Document:

exv10w11

EXHIBIT 10.11

EMPLOYMENT AND NON-SOLICITATION AGREEMENT

     THIS EMPLOYMENT AND NON-SOLICITATION AGREEMENT (“Agreement”), dated as of June 10, 2009, is by
and between DELTA APPAREL, INC., a Georgia corporation (“Company”), and Robert W. Humphreys, a
South Carolina resident (“Executive”).

     WHEREAS, Executive and the Company want to enter into a written agreement providing for the
terms of Executive’s employment by the Company.

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:

     1. Employment. Executive agrees to continue Executive’s employment with the Company,
and the Company agrees to employ Executive, on the terms and conditions set forth in this
Agreement. Executive agrees during the term of this Agreement to devote substantially all of his
business time, efforts, skills and abilities to the performance of his duties to the Company and to
the furtherance of the Company’s business.

          Executive’s job title will be Chairman of the Board of Directors and Chief Executive Officer
and his duties will be those as are designated by the Board of Directors of the Company.

     2. Compensation.

          (a) Base Salary. During the term of Executive’s employment with the Company pursuant
to this Agreement, the Company shall pay to Executive as compensation for his services an annual
base salary of not less than $690,000 (Base Salary). Executive’s Base Salary will be payable in
arrears in accordance with the Company’s normal payroll procedures and will be reviewed annually
and subject to upward adjustment at the discretion of the Compensation Committee of the Company’s
Board of Directors and confirmed by the full Board of Directors.

          (b) Incentive Bonus. During the term of Executive’s employment with the Company
pursuant to this Agreement, Executive shall be entitled to participate in the Company’s Short-Term
Incentive Compensation Plan as in effect from time to time. The Executive’s Base Short-Term
Incentive Compensation Base will be $600,000 during fiscal year 2010, $625,000 during fiscal year
2011, and $650,000 during fiscal year 2012. Calculation of the Executive’s Short-Term Incentive
Compensation will be the same as approved annually by the Board of Directors for the Delta Apparel,
Inc. Short-Term Incentive Compensation Participants. The maximum payout to the Executive from the
Short-Term Incentive Compensation Plan is $1,500,000 for any single fiscal year. Any cash
compensation payable under this paragraph shall be referred to as “Incentive Compensation” in this
Agreement.

          (c) Incentive Stock. During the term of the Executive’s employment with the Company
pursuant to this Agreement, Executive will participate in the Delta Apparel, Inc. Incentive Stock
Award Plan (“Plan”). Under the service participation of the Plan the Executive will receive a
grant on June 29, 2009 that provides a two year award of 30,000 shares per year of Delta Apparel,
Inc. Stock upon the filing with the Securities and Exchange Commission of the Company’s Form 10K
for each of the fiscal years 2010 and 2011. Under the service participation of the Plan the
Executive will receive an annual grant on June 27, 2011 that provides an annual award of 30,000
shares of Delta Apparel, Inc. Stock upon the filing with the Securities and Exchange Commission of
the Company’s Form 10K for fiscal year 2012. If shares are not available on the date of the award,
a cash award will be made to the Executive in the amount of the value of the award as of the close
of the market on the date of the award. In addition, at or about such time the Company shall pay
the Executive in cash an amount which will be approximately sufficient, after the payment of all
applicable federal and state income taxes attributable to such payment, to pay the federal and
state income taxes which the Participant will incur by virtue of the vesting of such Award (or
portion thereof) whether received in the form of stock or cash. In the event the Executive’s
employment is terminated other than for Cause as defined in Section 4(b) of the Agreement, the full
award will be made for the fiscal year in which the Executive’s employment is terminated.

          (d) Executive Fringe Benefits. During the term of Executive’s employment with the
Company pursuant to this Agreement, Executive shall be entitled to receive such executive fringe
benefits as are provided to the executives in comparable positions under any of the Company’s plans
and/or programs in effect from time to time for which Executive is eligible to participate and to
receive such other benefits as are customarily available to executives of the Company, including,
without limitation, vacations and life, medical and disability insurance.

 

 

          (e) Tax Withholding. The Company shall have the right to deduct from any compensation
payable to Executive under this Agreement social security (FICA) taxes and all federal, state,
municipal, foreign or other taxes or charges as may now be in effect or that may hereafter be
enacted or required.

          (f) Expense Reimbursements. The Company shall pay or reimburse Executive for all
reasonable business expenses incurred or paid by Executive in the course of performing his duties
hereunder, including, but not limited to, reasonable travel expenses for Executive. As a condition
to such payment or reimbursement, however, Executive shall maintain and provide to the Company
reasonable documentation and receipts for such expenses.

     3. Term. Unless sooner terminated pursuant to Section 4 of this Agreement, and
subject to the provisions of Section 5 and Section 6 hereof, the term of this Agreement (the
“Term”) shall commence as of the first day of fiscal year 2010 and shall continue until the date of
the filing with the Securities and Exchange Commission of the Company’s Form 10K for fiscal year
2012.

     4. Termination. Notwithstanding the provisions of Section 3 hereof, but subject to
the provisions of Section 5 and Section 6 hereof, Executive’s employment under this Agreement shall
terminate as follows:

          (a) Death. Executive’s employment shall terminate upon the death of Executive;
provided, however, that the Company shall continue to pay (in accordance with its normal payroll
procedures) the Base Salary to Executive’s estate for a period of six (6) months after the date of
Executive’s death if Executive is employed by the Company the on date of his death.

          (b) Termination for Cause. The Company may terminate Executive’s employment at any
time for “Cause” (as hereinafter defined) by delivering a written termination notice to Executive.
For purposes of this Agreement, “Cause” shall mean the Executive is convicted of a felony.

          (c) Termination Without Cause. The Company may terminate Executive’s employment at
any time for any or no reason by delivering a written termination notice to Executive.

          (d) Termination by Executive. Executive may terminate his employment at any time by
delivering one hundred eighty (180) days prior written notice to the Board of Directors of the
Company; provided, however, that the terms, conditions and benefits specified in Section 5 hereof
shall apply or be payable to Executive only if such termination occurs as a result of a material
breach by the Company of any provision of this Agreement which breach is not cured within ten (10)
days after the Board of Directors of the Company receives from Executive a written notice
detailing such breach.

          (e) Termination Following Disability. In the event Executive becomes “disabled” (as
defined below), the Company may terminate Executive’s employment by delivering a written
termination notice to Executive. Notwithstanding the foregoing, Executive shall continue to
receive his full Base Salary and benefits to which he is entitled under this Agreement for a period
of six (6) months after the effective date of such termination. For purposes of this section, the
Executive shall be considered disabled if the Executive (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous period of not less than
12 months, receiving income replacement benefits for a period of not less than three (3) months
under the Company’s disability insurance policy and/or salary continuation policy as in effect on
the date of such disability.

          (f) Payments. Subject to any limitations under Section 409A of the Internal Revenue
Code of 1986, as amended (“Code”), and related Treasury Regulations, following any expiration or
termination of this Agreement or Executive’s employment hereunder, and in addition to (but not in
duplication of) any amounts owed pursuant to Section 5 or Section 6 hereof, the Company shall pay
to Executive all amounts earned by Executive hereunder prior to the date of such expiration or
termination.

          (g) Non-Disparagement. Executive agrees that during and following the termination of
his employment he will not publicly (or in a manner he reasonably should have expected to be made
public) disparage or otherwise make negative comments regarding the Company, its employees or its
affiliates, provided, however, that the foregoing shall in no way restrict the Executive from in
good faith reporting any concerns that he may have to (i) any authority within the Company
designated to receive complaints or concerns from employees, including, without limitation, the
Company’s Board of Directors or a committee thereof, or (ii) any regulator or other governmental
authority with supervisory responsibility for the Company (including, without limitation, the
Securities and Exchange Commission) or the Company’s independent auditors.

 

 

     5. Certain Termination Benefits. In the event that:

          (i) the provisions of Section 6 do not apply;

          (ii) either the Company terminates Executive’s employment without Cause pursuant to
Section 4(c) or Executive terminates his employment pursuant to Section 4(d) as a
result of an uncured material breach by the Company of any provision of this Agreement; and

          (iii) the Executive executes and delivers the release contemplated in subsection (e)
below, then in such case the Company will provide Executive the benefits described in
subsection (a) below and, if and to the extent that Executive is eligible to participate in
such plans, subsections (b) through (c) below.

