Document:

exv10w1

 

EXHIBIT 10.1

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

	 	 	 	 	 
	IN RE TJX COMPANIES RETAIL

	 	|
	 	MASTER DOCKET
	SECURITY BREACH LITIGATION

	 	|
	 	Civil Action No. 07-10162
	          (including cases transferred

	 	|
	 	(Lead Case)
	          pursuant to:

	 	|	 	 
	THE TJX COMPANIES, INC.,

	 	|	 	 
	CUSTOMER DATA SECURITY BREACH

	 	|
	 	MDL Docket No. 1838
	LITIGATION)

	 	|	 	 
	 

	 	|	 	 
	 

	 	 	 	 
	THIS DOCUMENT RELATES TO:

	 	|	 	 
	CONSUMER TRACK ACTIONS

	 	|	 	 
	 

	 	|	 	 
	 

	 	 	 	 

SETTLEMENT AGREEMENT

     This Settlement
Agreement, dated as of September 21, 2007 (the “Settlement Agreement”), is
made and entered into by and among the following Settling Parties (as defined below) to the
above-captioned consolidated action: (i) ACohen Marketing & Public Relations, LLC, Julie Buckley,
Anne Cohen, LaQuita Kearney, Laura Lerner, Robert Mann, Jitka Parmet, Deborah Wilson, Kathleen
Robinson, Shannon Kidd and Mary Robb Farley, (the “Representative Plaintiffs”), individually and on
behalf of the Settlement Class (as defined below), by and through (in alphabetical order) Ben
Barnow, Barnow and Associates, P.C.; Lester L. Levy, Wolf Popper LLP; and Sherrie R. Savett, Berger
& Montague, P.C. (together, “Settlement Class Co-Lead Counsel”); (ii) The TJX Companies, Inc.
(“TJX”), by and through its counsel of record, Harvey J. Wolkoff and Mark P. Szpak, Ropes & Gray
LLP, and (iii) Fifth Third Bancorp (“Fifth Third”), by and through its counsel of record, W. Breck
Weigel, Vorys Sater Seymour and Pease LLP. The Settlement Agreement is intended by the Settling
Parties fully, finally, and forever to resolve, discharge, and settle the Released Claims (as
defined below), upon and subject to the terms and conditions hereof.

- 1 -

 

I. THE LITIGATION

     On January 17, 2007, and February 21, 2007, TJX issued press releases disclosing that it had
suffered an unauthorized intrusion or intrusions (hereinafter, “the Intrusion”) into the portion of
its computer system that processes and stores information related to customer transactions.
Beginning thereafter, in January 2007, and continuing through June 2007, lawsuits were filed in
various state and federal jurisdictions in the United States, as well as in Canada, asserting
claims against TJX in relation to the Intrusion. In April 2007, those actions pending in the
United States District Court for the District of Massachusetts (“the Court”) were consolidated
(“Consolidated Class Action”). The consolidated Massachusetts proceedings were divided into a
“consumer track,” comprising all actions asserting putative class claims on behalf of TJX customers
(“Consolidated Consumer Class Action”),1 and a “financial institution track,” comprising
all actions asserting putative class claims on behalf of financial institutions.

     On May 9, 2007, in the Consolidated Consumer Class Action, a Consolidated Class Action
Complaint (“the Complaint”) was filed alleging five counts, i.e., negligence, breach of contract,
breach of implied contract, violation of Massachusetts General Laws, Chapter 93A Section 9, and
Massachusetts General Laws, Chapter 93A, Section 11, and identifying ACohen Marketing & Public
Relations, LLC, Julie Buckley, Anne Cohen, LaQuita Kearney, Laura Lerner, Robert Mann, Kimberly
Myck-Rawson, Jitka Parmet, and Deborah Wilson, as the named representative plaintiffs.

 

			
	1	 	Mace v. TJX Companies, Inc., Civ. No.
1:07-cv-10162 (D. Mass.); Buckley et al. v. TJX Companies, Inc., et al., Civ.
No. 1:07-cv-10209 (D. Mass.); Gaydos v. TJX Companies, Inc., et al., Civ. No.
1:07-cv-10217 (D. Mass.); Cohen et al. v. TJX Companies, Inc., et al., Civ. No.
1:07-cv-10280 (D. Mass.); Rivas et al. v. TJX Companies, Inc., Civ. No.
1:07-cv-10565 (D. Mass.); McMorris et al. v. TJX Companies, Inc., et al., Civ.
No. 1:07-cv-10682 (D. Mass.); Arians et al. v. TJX Companies, Inc., et al.,
Civ. No. 1:07-cv-10754 (D. Mass.); Mascolo-Brown et al. v. TJX Companies, Inc.,
et al., Civ. No. 1:07-cv-10769 (D. Mass.).

- 2 -

 

The Complaint named, as defendants, TJX and Fifth Third. On June 12, 2007, TJX and Fifth
Third each filed motions to dismiss the Complaint, which motions were opposed on July 13, 2007.

     Pursuant to orders by the Judicial Panel on Multi-District Litigation dated June 28, 2007 and
July 18, 2007, actions pending in other federal district courts across the United States asserting
claims against TJX in relation to the Intrusion (“the Tag-along Actions”) were designated to be, or
by the time of the execution of this Settlement Agreement will have been, transferred to and made a
part of the consolidated proceedings pending in the United States District Court for the District
of Massachusetts.2 In conjunction with the filing of this Settlement Agreement, an
Amended Consolidated Class Action Complaint (the “Amended Consolidated Complaint”) is being filed
in the Consolidated Consumer Class Action on behalf of the Settlement Class alleging the same or
similar claims as are alleged in the Complaint and in the complaints in the Tag-along Actions,
adding Kathleen Robinson as a Representative Plaintiff, as well as adding similar claims under
Canadian and Puerto Rican law on behalf of putative classes of residents of Canada and Puerto Rico,
and also adding Shannon Kidd, a resident of Canada, and Mary Robb Farley, a resident of Puerto
Rico, as Representative Plaintiffs.

     Pursuant to the terms set out below, this Settlement Agreement resolves all actions and
proceedings asserted or that could be asserted against TJX and Fifth Third and their respective

 

			
	2	 	Wood et al. v. TJX Companies, Inc., et al.,
Civ. No. 2:07-cv-00147 (N.D. Ala.); Lemley v. TJX Companies, Inc., et al., Civ.
No. 2:07-cv-02168 (C.D. Cal.); Miranda v. TJX Companies, Inc., et al., Civ. No.
3:07-cv-01075 (D. P.R.); Tennent v. TJX Companies, Inc., et al., Civ. No.
3:07-cv-00484 (S.D. Cal.); Salinas et al. v. TJX Companies, Inc., et al., Civ.
No. 2:07-cv-02172 (C.D. Cal.); Pickering v. TJX Companies, Inc., et al., Civ.
No. 2:07-cv-02172 (C.D. Cal.); Robinson v. TJX Companies, Inc., et al., Civ.
No. 1:07-cv-02139 (N.D. Ill.); Wardrop v. TJX Companies, Inc., Civ. No.
1:07-cv-00430 (W.D. Mich.); Taliaferro et al. v. TJX Companies, Inc., et al.,
Civ. No. 1:07-cv-00388 (S.D. Ohio); Lack et al. v. TJX Companies, Inc., et al.,
Civ. No. 6:07-cv-00233 (E.D. Tex.); Lamb v. TJX Companies, Inc., et al., Civ.
No. 4:07-cv-00379 (W.D. Mo.); Roberts v. TJX Companies, Inc., et al., Civ. No.
1:07-cv-02887 (N.D. Ill.); Hamilton Griffin v. TJX Companies, Inc., et al.,
Civ. No. 4:07-cv-01113 (E.D. Mo.); Dundon et al. v. TJX Companies, Inc., et
al., Civ. No. 4:07-cv-00078 (S.D. Ga.); Hill et al. v. TJX Companies, Inc., et
al., Civ. No. 4:07-cv-00276 (N.D. Fla.); Sharkey v. TJX Companies, Inc., et
al., Civ. No. 2:07-cv-00389 (M.D. Fla.); Agnelly v. TJX Companies, Inc., et
al., Civ. No. 2:07-cv-03271 (E.D. La.); Gutierrez v. TJX Companies, Inc., et
al., Civ. No. 1:07-cv-03533 (N.D. Ill.).

- 3 -

 

Related Parties in relation to the Intrusion by and on behalf of putative classes of TJX
customers in the United States (including the District of Columbia), Puerto Rico and Canada,
including the Consolidated Consumer Class Action, the Tag-along Actions and any other such actions
by and on behalf of putative classes of TJX customers originating or that may originate in
jurisdictions in the United States (including the District of Columbia), Puerto Rico, and Canada
(collectively, “the Litigation”).

	II.	 	CLAIMS OF THE REPRESENTATIVE PLAINTIFFS AND BENEFITS OF SETTLEMENT

     The Representative Plaintiffs believe that the claims asserted in the Litigation as set forth
in the Amended Consolidated Complaint have merit. Representative Plaintiffs and Settlement Class
Co-Lead Counsel, however, recognize and acknowledge the expense and length of continued proceedings
necessary to prosecute the Litigation against TJX, Fifth Third and their respective Related Parties
through motion practice, trial, and potential appeals. Settlement Class Co-Lead Counsel also have
taken into account the uncertain outcome and the risk of further litigation, as well as the
difficulties and delays inherent in such litigation. Settlement Class Co-Lead Counsel are also
mindful of the inherent problems of proof and possible defenses to the claims asserted in the
Litigation. Settlement Class Co-Lead Counsel believe that the settlement set forth in this
Settlement Agreement confers substantial benefits upon the Settlement Class (as defined below).
Settlement Class Co-Lead Counsel have determined that the settlement set forth in this Settlement
Agreement is fair, reasonable, and adequate, and in the best interests of the Settlement Class.

