Exhibit
10.1


 


Bed Bath &
Beyond Inc.


 


November 16, 2009


 


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”) amends and
restates in its entirety, and supersedes, the prior agreement, dated January 11,
2006, which set forth the terms and conditions of the supplemental retirement
benefit payable to you or on your behalf by Bed Bath & Beyond Inc. (the “Company”).  This Agreement is effective as of January 11,
2006.


 


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(d) below) (the earliest of such dates being herein referred to as the “Vesting
Date”), you will be entitled to receive a supplemental retirement benefit (the “Retirement
Benefit”) upon your retirement or other separation from service from the
Company within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended and the applicable regulations thereunder (“Section 409A”) (a “Separation
from Service”), subject to the terms and conditions of this Agreement.  The Retirement Benefit shall be payable in
the form of a lump sum equal to the present value of an annual amount equal to
50% of your annual base salary rate on the date of your Separation from Service
if such annual amount were paid to you for a period of 10 years following your
Separation from Service in accordance with the Company’s normal payroll
practices.  This lump sum shall be
calculated using as the discount rate the monthly Applicable Federal Rate for
short-term Treasury obligations as published by the Internal Revenue Service
for the month in which your Separation from Service occurs.  (See example set forth in Exhibit A
hereto).  You may, at any time after the
Vesting Date, upon at least 90 days’ prior written notice given to the Company,
elect to retire from the Company or otherwise incur a voluntary Separation from
Service (except with respect to terminations under Section 2(a) hereof) and commence
receipt of the Retirement Benefit. 
Notwithstanding the foregoing, your Retirement Benefit shall be paid on
the first business day following the six month anniversary of your Separation
from Service and shall be includible in your income for tax purposes at such
time (regardless of whether a portion of such Retirement Benefit is deposited
into an escrow account pursuant to the following sentence).  Except in the circumstances described in the
following sentence, in the event you elect to retire or incur a voluntary
Separation from Service after the Vesting Date, a portion of your Retirement
Benefit, net of withholdings, will be deposited into an escrow account governed
by the terms of a separate escrow agreement as described in a separate letter
agreement being executed simultaneously 


 

















 


herewith.  For the avoidance of
doubt, no portion of your Retirement Benefit will be deposited into such escrow
account in the event (a) you die, (b) your employment is terminated by the
Company without Cause (as defined in your December 1, 1994 employment agreement
with the Company, as amended from time to time (the “Employment Agreement”)), (c)
you incur a Separation from Service due to Disability (as defined in Section 2(b)
hereof), or (d) you incur a Separation from Service within 12 months following
a Change in Control (as defined in Section 2(d) hereof).


 


2.             (a) If your
employment with the Company is terminated (i) prior to the Vesting Date by
reason of your voluntary Separation from Service or (ii) prior to or on or
after the Vesting Date by reason of your voluntary Separation from Service
where Cause exists or by the Company for Cause, you will forfeit any right or
entitlement to the Retirement Benefit.


 


(b)
Notwithstanding the reference to the Vesting Date in Section 1 above, if your
employment with the Company is terminated (i) by the Company without Cause, or (ii)
by the Company due to your Disability (as defined below) (in the case of either
(i) or (ii), whether prior to or on or after the Vesting Date), your Retirement
Benefit will become payable in accordance with, and subject to, Section 1 above.  For purposes of this Agreement, “Disability”
shall mean your inability to substantially perform your duties and
responsibilities under the Employment Agreement for a period of 180 consecutive
days as a result of physical or mental disability.


 


(c)
Notwithstanding the reference to the Vesting Date in Section 1 above, if you
die (whether prior to or on or after the Vesting Date), your Retirement Benefit
will become payable in accordance with Section 1, except that the six month
delay referred to in Section 1 shall not apply. 
In such case, your Retirement Benefit shall be paid within 30 days following
your death to the beneficiary(ies) you have designated pursuant to the
beneficiary designation form provided to you by the Company or, if no
beneficiary has been designated, to your estate.


 


(d)
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;


 


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(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 or 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 (including from any
amounts to be paid into an escrow account pursuant to Section 1 above).