          (a) Base Salary and Incentive Compensation. The Company shall pay to Executive (i)
his Base Salary (as in effect as of the date of his termination) and (ii) Incentive Compensation
(in an aggregate amount as follows:

	 	 	 	 	 	 	 
	Years of Service with	 	Base	 	 	 	Payout
	The Company	 	Salary	 	Incentive Compensation	 	Period
	Less than one

	 	3 months
	 	25% of the Short Term
Incentive Plan award
for the most recent
full fiscal year
prior to termination
	 	3 months
	 
	One but less than two

	 	6 months
	 	50% of the Short Term
Incentive Plan award
for the most recent
full fiscal year
prior to termination
	 	6 months
	 
	Two but less than three

	 	9 months
	 	75% of the Short Term
Incentive Plan award
for the most recent
full fiscal year
prior to termination
	 	9 months
	 
	Three or More

	 	12 months
	 	100% of the Short
Term Incentive Plan
base award for the
full fiscal year in
which the
termination occurs
	 	12 months

To the extent permitted under Code Section 409A, the sum of applicable Base Salary and Incentive
Compensation shall be divided into equal monthly payments and paid to the Executive over the
applicable Payout Period shown in the table above, depending on the Executive’s years of service at
the time of termination.

          (b) Life and Group Disability Insurance. If and to the extent that the Company’s
plans in effect from time to time permit such coverage and to the extent permitted under Code
Section 409A, the Company shall continue to provide Executive with group life and disability
insurance coverage for the applicable Payout Period described above in (a) following termination at
coverage levels and rates equal to those applicable to Executive immediately prior to such
termination or, if different, as provided to other executive level employees during such applicable
period.

          (c) Medical Insurance. Upon termination of employment, the Executive shall be
entitled to all COBRA continuation benefits available under the Company’s group health plans to
similarly situated employees. To the extent permitted under Code Section 409A, during the
applicable Payout Period, the Company shall provide such COBRA continuation benefits to the
Executive at the active employee rates similarly situated employees must pay for such benefits.
Upon the expiration of such Payout Period, the Executive will be responsible for paying the full
COBRA premiums for the remaining COBRA continuation period.

          (d) Offset. To the extent permitted by COBRA and the Health Insurance Portability and
Accountability Act of 1996, as amended (“HIPAA”), any fringe benefits received by Executive in
connection with any other employment accepted by Executive that are reasonably comparable, even if
not necessarily as beneficial to Executive, to the fringe benefits then being provided by the
Company pursuant to paragraphs (b) and (c) of this Section 5, shall be deemed to be the equivalent
of such benefits, and shall terminate the Company’s responsibility to continue providing the fringe
benefits package, taken as a whole, then being provided by the Company pursuant to paragraphs (b)
and (c) of this Section 5. The Company agrees that if Executive’s employment with the Company is
terminated, Executive shall have no duty to mitigate damages.

          (e)  General Release. Acceptance by Executive of any amounts pursuant to this Section
5 shall constitute a full and complete release by Executive of any and all claims Executive may
have against the Company, its officers, directors and affiliates, including, but not limited to,
claims he might have relating to Executive’s employment with the Company and cessation thereof;
provided, however, that there may properly be excluded from the scope of such general release the
following:

     (i) claims that Executive may have against the Company for reimbursement of
ordinary and necessary business expenses incurred by him during the course of his
employment;

 

 

     (ii) claims that may be made by the Executive for payment of Base Salary,
bonuses, fringe benefits, stock upon vesting of incentive stock awards, stock upon
exercise of stock options properly due to him, or other amounts or benefits due to him
under this Agreement;

     (iii) claims respecting any matters for which the Executive is entitled to be
indemnified under the Company’s Articles of Incorporation or By-laws or applicable
law, respecting third party claims asserted or third party litigation pending or
threatened against the Executive; and

     (iv) any claims prohibited by applicable law from being included in the release.

A condition to Executive’s receipt of any amounts pursuant to this Section 5 shall be Executive’s
execution and delivery of a general release as described above. In exchange for such release, the
Company shall, if Executive’s employment is terminated without Cause, provide a release to
Executive, but only with respect to claims against Executive that Executive identifies in writing
to the Company at the time of such termination.

     6. Effect of Change of Control.

          (a) If within one (1) year following a “Change of Control” (as hereinafter defined), Executive
terminates his employment with the Company for “Good Reason” (as hereinafter defined) or the
Company terminates Executive’s employment for any reason other than Cause, death or disability (as
defined in Section 4(e)), the Company shall pay to Executive in a lump sum within thirty (30) days
following Executive’s termination of employment: (i) an amount equal to one times the Executive’s
Base Salary as of the date of termination; and (ii) an amount equal to the full amount of the cash
Short-Term Incentive Compensation base during the fiscal year in which the termination occurs. In
addition, the Company shall provide the Executive with out-placement assistance. In addition, to
the extent permitted under the terms of the various plans, the Company shall continue to provide
the Executive with coverage under the Company’s various welfare and benefit plans, including
retirement and group healthcare, dental and life in which Executive participates at the time of
termination, for the period equal to twelve (12) months from the date of termination at coverage
levels and rates substantially equal to those applicable to Executive immediately prior to such
termination.

          (b) “Change of Control” means, with respect to the Executive, a “change in ownership,” a
“change in effective control,” or a “change in the ownership of substantial assets” of a
corporation as described in Treasury Regulations Section 1.409A-3(g)(5) (which events are
collectively referred to herein as “Change of Control events”) after the date of this Agreement.
To constitute a Change of Control with respect to the Executive, the Change of Control event must
relate to a change in control of Delta Apparel, Inc.

     (i) A “change in ownership” of a corporation occurs on the date that any one
person, or more than one person acting as a group, acquires ownership of stock of the
corporation that, together with stock held by such person or group, constitutes more
than 50 percent of the total fair market value or total voting power of the stock of
such corporation. However, if any one person, or more than one person acting as a
group, is considered to own more than 50 percent of the total fair market value or
total voting power of the stock of a corporation, the acquisition of additional stock
by the same person or persons is not considered to cause a change in ownership of the
corporation (or to cause a change in the effective control of the corporation (within
the meaning of paragraph (ii) below)).

     (ii) Notwithstanding that a corporation has not undergone a change in ownership
under paragraph (i) above, a “change in effective control” of a corporation occurs on
the date that either:

          (A) Any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition
by such person or persons) ownership of stock of the corporation possessing 35 percent
or more of the total voting power of the stock of such corporation; or

          (B) A majority of members of the corporation’s board of directors is replaced
during any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the corporation’s board of directors prior to the date
of the appointment or election.

          For purposes of this paragraph (ii), the term corporation refers solely to the
relevant corporation identified in the opening paragraph of this Section 6(b) for
which no other corporation is a majority shareholder.

 

 

          (c) “Good Reason” shall mean any of the following actions taken by the Company without the
Executive’s written consent after a Change of Control:

     (i) the assignment to the Executive by the Company of duties inconsistent with,
or the reduction of the powers and functions associated with, the Executive’s
position, duties, responsibilities and status with the Company immediately prior to a
Change of Control or Potential Change of Control (as defined below), or an adverse
change in Executive’s titles or offices as in effect immediately prior to a Change of
Control or Potential Change of Control, or any removal of the Executive from or any
failure to re-elect Executive to any of such positions, except in connection with the
termination of his employment for disability (as provided in Section 4(e)) or Cause or
as a result of Executive’s death, except to the extent that a change in duties relates
to the elimination of responsibilities attendant to the Company’s no longer being a
publicly traded company;

     (ii) a reduction by the Company in the Executive’s Base Salary as in effect on
the date of a Change of Control or Potential Change of Control, or as the same may be
increased from time to time during the term of this Agreement;

     (iii) the Company shall require the Executive to be based anywhere other than at
or within a 25-mile radius of the Company’s principal executive offices or the
location where the Executive is based on the date of a Change of Control or Potential
Change of Control, or if Executive agrees to such relocation, the Company fails to
reimburse the Executive for moving and all other expenses reasonably incurred in
connection with such move;

     (iv) a significant increase in Executive’s required travel on behalf of the
Company;

     (v) the Company shall fail to continue in effect any Company-sponsored plan or
benefit that is in effect on the date of a Change of Control or Potential Change of
Control (other than the Incentive Stock Award Plan or the Company’s stock option
plan) and pursuant to which Executive has received awards or benefits and that
provides (A) incentive or bonus compensation, (B) fringe benefits such as vacation,
medical benefits, life insurance and accident insurance, (C) reimbursement for
reasonable expenses incurred by the Executive in connection with the performance of
duties with the Company, or (D) retirement benefits such as a Internal Revenue Code
Section 401(k) plan, except to the extent that such plans taken as a whole are
replaced with substantially comparable plans;

     (vi) any material breach by the Company of any provision of this Agreement which
is not cured within ten (10) days of the Company’s receipt from Executive of notice
thereof; and

     (vii) any failure by the Company to obtain the assumption of this Agreement by
any successor or assign of the Company effected in accordance with the provisions of
Section 13.

          (d) “Potential Change of Control” shall mean the date as of which (i) the Company enters into
an agreement the consummation of which, or the approval by shareholders of which, would constitute
a Change of Control; (ii) proxies for the election of directors of the Board of Directors of the
Company are solicited by anyone other than the Company which solicitation, if successful, would
result in a Change of Control; (iii) any person (including, but not limited to, any individual,
partnership, joint venture, corporation, association or trust) publicly announces an intention to
take or to consider taking actions which, if consummated, would constitute a Change of Control; or
(iv) any other event occurs which is deemed to be a Potential Change of Control by the Board of
Directors of the Company and the Board adopts a resolution to the effect that a Potential Change of
Control has occurred.