	III.	 	DENIAL OF WRONGDOING AND LIABILITY

     TJX denies each and all of the claims and contentions alleged against it and its Related
Parties in the Litigation, including as set forth in the Amended Consolidated Complaint, and
believes that these claims and contentions are totally without merit. Specifically, TJX denies all
charges of

- 4 -

 

wrongdoing or liability as alleged against it and its Related Parties in the Litigation.
Nonetheless, TJX has concluded that further conduct of the Litigation would be protracted and
expensive, and that it is desirable that the Litigation be fully and finally settled in the manner
and upon the terms and conditions set forth in this Settlement Agreement. TJX also has taken into
account the uncertainty and risks inherent in any litigation, especially in class action cases such
as this Litigation. TJX has, therefore, determined that it is desirable and beneficial that the
Litigation be settled in the manner and upon the terms and conditions set forth in this Settlement
Agreement. Fifth Third denies each and all of the claims and contentions alleged against it and
its Related Parties in the Litigation, including as set forth in the Amended Consolidated
Complaint, and believes that these claims and contentions are totally without merit. Specifically,
Fifth Third denies all charges of wrongdoing or liability as alleged against it and its Related
Parties in the Litigation.

	IV.	 	TERMS OF SETTLEMENT

     NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and among the Representative
Plaintiffs, individually and on behalf of the Settlement Class, by and through Settlement Class
Co-Lead Counsel, and each of TJX and Fifth Third that, subject to the approval of the Court, the
Litigation and the Released Claims shall be finally and fully compromised, settled, and released,
and the Litigation shall be dismissed with prejudice as to all Settling Parties, upon and subject
to the terms and conditions of this Settlement Agreement, as follows.

     1. Definitions

     As used in the Settlement Agreement, the following terms have the meanings specified below:

     1.1 “Claims” means known claims and Unknown Claims, actions, allegations, demands, rights,
liabilities, and causes of action of every nature and description whatsoever, whether contingent
or non-contingent, and whether at law or equity.

- 5 -

 

     1.2 “Claims Administration” means the processing of claims received from Settlement Class
Members by the Claims Administrator, and “Costs of Claims Administration” means all actual costs
associated with or arising from Claims Administration.

     1.3 “Claims Administrator” means such claims administrator as may be selected by TJX and
agreed to by Settlement Class Co-Lead Counsel, with preference to the Garden City Group, Inc.,
if feasible.

     1.4 “Credit Monitoring and Identity Theft Insurance” shall mean (i) for Unreceipted Return
Customer Claimants residing in the United States or Puerto Rico, the Equifax “Credit
WatchTM Gold with 3-in-1 Credit Monitoring” product (including $20,000 in identity
theft insurance) that TJX previously offered in the Prior TJX Credit Monitoring/Insurance Offer,
(ii) for Unreceipted Return Customer Claimants residing in Canada, the most similar credit
monitoring and identity theft insurance products offered commercially by Intersections Inc. at
equivalent cost to TJX, and (iii) for Unreceipted Return Customer Claimants residing in New
York, where such Credit Monitoring and Identity Theft Insurance is not currently available from
Equifax or other similar provider, the most similar credit monitoring and identity theft
insurance products offered commercially.

     1.5 “Effective Date” means the first date by which all of the events and conditions
specified in ¶ 9.1 hereof have occurred and have been met.

     1.6 “Final” means the occurrence of all of the following events: (i) the settlement
pursuant to this Settlement Agreement is approved by the Court; (ii) the Court has entered a
Judgment (as that term is defined herein); (iii) the time to appeal or seek permission to appeal
from the Judgment has expired or, if appealed, the appeal has been dismissed in its entirety, or
the Judgment has been affirmed in its entirety by the court of last resort to which such appeal
may be taken, and such dismissal or affirmance has become no longer subject to further appeal

- 6 -

 

or review. Notwithstanding the above, any order modifying or reversing any fee award made
in this case shall not affect whether the Judgment is “Final” as defined in the preceding
sentence, or any other aspect of the Judgment.

     1.7 “Judgment” means a judgment rendered by the Court, in the form attached hereto as
Exhibit E, or a judgment substantially similar to such form in both terms and cost.

     1.8 “Named Plaintiff” means each Person (as defined in ¶ 1.11 herein) who is named as a
plaintiff in any pending case in the Litigation and who, prior to the execution of the
Settlement Agreement by Settlement Class Co-Lead Counsel, joins in this settlement by affirming
in a writing (which will be filed with the Court by the Settling Parties) that he or she, or his
or her counsel, approve and join in this settlement.

     1.9 “Notice Specialist” means Hilsoft Notifications, Souderton, Pennsylvania.

     1.10 “Opt-Out Date” means the date by which members of the Settlement Class must mail their
requests to be excluded from the Settlement Class in order for that request to be effective.
The postmark date shall be the mailing date.

     1.11 “Person” means an individual, corporation, partnership, limited partnership, limited
liability company or partnership, association, joint stock company, estate, legal
representative, trust, unincorporated association, government or any political subdivision or
agency thereof, and any business or legal entity, and their respective spouses, heirs,
predecessors, successors, representatives, or assignees.

     1.12 “Plaintiffs’ Counsel” means Settlement Class Co-Lead Counsel, and all other attorneys
who represent Named Plaintiffs who have joined in this settlement.

     1.13 “Prior TJX Credit Monitoring/Insurance Offer” means the offer previously made by TJX
to certain Unreceipted Return Customers of one year of the Equifax “Credit WatchTM
Gold with 3-in-1 Credit Monitoring” product.

- 7 -

 

     1.14 “Related Parties” means an entity’s past or present directors, officers, employees,
contractors, auditors, principals, agents, attorneys, predecessors, successors, parents,
subsidiaries, divisions and related or affiliated entities, and includes, without limitation,
any Person related to such entity who is, was or could have been named as a defendant in any of
the United States, Puerto Rico or Canadian actions in the Litigation.

     1.15 “Released Acquiring Banks” means Chase Merchant Services LLC; The Chase Manhattan
Bank; Chase Paymentech Solutions; Paymentech Canada; Banco Popular de Puerto Rico; First Data
Loan Company, Canada; and Laurentian Bank of Canada (assignee of Toronto-Dominion Bank).

     1.16 “Released Claims” shall collectively mean any and all Claims, including those arising
under state or federal law of the United States or under provincial or federal law of Canada or
under the law of Puerto Rico (including, without limitation, any causes of action under Mass.
Gen. Laws ch. 93A, Mass. Gen. Laws ch. 214, § 1B, the California Business & Professional Code §
17200 et seq., California Civil Code § 1798.80 – 84 et seq., California Civil Code § 1798.53,
Tex. Bus. & Com. § 48.001 et seq., Georgia Code § 10-1-910 et seq., and any similar statutes in
effect in any other states in the United States or in Puerto Rico; the Personal Information
Protection Act, the Privacy Act, the Personal Information Protection and Electronic Documents
Act, the Freedom of Information and Protection of Privacy Act, and any similar statutes in
effect in Canada or the provinces of Canada; negligence; negligence per se; breach of contract;
breach of fiduciary duty; breach of confidence; misrepresentation (whether fraudulent, negligent
or innocent); unjust enrichment; and bailment), and including, but not limited to, any and all
claims in any state or federal court of the United States, or any provincial or federal court of
Canada, or any court of or located in Puerto Rico, for damages, injunctive relief, disgorgement,
declaratory relief, equitable relief, attorneys’ fees and expenses, pre-judgment

- 8 -

 

interest, credit monitoring services, the creation of a fund for future damages, statutory
penalties, restitution, the appointment of a receiver, and any other form of relief, that either
have been asserted or could have been asserted by any Settlement Class Member against any of the
Released Persons or any of the Indemnified Persons (as defined below) based on, relating to,
concerning or arising out of the allegations, facts, or circumstances alleged in the Litigation
or any other allegations, facts or circumstances with respect to the Intrusion. Without
limitation of the foregoing, Released Claims specifically include any Claim for alleged injury
or loss stemming from the Intrusion as may have been or could have asserted by any Settlement
Class Member against any person or entity (such as, for example and without limitation, any
entity that issued credit or debit cards to Settlement Class Members) (collectively, the
“Indemnified Persons”) that could seek indemnification or contribution from any of the Released
Persons in respect of such Claim, except that Released Claims shall not include Claims by any
individual Settlement Class Member against any card-issuing financial institution brought on an
individual, case-by-case basis for reimbursement or waiver of purportedly fraudulent card
charges (or other charges by the card-issuing financial institution in connection with
purportedly fraudulent card charges) that such card-issuing financial institution assertedly
should have reimbursed or waived but has refused to reimburse or waive. Released Claims shall
not include the right of any Settlement Class Member or any Released Person or any Indemnified
Person to enforce the terms of the settlement contained in the Settlement Agreement. Further,
for all Settlement Class Members who are not part of the Unreceipted Return Customers referenced
in ¶ 2.1 below, and who have given their social security number, whether by driver’s license or
any other means, to TJX, there shall be no waiver of any claim that they may have regarding
identity theft from the Intrusion (other than credit/debit card charges) if brought within three
years from the execution of this Settlement Agreement. Any such claim may be made only as an
individual claim, as the

- 9 -

 

right to a class action or relief on a class basis for any such claim is released and
waived, and, in the event of the assertion of any such individual claim, the parties against
whom the claim is asserted shall be deemed to have retained and shall have the right to assert
any responsive claims, counterclaims and defenses relating thereto, as well as any cross-claims
and third-party claims and defenses relating thereto, all notwithstanding the provisions of ¶
6.2 and ¶ 6.3 below.

