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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
/X/Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
or
/ /Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
January 27, 1996 1-4908
The TJX Companies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-2207613
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
770 Cochituate Road
Framingham, Massachusetts 01701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508)390-1000
- ----------------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, par value $1.00 New York Stock Exchange
Series C Cumulative Convertible Preferred
Stock, par value $1.00 New York Stock Exchange
9-1/2% Sinking Fund Debentures due
May 1, 2016 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X. NO.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant on March 15, 1996 was $1,872,333,736.
There were 72,517,328 shares of the Registrant's Common Stock, $1 par
value, outstanding as of March 15, 1996.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the fiscal year ended
January 27, 1996 (certain parts as indicated herein) (Parts I and II).
Portions of the Proxy Statement for the Annual Meeting of Stockholders
to be held on June 4, 1996 (Part III).
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ITEM 1. Business
--------
The TJX Companies, Inc., (together with its wholly-owned subsidiaries,
hereinafter referred to as the "Company"), is the largest off-price apparel
retailer in North America. The Company operates 587 T.J. Maxx stores, the
recently acquired Marshalls chain of 496 stores, and Winners Apparel Ltd., a
Canadian off-price family apparel chain with 52 stores. TJX is also developing
HomeGoods, a U.S. off-price home fashion chain with 22 stores, and T.K. Maxx,
an off-price family apparel concept in the United Kingdom, which has 9 stores.
The Company also operates the Chadwick's of Boston off-price women's fashion
catalog.
The Company completed the acquisition of Marshalls, an off-price family
apparel chain, from Melville Corporation on November 17, 1995 having paid $375
million in cash before closing adjustments, plus $175 million in TJX convertible
preferred stock. The results of Marshalls are included in the Company's
consolidated results from the date of acquisition.
The Company strives to provide value to its customers by delivering
brand names, fashion, quality and price. During the fiscal year ended January
27, 1996 ("fiscal 1996"), the Company's stores derived 31.4% of its sales from
the Northeast, 21.4% from the Midwest, 28.2% from the South, 1.5% from the
Central States, 13.0% from the West and 4.5% from Canada.
As a result of the Marshalls acquisition, the Company added 496
Marshalls stores to its existing base of 587 T.J. Maxx off-price family apparel
stores as of January 27, 1996. Management believes that it will realize improved
operating efficiencies for the combined entity through the integration of many
administrative and operational functions as well as through increased purchasing
leverage. In addition, through the acquisition of Marshalls, the Company will be
able to decrease the amount of excess retail square footage in the competitive
off-price retail sector by the closure of underperforming stores. The Company
expects to close approximately 30 T.J. Maxx stores during fiscal 1997 and 170
Marshalls stores over the next two years. The Company plans to retain the
independent identities of the T.J. Maxx and Marshalls stores, including certain
elements of merchandising, product assortment and store appearance.
The majority of the Company's sales volume is done through the Company's
T.J. Maxx and Marshalls stores. T.J. Maxx operates 587 stores in 48 states, with
an average store size of 28,000 gross square feet, while Marshalls operates 496
stores in 38 states and Puerto Rico, with an average store size of 32,000 gross
square feet. T.J. Maxx and Marshalls sell a broad range of brand name family
apparel, accessories, shoes, domestics, giftware and jewelry at prices generally
20% to 60% below department and specialty store regular prices. Winners Apparel
Ltd., which was acquired by the Company in fiscal 1991, is a Canadian off-price
family apparel retailer, which operates 52 stores in Canada. HomeGoods, an
off-price business the Company began testing in fiscal 1993, sells domestics,
giftware and other home fashions and operates a total of 22 stores. T.K. Maxx,
the Company's newest venture, operates 9 off-price apparel stores in the United
Kingdom. Unless otherwise indicated, all figures herein relating to numbers of
stores are as of January 27, 1996. Chadwick's of Boston sells, through a
mail-order catalog, women's career and casual fashion apparel priced
significantly below department store regular prices.
In common with the business of apparel retailers generally, the
Company's business is subject to seasonal influences, with higher levels of
sales and income generally realized in the second half of the year.
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In September 1995, the Company sold its Hit or Miss chain of off-price
women's specialty apparel stores. The Company will continue to evaluate its
existing operations and that of other retailers and review acquisition and
divestment opportunities that would strengthen its position in the off-price
apparel industry.