          (e) In the event that (i) Executive would otherwise be entitled to the compensation and
benefits described in Section 5 or 6(a) hereof (“Compensation Payments”), and (ii) the Company
determines, based upon the advice of tax counsel, that, as a result of such Compensation Payments
and any other benefits or payments required to be taken into account under the Internal Revenue
Code of 1986, as amended (the “Code”), Section 280G(b)(2) (collectively,“Parachute Payments”), any
of such Parachute Payments would be reportable by the Company as an “excess parachute payment”
under Code Section 280G, such Compensation Payments shall be reduced to the extent necessary to
cause the aggregate present value (determined in accordance with Code Section 280G and applicable
regulations promulgated thereunder) of the Executive’s Parachute Payments to equal 2.99 times the
“base amount” as defined in Code Section 280G(b)(3) with respect to such Executive. However, such
reduction in the Compensation Payments shall be made only if, in the opinion of such tax counsel,
it would result in a larger Parachute Payment to the Executive than payment of the unreduced
Parachute Payments after deduction in each case of tax imposed on and payable by the Executive
under Section 4999 of the Code (“Excise Tax”). The value of any non-cash benefits or any deferred
payment or benefit for purposes of this paragraph shall be determined by a firm of independent
auditors selected by the Company.

 

 

          (f) The parties hereto agree that the payments provided under Section 6(a) above are
reasonable compensation in light of Executive’s services rendered to the Company and that subject
to paragraph (e) above neither party shall assert that the payment of such benefits constitutes an
“excess parachute payment” within the meaning of Section 280G(b)(1) of the Code.

          (g) Unless the Company determines that any Parachute Payments made hereunder must be reported
as “excess parachute payments” in accordance with Section 6(e) above, neither party shall file any
return taking the position that the payment of such benefits constitutes an “excess parachute
payment” within the meaning of Section 280G(b)(1) of the Code.

     7. Non-Competition. Executive agrees that during the Term and for a period of twelve
months from the date of the termination of Executive’s employment with the Company pursuant to
Sections 4(b), 4(c), 4(d), 4(e) or 6 herein or for any other reason that results in the Executive
being entitled to the benefits described in Section 5 or Section 6, he will not, directly or
indirectly, compete with the Company by providing to any company that is in a “Competing Business”
services substantially similar to the services provided by Executive at the time of termination.
Competing Business shall be defined as any business that engages, in whole or in part, in the
manufacturing or marketing of activewear apparel in the United States of America (the “Restricted
Territory”), and Executive’s employment function or affiliation is directly or indirectly in such
business of activewear apparel manufacturing or marketing.

     8. Non-Solicitation. For a period of two years after the later of the expiration of
the Term or the termination or cessation of his employment with the Company for any reason
whatsoever, Executive shall not, on his own behalf or on behalf of any other person, partnership,
association, corporation, or other entity, (a) solicit or in any manner attempt to influence or
induce any employee of the Company or its subsidiaries or affiliates (known by the Executive to be
such) to leave the employment of the Company or its subsidiaries or affiliates (other than through
general advertisements not directed at any particular employee or group of employees), nor shall he
use or disclose to any person, partnership, association, corporation or other entity any
information obtained while an employee of the Company concerning the names and addresses of the
Company’s employees, or (b) solicit, entice or induce any customer or supplier of the Company (or
any actively sought customer or supplier of the Company) at the time of such expiration or
termination for or on behalf of any Competing Business in the Restricted Territory.

     9. Non-Disclosure of Trade Secrets. During and prior to the Term of this Agreement,
Executive has had access to and became familiar with and will have access to and become familiar
with various trade secrets and proprietary and confidential information of the Company and its
affiliates, including, but not limited to, processes, computer programs, compilations of
information, records, sales procedures, customer requirements, pricing techniques, customer lists,
methods of doing business and other confidential information (collectively, referred to as “Trade
Secrets”) which are owned by the Company and/or its affiliates and regularly used in the operation
of its or their business, and as to which the Company and/or its affiliates take precautions to
prevent dissemination to persons other than certain directors, officers and employees. Executive
acknowledges and agrees that the Trade Secrets (1) are secret and not known in the industry; (2)
give the Company and/or its affiliates an advantage over competitors who do not know or use the
Trade Secrets; (3) are of such value and nature as to make it reasonable and necessary to protect
and preserve the confidentiality and secrecy of the Trade Secrets; and (4) are valuable, special
and unique assets of the Company and/or its affiliates, the disclosure of which could cause
substantial injury and loss of profits and goodwill to the Company and/or its affiliates.
Executive may not use in any way or disclose any of the Trade Secrets, directly or indirectly,
either during the Term or at any time after the expiration of the Term or the termination of
Executive’s employment with the Company for any reason whatsoever, except as required in the course
of his employment under this Agreement, as required in connection with a judicial or administrative
proceeding, or if the information becomes public knowledge other than as a result of an
unauthorized disclosure by the Executive. All files, records, documents, information, data and
similar items relating to the business of the Company and/or its affiliates, whether prepared by
Executive or otherwise coming into his possession, will remain the exclusive property of the
Company and/or its affiliates (as the case may be) and may not be removed from the premises of the
Company under any circumstances without the prior written consent of the Board of Directors of the
Company and/or its affiliates (as the case may be) (except in the ordinary course of business
during Executive’s period of active employment under this Agreement), and in any event must be
promptly delivered to the Board of Directors of the Company upon termination of Executive’s
employment with the Company. Executive agrees that upon his receipt of any subpoena, process or
other request to produce or divulge, directly or indirectly, any Trade Secrets to any entity,
agency, tribunal or person, Executive shall timely notify and promptly hand deliver a copy of the
subpoena, process or other request to the Board of Directors of the Company. For this purpose,
Executive irrevocably nominates and appoints the Company (including any attorney retained by the
Company), as his true and lawful attorney-in-fact, to act in Executive’s name, place and stead to
perform any act that Executive might perform to defend and protect against any disclosure of any
Trade Secrets. The rights granted to the Company and/or its affiliates in this Section 9 are
intended to be in addition to and not in replacement of any protection of trade secrets provided by
equity, any statute, judicially created law or other agreement.

     10. Remedies. In the event that Executive violates any of the provisions of Sections
7, 8 or 9 hereof (the “Protective Covenants”) or fails to provide the notice required by Section
4(d) hereof, in addition to any other remedy that may be available at

 

 

law, in equity or hereunder, the Company shall be entitled to receive from Executive the profits,
if any, received by Executive upon exercise of any Company granted stock options or incentive stock
awards or upon lapse of the restrictions on any grant of restricted stock to the extent such
options or rights were exercised, or such restrictions lapsed, subsequent to the commencement of
the six-month period prior to the termination of Executive’s employment. In addition, Executive
acknowledges and agrees that any breach of a Protective Covenant by him will cause irreparable
damage to the Company and/or its affiliates, the exact amount of which will be difficult to
determine, and that the remedies at law for any such breach will be inadequate. Accordingly,
Executive agrees that, in addition to any other remedy that may be available at law, in equity or
hereunder, the Company, and/or its affiliates shall be entitled to specific performance and
injunctive relief, without posting bond or other security, to enforce or prevent any violation of
any of the Protective Covenants by him.

     11. Severability. The parties hereto intend all provisions of this Agreement to be
enforced to the fullest extent permitted by law. The provisions of this Agreement are severable.
The covenants on the part of the Executive contained in the Protective Covenants shall be construed
as independent covenants and agreements of the Executive, independently supported by good and
adequate consideration, shall be construed independently of the other provisions in this Agreement
and shall survive this Agreement. The existence of any claim or cause of action of Executive
against the Company or any of its affiliates, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company or its affiliates of the covenants
of Executive contained in this Agreement. The parties in no way intend to include a provision that
contravenes public policy. Therefore, if any of the provisions, clauses, sentences, or paragraphs,
or portions (“provisions”) of this Agreement is unlawful, against public policy, or otherwise
declared void or unenforceable, such provision shall be deemed excluded from this Agreement, which
shall in all other respects remain in effect. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added as part of this Agreement a provision as similar in
its terms to such illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable. If any Court should construe any portion of this Agreement to be too broad
to prevent enforcement to its fullest extent then such portion shall be enforced to the maximum
extent that the Court finds reasonable and enforceable.

     12. Compliance With Section 409A. Notwithstanding any other provision of this
Agreement, to the extent applicable, this Agreement is intended to comply with Section 409A of the
Code and the regulations (or similar guidance) thereunder. To the extent any provision of this
Agreement is contrary to or fails to address the requirements of Section 409A of the Code, this
Agreement shall be construed and administered as necessary to comply with such requirements.