     1.17 “Released Persons” means TJX and its Related Parties, Fifth Third and its Related
Parties, and the Released Acquiring Banks and their respective Related Parties.

     1.18 “Representative Plaintiffs” means ACohen Marketing & Public Relations, LLC, Julie
Buckley, Anne Cohen, LaQuita Kearney, Laura Lerner, Robert Mann, Jitka Parmet, Deborah Wilson,
Kathleen Robinson, Shannon Kidd, and Mary Robb Farley.

     1.19 “Settlement Class” means all Persons in the United States (including the District of
Columbia), Puerto Rico or Canada who shopped at TJX Stores in the United States, Puerto Rico or
Canada, made a purchase or return, have had or allege having had personal or financial data
stolen or placed at risk of being stolen from TJX’s computer systems, and who were or may be
damaged thereby or who allege damage therefrom. Excluded from the definition of Settlement
Class are TJX, Fifth Third, and their respective officers and directors, and those Persons who
timely and validly request exclusion from the Settlement Class.

     1.20 “Settlement Class Co-Lead Counsel” means Ben Barnow, Barnow and Associates, P.C.;
Lester L. Levy, Wolf Popper LLP; and Sherrie R. Savett, Berger & Montague, P.C.

     1.21 “Settlement Class Member(s)” means a Person(s) who falls within the definition of the
Settlement Class.

- 10 -

 

     1.22 “Settling Parties” means, collectively, TJX, on behalf of itself and its Related
Parties, Fifth Third, on behalf of itself and its Related Parties, and the Representative
Plaintiffs, individually and on behalf of the Settlement Class.

     1.23 “TJX Stores” means stores operated by TJX under any of the names T.J. Maxx, Marshalls,
T.J. Maxx ‘n More, Marshalls MegaStore, The Maxx, HomeGoods, A.J. Wright, Winners, and
HomeSense.

     1.24 “Unknown Claims” means any of the Released Claims that any Settlement Class Member,
including any Representative Plaintiff, does not know or suspect to exist in his favor at the
time of the release of the Released Persons which, if known by him or her, might have affected
his or her settlement with and release of the Released Persons, or might have affected his or
her decision not to object to and/or to participate in this settlement. With respect to any and
all Released Claims, the Settling Parties stipulate and agree that, upon the Effective Date, the
Representative Plaintiffs expressly shall have, and each of the other Settlement Class Members
shall be deemed to have, and by operation of the Judgment shall have, waived the provisions,
rights, and benefits conferred by California Civil Code § 1542, and also any and all provisions,
rights, and benefits conferred by any law of any state, province or territory of the United
States, Puerto Rico or Canada, or principle of common law or international or foreign law,
including Canadian and Puerto Rican law, which is similar, comparable, or equivalent to
California Civil Code §1542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.

The Settlement Class Members, including the Representative Plaintiffs, and any of them, may
hereafter discover facts in addition to or different from those that they, and any of them, now

- 11 -

 

know or believe to be true with respect to the subject matter of the Released Claims, but the
Representative Plaintiffs expressly shall have, and each other Settlement Class Member shall be
deemed to have, and by operation of the Judgment shall have, upon the Effective Date, fully,
finally, and forever settled and released any and all Released Claims. The Settling Parties
acknowledge, and the Settlement Class Members shall be deemed by operation of the Judgment to
have acknowledged, that the foregoing waiver is a material element of the settlement of which
this release is a part. Notwithstanding the foregoing, the Settling Parties acknowledge and
incorporate here as if fully set forth here the last two sentences of ¶ 1.16 above.

     1.25 “Unreceipted Return Customers” means those customers who returned merchandise to a TJX
Store without receipts and who were sent a letter from TJX that TJX had specifically identified
that their names and addresses, and driver’s license or military, state or tax identification
numbers, were information TJX believed was stolen in the Intrusion.

     1.26 “Unreceipted Return Customer Claimant” means an Unreceipted Return Customer who
submits a valid claim under ¶ 2.1 below.

     1.27 “Voucher” means a voucher usable for credit against the purchase of merchandise
(excluding gift cards) at any TJX Store (with up to $1.00 in cash back according to TJX’s usual
procedures), which shall be valid for a period of one year from the date of transmission, have
no restrictions on transferability and be freely stackable (i.e., multiple vouchers can be
combined on a single transaction) and applied for credit in addition to all other sales or
discounts then available, including the 15% off three day sales event provided for hereunder
(for example, if the purchase price of goods equals $100 and the balance remaining on a Voucher
equals $30, and another sale or discount amounts to 15% off, then the Settlement Class Member
pays $55 ($100 — $15 — $30 = $55)), and may be provided in paper or plastic form, at TJX’s
election, and may be in the form of a special gift card issued by TJX or an affiliate thereof,
again at TJX’s election.

- 12 -

 

Vouchers provided under ¶ 2.2 below to Settlement Class Members with an address in the
United States or Puerto Rico shall be issued in U.S. currency amounts and shall be usable at TJX
Stores located in the United States or Puerto Rico. Vouchers provided under ¶ 2.2 below to
Settlement Class Members with an address in Canada shall be issued in Canadian currency amounts
and shall be usable at TJX Stores located in Canada.

     1.28 “United States” as used in this Settlement Agreement includes the District of
Columbia.

     2. The Settlement

     2.1 (a) TJX shall make available free of charge (i) to Unreceipted Return Customer Claimants
(other than those set forth in subparagraph 2.1(a)(ii)), three years of Credit Monitoring and
Identity Theft Insurance from the date of subscription, and (ii) to Unreceipted Return Customer
Claimants who accepted the Prior TJX credit monitoring/insurance Offer, two years of Credit
Monitoring and Identity Theft Insurance from the date of subscription in addition to the one year
of Credit Monitoring/Insurance previously provided under the Prior TJX Credit Monitoring/Insurance
Offer. Unreceipted Return Customer Claimants shall have 60 days following the Claims
Administrator’s mailing of written notice of the settlement benefit provided in this subparagraph
2.1(a), as set out in the form attached hereto as Exhibit D, to subscribe for the Credit Monitoring
and Identity Theft Insurance made available under this subparagraph.

          (b) TJX shall reimburse each Unreceipted Return Customer Claimant who submits valid
documentary support to the Claims Administrator showing that he or she replaced his or her driver’s
license between January 17, 2007 and June 30, 2007, other than in the ordinary course, for the
actual replacement cost of the driver’s license in the amount charged by the motor vehicle
department of the issuing state, province or territory. Unreceipted Return Customer Claimants
shall have 60 days following the Claims Administrator’s mailing of written notice of the

- 13 -

 

settlement benefit provided in this subparagraph 2.1(b), as set out in the form attached hereto as
Exhibit C-1, to submit a claim therefor. This provision compensates any such Settlement Class
Member for driver’s license replacement costs only, and does not preclude such Settlement Class
Member from seeking any other benefit or reimbursement available to such Settlement Class Member
under any other provision of this Settlement Agreement.

          (c) TJX shall reimburse each Unreceipted Return Customer Claimant whose social security number
is the same as his or her driver’s license or military, tax or state identification number, and who
did not accept the Prior TJX Credit Monitoring/Insurance Offer, for any unreimbursed loss of more
than sixty dollars ($60) resulting from identity theft from the Intrusion (other than credit/debit
card charges) that occurred during the period from January 17, 2007 through the date 40 days after
the Credit Monitoring and Identity Theft Insurance is first offered generally pursuant to the
Settlement Agreement.

               (i) Unreceipted Return Customers seeking reimbursement of losses pursuant to this subparagraph
2.1(c) must submit a written claim to TJX (through the Claims Administrator), in the form of
Exhibit C-2, together with proof of such losses, within six months after the Effective Date.
Following such submission of the claim, TJX shall have 30 days to accept the claim, reject the
claim, or identify, in writing to the claimant, such consents and additional information (“Claim
Supplementation”) as TJX may reasonably request to investigate the claim. If TJX requests such
Claim Supplementation, it shall be provided to TJX (through the Claims Administrator) by the
claimant within 30 days of the request, and TJX shall have 30 days from receipt of the Claim
Supplementation to accept or reject the claim.

               (ii) The claimant shall have 30 days following any rejection by TJX to submit the claim,
including all supporting materials previously submitted to TJX, to an independent arbitrator from
JAMS/Endispute. JAMS/Endispute shall notify TJX and TJX shall have 30 days

- 14 -

 

from the date of such notice to provide its reasons for rejection of the claim to JAMS/Endispute,
and JAMS/Endispute shall conduct such hearing and proceedings, if any, as it deems fit. The
decision of JAMS/Endispute shall be final. The fees and expenses of JAMS/Endispute shall be paid
for by TJX.

               (iii) Individual payments made by TJX pursuant to this subparagraph 2.1(c) shall be reduced by
the amount of any Vouchers received by the Unreceipted Return Customer Claimant pursuant to
subparagraph 2.2 below. In any event, any such Settlement Class Member may continue to seek any
other benefit or reimbursement available to such Settlement Class Member under any other provision
in this agreement. For example, if a claim under this ¶ 2.1(c) exceeds the amount of any Vouchers
received by such Settlement Class Member pursuant to ¶ 2.2 below, then such Settlement Class Member
may seek reimbursement for cash pursuant to this ¶ 2.1(c), less the amount of any Vouchers
received. Notwithstanding the foregoing, the total amount payable by TJX pursuant to this
subparagraph 2.1(c) is limited to an aggregate of $1 million, and in the event the value of
accepted claims pursuant to this subparagraph 2.1(c) exceeds $1 million, such claims shall be
prorated. No claims under this subparagraph 2.1(c) shall be payable by TJX until 30 days after the
decision by JAMS/Endispute of all claims submitted to independent arbitration.