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<TABLE>
Set forth in the following table are the locations of stores operated by
the Company's United States operations as of January 27, 1996:
<CAPTION>
T.J. Maxx Marshalls HomeGoods
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Alabama ............................ 9 2 -
Arizona ............................ 9 8 -
Arkansas ........................... 3 - -
California ......................... 50 70 -
Colorado ........................... 8 5 -
Connecticut ........................ 24 20 2
Delaware ........................... 2 1 -
District of Columbia ............... 1 - -
Florida ............................ 42 43 -
Georgia ............................ 19 19 2
Hawaii ............................. 1 5 -
Idaho .............................. 1 - -
Illinois ........................... 37 29 2
Indiana ............................ 8 4 -
Iowa ............................... 4 1 -
Kansas ............................. 4 1 -
Kentucky ........................... 4 1 1
Louisiana .......................... 4 5 -
Maine .............................. 5 1 -
Maryland ........................... 11 14 -
Massachusetts ...................... 40 34 6
Michigan ........................... 25 7 -
Minnesota .......................... 12 12 -
Mississippi ........................ 1 - -
Missouri ........................... 9 8 -
Montana ............................ 1 - -
Nebraska ........................... 2 1 -
Nevada ............................. 3 3 -
New Hampshire ...................... 9 7 2
New Jersey ......................... 15 26 -
New Mexico ......................... 2 - -
New York ........................... 40 35 -
North Carolina ..................... 16 9 -
North Dakota ....................... 2 - -
Ohio ............................... 32 14 3
Oklahoma ........................... 3 1 -
Oregon ............................. 3 2 -
Pennsylvania ....................... 28 18 -
Puerto Rico ........................ - 12 -
Rhode Island ....................... 3 3 -
South Carolina ..................... 9 4 -
South Dakota ....................... 1 - -
Tennessee .......................... 13 6 -
Texas .............................. 27 36 -
Utah ............................... 4 - -
Vermont ............................ 2 - -
Virginia ........................... 22 20 -
Washington ......................... 7 6 -
West Virginia ...................... 1 - -
Wisconsin .......................... 9 3 4
--- --- --
Total Stores 587 496 22
=== === ==
</TABLE>
Winners Apparel Ltd. operates 52 stores in Canada: 9 in Alberta, 3 in
Manitoba, 29 in Ontario, 8 in Quebec, 2 in Nova Scotia and 1 in Saskatchewan.
T.K. Maxx operates 9 stores in the United Kingdom.
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T.J. MAXX
---------
T.J. Maxx, the largest off-price family apparel chain in the United
States, was founded by the Company in 1976 and operates 587 stores in 48
states.
T.J. Maxx sells brand name family apparel, accessories, giftware,
domestics, women's shoes and fine jewelry at prices generally 20% to 60% below
department and specialty store regular prices. T.J. Maxx's target customers are
women between the ages of 25 to 50, who typically have families with middle and
upper-middle incomes and who generally fit the profile of a department store
shopper.
The ability to purchase merchandise at favorable prices and operate with
a low cost structure is essential to T.J. Maxx's off-price mission. The chain
uses opportunistic buying strategies to purchase large quantities of merchandise
at significant discounts from initial wholesale prices. Those strategies include
special situation purchases, closeouts of current season fashions and
out-of-season purchases of basic seasonal items for warehousing until the
appropriate selling season. These buying strategies rely heavily on inventory
controls that permit a virtually continuous "open-to-buy" position. In addition,
highly automated storage and distribution systems track, allocate and deliver an
average of 10,000 items per week to each store. T.J. Maxx's computerized
warehouse storage, handling and shipping systems permit a continuous evaluation
and replenishment of store inventory requirements and the breakdown of
manufacturers' bulk shipments into computer-determined individual store
allotments by style, size and quantity. Pricing and markdown decisions and store
inventory replenishment requirements are determined centrally, using
satellite-transmitted information provided by point-of-sale computer terminals;
this ensures that substantially all merchandise is sold within targeted selling
periods. Each T.J. Maxx store is currently serviced by one of the chain's four
distribution centers in Worcester, Massachusetts; Evansville, Indiana; Las
Vegas, Nevada; and Charlotte, North Carolina.
T.J. Maxx stores are generally located in suburban community shopping
centers and average approximately 28,000 gross square feet in size. In recent
years, T.J. Maxx has enlarged a number of stores to a larger format,
approximately 30,000-40,000 square feet in size, and plans to continue its
program of enlarging other successful stores. This larger format allows T.J.
Maxx to expand all of its departments, with particular emphasis on its
successful giftware and housewares departments and other non-apparel categories.
During fiscal 1996, 41 stores were opened, including 22 of the new larger
prototype, and 5 were closed. In addition, 17 existing stores were expanded to
the larger format, bringing the total of T.J. Maxx stores in the larger format
to 217. In fiscal 1997, approximately 25 new stores are planned, of which
approximately 10 are expected to be larger stores, along with the planned
expansion of about 19 existing locations.