     13. Miscellaneous.

          a. Notices. Any notices, consents, demands, requests, approvals and other
communications to be given under this Agreement by either party to the other must be in writing and
must be either (i) personally delivered, (ii) mailed by registered or certified mail, postage
prepaid with return receipt requested, (iii) delivered by reputable overnight express delivery
service or reputable same-day local courier service, or (iv) delivered by telex or facsimile
transmission, with confirmed receipt, to the address set forth below, or to such other address as
may be designated by the parties from time to time in accordance with this Section 13(a):

If to the Company:

Delta Apparel, Inc.

322 South Main Street

Greenville, South Carolina 29601

Attn: Vice President of Human Resources

Fax No.: (864) 232 5199

If to Executive:

Mr. Robert W. Humphreys

203 Rockingham Road

Greenville, SC 29607

               Notices delivered personally or by overnight express delivery service or by local courier
service are deemed given as of actual receipt. Mailed notices are deemed given three (3) business
days after mailing. Notices delivered by telex or facsimile transmission are deemed given upon
receipt by the sender of the answer back (in the case of a telex) or transmission confirmation (in
the case of a facsimile transmission).

 

 

          b. Entire Agreement. This Agreement supersedes any and all other agreements, either
oral or written, between the parties with respect to the subject matter of this Agreement and
contains all of the covenants and agreements between the parties with respect to the subject matter
of this Agreement.

          c. Modification. No change or modification of this Agreement is valid or binding upon
the parties, nor will any waiver, termination or discharge of any term or condition of this
Agreement be so binding, unless confirmed in writing and signed by the parties to this Agreement.

          d. Governing Law and Venue. The parties acknowledge and agree that this Agreement and
the obligations and undertakings of the parties under this Agreement will be performable in
Georgia. This Agreement is governed by, and construed in accordance with, the laws of the State of
Georgia without giving consideration to the conflict of laws provisions thereof. If any action is
brought to enforce or interpret this Agreement, the parties consent to the jurisdiction and venue
of the Federal District Court for the Northern District of Georgia and any state or superior court
located in Fulton or Gwinett Counties, Georgia.

          e. Enforcement. Executive agrees that upon Executive’s violation or threatened
violation of any of the provisions of this Agreement, the Company shall, in addition to any other
rights and remedies available to it, at law, in equity, or otherwise, be entitled to specific
performance and injunctive relief including, without limitation, an injunction to be issued by any
court of competent jurisdiction enjoining and restraining Executive from committing any violation
or threatened violation of the provisions of this Agreement and Executive consents to the issuance
of such injunction without the necessity of bond or other security in the event of a breach or
threatened breach by him of this Agreement. Furthermore and notwithstanding anything to the
contrary in this Agreement, the Company shall, in addition to any other rights or remedies
available to it, at law, in equity, or otherwise, be entitled to reimbursement of court costs,
reasonable attorneys’ fees, and any other expenses reasonably incurred by it or its affiliates as a
result of a breach or threatened breach of this agreement by Executive.

          f. Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement, and all of which, when taken
together, shall be deemed to constitute one and the same agreement. The exchange of copies of this
Agreement and of signature pages by facsimile transmission shall constitute effective execution and
delivery of this Agreement as to the parties and may be used in lieu of the original agreement for
all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their
original signatures for any purpose whatsoever.

          g. Costs. Except as provided in Section 13(e) above or except as provided below, if
any action at law or in equity is necessary to enforce or interpret the terms of this Agreement,
each party shall bear its own costs and expenses (including, without limitation, attorneys’ fees);
provided, however, that in the event Executive incurs costs or expenses in connection with
successfully enforcing this Agreement following a Change of Control, the Company shall reimburse
the Executive for all such reasonable costs and expenses (including, without limitation, attorneys’
fees).

          h. Estate. If Executive dies prior to the expiration of the term of employment or
during a period when monies are owing to him, any monies that may be due him from the Company under
this Agreement as of the date of his death shall be paid to his estate as and when otherwise
payable.

          i. Assignment. The rights, duties and benefits to Executive hereunder are personal to
him, and no such right, duty or benefit may be assigned by him without the prior written consent of
the Company. The rights and obligations of the Company shall inure to the benefit and be binding
upon it and its successors and assigns, which assignment shall not require the consent of
Executive.

          j. Binding Effect. This Agreement is binding upon and shall inure to the benefit of
the parties hereto, their respective executors, administrators, successors, personal
representatives, heirs and assigns permitted under subsection 13(i) above.

          k. Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person or entity (other than affiliates of the Company
as provided herein) any rights, benefits or remedies of any nature whatsoever under or by reason of
this Agreement.

          l. Waiver of Breach. The waiver by the Company or Executive of a breach of any
provision of this Agreement by Executive or the Company may not operate or be construed as a waiver
of any subsequent breach.

          m. Construction. The parties agree that this Agreement was freely negotiated among
the parties and that Executive has had the opportunity to consult with an attorney in negotiating
its terms. Accordingly, the parties agree that this Agreement shall not be construed in favor of
any party or against any party. The parties further agree that the headings and subheadings are
for convenience of the parties only and shall not be given effect in the construction of this
Agreement.

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	DELTA APPAREL, INC.	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Delta Apparel, Inc.	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Martha M. Watson
   

	 	 
	 	 	Name: Martha M. Watson	 	 
	 	 	Title:   Vice President and Corporate Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	“Executive”	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Robert W. Humphreys	 	 
	 	 	 	 	 
	 	 	Name: Robert W. Humphreys	 	 
	 	 	Title:   Chairman of the Board of Directors and 

            Chief Executive Officerexv10w1

Exhibit 10.1

THE TJX COMPANIES, INC.

STOCK INCENTIVE PLAN

(2009 Restatement)

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	SECTION 1. NAME; EFFECTIVE DATE; GENERAL PURPOSE
	 	 	 	2 
	 
	 	 	 	 
	SECTION 2. PLAN ADMINISTRATION
	 	 	 	 2
	 
	 	 	 	 
	SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
	 	 	 	 3
	 
	 	 	 	 
	SECTION 4. ELIGIBILITY
	 	 		 4
	 
	 	 	 	 
	SECTION 5. DURATION OF AWARDS; TERM OF PLAN
	 	 	 	 4
	 
	 	 	 	 
	SECTION 6. STOCK OPTIONS; SARs
	 	 	 	 4
	 
	 	 	 	 
	SECTION 7. OTHER STOCK-BASED AWARDS
	 	 	 	 7
	 
	 	 	 	 
	SECTION 8. PERFORMANCE AWARDS
	 	 	 	 12
	 
	 	 	 	 
	SECTION 9. TRANSFER, LEAVE OF ABSENCE
	 	 		 13
	 
	 	 	 	 
	SECTION 10. AMENDMENTS AND TERMINATION
	 	 	 	 14
	 
	 	 	 	 
	SECTION 11. STATUS OF PLAN
	 	 	 	 14
	 
	 	 	 	 
	SECTION 12. CHANGE OF CONTROL PROVISIONS
	 	 	 	 14
	 
	 	 	 	 
	SECTION 13. GENERAL PROVISIONS.
	 	 	 	 15
	 
	 	 	 	 
	SECTION 14. DEFINITIONS
	 	 	 	 16

 

 

THE TJX COMPANIES, INC.

STOCK INCENTIVE PLAN

(2009 Restatement)

SECTION 1. NAME; EFFECTIVE DATE; GENERAL PURPOSE

     The name of the plan is The TJX Companies, Inc. Stock Incentive Plan (the “Plan”). The Plan
is an amendment and restatement of The TJX Companies, Inc. Stock Incentive Plan as most recently
previously amended in 2006. The provisions of the Plan as herein amended and restated shall apply
to Awards made after January 31, 2009 (the “Adoption Date”), except that the definition of “Change
of Control” as set forth herein shall apply to all Awards outstanding on the Adoption Date and the
clarifications and related rules set forth herein that are related to Section 409A of the Code
shall apply effective as of January 1, 2008.

     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 stock ownership and the receipt of incentive
awards by selected key employees and directors of the Company and its Subsidiaries who contribute
to and will be responsible for its continued long term growth. The Plan is intended to motivate
such individuals to enhance the long-term value of the Company by providing an opportunity for
capital appreciation and to recognize services that contribute materially to the success of the
Company. Capitalized terms used in the Plan shall have the meaning set forth in Section 14.

SECTION 2. PLAN ADMINISTRATION

     The Plan shall be administered by the Executive Compensation Committee of the Board or such
other committee of the Board as the Board may from time to time determine (the “Committee”). The
Committee shall consist of not fewer than two directors, each of whom is both a Non-Employee
Director and an Outside Director. If at any time the Committee shall include one or more members
who are not Non-Employee Directors or Outside Directors, a subcommittee consisting solely of two or
more individuals who are both Non-Employee Directors and Outside Directors shall constitute the
Committee for purposes of the immediately preceding sentence. If at any time no Committee shall be
in office, the functions of the Committee shall be exercised by the independent Directors.