 


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,
as modified by this Section 4 (the “Restrictive Covenant”).  In the event that you breach the terms of the
Restrictive Covenant prior to payment of the Retirement Benefit under this
Agreement, such Retirement Benefit shall immediately be forfeited.  In the event that you breach the terms of the
Restrictive Covenant following payment of the Retirement Benefit payable under
this Agreement due to your retirement or other voluntary Separation from
Service during the 10 year period following such retirement or other voluntary
Separation from Service, the Company’s rights shall be governed by the terms of
a separate escrow agreement to be entered into between you and the Company and
any portion of the Retirement Benefit remaining in the escrow account will be
forfeited.  If, in accordance with the
last sentence of Section 1 hereof, no portion of the Retirement Benefit is
deposited into an escrow account, the Restrictive Covenant shall cease to apply
solely with respect to the Retirement Benefit following your receipt of the
Retirement Benefit.  Nothing in this
Agreement shall be deemed to require compliance by you with the Restrictive Covenant
beyond the period specified in Section 4 of your Employment Agreement; the only
consequence of your breach of the Restrictive Covenant after the period
specified in Section 4 of your Employment Agreement and before the tenth
anniversary of your retirement or other voluntary Separation from Service is
the forfeiture of payment in accordance with the terms of the separate escrow
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 you return to the Company a fully effective release
no later than 8 days prior to the six month anniversary of your Separation from
Service.  A release will be deemed fully
effective only if: (a) provided in a form 


 


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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, state or
local 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 been 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.  The foregoing shall not
apply to any amount deposited into an escrow account.


 


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 continue to employ or retain you for any period
of time, 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 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.           (a) This Agreement is intended to comply with the
applicable requirements of Section 409A and shall be limited, construed and
interpreted in accordance with such intent. 
To the extent that the Retirement Benefit is subject to Section 409A, it
shall be paid in a manner that will comply with Section 409A and any other
guidance issued by the Secretary of the Treasury and the Internal Revenue
Service with respect thereto.


 


(b)
In the event it is determined that the Retirement Benefit is subject to the
interest and additional 20% tax imposed by Section 409A (the “Section 409A
Taxes”), then you will be entitled to a payment from the Company in an amount
that places you in the same after-tax economic position that you would have
been in had the Retirement Benefit not been subject to the Section 409A
Taxes.  In the event that the Retirement
Benefit is subject to the Section 409A Taxes before the Retirement Benefit is
paid to you or otherwise includible in your income, this payment will also
include (i) any other income and employment taxes imposed on the Retirement
Benefit and (ii) any income and employment taxes imposed as a result of the
payment of the amounts in clause (i) and this clause (ii), provided that, if
the Retirement Benefit is subsequently paid to you or deposited into an escrow
account, the Retirement Benefit will then be reduced by the amount in clause
(i).  In addition, the Company shall 


 


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reimburse
you for or pay on your behalf all reasonable legal fees and expenses incurred
by you in connection with any tax audit or proceeding involving the application
of Section 409A to the Retirement Benefit. 
The additional payment and any reimbursement or payment of expenses will
be made to you or on your behalf promptly upon the determination that such a
payment or reimbursement is due from the Company, but in no event later than 30
days following the date you remit the Section 409A Taxes to the Internal Revenue
Service (or, if no amounts are remitted as a result of the tax audit or
proceeding, then the expenses will be reimbursed to you or paid on your behalf no
later than 30 days following the completion of the audit or reaching a final
and non-appealable settlement or other resolution of the proceeding).


 


(c)
Notwithstanding subsection (b) above, the Company will not be required to make
any payments to you under subsection (b) above if, after the Company makes a
reasonable request to you in writing, you fail to enter into an amendment to
this Agreement if such amendment could reasonably be expected to result in the
avoidance of the Retirement Benefit being subject to the Section 409A Taxes and
such amendment has no more than an immaterial adverse affect on your rights
hereunder.


 


11.           This Agreement shall be governed and construed in
accordance with the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), the Internal Revenue Code of 1986, as amended 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,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Warren Eisenberg

  
	
   

  	
   

  	
  Warren
  Eisenberg

  
	
   

  	
   

  	
  Co-Chairman
  of the Board of Directors

  
	
   

  	
   

  	
   

  
	
  Acknowledged
  and Agreed by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Steven H. Temares

  	
   

  	
   

  
	
  Steven
  H. Temares

  	
   

  	
   

  



 


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EXHIBIT A


 


Illustration of Calculation of Lump Sum Value of Retirement Benefit


 


The
Retirement Benefit is payable in the form of a lump sum equal to the present
value of an annual amount equal to 50% of annual base salary rate on Separation
from Service if paid over a period of 10 years in accordance with payroll
practices, discounted using the Applicable Federal Rate for short-term Treasury
obligations for the month in which the Separation from Service occurs.


 


Assumptions
for Purposes of this Illustration Only:


 


Annual
Base Salary Rate - $1,500,000


Applicable
Federal Rate for short-term Treasury obligations (as published by the IRS) -
..82%


Frequency
of Payments –semi-monthly


Termination
Date - July 1, 2013


 


50%
of $1,500,000 x 10 years = $7,500,000


$7,500,000/240
(paid in semi-monthly installments) = $31,250 per installment


 


Lump
Sum Present Value


 


Stream
of payments of $31,250


Over
240 periods


Discounted
based on rate of .03417% per period (.82%/24)


Lump
Sum Present Value = $7,199,612


 


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