Exhibit
10.2


 


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:          Escrow Account with Respect
to Supplemental Executive Retirement Benefit


 


Dear Mr. Temares:


 


As you know, the letter agreement between you and
Bed Bath & Beyond Inc. (the “Company”), originally effective as of January 11,
2006, which set forth the terms and conditions of your supplemental executive
retirement benefit, is being amended and restated in its entirely effective as of
January 11, 2006, as memorialized in the letter agreement dated November 16,
2009 (the “SERP”).  Capitalized terms
used in this letter will have the meanings set forth in the SERP.


 


In connection with the amendment and restatement of
the SERP, your execution of this letter will evidence your agreement that
should you become eligible to receive a distribution from the SERP due to your retirement
or voluntary Separation from Service (a “Triggering Event”), your lump sum SERP
distribution, less all applicable withholding taxes, will be paid on the first
business day following the six month anniversary of the Triggering Event (the “First
Payment Date”) as follows: (a) 1/10 of the lump sum SERP distribution (net of
applicable withholding taxes) will be distributed to you; and (b) 9/10 of the lump
sum SERP distribution (net of applicable withholding taxes) will be deposited
into an escrow account to be held by an escrow agent, which escrow agent will
be mutually agreed upon by you and the Company (but which, in any event, shall
be a bank or other financial institution having assets of at least $10 billion).  In the event of a distribution from the SERP
due to your death, Disability, termination by the Company without Cause or
Separation from Service within 12 months following a Change in Control, no
escrow account will be established and you will be entitled to receive the SERP
distribution in accordance with the terms of the SERP.


 


You agree that, no later than 120 days following a
Triggering Event, you will enter into an escrow agreement by and among you, the
Company and the escrow agent which will set forth the terms and conditions with
respect to amounts held in the escrow account. 
You further agree that the escrow agreement will contain the following
terms:


 


1.             Amounts
deposited and held in the escrow account will be distributed in 9 equal annual
installments to be distributed on each of the 9 annual anniversaries of the First
Payment Date.


 


2.             You will have
the right to direct the investment of the funds in the escrow account from
among the permitted investments which will be: (i) debt obligations of the U.S.
government, (ii) short-term investment grade obligations of U.S. and foreign
corporations, including commercial paper, certificates of deposit, notes,
bonds, debentures, and (iii) pooled, commingled or mutual funds which invest
solely in the above.


 

















 


3.             Interest,
dividends and other earnings on escrow account funds during the 12-month period
between distribution dates will be distributed to you annually with each annual
installment.  You will be responsible for
the payment of any income or other taxes arising as a result of such
distributions.  A net loss incurred by
the escrow account during any such 12-month period will reduce the annual
installment to be paid immediately following the conclusion of such 12-month
period (and, if necessary, any subsequent installments).


 


4.             In the event of
your death prior to payment of all 9 installments, the Company will direct the
escrow agent to pay the remaining amount in the escrow account, including
accrued investment earnings (such total amount the “Remaining Amount”) to the beneficiary(ies)
you have designated pursuant to the SERP (or, if you have not designated a
beneficiary, to your estate) no later than 30 days after your death.


 


5.             In the event of
a Change of Control of the Company that occurs on or after the deposit of the
Retirement Benefit into the escrow account and prior to payment of all 9
installments, the Company will direct the escrow agent to pay the Remaining
Amount to you simultaneously with the Change of Control, or as soon as possible
thereafter, but in no event later than 30 days following the Change in Control.


 


6.             In the event
you do not comply with the restrictive covenant not to compete with the Company
(as described in Section 4 of your Employment Agreement, but for the term of
the escrow agreement) (the “Restrictive Covenant”) prior to the payment of the entire
Remaining Amount from the escrow account, the Company will have the right
(subject to the provisions of the escrow agreement) to direct the escrow agent
to pay the Remaining Amount to the Company no later than 15 days after notice
to the escrow agent and to you, and you will forfeit any and all rights to the
Remaining Amount.  Notwithstanding the
foregoing, it is specifically understood and agreed that following a Change in
Control that occurs on or after the deposit of the Retirement Benefit into the
escrow account, no forfeiture due to a violation of Restrictive Covenant shall
occur, and the provisions of the Restrictive Covenant shall no longer be
applicable solely with respect to the Retirement Benefit.  Nothing in the SERP or this letter 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 payment to
you of the entire Remaining Amount from the escrow account is the forfeiture of
the Remaining Amount in accordance with the terms of the SERP and this letter.


 


7.             The Company
will be responsible for payment of the escrow agent’s annual fees.


 


You further agree that in the event you violate the
Restrictive Covenant following the Triggering Event and prior to the payment of
the entire Remaining Amount, you will use commercially reasonable efforts (taking
into account applicable costs, fees and tax ramifications) to obtain a refund
from the appropriate taxing authorities of the withholding taxes previously
remitted on the portion of the Retirement Benefit forfeited by you under Section
6 above and, in the event any such amounts are refunded to you, you will
promptly remit such refunded amounts to the Company (less any other income or
other taxes, penalties or interest incurred by you solely as a result of any such
refund).  Upon written notice given to
you by the Company, you will, to the maximum extent permitted by law, assign to
the Company the right to obtain such refund. 
The Company shall promptly reimburse you for or pay on your behalf all
reasonable legal fees and expenses incurred by 


 


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you in connection with any filings or proceedings to
the extent attributable to such refund request within 60 days after such fees
or expenses are incurred.  Such
reimbursement right shall continue for your lifetime and the lifetime of your
spouse as contemplated pursuant to the objectively and specifically prescribed period
requirement of Treasury Regulation Section 1.409A-3(iv)(A)(2), and will not be
subject to liquidation or exchange for another benefit.  The amount of such expenses reimbursed to you
or paid on your behalf in any one calendar year will not affect the amount of
such expenses eligible for reimbursement or payment in any other calendar year.


 


This Agreement sets forth all understandings with
regard to the escrow account to be established to hold your SERP distribution
in the event you retire or voluntarily incur a Separation from Service with the
Company.  This Agreement may not be
amended or terminated without the written agreement of both parties hereto.  This Agreement will be governed by the laws
of the State of New York without giving effect to its conflict of laws
principles.


 


	
   

  	
   

  	
  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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