     The Committee shall have the power and authority to: grant Awards consistent with the terms of
the Plan, including the power and authority to select from among those eligible the persons to whom
Awards may from time to time be granted; determine the time or times of grant of any Awards; to
determine the number of shares to be covered by any Award; determine the terms and conditions of
any Award; adopt such rules, guidelines and practices for administration of the Plan and for its
own acts and proceedings as it shall deem advisable; interpret the terms and provisions of the Plan
and any Award; prescribe such forms and agreements as it deems advisable in connection with any
Award; make all determinations it deems advisable for the administration of the Plan; decide all
disputes arising in connection with the Plan; and otherwise

-2-

 

supervise the administration of the Plan. All decisions and interpretations of the Committee
shall be binding on all persons, including the Company and Participants.

SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS;
SUBSTITUTION.

     (a) Shares Issuable. The maximum number of shares of Stock (“Share Limit”) that may
be issued under Awards shall be the sum of (i) 28,000,000 plus (ii) the number of shares of Stock
subject to Awards outstanding as of the Adoption Date. For the avoidance of doubt, if a New Award
is forfeited, expires, or is satisfied without the issuance of Stock, the shares of Stock subject
to such New Award shall not be treated as issued for purposes of the preceding sentence. Each
share issued under a New Award that is a Stock Option or SAR shall reduce the Share Limit by one
(1) share, and each share of Stock issued under any other New Award (unless reacquired by the
Company through forfeiture) shall reduce the Share Limit by one and thirteen one-hundredths (1.13)
shares. Subject to the Share Limit, no more than 27,500,000 shares of Stock in the aggregate may
be issued pursuant to NSOs, and no more than 27,500,000 shares of Stock (less the number of shares
issued pursuant to NSOs) in the aggregate may be issued pursuant to the exercise of ISOs. The
number of shares of Stock subject to each of Stock Options, SARs and Performance Awards that may be
awarded to any Participant during any consecutive three-year period commencing after the Adoption
Date shall be limited to 8,000,000 shares each. Shares issued under the Plan may be authorized but
unissued shares or shares reacquired by the Company. The Company shall appropriately reserve
shares in connection with the grant of Awards to reflect the limitations set forth above.

     (b) Stock Dividends, Mergers, etc. In the event of a stock dividend, stock split,
reverse 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,
including the limits described in Section 3(a) and Section 7(c), 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 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 12.

     (c) Substitute Awards. The Company may grant Awards under the Plan in conversion,
replacement or adjustment of outstanding options or other equity-based compensation awards held by
employees of another corporation who become employees or Eligible Directors of the Company or a
Subsidiary as described in the first sentence of Section 4 as the result of a merger or
consolidation of the employing corporation or an affiliate with the Company or a Subsidiary or the
acquisition by the Company or a Subsidiary of stock of the employing corporation or an

-3-

 

affiliate. The Committee may direct that the converted, replacement or adjusted awards be
granted on such terms and conditions as the Committee considers appropriate in the circumstances to
reflect the transaction. The shares which may be delivered under such substitute Awards shall be
in addition to the limitations set forth in Section 3(a) on the number of shares available for
issuance under Awards, and such substitute Awards shall not be subject to the per-Participant Award
limits described in Section 3(a).

SECTION 4. ELIGIBILITY.

     Participants in the Plan will be (i) such full or part time officers and other key employees
of the Company and its Subsidiaries who are selected from time to time by the Committee in its sole
discretion, and (ii) Eligible Directors. Persons who are not employees of the Company or a
subsidiary (within the meaning of Section 424 of the Code) shall not be eligible to receive grants
of ISOs.

SECTION 5. DURATION OF AWARDS; TERM OF PLAN.

     (a) Duration of Awards. Subject to Sections 13(a) and 13(e) below, no Stock Option
or SAR may remain exercisable beyond 10 years from the grant date, and no other Award shall have a
vesting or restriction period that extends beyond 10 years 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 June 2, 2019, but then
outstanding Awards may extend beyond such date.

SECTION 6. STOCK OPTIONS; SARs.

     Any Stock Option or SAR granted under the Plan shall be in such form as the Committee may from
time to time approve. Stock Options granted under the Plan may be either ISOs or NSOs. Any Stock
Option that is not expressly designated as an ISO at time of grant shall be deemed to have been
expressly designated at time of grant as an NSO. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to ISOs shall be interpreted, amended or altered,
nor shall any discretion or authority granted to the Committee under the Plan be exercised, so as
to disqualify the Plan or, without the consent of the optionee, any ISO under Section 422 of the
Code.

     Stock Options granted under the Plan shall be subject to the provisions of Sections 6(a)
through Section 6(k) below; SARs shall be subject to the provisions of Section 6(l) below; and
Stock Options and SARs 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.

-4-

 

     (b) Exercisability. Stock Options shall be exercisable at such 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.

     (c) Method of Exercise. The person holding a Stock Option may exercise the Stock
Option in whole or in part by means of such exercise procedures as the Committee may from time to
time establish, each of which shall require, as the Committee determines, delivery to the Committee
of the full purchase price plus (as provided in Section 13(d)) any taxes required to be withheld in
connection with the exercise, or delivery of an unconditional and irrevocable undertaking by a
broker to deliver promptly to the Company sufficient funds to pay such purchase price and taxes,
for the portion of Stock Option so exercised. If so permitted by the Committee in its discretion
and subject to such limitations and restrictions as the Committee may impose, payment in full or in
part of the exercise price or payment of withholding taxes (as provided in Section 13(d)) may also
be made in the form of shares of Stock not then subject to restrictions under any Company plan.
The person holding a Stock Option 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.

     (d) Non-transferability of Options. No ISO (and, except as determined by the
Committee, no NSO) shall be transferable by the person to whom such Stock Option was granted
otherwise than by will or by the laws of descent and distribution, and all ISOs (and, except as
determined by the Committee, all NSOs) shall be exercisable during the lifetime of the person to
whom such Stock Options were granted only by such person. Transfers, if any, permitted by the
Committee in the case of NSOs shall be limited to gratuitous transfers (transfers not for value).
Where an NSO is permitted by the Committee to be transferred, references in the Plan to the “person
to whom the Stock Option was granted” and similar terms shall be construed, as the Committee in its
discretion deems appropriate, to include any permitted transferee to whom the Stock Option is
transferred.

     (e) Termination by Death. If the employment by the Company and its Subsidiaries of
a person to whom a Stock Option was granted terminates by reason of death, the Stock Option may
thereafter be exercised, to the extent exercisable immediately prior to death (or on such
accelerated or other basis as the Committee shall at any time determine), by the legal
representative or legatee of the decedent, for a period of five 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.

     (f) Termination by Reason of Disability. If the employment by the Company and its
Subsidiaries of a person to whom a Stock Option was granted terminates by reason of Disability, or
if such person has been designated an inactive employee by reason of Disability, any Stock Option
previously granted to such person may thereafter be exercised to the extent it was exercisable
immediately prior to the earlier of such termination or such designation (or on such accelerated or
other basis as the Committee shall at any time determine prior to such termination or designation),
by the person to whom the Stock Option was granted or, in the event of his or her death following
termination, by his or her legal representative or legatee, for a period of five

-5-

 

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
during the final year of such exercise period of the person to whom such Stock Option was granted
shall, if such person still holds such Stock Option, extend such period for one year following
death or until 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 and the date of such termination or designation.

     (g) Termination by Reason of Normal Retirement. If the employment by the Company
and its Subsidiaries of a person to whom a Stock Option has been granted terminates by reason of
Normal Retirement, the Stock Option may thereafter be exercised to the extent that it was then
exercisable immediately prior to such termination (or on such accelerated or other basis as the
Committee shall at any time determine), by the person to whom the Stock Option was granted or, in
the event of his or her death following Normal Retirement, by his or her legal representative or
legatee, for a period of five 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
during the final year of such exercise period of the person to whom such Stock Option was granted
shall extend such period for one year following death, subject to termination on the expiration of
the stated term of the option, if earlier.

     (h) Termination by Reason of Special Service Retirement. If the employment by the
Company and its Subsidiaries of a person to whom a Stock Option has been granted terminates by
reason of a Special Service Retirement, the Stock Option may thereafter be exercised (to the extent
exercisable from time to time during the extended exercise period as hereinafter determined), by
the person to whom the Stock Option was granted or, in the event of his or her death following the
Special Service Retirement, by his or her legal representative or legatee, for a period of five
years (or such shorter period as the Committee shall specify at time of grant) from the date of the
Special Service 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 during the final year
of such exercise period of the person to whom such Stock Option was granted shall extend such
period for one year following death or until the expiration of the stated term of the option, if
earlier. A Stock Option that is outstanding but not yet fully exercisable at the date of the
Special Service Retirement of the person to whom the Stock Option was granted shall continue to
become exercisable, over the period of three years following the Special Service Retirement Date
(subject to the stated term of the option, or on such accelerated or other basis as the Committee
shall at any time determine), on the same basis as if such person had not retired.