     2.2 TJX shall provide Vouchers to all Settlement Class Members who submit valid claims under
pains and penalties of perjury, using the claim form attached hereto as Exhibit C-3, showing that
they:

(i) made a purchase with a credit card, debit card or check at a TJX Store
during the period from December 31, 2002 through September 2, 2003 or the
period from May 15, 2006 through December 18, 2006, and

(ii) incurred reasonable, more than de minimis (i.e., $5.00 or more)
out-of-pocket costs and/or lost time (calculated at $10.00 per hour) between
January 17, 2007 and June 30, 2007, as a result of the Intrusion as alleged
in

- 15 -

 

the Complaint (other than driver’s license replacement costs reimbursed
under ¶ 2.1 above), all as set forth in (a) and (b) below.

Settlement Class Members submitting a voucher claim may do so under one of two categories:

          (a) Self-Certification Category ($30 Voucher): Settlement Class Members may demonstrate that
they satisfy both (i) and (ii) above by self-certification. TJX will provide Settlement Class
Members submitting valid self-certifications in this category a Voucher in the amount of $30.00.
The total amount of Vouchers payable by TJX pursuant to this subparagraph 2.2(a) shall not exceed
$7 million, and in the event the dollar amount of claims for such Vouchers exceeds $7 million, the
dollar amount of each Voucher shall be proportionately reduced.

          (b) Documentary Support Category (Up to $60 in Vouchers): Settlement Class Members must
submit a sales slip, credit or debit card account statement, or cancelled check to demonstrate that
they satisfy (i) above, and reasonable documentation (other than self-certification) to demonstrate
that they satisfy (ii) above. TJX will provide each Settlement Class Member submitting a valid
claim in this category a Voucher in the amount of $30.00. If a Settlement Class Member submits
documentation to satisfy (ii) above showing (by means other than self-certification) $5.00 or more
in actual, out-of pocket costs and that the total of out-of-pocket costs together with lost time
(calculated at $10.00 per hour) are more than $30.00, TJX shall provide such Settlement Class
Member a second Voucher in the amount of $30.00. The total amount of Vouchers under this
subparagraph 2.2(b) is not subject to any cap.

     Eligible Settlement Class Members submitting a Voucher claim are limited to one claim, and
must do so under category (a) or category (b), but not both. Settlement Class Members submitting a
Voucher claim hereunder may also submit a claim for any other benefit or reimbursement available to
such Settlement Class Member under any other provision of this agreement. Settlement Class Members
meeting the requirements for benefits under this paragraph shall have until a date certain,

- 16 -

 

which shall be 90 days from the first scheduled date for the Final Fairness Hearing, but if that
date shall fall on a weekend or holiday, then the first business day following, to submit a claim
therefor. Claims shall be submitted to, and Vouchers provided by TJX to valid claimants shall be
distributed to such valid claimants by, the Claims Administrator.

     2.3 TJX shall hold a one-time special event (the “Special Event”) in which prices on all
merchandise in all TJX Stores shall be reduced by 15%. This 15% price reduction shall be applied
at the check-out register and shall be in addition to all other discounts (other than employee
discounts), if any, and shall be available to all customers making purchases on those days. The
Special Event shall be on a consecutive Thursday, Friday and Saturday, in January, February or
July. The Special Event shall occur following the Effective Date on dates which will allow for
proper commercial management of the event. While by necessity and practicality, the public may
access this sale, the sale is provided for by this Settlement Agreement and is available to all
members of the Settlement Class. The description of this settlement benefit in the Summary Notice
and Notice shall be as set out in the forms attached hereto as Exhibits B and C hereto. TJX shall
provide customary course of business notice of the event, to be advertised close in time to the
days on which the Special Event will occur. TJX represents that it has not had any storewide sale
event in the TJX Stores systemwide in the past, to the best of senior management’s recollection,
and that this sale event is the direct result of this settlement, and that the 15% price reduction
during the event shall be in addition to any and all other discounts, sales, and the like (other
than employee discounts) available at the time of the event. No discount available to the public
shall be withdrawn on account of the Special Event.

     2.4 TJX shall provide for an ombudsman to be available at a toll free number during normal
business hours to handle questions about card cancellations, credit theft, etc., through January
19, 2008. TJX shall provide a link on its website to the website of the Federal Trade Commission
(the “FTC”) regarding credit or identity theft, through January 19, 2008.

- 17 -

 

     2.5 By October 17, 2007, an independent expert retained by TJX shall submit a written
report to plaintiffs’ designated independent expert, setting forth any actions taken or planned to
be taken by TJX, subsequent to TJX’s discovery of the Intrusion, to enhance the security of TJX’s
computer system (the “Enhancement Actions”). The independent expert retained by TJX shall, within
30 days of submitting such report, meet with plaintiffs’ independent expert (together with counsel
for TJX and plaintiffs) to discuss the report. Plaintiffs’ independent expert shall within 30 days
thereafter provide a responsive letter to plaintiffs stating whether the Enhancement Actions are,
in the judgment of plaintiff’s independent expert, a prudent and good faith attempt by TJX to
minimize the likelihood of intrusions in the future. Within 15 days thereafter, Settlement Class
Co-Lead Counsel shall provide TJX with a letter indicating whether they accept the report, or do
not accept it, and failure to provide such letter to TJX shall be deemed acceptance. All of the
foregoing terms of this ¶ 2.5 shall be subject to such confidentiality restrictions as TJX may
reasonably require to protect the security of its computer system. The settlement is contingent
upon Settlement Class Co-Lead Counsel’s acceptance of the Enhancement Actions as set out in the
report, which must in any event occur prior to any notice to the class, and which acceptance shall
not be unreasonably withheld. Unless otherwise prohibited by the FTC, and subject to such
confidentiality restrictions as TJX or the FTC may reasonably require (including, without
limitation, any appropriate redactions) to protect the security of TJX’s computer system, TJX shall
provide to the Settlement Class Co-Lead Counsel reports relative to any actions taken or planned to
be taken by TJX, subsequent to TJX’s discovery of the Intrusion, to enhance the security of TJX’s
computer system, that TJX submits to the FTC upon conclusion of any resolution of the pending FTC
investigation of the Intrusion.

     2.6 All costs associated with notice to the Settlement Class as required herein and Claims
Administration shall be paid by TJX.

- 18 -

 

     2.7 The Settling Parties agree, for purposes of this settlement only, to the certification of
the Settlement Class. If the settlement set forth in this Settlement Agreement is not approved by
the Court, or if the settlement is terminated or cancelled pursuant to the terms of this Settlement
Agreement, then this Settlement Agreement, and the certification of the Settlement Class provided
for herein, will be vacated and the Litigation shall proceed as though the Settlement Class had
never been certified, without prejudice to any party’s position on the issue of class certification
or any other issue. The Settling Parties’ agreement to the certification of the Settlement Class
is also without prejudice to any position asserted by the Settling Parties in any other proceeding,
case or action including, without limitation, the “financial institutions track” proceedings
otherwise consolidated with the Litigation in the above-captioned civil action, as to which all of
their rights are specifically preserved.

     2.8 The Settling Parties agree that, except for confirmatory discovery as expressly provided
for herein, the Litigation shall be stayed pending final approval by the Court of the settlement
set forth in this Settlement Agreement. Settlement Class Co-Lead Counsel agree that TJX’s and
Fifth Third’s time to answer or otherwise respond to the Amended Consolidated Complaint is extended
without date.

	 	3.	 	Order of Preliminary Approval and Publishing of Notice of a Final
Fairness Hearing

     3.1 As soon as practicable after the execution of the Settlement Agreement, Settlement Class
Co-Lead Counsel and counsel for TJX and Fifth Third shall jointly submit this Settlement Agreement
to the Court, and, within 7 calendar days after the period for any termination of the Settlement
Agreement pursuant to ¶ 10.4 has expired without Settlement Class Co-Lead Counsel having taken such
action, Settlement Class Co-Lead Counsel shall file a motion for preliminary approval of the
settlement with the Court and apply for entry of an order (the “Order of

- 19 -

 

Preliminary Approval and Publishing of Notice of a Final Fairness Hearing”), in the form
attached hereto as Exhibit A, or an order substantially similar to such form in both terms and
cost, requesting, inter alia,

          (a) certification of the Settlement Class for settlement purposes only pursuant to ¶ 2.7;

          (b) preliminary approval of the settlement as set forth herein;

          (c) approval of the publication of a customary form of summary notice (the “Summary Notice”)
in the form attached hereto as Exhibit B (in a manner certified by the Notice Specialist to have a
reach of not less than approximately 80% of the putative class, targeted to adults over 18, in the
United States, Puerto Rico and Canada), and a customary long form of notice (“Notice”) in the form
attached hereto as Exhibit C, which together shall include a fair summary of the parties’
respective litigation positions, the general terms of the settlement set forth in the Settlement
Agreement, instructions for how to object to or opt-out of the settlement, the process and
instructions for making claims to the extent contemplated herein, and the date, time, and place of
the Final Fairness Hearing;

          (d) appointment of Hilsoft Notifications as Notice Specialist;

          (e) appointment of the Garden City Group, Inc. as Claims Administrator (provided Garden City
Group, Inc. has been selected as conditioned above); and

          (f) approval of the Unreceipted Return Customer Notice and Proofs of Claim attached hereto as
Exhibits D, C-1 and C-2; and approval of the Voucher Proof of Claim attached hereto as Exhibit C-3.

