefit is subject to Section 409A of the Code,
it shall be paid in a manner that will comply with Section 409A of the
Code, including proposed, temporary or final regulations or any other guidance
issued by the Secretary of the Treasury and the Internal Revenue Service with
respect thereto.  Notwithstanding
anything herein to the contrary, any provision in this Agreement that is
inconsistent with Section 409A of the Code shall be deemed to be amended
to comply with Section 409A of the Code and to the extent such provision
cannot be amended to comply therewith, such provision shall be null and void.  Such compliance shall be as mutually agreed
between the Company and you, but the Company shall not be an indemnifier of
compliance with Code Section 409A, which shall be your risk.


 


11.                                 This
Agreement shall be governed and construed in accordance with the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Code and
other applicable federal law.  To the
extent not preempted by or inconsistent with federal law, the laws of the state
of New York shall apply.  If any provision
of this Agreement is held invalid or unenforceable, the invalidity or
unenforceability shall not affect any other provision of this Agreement and the
Agreement shall be construed and enforced as if the provision had not been
included.


 


12.                                 This
Agreement is intended to be a plan which is unfunded and maintained primarily
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees within the meaning of Sections 201,
301 and 401 of ERISA, and therefore to be exempt from the provisions of Parts
2, 3 and 4 of Title I of ERISA.


 


13.                                 For
purposes of this Agreement, the term “Company” shall include any and all
successors and assignees, whether direct or indirect, by purchase, merger,
consolidation or otherwise, to all or substantially all the business or assets
of the Company, and such successors and assignees shall perform the Company’s
obligations under this Agreement, in the same manner and to the same extent
that the Company would be required to perform if no such succession or
assignment had taken place.


 


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14.                                 This
Agreement sets forth all understandings with regard to your Retirement Benefit
payable by the Company.  This Agreement
has been presented to, and duly authorized by, the Compensation Committee of
the Board.  It may not be amended or
terminated without the written agreement of both parties hereto.


 


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: Warren
  Eisenberg

  
	
   

  	
  Title:
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and Agreed by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Steven H. Temares

  	
   

  
				



 


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