     (i) Other Termination. If the employment by the Company and its Subsidiaries of a
person to whom a Stock Option has been granted terminates for any reason other than death,
Disability, Normal Retirement, Special Service Retirement or for Cause, the Stock Option 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 other period up to three years as the Committee shall specify at or after

-6-

 

grant), by the person to whom the Stock Option was granted or, in the event of his or her
death following termination, by his or her legal representative or legatee, from the date of
termination of employment or until the expiration of the stated term of the option, if earlier. If
the employment of such person terminates or is terminated for Cause, the unexercised portion of any
Stock Option previously granted to such person shall immediately terminate.

     (j) Form of Settlement. Subject to Section 13(a) and Section 13(e) 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 may reserve the right to so provide after time of grant.

     (k) Discretionary Payments; Automatic Exercise. The Committee may, in its
discretion, upon the written request of the person exercising a Stock Option (which request shall
not be binding on the Committee, except as hereinafter provided), cancel such Stock Option,
whereupon the Company shall pay to the person exercising such Stock Option an amount equal to the
excess, if any, of 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 canceled) over 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 another form of payment acceptable both to the Committee
and the person exercising the option) 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. If a Stock Option remains unexercised on the date it would otherwise
have expired and if on such date the Fair Market Value of the shares subject to the Stock Option
exceeds the aggregate consideration that would have been required to have been paid to purchase
such shares had the Stock Option been exercised, the person then holding the Stock Option shall be
deemed to have requested, and the Committee shall be deemed to have approved, a cancellation of
such Stock Option in accordance with the first sentence of this Section 6(k) and the amount payable
pursuant to the first sentence of this Section 6(k) shall be paid in the form of shares of Stock in
accordance with the first sentence of this Section 6(k).

     (l) SARs. An SAR is an award entitling the recipient to receive an amount in cash or
shares of Stock (or in any other form of payment acceptable to the Committee) or a combination
thereof having a value determined by reference to (and not to exceed) 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 SAR was granted in tandem with a Stock
Option). The Committee shall determine all terms of SARs granted under the Plan. SARs may be
granted in tandem with, or independently of, any Stock Option granted under the Plan. Any SAR
granted in tandem with ISOs shall comply with the ISO rules relating to tandem SARs. The Committee
may at any time accelerate the exercisability of all or any portion of any SAR.

SECTION 7. OTHER STOCK-BASED AWARDS.

     (a) Nature of Stock Awards. Awards under this Section 7 include Awards other than
Stock Options or SARs that entitle the recipient to acquire for a purchase price (which may be

-7-

 

zero) shares of Stock subject to restrictions under the Plan (including a right on the part of
the Company during a specified period to repurchase such shares at their original purchase price,
or to require forfeiture if the purchase price was zero, upon the Participant’s termination of
employment) determined by the Committee (“Restricted Stock”); Awards that entitle the recipient,
with or without payment, to the future delivery of shares of Stock, subject to such conditions and
restrictions as may be determined by the Committee (“Stock Units”); and other Awards under which
Stock may be acquired or which are otherwise based on the value of Stock.

     (b) Rights as a Shareholder. A Participant shall have all the rights of a
shareholder, including voting and dividend rights, (i) only as to shares of Stock received by the
Participant under an Other Stock-based Award, and (ii) in any case, subject to such
nontransferability restrictions, Company repurchase or forfeiture rights, and other conditions as
are made applicable to the Award.

     (c) Restrictions. The Committee may determine the conditions under which an Other
Stock-based Award, or Stock acquired under an Other Stock-based Award, shall be forfeited, and may
at any time accelerate, waive or, subject to Section 10, amend any or all of such limitations or
conditions. Each Other Stock-based Award shall specify the terms on which such Award or the shares
under such Award shall vest (become free of restrictions under the Plan), which may include,
without limitation, terms that provide for vesting on a specified date or dates, vesting based on
the satisfaction of specified performance conditions, and accelerated vesting in the event of
termination of employment under specified circumstances. The Committee shall take such steps as it
determines to be appropriate to reflect any restrictions applicable to an Other Stock-based Award
or the shares thereunder and to facilitate the recovery by the Company of any such Award or shares
that are forfeited.

     Notwithstanding the foregoing, no grants of Full Value Awards, other than grants made in
connection with a Participant’s commencement of employment with the Company or any Subsidiary,
shall specify a vesting date that is less than three years from the date of grant except as
follows: (i) the vesting date may be one year (or a greater period) from the date of grant in the
case of a Full Value Award subject to the attainment of performance goals, (ii) Full Value Awards
may be granted which specify full vesting in no less than three years and partial vesting at a rate
no faster than one-third of such shares each year, (iii) Full Value Awards may provide for
accelerated vesting in the event of death, disability, retirement or a Change of Control, and (iv)
Full Value Awards may be granted without regard to the foregoing limitations provided that the
maximum number of shares subject to such Awards granted after the Adoption Date, when no longer
subject to restrictions under the Plan, does not exceed 3,000,000 shares.

     Except as otherwise determined by the Committee, (A) neither any Other Stock-based Award nor
any unvested Restricted Stock acquired under an Other Stock-based Award may be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein,
and (B) in the event of termination of employment with the Company and its Subsidiaries for any
reason, any shares of Restricted Stock that are not then vested (taking into account any
accelerated vesting applicable to such shares under the terms of the Award or otherwise) shall be
resold to the Company at their purchase price or forfeited to the Company if the purchase price was
zero. The Committee at any time may accelerate the vesting

-8-

 

date or dates for an Other Stock-based Award or for Restricted Stock, if any, granted
thereunder and may otherwise waive or, subject to Section 10, amend any conditions of the Award.
Neither the Committee nor the Company shall be liable for any adverse tax or other consequences to
a Participant from any such acceleration, waiver, or amendment.

     (d) Dividends; Dividend Equivalents. Except as otherwise determined by the
Committee, a Participant’s rights under an Other Stock-based Award to dividends (or dividend
equivalent payments, in the case of an Other Stock-based Award, if any, other than Restricted
Stock, that is subject to vesting conditions and as to which the Committee has made provision for
such payments) shall be treated as unvested so long as such Award remains unvested (the “restricted
period”), and any such dividends or dividend equivalent payments that would otherwise have been
paid during the restricted period shall instead be accumulated and paid within thirty (30) days
following the date on which such Award is determined by the Company to have vested.

     (e) Annual Deferred Stock Awards, Additional Deferred Stock Awards and Dividend Awards
for Eligible Directors.

	 	(i)	 	Accounts. The Company shall establish and maintain an Account in the
name of each Eligible Director to which the Annual Deferred Stock Awards, Additional
Deferred Stock Awards and Dividend Awards shall be credited.
	 
	 	(ii)	 	Annual Awards. On the date of each Annual Meeting, each Eligible
Director who is elected a Director at such Annual Meeting shall automatically and
without further action by the Board or Committee be granted an Annual Deferred Stock
Award as provided in subsection (iv) and an Additional Deferred Stock Award as provided
in subsection (v). On each date other than the date of an Annual Meeting on which an
Eligible Director is first elected a Director by the Board, the Eligible Director then
so elected shall automatically and without further action by the Board or Committee be
granted a prorated Annual Deferred Stock Award as provided in subsection (iv) and a
prorated Additional Deferred Stock Award as provided in subsection (v). The grant of
each Annual Deferred Stock Award and Additional Deferred Stock Award shall entitle each
recipient, automatically and without further action by the Board or the Committee, to
Dividend Awards as provided in subsection (vi).
	 
	 	(iii)	 	Nature of Awards. Each Annual Deferred Stock Award, Additional
Deferred Stock Award and Dividend Award shall be an Other Stock-based Award subject to
the terms of this Plan and shall constitute an unfunded and unsecured promise of the
Company to deliver in the future to such Eligible Director, without payment, the number
of shares of Stock in the amounts and at the times hereinafter provided. The shares of
Stock notionally credited to the Accounts of Eligible Directors shall be notional
shares only and shall not entitle the Eligible Director to any voting rights, dividend
or distribution or other rights except as expressly set forth herein. Nothing herein
shall obligate the Company to issue or

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	 	 	 	set aside shares of Stock, in trust or otherwise, to meet its contractual
obligations hereunder.
	 
	 	(iv)	 	Annual Deferred Stock Award. In respect of each Annual Deferred Stock
Award granted on the date of an Annual Meeting, the Company shall credit to each
Eligible Director’s Account, effective as of the date of such Annual Meeting, the
number of notional shares of Stock, including any fractional share, equal to $100,000
or such lesser dollar amount as may be determined by the Board divided by the Fair
Market Value of a share of Stock on the date of such Annual Meeting. In respect of
each Annual Deferred Stock Award granted on a date other than the date of an Annual
Meeting, the Company shall credit to the Account of the Eligible Director first elected
on such date the number of notional shares of Stock, including any fractional share,
equal to (i) $100,000 or such lesser dollar amount as may be determined by the Board
divided by the Fair Market Value of a share of Stock on the date of such first election
multiplied by (ii) the quotient (not greater than one) obtained by dividing (A) the
number of days starting with the date of such first election and ending on the day
first preceding the anticipated date of the next Annual Meeting, by (B) 365.
	 