     3.2 TJX shall pay for and shall assume the administrative responsibility of providing notice
to the Settlement Class in accordance with the Order of Preliminary Approval and Publishing of
Notice of a Final Fairness Hearing, and the costs of such notice, together with the Costs of Claims

- 20 -

 

Administration, shall be paid by TJX. Notice shall be provided to the Unreceipted Return
Customers by first-class direct mail, to the extent reasonably practicable. The notice program
otherwise (including notice to those Settlement Class Members referenced in the last two sentences
of ¶ 1.16 above) shall be by publication in print and shall be designed to have a reach of not
less than approximately 80% of the putative class, targeted to adults over 18, in the United
States, Puerto Rico and Canada through publication of a Summary Notice in the form attached hereto
as Exhibit B, and which publication shall run, if approved by the Court, in a range of consumer
magazines, newspapers, and/or newspaper supplements to be designated by the Notice Specialist and
approved by the Court. The Claims Administrator shall establish a dedicated settlement website,
and shall maintain and update the website throughout the Claim Period, with the forms of Summary
Notice, Notice, and Proofs of Claim approved by the Court, as well as this Settlement Agreement.
The Claims Administrator also will provide copies of the forms of Summary Notice, Notice, and
Proofs of Claim approved by the Court, as well as this Settlement Agreement, upon request. Prior
to the Final Fairness Hearing, the Settlement Class Co-Lead Counsel and TJX shall cause to be filed
with the Court an appropriate affidavit or declaration with respect to complying with this
provision of notice. At a minimum, Notice shall be provided in English, Spanish or French as
appropriate for TJX locations in accordance with the language used in TJX’s usual course of
business advertising, promotions and in-store displays.

     3.3 The Settlement Class Co-Lead Counsel and TJX shall request that after notice is given, the
Court hold a hearing (the “Final Fairness Hearing”) and grant final approval of the settlement set
forth herein.

     3.4 The Settlement Class Co-Lead Counsel and TJX further agree that the proposed Order of
Preliminary Approval and Publishing of Notice of a Final Fairness Hearing shall contain, among
other things, the following provisions: All discovery and pretrial proceedings in this

- 21 -

 

Litigation, other than confirmatory discovery provided for herein, are stayed and suspended
until further order of this Court. Pending the final determination of the fairness,
reasonableness, and adequacy of the settlement set forth in the Settlement Agreement, no Settlement
Class Member, either directly, representatively, or in any other capacity, shall institute,
commence, or prosecute against the Released Persons any of the Released Claims in any action or
proceeding in any court or tribunal.

	 	4.	 	Opt-Out Procedures

     4.1 Each Person wishing to opt out of the Settlement Class shall individually sign and timely
submit written notice of such intent to either of the designated Post Office boxes established by
the Claims Administrator. The written notice must clearly manifest an intent to be excluded from
the Settlement Class. To be effective, written notice must be postmarked at least 21 days prior to
the date set in the Notice for the Final Fairness Hearing.

     4.2 All Persons who submit valid and timely notices of their intent to be excluded from the
Settlement Class, as set forth in ¶ 4.1 above, referred to herein as “Opt-Outs,” shall neither
receive any benefits of nor be bound by the terms of this Settlement Agreement. All Persons
falling within the definition of the Settlement Class who do not request to be excluded from the
Settlement Class in the manner set forth in ¶ 4.1 above shall be bound by the terms of this
Settlement Agreement and Judgment entered thereon.

	 	5.	 	Objection Procedures

     5.1 Each Settlement Class Member wishing to object to the settlement shall submit a timely
written notice of his objection which shall set forth the reasons for the Settlement Class Member’s
objection, and further state whether the objector intends to appear at the Final Fairness Hearing.
The objection also must provide information identifying the objector as a Settlement Class Member,
including (a) proof (e.g., a sales slip, credit or debit statement, or cancelled check) of

- 22 -

 

having made a purchase or return at a TJX Store, or an affidavit setting forth, in as much
detail as the objector remembers, the fact of purchase(s) or return(s), the product(s) purchased or
returned, the price of the product(s), the approximate date of said purchase(s) or returns, and the
place of the purchase(s) or returns, and (b) documentation supporting the objector’s allegation of
damage. To be timely, written notice of an objection in appropriate form must be filed with the
Clerk of the United States District Court for the District of Massachusetts, John Joseph Moakley
U.S. Courthouse, 1 Courthouse Way, Boston, MA 02210, 21 days prior to the date set in the Notice
for the Final Fairness Hearing, and served concurrently therewith upon any one of the Settlement
Class Co-Lead Counsel (Ben Barnow, Barnow and Associates, P.C., One North LaSalle Street, Suite
4600, Chicago, IL 60602; Sherrie R. Savett, Berger & Montague, P.C. , 1622 Locust Street,
Philadelphia, PA 19103; or Lester L. Levy, Wolf Popper LLP, 845 Third Avenue, New York, NY 10022),
counsel for TJX (Harvey J. Wolkoff, Ropes & Gray LLP, One International Place, Boston, MA, 02110),
and counsel for Fifth Third (W. Breck Weigel, Vorys Sater Seymour and Pease LLP, Atrium Two, Suite
2000, 221 East Fourth Street, Cincinnati, OH 45202).

	 	6.	 	Releases

     6.1 Upon the Effective Date, each Settlement Class Member, including the Representative
Plaintiffs, shall be deemed to have, and by operation of the Judgment shall have, fully, finally,
and forever released, relinquished, and discharged all Released Claims. Further, upon the
Effective Date of the settlement, and to the fullest extent permitted by law, each Settlement Class
Member including the Representative Plaintiffs shall, either directly, indirectly,
representatively, as a member of or on behalf of the general public, or in any capacity, be
permanently barred and enjoined from commencing, prosecuting, or participating in any recovery in,
any action in this or any other forum (other than participation in the settlement as provided
herein) in which any of the Released Claims is asserted.

- 23 -

 

     6.2 Upon the Effective Date, TJX and Fifth Third shall be deemed to have, and by operation of
the Judgment shall have, fully, finally, and forever released, relinquished, and discharged,
Representative Plaintiffs, each and all of the Settlement Class Members, Settlement Class Co-Lead
Counsel, and all other Plaintiffs’ Counsel who have consented to and joined in the settlement, from
all claims, including Unknown Claims, based upon or arising out of the institution, prosecution,
assertion, settlement or resolution of the Litigation or the Released Claims, except for
enforcement of the Settlement Agreement as to such matters as pertain to each of them. Any other
Claims or defenses TJX and Fifth Third may have against such Persons, including without limitation
any Claims based upon or arising out of any retail, banking, debtor-creditor, contractual or other
business relationship with such Persons, that are not based upon or do not arise out of the
institution, prosecution, assertion, settlement or resolution of the Litigation or the Released
Claims, are specifically preserved and shall not be affected by the preceding sentence.

     6.3 Upon the Effective Date, Fifth Third, on behalf of itself and its subsidiaries, divisions
and affiliates (including, without limitation, Fifth Third Bank), and TJX, on behalf of itself and
its subsidiaries, divisions and affiliates, shall be deemed to have, and by operation of the
Judgment shall have, fully, finally, and forever released, relinquished, and discharged each other,
and one another’s respective subsidiaries, divisions and affiliates, of and from only those Claims
based upon or arising out of the institution, prosecution, assertion, settlement or resolution of
the Litigation or the Released Claims (except for the enforcement of the Settlement Agreement as to
such matters as pertain to each of them), including (without limitation) any Claim for
indemnification or contribution in respect of, or for attorneys’ fees or costs incurred by reason
of, the Litigation or the Released Claims. Any other Claims they or their respective
subsidiaries, divisions and affiliates may have against one another or their respective
subsidiaries, divisions and affiliates are specifically preserved, including without limitation
Claims for contribution or indemnity by

- 24 -

 

contract or at common law not in respect of the Litigation or the Released Claims, Claims
based upon or arising out of the institution, prosecution, assertion, settlement or resolution of
the Claims asserted against them or either of them in the “financial institutions track” of the
consolidated proceedings in the United States District Court for the District of Massachusetts,
Claims based on their respective rights and duties under existing contracts with respect to fees,
charges, penalties, assessments, fines, and allocations of loss by and all other obligations to
payment card associations, and Claims based upon or arising out of any precompliance or compliance
or noncompliance proceedings or any other proceedings under payment card association rules.

     6.4 Notwithstanding any term herein, TJX shall not have, or been deemed to have, released,
relinquished, or discharged any Representative Plaintiff, Settlement Class Member, or Plaintiffs’
Counsel who have consented to and joined in the settlement, from any claim based on or arising out
of any act of fraud, misrepresentation, or other misconduct in connection with the submission of
any claim pursuant to the settlement set forth in this Settlement Agreement, or any claim against
any of them based on or arising out of any failure to abide by the terms of the Settlement
Agreement.

     6.5 Notwithstanding any term herein, neither TJX nor Fifth Third nor their respective
subsidiaries, divisions or affiliates shall have or shall be deemed to have released, relinquished
or discharged any Claim or defense against any Person other than each other, their respective
subsidiaries, divisions and affiliates, Representative Plaintiffs, each and all of the Settlement
Class Members, Settlement Class Co-Lead Counsel, and all other Plaintiffs’ Counsel who have
consented to and joined in the settlement. Persons not released by TJX or Fifth Third or their
respective subsidiaries, divisions or affiliates of any Claim or defense include, without
limitation, the Released Acquiring Banks and their respective Related Parties.