	 	(v)	 	Additional Deferred Stock Award. In addition to the Annual Deferred
Stock Award, the Company shall credit to the Account of each Eligible Director,
effective as of the date that any Annual Deferred Stock Award is credited to such
Account, an Additional Deferred Stock Award covering the same number of shares as are
covered by such Annual Deferred Stock Award determined in the same manner prescribed in
subsection (iv) above.
	 
	 	(vi)	 	Dividend Awards. The Company shall credit (each such credit, a
“Dividend Award”) the Account of each Eligible Director on the date of each Annual
Meeting and on the date on which an Eligible Director ceases to be a Director if not
the date of an Annual Meeting with a number of notional shares of Stock, including any
fractional share, equal to (i) plus (ii), divided by (iii), where:

	 	(i)	 	is the product obtained by multiplying the number of shares
then allocated to such Eligible Director’s Account (disregarding, for purposes
of this clause (i), any shares credited to such Account since the date of the
immediately preceding Annual Meeting) by the aggregate per-share amount of
dividends for which the record date occurred since the date of the immediately
preceding Annual Meeting;
	 
	 	(ii)	 	is the product obtained by multiplying the number of shares
first credited to such Eligible Director’s Account since the date of the
immediately preceding Annual Meeting but prior to the date of such Dividend
Award by the aggregate per-share amount of dividends for which the record date
occurred since the date that such shares were credited to such Account; and

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	 	(iii)	 	is the Fair Market Value of one share of Stock on the date of
such Dividend Award.

	 	(vii)	 	Vesting. Each Annual Deferred Stock Award, and any Dividend Awards in
respect of Annual Deferred Stock Awards and/or Additional Deferred Stock Awards, shall
vest immediately upon grant and be non-forfeitable. Each Additional Deferred Stock
Award shall vest and become non-forfeitable on the date immediately preceding the date
of the Annual Meeting next succeeding the date of grant of such Award; provided, that
the recipient is still a Director on such date. In the event that an Eligible Director
terminates his or her service as a Director for any reason prior to such vesting date,
the Eligible Director shall forfeit any then unvested Additional Deferred Stock Award.
	 
	 	(viii)	 	Delivery. The Company shall deliver to an Eligible Director (or a former
Eligible Director) the number of shares of Stock, rounded up to the next full share,
represented by notional shares of Stock credited to the Account of such Eligible
Director in respect of Annual Deferred Stock Awards (including any Dividend Awards made
in respect of such Annual Deferred Stock Awards) at the earlier of the following: (x)
immediately prior to a Change of Control or (y) within sixty (60) days following the
Eligible Director’s death or earlier separation from service (as determined under the
regulations under Section 409A of the Code). With respect to any Additional Deferred
Stock Award, absent an election to defer delivery of the shares of Stock subject to
such Award pursuant to subsection (ix) below, the Company shall deliver to an Eligible
Director the number of shares of Stock, rounded up to the next full share, represented
by notional shares of Stock credited to the Account of such Eligible Director in
respect of such Additional Deferred Stock Award (including any Dividend Awards made in
respect of such Additional Deferred Stock Award) at the earlier of the following: (x)
immediately prior to a Change of Control or (y) within sixty (60) days following the
date of vesting pursuant to subsection (vii) above. In the event of a termination by
reason of death, such shares of Stock shall be delivered to such beneficiary or
beneficiaries designated by the Eligible Director in writing in such form, and
delivered prior to his or her death to such person at the Company, as specified by the
Company or, in the absence of such a designation, to the legal representative of
Eligible Director’s estate.
	 
	 	(ix)	 	Deferral of Delivery of Additional Deferred Stock Awards. By filing a
written notice to the Company in such form, and delivered to such person at the
Company, as specified by the Company, an Eligible Director may irrevocably elect to
defer receipt of the delivery of shares of Stock representing all or a portion of the
notional shares of Stock subject to any Additional Deferred Stock Award (including any
Dividend Awards made in respect of such notional shares) until the earlier of the
following: (x) immediately prior to a Change of Control or (y) as soon as practicable
and in all events within sixty (60) days following the

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	 	 	 	Eligible Director’s death or earlier separation from service (as determined under
the regulations under Section 409A of the Code). Any election made pursuant to this
subsection (ix) must be submitted with respect to any Additional Deferred Stock
Award (A) in the case of the Additional Deferred Stock Award granted on the date an
Eligible Director is first elected as a Director, no later than 30 days after the
date of such Eligible Director’s election to the Board or (B) in the case of any
other Additional Deferred Stock Award, no later than December 31 of the calendar
year preceding the calendar year in which such Award is granted, or (C) at such
other time as is necessary to satisfy the requirements of Section 409A of the Code,
as determined by the Committee.

SECTION 8. PERFORMANCE AWARDS.

     (a) Nature of Performance Awards. A Performance 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 goals. If the grant, vesting, or exercisability of a Stock
Option, SAR, or Other Stock-Based Award is conditioned upon attainment of a specified performance
goal or goals, it shall be treated as a Performance Award for purposes of this Section and shall be
subject to the provisions of this Section in addition to the provisions of the Plan applicable to
such form of Award.

     (b) Qualifying and Nonqualifying Performance Awards. Performance Awards may include
Awards intended to qualify for the performance-based compensation exception under Section
162(m)(4)(C) of the Code (“Qualifying Awards”) and Awards not intended so to qualify
(“Nonqualifying Awards”).

     (c) Terms of Performance Awards. The Committee in its sole discretion shall
determine 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 Award.
Performance Awards may be granted independently or in connection with the granting of other Awards.
In the case of a Qualifying Award (other than a Stock Option), the following special rules shall
apply: (i) the Committee shall preestablish the performance goals and other material terms of the
Award not later than the latest date permitted under Section 162(m) of the Code; (ii) the
performance goal or goals fixed by the Committee in connection with the Award shall be based
exclusively on one or more Approved Performance Criteria; (iii) no payment (including, for this
purpose, vesting or exercisability where vesting or exercisability, rather than the grant of the
Award, is linked to satisfaction of performance goals) shall be made unless the preestablished
performance goals have been satisfied and the Committee has certified (pursuant to Section 162(m)
of the Code) that they have been satisfied; (iv) no payment shall be made in lieu or in
substitution for the Award if the preestablished performance goals are not satisfied (but this
clause shall not limit the ability of the Committee or the Company to provide other remuneration to
the affected Participant, whether or not under the Plan, so long as the payment of such
remuneration would not cause the Award to fail to be treated as having been contingent on the
preestablished performance goals) and (v) in all other respects the Award shall be construed and
administered consistent with the intent that any compensation under the Award be treated as
performance-based compensation under Section 162(m)(4)(C) of the Code.

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     (d) Rights as a Shareholder. A Participant shall have all the rights of a
shareholder, including voting and dividend rights, (i) only as to shares of Stock received by the
Participant under a Performance Award, and (ii) in any case, subject to such nontransferability
restrictions, Company repurchase or forfeiture rights, and other conditions as are made applicable
to the Award. Notwithstanding the foregoing and for the avoidance of doubt, in the case of any
Performance Award that is also an Other Stock-based Award, the limitations of Section 7(d)
(providing that rights to dividends and dividend equivalents shall remain unvested until the
underlying Stock or rights to Stock are vested) shall apply to any right to dividends or dividend
equivalent payments hereunder.

     (e) Termination. Except as may otherwise be provided by the Committee (consistent
with Section 162(m) of the Code, in the case of a Qualifying Award), a Participant’s rights in all
Performance 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.. The Committee may in its sole discretion (but
subject to Section 162(m) of the Code, in the case of a Qualifying Award) accelerate, waive or,
subject to Section 10, amend any or all of the goals, restrictions or conditions imposed under any
Performance Award. Neither the Committee nor the Company shall be liable for any adverse tax or
other consequences to a Participant from any such acceleration, waiver, or amendment.

SECTION 9. TRANSFER, LEAVE OF ABSENCE.

     For purposes of the Plan, the following events shall not be deemed a termination of
employment:

	 	(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, but in each case only 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. Subject to the foregoing, an individual’s employment with the Company and its
Subsidiaries shall be considered to have terminated on the last day of his or her actual
employment, whether such day is determined by agreement between the Company or a Subsidiary and the
individual or unilaterally, and whether such termination is with or without notice, and no period
of advance notice, if any, that is or ought to have been given under applicable law in respect of
such termination of employment shall be taken into account in determining the individual’s
entitlements, if any, under the Plan or any Award.

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     Notwithstanding the foregoing, in the case of any Award that is subject to the requirements of
Section 409A of the Code, “termination of employment” shall mean a separation from service (as
determined under the regulations under Section 409A of the Code).

SECTION 10. AMENDMENTS AND TERMINATION.