- 25 -

 

     7. Plaintiffs’ Counsel’s Attorneys’ Fees, Costs, and Expenses

     7.1 The Settling Parties did not discuss attorneys’ fees, costs, and expenses, as provided for
in ¶ 7.2, until after the substantive terms of the settlement had been agreed upon, other than that
TJX would pay reasonable attorneys’ fees and expenses as may be agreed to by TJX and Settlement
Class Co-Lead Counsel, and/or as ordered by the Court, or in the event of no agreement, then as
ordered by the Court. TJX and Settlement Class Co-Lead Counsel then negotiated and agreed as
follows:

     7.2 TJX has agreed to pay, subject to Court approval, up to the amount of $6,500,000.00 to
Settlement Class Co-Lead Counsel for attorneys’ fees, and up to $150,000.00 to Settlement Class
Co-Lead Counsel for reasonable costs and expenses, subject to reasonable documentation. Settlement
Class Co-Lead Counsel, in their sole discretion, to be exercised reasonably, shall allocate and
distribute the amount of attorneys’ fees, costs, and expenses awarded by the Court among
Plaintiffs’ Counsel. If any Plaintiff’s Counsel disagrees with the allocation of fees and/or costs
he or she has been awarded, they may after 14 days of the receipt of said award file a motion with
the Court seeking an adjustment in said award. Settlement Class Co-Lead Counsel shall have 14 days
to file a response to any such motion.

     7.3 Within 10 days of the Effective Date, TJX shall pay the attorneys’ fees, costs, and
expenses, as set forth above in ¶ 7.2, to an account established by Settlement Class Co-Lead
Counsel. Settlement Class Co-Lead Counsel shall thereafter distribute the award of attorneys’
fees, costs, and expenses consistent with ¶ 7.2.

     7.4 The amount(s) of any award of attorneys’ fees, costs, and expenses is intended to be
considered by the Court separately from the Court’s consideration of the fairness, reasonableness,
and adequacy of the settlement. No order of the Court or modification or reversal or appeal of any
order of the Court concerning the amount(s) of any attorneys’ fees, costs, or expenses awarded by

 - 26 - 

 

the Court to Settlement Class Co-Lead Counsel shall affect whether the Judgment is Final or
constitute grounds for cancellation or termination of this Settlement Agreement.

     8. Administration of Claims

     8.1 The Claims Administrator shall administer and calculate the claims submitted by Settlement
Class Members under ¶ 2.1 and ¶ 2.2, except as provided otherwise therein. Settlement Class
Co-Lead Counsel and TJX shall be given reports as to both claims and distribution, and have the
right to review and obtain supporting documentation and challenge such reports if they believe them
to be inaccurate or inadequate. The Claims Administrator’s determination of the validity or
invalidity of any such claims shall be binding.

     8.2 Except as otherwise ordered by the Court, all Settlement Class Members who fail to timely
submit a proof of claim for any benefits hereunder within the time frames set forth herein, or such
other period as may be ordered by the Court, or otherwise allowed, shall be forever barred from
receiving any payments or benefits pursuant to the settlement set forth herein, but will in all
other respects be subject to and bound by the provisions of the Settlement Agreement, the releases
contained herein, and the Judgment.

     8.3 No Person shall have any claim against the Claims Administrator, TJX, or Settlement Class
Co-Lead Counsel based on distributions of benefits made substantially in accordance with the
Settlement Agreement and the settlement contained herein, or further order(s) of the Court.

     8.4 All payments and distributions (including voucher distributions) hereunder, unless
expressly provided otherwise, shall be made within 90 days of the deadline for filing claims, or 90
days of the Effective Date, whichever is later.

 - 27 - 

 

     9. Conditions of Settlement, Effect of Disapproval, Cancellation or
Termination

     9.1 The Effective Date of the settlement shall be conditioned on the occurrence of all of the
following events:

           (a) the Court has entered the Order of Preliminary Approval and Publishing of Notice of a
Final Fairness Hearing, as required by ¶ 3.1, hereof;

           (b) TJX has not exercised its option to terminate the Settlement Agreement pursuant to ¶ 9.3
hereof;

           (c) the Court has entered the Judgment granting final approval to the settlement as set forth
herein; and

           (d) the Judgment has become Final, as defined in ¶ 1.6, hereof.

     9.2 If all of the conditions specified in ¶ 9.1 hereof are not satisfied, then the Settlement
Agreement shall be canceled and terminated subject to ¶ 9.4 hereof, unless Settlement Class Co-Lead
Counsel and counsel for TJX mutually agree in writing to proceed with the Settlement Agreement.

     9.3 Within 7 days after the deadline established by the Court for Persons to request exclusion
from the Settlement Class, Settlement Class Co-Lead Counsel shall furnish to counsel for TJX a
complete list of all timely and valid requests for exclusion (the “Opt-Out List”). TJX, in its
sole discretion, shall have the option to terminate this Settlement Agreement if the aggregate
number of Persons who submit valid and timely requests for exclusion from the Settlement Class
exceeds 10,000 Persons eligible to be Settlement Class Members.

     9.4 In the event that the Settlement Agreement is not approved by the Court or the settlement
set forth in the Settlement Agreement is terminated in accordance with its terms, the Settling
Parties shall be restored to their respective positions in the Litigation, except that all

 - 28 - 

 

scheduled litigation deadlines shall be reasonably extended so as to avoid prejudice to any
Settling Party or litigant. In such event, the terms and provisions of the Settlement Agreement
shall have no further force and effect with respect to the Settling Parties and shall not be used
in the Litigation or in any other proceeding for any purpose, and any judgment or order entered by
the Court in accordance with the terms of the Settlement Agreement shall be treated as vacated,
nunc pro tunc. Notwithstanding any statement in this Settlement Agreement to the contrary, no
order of the Court or modification or reversal on appeal of any order reducing the amount of
attorneys’ fees, costs, and expenses awarded to Settlement Class Co-Lead Counsel shall constitute
grounds for cancellation or termination of the Settlement Agreement.

     9.5 Settlement Class Co-Lead Counsel and TJX acknowledge that the Litigation includes six
pending lawsuits filed against TJX as putative class actions in Canada (the “Canadian
Actions”).3 Each Plaintiff in each of those actions (the “Canadian Plaintiffs”) agrees
to the terms of the settlement set forth in this Settlement Agreement, including, without
limitation, ¶ 6.1 hereinabove and this ¶ 9.5, as signified by the signature of their counsel herein
below. Settlement Class Co-Lead Counsel and TJX, with the Canadian Plaintiffs and the Canadian
counsel signing this agreement on their behalf, stipulate and agree to a stay of the Canadian
Actions pending implementation of the settlement contained in this Settlement Agreement through the
Effective Date, and further stipulate and agree to secure in advance of the Effective Date such
orders from the Canadian courts as may be necessary to implement the foregoing stay and further
obtain, prior to the

 

			
	3	 	Copithorn v. TJX Companies, Inc., et al.,
Q.B.G. No. 100 of A.D. 2007 (Court of Queen’s Bench of Saskatchewan,
Judicial Centre of Regina); Churchman et al. v. TJX Companies, Inc., et al.,
Civ. No. 0701-000964 (Court of Queen’s Bench of Alberta, Judicial
District of Calgary); Ryley v. TJX Companies, Inc., et al., Civ. No. 07 0278
Victoria (Supreme Court of British Columbia); Howick v. TJX Companies, Inc., et
al., Civ. No. 06-000382-073 (Province of Quebec, District of Montreal);
Churchman et al. v. TJX Companies, Inc., et al., Civ. No. 07-50449 (Court of
Queen’s Bench of Manitoba, Winnipeg Centre); Wong et al. v. TJX
Companies, Inc., et al., Civ. No. 07-ct-000272CP (Ontario Superior Court of
Justice).

 - 29 - 

 

Effective Date, all orders necessary to dismiss the Canadian Actions with prejudice effective
as of and no later than the Effective Date.

     10. Miscellaneous Provisions

     10.1 The Settling Parties: (a) acknowledge that it is their intent to consummate this
agreement; and (b) agree to cooperate to the extent reasonably necessary to effectuate and
implement all terms and conditions of this Settlement Agreement, and any applicable requirements
under the Class Action Fairness Act of 2005, and to exercise their best efforts to accomplish the
terms and conditions of this Settlement Agreement.

     10.2 The parties intend this settlement to be a final and complete resolution of all disputes
between them with respect to the Litigation. The settlement compromises claims which are contested
and shall not be deemed an admission by any Settling Party as to the merits of any claim or
defense. The Settling Parties each agree that the settlement was negotiated in good faith by the
Settling Parties, and reflects a settlement that was reached voluntarily after consultation with
competent legal counsel. The Settling Parties reserve their right to rebut, in a manner that such
party determines to be appropriate, any contention made in any public forum that the Litigation was
brought or defended in bad faith or without a reasonable basis.

     10.3 Neither the Settlement Agreement nor the settlement contained therein, nor any act
performed or document executed pursuant to or in furtherance of the Settlement Agreement or the
settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the
validity or lack thereof of any Released Claim, or of any wrongdoing or liability of any of the
Released Persons; or (b) is or may be deemed to be or may be used as an admission of, or evidence
of, any fault or omission of any of the Released Persons, in any civil, criminal, or administrative
proceeding in any court, administrative agency, or other tribunal. Any of the Released Persons may
file the Settlement Agreement and/or the Judgment in any action that may be brought against them in

 - 30 - 

 

order to support a defense or counterclaim based on principles of res judicata, collateral
estoppel, release, good faith settlement, judgment bar or reduction or any other theory of claim
preclusion or issue preclusion or similar defense or counterclaim.

     10.4 Representative Plaintiffs shall be entitled to reasonable confirmatory discovery from TJX
to be conducted by Settlement Class Co-Lead Counsel. The period for confirmatory discovery shall
begin as of the date this Settlement Agreement is fully executed and shall last for a period of 45
days thereafter. Defendants shall cooperate in good faith to make such confirmatory discovery
possible. At the conclusion of confirmatory discovery, Settlement Class Co-Lead Counsel shall,
based upon all facts known to them, determine in good faith whether in their opinion the settlement
is fair, reasonable and adequate. If Settlement Class Co-Lead Counsel determine that the
settlement is not in their opinion fair, reasonable and adequate, Settlement Class Co-Lead Counsel
shall terminate the Settlement and give notice to defendants of such termination within 10 days
after confirmatory discovery concludes. In such case, the settlement shall be null and void, and
the parties shall return to their original positions. TJX may defer incurring costs for notice
under ¶ 3.2, and/or providing such notice under ¶ 3.2, until the period for Settlement Class
Co-Lead Counsel to terminate the settlement pursuant to this paragraph has expired without
Settlement Class Co-Lead Counsel taking such action.

     10.5 All documents and materials provided by TJX in confirmatory discovery shall be returned
to TJX, pursuant to ¶ 21 of the Stipulated Protective Order entered by the Court on July 2, 2007,
within 60 days of the Effective Date.

     10.6 The Settlement Agreement may be amended or modified only by a written instrument signed
by or on behalf of all Settling Parties or their respective successors-in-interest.

     10.7 This Settlement Agreement, together with the Exhibits attached hereto, constitutes the
entire agreement among the parties hereto and no representations, warranties, or inducements

 - 31 - 

 

have been made to any party concerning the Settlement Agreement other than the
representations, warranties, and covenants contained and memorialized in such document. Except as
otherwise provided herein, each party shall bear its own costs.

     10.8 Settlement Class Co-Lead Counsel, on behalf of the Settlement Class, are expressly
authorized by the Representative Plaintiffs to take all appropriate actions required or permitted
to be taken by the Settlement Class pursuant to the Settlement Agreement to effectuate its terms
and also are expressly authorized to enter into any modifications or amendments to the Settlement
Agreement on behalf of the Settlement Class which they deem appropriate.

     10.9 Each counsel or other Person executing the Settlement Agreement on behalf of any party
hereto hereby warrants that such Person has the full authority to do so.

     10.10 The Settlement Agreement may be executed in one or more counterparts. All executed
counterparts and each of them shall be deemed to be one and the same instrument. A complete set of
original executed counterparts shall be filed with the Court.

     10.11 The Settlement Agreement shall be binding upon, and inure to the benefit of, the
successors and assigns of the parties hereto.

     10.12 The Court shall retain jurisdiction with respect to implementation and enforcement of
the terms of the Settlement Agreement, and all parties hereto submit to the jurisdiction of the
Court for purposes of implementing and enforcing the settlement embodied in the Settlement
Agreement.

     10.13 This Settlement Agreement shall be considered to have been negotiated, executed and
delivered, and to be wholly performed, in the Commonwealth of Massachusetts, and the rights and
obligations of the parties to the Settlement Agreement shall be construed and enforced in
accordance with, and governed by, the internal, substantive laws of the Commonwealth of
Massachusetts without giving effect to that State’s choice of law principles.

 - 32 - 

 

     10.14 As used herein, “he” means “he, she, or it;” “his” means “his, hers, or its,” and “him”
means “him, her, or it.”

     10.15 All dollar amounts are in United States dollars, unless otherwise expressly stated.

     10.16 All agreements made and orders entered during the course of the Litigation relating to
the confidentiality of information shall survive this Settlement Agreement.

     //

     //

     //

     //

 - 33 - 

 

     IN WITNESS WHEREOF, the parties hereto have caused the Settlement Agreement to be executed, by
their duly authorized attorneys.

	 	 	 	 	 
	Counsel for The TJX Companies, Inc.

	 	 	 	Settlement Class Co-Lead Counsel

(in alphabetical order)
	 
	 	 	 	 
	/s/ Harvey J. Wolkoff

	 	 	 	 
	
 
Harvey J. Wolkoff
	 	 	 	/s/
Ben Barnow 
	 

	 	 	 	 
	Mark P. Szpak

	 	 	 	Ben Barnow
	ROPES & GRAY LLP

	 	 	 	BARNOW AND ASSOCIATES, P.C.
	One International Place

	 	 	 	1 North LaSalle, Suite 4600
	Boston, MA 02110-2624

	 	 	 	Chicago, IL 60602
	(617) 951-7000

	 	 	 	(312) 621-2000
	hwolkoff@ropesgray.com

	 	 	 	b.barnow@barnowlaw.com
	mszpak@ropesgray.com
	 	 	 	 
	 
	 	 	 	/s/ Lester L. Levy 
	 

	 	 	 	 
	Counsel for Fifth Third Bancorp

	 	 	 	Lester L. Levy
	 

	 	 	 	WOLF POPPER LLP
	/s/ W. Breck Weigel
 

	 	 	 	845 Third Avenue
	 
W. Breck Weigel

	 	 	 	New York, NY 10022
	VORYS SATER SEYMOUR AND PEASE LLP

	 	 		(212) 759-4600
	Atrium Two, Suite 2000

	 	 	 	llevy@wolfpopper.com
	221 East Fourth Street
	 	 	 	 
	Cincinnati, OH 45202
	 	 	 	/s/ Sherrie R. Savett  
	 

	 	 	 	 

	(513) 723-4078

	 	 	 	Sherrie R. Savett
	wbweigel@vssp.com

	 	 	 	BERGER & MONTAGUE, P.C.
	 

	 	 	 	1622 Locust Street
	 

	 	 	 	Philadelphia, PA 19103
	Robert N. Webner

	 	 	 	(215) 875-3000
	VORYS SATER SEYMOUR AND PEASE LLP

	 	 	 	ssavett@bm.net
	52 E. Gay Street
	 	 	 	 
	P.O. Box 1008
	 	 	 	
	Columbus, OH 43215
	 	 	 	Counsel for Canadian Plaintiffs,
	(614) 464-8243
	 	 	 	pursuant to ¶ 9.5 hereinabove
	rnwebner@vssp.com
 

	 	 	 	
	/s/ James R. Carroll 
	 	 	 	/s/ E.F. Anthony Merchant, Q.C. 
	 

	 	 	 	 
	 
James R. Carroll

	 	 	 	E.F. Anthony Merchant, Q.C.
	SKADDEN, ARPS, SLATE, MEAGHER &

	 	 	 	MERCHANT LAW GROUP LLP
	FLOM, LLP

	 	 	 	2401 Saskatchewan Drive
	One Beacon Street
	 	 	 	Regina, Canada S4P 4H8
	Boston, Massachusetts
	 	 	 	(306) 359-7777
	(617) 573-4800
	 	 	 	tmerchant@merchantlaw.com
	jcarroll@skadden.com
	 	 	 	

 - 34 -EXHIBIT 10.1

GENTA INCORPORATED

September ___, 2007

 

	
                         
 	
                         
 
	
                         
 	
                         
 
	
                         
 	
                         
 

Dear ______________________:

We are pleased to inform you that you are eligible for the acquisition bonus program (the “Acquisition Bonus Program”) recently authorized by the Company’s Board of Directors. The purpose of the new program is to allow employees to share in a portion of the proceeds realized from a future sale of the Company that occurs prior to the earlier of (i) the approval by the Company’s shareholders of the Company’s 2007 Stock Incentive Plan or (ii) December 31, 2008. Any stock options granted to you under the 2007 Stock Incentive Plan will terminate in the event you become entitled to payment under Part II C of this letter agreement.

The purpose of this letter is to notify you of the terms and conditions which will govern your participation. Part One of this letter contains certain definitions which will be in effect for purposes of your bonus award. Part Two indicates the nature of your participation and the provisions governing the payout of your bonus award. Part Three concludes with a summary of certain miscellaneous features of your bonus award.

PART ONE – DEFINITIONS

For purposes of your participation in the Acquisition Bonus Program, the following definitions will be in effect:

Board means the Company’s Board of Directors.

Bonus Award means the bonus amount specifically allocated to you pursuant to Part Two of this agreement.

Change in Control shall have occurred if:

(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the 1934 Act) other than (a) the Company or any subsidiary of the Company, (b) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, or (c) any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities without the prior written consent of the Board;

 

 

	
                        Acquisition Bonus Plan September 2007
 	
                        1
 

 

 

(ii) the shareholders of the Company approve a merger or consolidation of the Company with any other company (other than a wholly-owned subsidiary of the Company), other than (a) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (b) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as defined in clause (i) above with the exceptions noted in clause (i)) acquires more than 50% of the combined voting
power of the Company’s then outstanding securities; or

(iii) the shareholders approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect).

Change in Control Proceeds mean the following items of consideration (in cash, securities or other property) paid by the acquiring person or persons in effecting the Change in Control:

(i) for a Change in Control effected by a merger or consolidation or by the direct purchase of the Company’s outstanding securities, the aggregate amount of consideration (valued at fair market value) paid to the holders of the Company’s outstanding securities in acquisition of their stockholder interests, 

(ii) for a Change in Control effected by the purchase of all or substantially all of the Company’s assets, the portion of the consideration (valued at fair market value) paid to the Company for those assets which is subsequently distributed to the holders of the Company’s outstanding securities, or

(iii) in the case of a liquidation of the Company, the consideration (valued at fair market value) distributed to the holders of the Company’s outstanding securities in liquidation of their shareholder interests. 

No liability of the Company assumed or discharged by the acquiring person or persons in the Change in Control will be taken into account in determining the amount of the Change in Control Proceeds. However, the Change in Control Proceeds will, for purposes of determining the Unit Value, include any and all Earn-Out Payments made after the effective date of the Change in Control.

Code means the Internal Revenue Code, as amended from time to time.

 

 

	
                        Acquisition Bonus Plan September 2007
 	
                        2
 

 

 

Earn-Out means any portion of the Change in Control Proceeds which is not payable or determinable at the time of the Change in Control by reason of any earn-out provision or other contingent pay-out feature based upon the financial or other performance of the Company following the effective date of such Change in Control.

Earn-Out Payment means the portion of the Change in Control Proceeds which becomes payable pursuant to the Earn-Out on one or more dates following the effective date of the Change in Control.