     The Board or the Committee may at any time amend or discontinue the Plan and the Committee may
at any time amend or cancel any outstanding Award for the purpose of satisfying changes in law or
for any other lawful purpose, but no such action shall materially adversely affect rights under any
outstanding Award without the holder’s consent. However, no such amendment shall be effective
unless approved by stockholders if it would (i) reduce the exercise price of any option previously
granted hereunder or otherwise constitute a repricing requiring stockholder approval under
applicable New York Stock Exchange rules, or (ii) effect a change which, in the determination of
the Committee, would jeopardize the qualification of an Award that the Committee has determined is
intended to qualify (and to continue to qualify) as an ISO or as exempt performance-based
compensation under Section 162(m) of the Code. 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.

SECTION 11. 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 12. CHANGE OF CONTROL PROVISIONS.

     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 shall automatically become fully exercisable unless the
Committee shall otherwise expressly provide at the time of grant.

	 	(ii)	 	Restrictions and conditions on Other Stock-based Awards (including without
limitation Restricted Stock) and Performance Awards shall automatically be deemed
waived unless the Committee shall otherwise expressly provide at the time of grant.

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The Committee may at any time prior to or after a Change of Control accelerate the exercisability
of any Stock Options and may waive restrictions, limitations and conditions on Other Stock-based
Awards (including without limitation Restricted Stock) and Performance Awards to the extent it
shall in its sole discretion determine.

SECTION 13. 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) References to Employment. Wherever reference is made herein to “employee,”
“employment” (or correlative terms), except in Section 4, the term shall be deemed to include both
common law employees and others.

     (c) 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.

     (d) 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 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 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 not then subject to restrictions under any Company
plan or (ii) have the Company hold back from the transfer or vesting Stock having a value
calculated to satisfy such withholding obligation. In no event shall Stock be surrendered under
clause (i) or held back by the Company under clause (ii) in excess of the minimum amount required
to be withheld for Federal, state and local taxes.

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     Except as otherwise expressly provided by the Committee in any case, all Awards under the Plan
that are not exempt from the requirements of Section 409A of the Code shall be construed to comply
with the requirements of Section 409A of the Code and any discretionary authority of the Committee
or the Company with respect to an Award that is intended to be exempt from or in compliance with
the requirements of Section 409A of the Code shall be exercised in a manner that is consistent with
such intent. Notwithstanding the foregoing, neither the Company nor any Subsidiary, nor any
officer, director or employee of the Company or any Subsidiary, nor the Board or the Committee or
any member of either, shall be liable to the Participant or any beneficiary of a Participant by
reason of any additional tax (whether or not under Section 409A of the Code), including any
interest or penalty, resulting from any exercise of discretion or other action or failure to act by
any of the Company, any Subsidiary, any such officer, director or employee, or the Board or the
Committee, or by reason of the failure of an Award to qualify for an exemption from, or to comply
with the requirements of, Section 409A of the Code, or for any cost or expense incurred in
connection with any action by any taxing authority related to any of the foregoing.

     (e) Deferral of Awards. Participants may elect to defer receipt of Awards or
vesting of Awards only in such cases and to the extent that the Committee shall determine at or
after the grant date.

SECTION 14. DEFINITIONS.

     The following terms shall be defined as set forth below:

     (a) “Account” means a bookkeeping account established and maintained under Section
7(e) in the name of each Eligible Director to which Annual Deferred Stock Awards, Additional
Deferred Stock Awards, and Dividend Awards are credited hereunder.

     (b) “Act” means the Securities Exchange Act of 1934.

     (c) “Additional Deferred Stock Award” means an Award granted to an Eligible Director
pursuant to Section 7(e)(v).

     (d) “Adoption Date” is defined in Section 1.

     (e) “Annual Deferred Stock Award” means an Award granted to an Eligible Director
pursuant to Section 7(e)(iv).

     (f) “Annual Meeting” shall mean the annual meeting of stockholders of the Company.

     (g) “Approved Performance Criteria” means criteria based on any one or more of the
following (on a consolidated, divisional, line of business, geographical or area of
executive’s responsibilities basis): one or more items of or within (i) sales, revenues,
assets or expenses; (ii) earnings, income or margins, before or after deduction for all or
any portion of interest, taxes, depreciation, or amortization, whether or not on a

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continuing operations, or aggregate or per share basis; (iii) return on investment,
capital, assets, sales or revenues; and (iv) stock price; in each case with such inclusions
thereto or exclusions therefrom as the Committee may determine in a manner consistent with
Section 162(m) of the Code. In determining whether a performance goal based on one or more
Approved Performance Criteria has been satisfied for any period, any extraordinary item,
change in generally accepted accounting principles, or change in law (including regulations)
that would affect the determination as to whether such performance goal had been achieved
will automatically be disregarded or taken into account, whichever would cause such
performance goal to be more likely to be achieved, and to the extent consistent with Section
162(m) of the Code the Committee may provide for other objectively determinable and
nondiscretionary adjustments; provided, that nothing herein shall be construed as limiting
the Committee’s authority to reduce or eliminate a Performance Award (including, without
limitation, by restricting vesting under any such Award) that would otherwise be deemed to
have been earned.

     (h) “Award” or “Awards” except where referring to a particular category of grant under
the Plan shall include Stock Options, SARs, Other Stock-based Awards and Performance Awards.

     (i) “Board” means the Board of Directors of the Company.

     (j) “Cause” means (i) as to any Participant who at the relevant time is party to an
employment, severance, or similar agreement with the Company or a Subsidiary that contains a
definition of “cause” (including any similar term used in connection with a for-cause
involuntary termination), the definition set forth in such agreement, and (ii) in every
other case, 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.

     (k) “Code” means the Internal Revenue Code of 1986, as amended, and any successor
Code, and related rules, regulations and interpretations.

     (l) “Committee” means the Committee referred to in Section 2.

     (m) “Company” means The TJX Companies, Inc.

     (n) “Director” means a member of the Board.

     (o) “Disability” means disability as determined in accordance with standards and
procedures similar to those used under the Company’s long term disability program.

     (p) “Dividend Award” means an Award granted to an Eligible Director pursuant to Section
7(e)(vi).

     (q) “Eligible Director” means a Director who is not employed (other than as a
Director) by the Company or by any Subsidiary.

-17-

 

     (r) “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.

     (s) “Full Value Award” means an Award other than a Stock Option or an SAR.

     (t) “ISO” means a Stock Option intended to be and designated as an “incentive stock
option” as defined in the Code.

     (u) “Non-Employee Director” shall have the meaning set forth in Rule 16b-3(b)(3)
promulgated under the Act, or any successor definition under the Act.

     (v) “NSO” means any Stock Option that is not an ISO.

     (w) “Normal Retirement” means retirement from active employment with the Company and
its Subsidiaries at or after age 65 with at least five years of service for the Company and
its Subsidiaries as specified in The TJX Companies, Inc. Retirement Plan.

     (x) “Other Stock-based Award” means an Award of one of the types described in Section
7.

     (y) “Outside Director” means a member of the Board who is treated as an “outside
director” for purposes of Section 162(m) of the Code.

     (z) “Participant” means a participant in the Plan.

     (aa) “Performance Award” means an Award described in Section 8.

     (bb) “Plan” is defined in Section 1.

     (cc) “Restricted Stock” is defined in Section 7(a).

     (dd) “SAR” means an Award described in Section 6(l).

     (ee) “Stock Unit” is defined in Section 7(a).

     (ff) “Share Limit” is defined in Section 3(a).

     (gg) “Special Service Retirement” means retirement from active employment with the
Company and its Subsidiaries (i) at or after age 60 with at least twenty years of service
for the Company and its Subsidiaries, or (ii) at or after age 65 with at least ten years of
service for the Company and its Subsidiaries.

     (hh) “Stock” means the Common Stock, $1.00 par value, of the Company, subject to
adjustments pursuant to Section 3.

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     (ii) “Stock Option” means any option to purchase shares of Stock granted pursuant to
Section 6.

     (jj) “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.

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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 Company of a nature that would be required
to be reported in response to Item 5.01 of the Current Report on Form 8-K (as amended in
2004) 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
if the Participant or a Participant Related Party is the Person or a member of a group
constituting the Person acquiring control, a transaction shall not be deemed to be a Change
of Control as to a Participant unless the Committee shall otherwise determine prior to such
occurrence; 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 a majority 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 a majority 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 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

-20-

 

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 the acquisition, merger, or consolidation contemplated by such agreement is
consummated (but immediately prior to the consummation of such acquisition, merger, or
consolidation, 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.

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     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).

     Notwithstanding the foregoing, in any case where the occurrence of a Change of Control could
affect the vesting of or payment under an Award subject to the requirements of Section 409A of the
Code, the term “Change of Control” shall mean an occurrence that both (i) satisfies the
requirements set forth above in this Exhibit A, and (ii) is a “change in control event” as that
term is defined in the regulations under Section 409A of the Code.

-22-

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