1934 Act means the Securities Exchange Act of 1934, as amended from time to time.

Plan Expiration Date means the earlier of (i) December 31, 2008 or (ii) the date of approval of the Company’s 2007 Stock Incentive Plan by the Company’s shareholders.

Termination for Cause means the termination of your employment due to (i) your commission of any act of fraud, embezzlement or dishonesty, (ii) your unauthorized use or disclosure of confidential information or trade secrets of the Company (or any parent or subsidiary) or (iii) any other intentional misconduct on your part adversely affecting the business or affairs of the Company in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Company (or any parent or subsidiary) may consider as grounds for your dismissal or discharge or for the dismissal or discharge of any other individual in the service of the Company (or any parent or subsidiary).

Unit Value means the value of the Unit at the time of the Change in Control as determined under Part Two of this letter agreement.

Units means the participating interests awarded from time to time to you and other participants in the Acquisition Bonus Program.

PART TWO – BONUS AWARD

A. Award of Units. You have been awarded _______ Units in the Acquisition Bonus Program. Solely for purposes of valuing this award upon the time of any payout, each of your Units has been assigned a Base Value of $X.XX. 

B. Bonus Award. Your Bonus Award will be the amount determined by multiplying (i) the difference between (a) the Unit Value (determined as specified below) and (b) the Base Value (as specified in paragraph A above) and (ii) the number of Units awarded to you.  For purposes of this award, the Unit Value for each Unit will be determined by dividing (i) the Change in Control Proceeds (excluding any Earn Out Payments) by (ii) the total number of shares of Genta common stock outstanding at the time of the Change in Control. The Acquisition Bonus Program shall terminate, and you will
cease to be entitled to any Bonus Award, if no Change in Control becomes effective before the Plan Expiration Date.

C. Vesting of Bonus Award. Any Bonus Award to which you actually become entitled under the program will vest on the effective date of the Change in Control, provided you are an active employee on that date and the Plan Expiration Date has not yet occurred, and will be payable as provided in Part II E below. In addition,

 

 

	
                        Acquisition Bonus Plan September 2007
 	
                        3
 

 

 

if you remain employed by the Company for at least one (1) year from the date of this letter agreement, then in the event of an Exempted Termination following such one (1)-year period, you will be entitled to 50% of your Bonus Award, provided the effective date of the Change in Control referred to in the next sentence occurs prior to the Plan Expiration Date. For purposes of this letter agreement, an Exempted Termination means a termination of your employment either (i) voluntarily by you or by the Company for reasons other than Termination for Cause in each case within the three (3)-month period immediately preceding the Change in Control or (ii) by reason of death or permanent disability within the twelve (12)-month period immediately preceding the Change in Control. 

D. Cancellation of Units. In the event that your employment has terminated prior to the Change in Control (other than an Exempted Termination that occurs more than one (1) year from the date of this letter agreement), your Units will be immediately cancelled and you will not be entitled to any Bonus Award. In the event of an Exempted Termination that occurs more than one (1) year after the date of this letter agreement, fifty percent (50%) of your Units will terminate immediately upon your termination, and your right to the balance of your Units will be determined in accordance with Part II C above.

E. Payment. Your vested Bonus Award will be paid within thirty (30) days after the later of (i) the effective date of the Change in Control or (ii) the date the Change in Control Proceeds are paid to the Company’s shareholders. However, to the extent any portion of the Change in Control Proceeds payable to the Company’s shareholders are subject to an indemnity holdback or escrow arrangement, then the amount of your Bonus Award will be reduced by the same percentage holdback in effect for the shareholders, and that held-back percentage will be paid
to you only when and to the extent similar holdback percentage applicable to the Company’s shareholders is in fact subsequently paid to them.

All payments under the program will be made in cash; provided, however, that if all or any portion of the Change in Control Proceeds is paid in the form of freely-tradable securities registered under the federal securities laws, then the payment of the Bonus Award due to you may, in the Board’s sole discretion, be made in those securities, but not in excess of the percentage of the Change in Control Proceeds paid to the Company’s shareholders in the same securities.

All of your rights under the program will terminate, upon the receipt of the amount or amounts which become due and payable to you under the provisions of this letter agreement in connection with the first transaction constituting a Change in Control.

F. Earn-Out Payments. Notwithstanding paragraph E above, if any portion of the Change in Control Proceeds is to be paid after the effective date of the Change in Control pursuant to an Earn Out, then the portion of your Bonus Award that is attributable to each Earn-Out Payment shall be paid within thirty (30) days after the date that Earn Out Payment is made to the Company’s shareholders. However, if the Earn Out Payment is to be paid to the shareholders later than the fifth anniversary of the
effective date of the Change in Control, then you will not receive the portion of your Bonus Award attributable to such Earn Out Payment. 

 

 

	
                        Acquisition Bonus Plan September 2007
 	
                        4
 

 

 

The additional Bonus Award to which you may become entitled in connection with each Earn-Out Payment will be determined as follows:

First, the Unit Value will be recalculated on the basis of all Change in Control Proceeds paid to date to the Company’s shareholders, including the current Earn-Out Payment. 

Then, the amount of your Bonus Award at the time of the Earn-Out Payment will be determined under paragraph B above based on the recalculated Unit Value.

Finally, the resulting dollar amount will be reduced dollar-for-dollar by all prior Bonus Awards made to you under the program.

G. Special Limitation. In the event that any payments to which you become entitled in accordance with the provisions of this letter would otherwise constitute a parachute payment under Section 280G of the U.S. Internal Revenue Code, then such payments will be subject to reduction to the extent necessary to assure that you receive only the greater of (i) the amount of those payments which would not constitute such a parachute payment or  (ii) the amount which yields you the greatest after-tax amount of benefits after taking into account any excise tax imposed on the payments provided to you under this letter agreement (or on any other benefits to which you may be entitled in
connection with the Change in Control or the subsequent termination of your Employee status) under Section 4999 of the U.S. Internal Revenue Code.

PART THREE --- MISCELLANEOUS PROVISIONS

All decisions with respect to your Bonus Award and the Acquisition Bonus Program (including, without limitation, your eligibility to receive your Bonus Award, the number of Units issued or issuable under the Acquisition Bonus Program and the Unit Value) shall be made by the Compensation Committee in its sole discretion and its decisions will be final and binding.

The implementation of the Acquisition Bonus Program will in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

Your rights and interests pertaining to the Bonus Award may not be transferred, assigned, pledged or encumbered, other than a transfer effected by will or the laws of inheritance following your death. Any Bonus Award which becomes due in connection with your death will be paid to your designated beneficiary under the Acquisition Bonus Program or, in absence of such designated beneficiary, to the personal representative or administrator of your estate.

The payment of your Bonus Award will be subject to the Company’s collection of all applicable Federal, state and local income and employment taxes required to be withheld therefrom, and you will only receive the portion of your Bonus Award in excess of those taxes.

Any Bonus Award which you become entitled hereunder shall be paid, when due, from the Company’s general assets, and no trust fund, escrow arrangement or other special

 

 

	
                        Acquisition Bonus Plan September 2007
 	
                        5
 

 

 

account shall be established as a funding vehicle for the amounts which become payable from the Bonus Pool, including your Bonus Award. Accordingly, your right (or the right of the executors or administrators of your estate) to receive the Bonus Award will at all times be that of a general creditor of the Company and shall have no priority over the claims of other general creditors.

No provision of the Acquisition Bonus Program will confer any right upon you to continue in the employ of the Company (or any successor entity) for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or your rights, to terminate your employment at any time for any reason, with or without cause.

Your participation in the Acquisition Bonus Program will terminate upon the earlier of (i) your cessation of employment with the Company (or any successor entity) other than an Exempted Termination or (ii) your receipt of the payment and benefits to which you become entitled hereunder.

The terms and provisions of this letter agreement shall cease to have any force and effect and the entire Acquisition Bonus Program shall terminate, and you will cease to be entitled to any Bonus Award or any other benefits otherwise payable pursuant to the terms of this letter agreement if no Change in Control is in fact consummated on or before the Plan Expiration Date.

The provisions of the Acquisition Bonus Program and this letter agreement will be governed by and construed in accordance with the laws of the State of New Jersey without resort to that State’s conflict-of-laws rules.

The liabilities and obligations of the Company under the Acquisition Bonus Program and this letter will be binding upon any successor corporation or entity which succeeds to all or substantially all of the assets and business of the Company by merger or other transaction, whether or not such transaction qualifies as a Change in Control.

We ask that you acknowledge your receipt of this letter and your acceptance of the terms and conditions in effect for your award under the Acquisition Bonus Program by signing and dating the Acceptance section below and returning it to Gregg Siefert at the Company as soon as possible.

 

	
                         
 	
                         
 	
                         
 	
                        Very truly yours,
 
	
                          
 	
                         
 	
                         
 	
                          
 
	
                         
 	
                         
 	
                         
 	
                        

Gregg Siefert
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        Vice President, Human Resources
 

 

 

	
                        Acquisition Bonus Plan September 2007
 	
                        6
 

 

 

ACCEPTANCE

I hereby acknowledge receipt of the Company’s letter of September XX, 2007 setting forth the terms and conditions governing the award made to me under the Company’s new Acquisition Bonus Program. I hereby agree to and accept all those terms and conditions, and my entitlement to any Bonus Award under such program shall be determined solely by the terms and conditions of such letter. I understand and agree that I will not be entitled to any of those benefits if a Change in Control is not consummated on or before the Plan Expiration Date.

 

	
                         
 	
                         
 	
                        Signature:
 	
                         
 
	
                          
 	
                         
 	
                        

Printed Name:
 	
                         
 
	
                         
 	
                         
 	
                        
 Dated:
 	
                         
 	
                        , 2007
 
							

 

 

	
                        Acquisition Bonus Plan September 2007
 	
                        7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]