MARSHALLS
---------
Marshalls, the second largest off-price family apparel retailer in the
United States, operates 496 stores in 38 states and Puerto Rico. Marshalls
target customers fit a profile similar to those of T.J. Maxx. Marshalls
merchandise is also similar to that carried by T.J. Maxx, except that Marshalls
offers its customers a full-line shoe department, a larger men's department and
costume, rather than fine, jewelry. Marshalls stores average approximately
32,000 gross square feet. During fiscal 1996, 25 Marshalls stores were opened
and 13 were closed and in fiscal 1997, approximately 12 new stores are planned.
Each Marshalls store is currently
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serviced by one of four main distribution centers located in Woburn,
Massachusetts; Decatur, Georgia; Bridgewater, Virginia; and Chatsworth,
California.
The operations and strategies of T.J. Maxx and Marshalls have been very
similar historically. In recent years, however, Marshalls had deviated from some
of its key strategies, such as everyday low prices, in favor of other marketing
ideas, including frequent promotional pricing. By restoring Marshalls historical
strategies and effecting other improvements, the Company believes that it can
increase Marshalls level of profitability and performance.
WINNERS APPAREL LTD.
--------------------
The Company acquired the Winners chain in fiscal 1991. The Winners
acquisition has provided the Company with the opportunity to introduce the
concept of off-price apparel retailing to the Canadian market. Since the
acquisition, Winners has increased its number of stores from 5 to 52.
Winners' apparel merchandising concept is substantially similar to that
of T.J. Maxx. Winners' stores average 24,000 square feet, and emphasize
off-price designer and brand name misses sportswear, dresses, lingerie,
accessories and giftware, as well as menswear and clothing for children,
including infants and toddlers. In fiscal 1996, Winners opened 15 stores in new
and existing Canadian markets. Winners expects to open 12-15 stores in fiscal
1997.
HOMEGOODS
---------
The Company is continuing to develop its HomeGoods stores, which are
designed to expand the Company's off-price presence in the home fashions market.
The HomeGoods stores offer a broad and deep range of home fashion products,
including domestics, cookware, bath accessories, and giftware in a no-frills,
multi-department format.
HomeGoods' stores currently average approximately 38,000 square feet.
HomeGoods has been moving to a smaller 35,000 square foot prototype for new
openings and downsizing existing locations. HomeGoods opened 9 stores and
closed 2 stores in fiscal 1996 and now operates a total of 22 stores. HomeGoods
and T.J. Maxx are experimenting with a new format that combines T.J. Maxx and
HomeGoods in one store and expect to open approximately four such stores in
fiscal 1997.
T.K. MAXX
---------
During fiscal 1995, the Company began testing the off-price family
apparel concept in Europe by opening its first 5 T.K. Maxx stores in the United
Kingdom. T.K. Maxx utilizes the same off-price strategy employed by T.J. Maxx
and Winners. At the end of fiscal 1996, the Company had a total of 9 stores and
has plans to open approximately 9 in fiscal 1997.
CHADWICK'S OF BOSTON
--------------------
Chadwick's, founded by the Company in 1983, offers off-price women's
career and casual fashion apparel through a catalog operation. The Chadwick's
catalog features first quality, current fashion and classic merchandise,
including career, sportswear, casual wear, dresses, suits and accessories, with
a mix of brand name and private label merchandise, priced significantly below
conventional retailers and other catalog operations. Chadwick's target customers
are 20 to 50 year old women interested in
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moderately to upper-moderately priced merchandise. Certain of Chadwick's
catalogs also carry menswear.
Chadwick's buying and merchandising policies result in a changing
selection of merchandise, which increases the freshness, fashion content and
excitement of each catalog. Chadwick's also benefits from the ability to
liquidate its inventory overstocks through the Company's other divisions.
EMPLOYEES
---------
At January 27, 1996, the Company had approximately 58,000 employees,
many of whom work less than 40 hours per week. In addition, temporary employees
are hired during the peak back-to-school and holiday seasons. The Company has
several collective bargaining agreements with the International Ladies Garment
Workers Union ("ILGWU"), covering approximately 3,700 employees in its
distribution facilities in West Bridgewater and Worcester, Massachusetts;
Evansville, Indiana; Las Vegas, Nevada and Charlotte, North Carolina. New
three-year agreements, effective January 1, 1995, were ratified by the union
workers in the West Bridgewater, Worcester and Las Vegas facilities. The Company
is currently negotiating a new agreement for the Evansville facility to replace
the existing agreement which expires May 31, 1996. The current agreement for the
Charlotte facility expires December 31, 1996, and it is expected that
negotiations for a new agreement will commence in the fall. The Company
considers its labor/management relations and overall employee relations to be
good.
COMPETITION
-----------
The retail apparel business is highly competitive. The Company generally
competes for customers with a variety of conventional and discount retail
stores, including national, regional and local independent department and
specialty stores, as well as with catalog operations, factory outlet stores and
other off-price stores. In recent years, the Company has encountered increased
competition from department stores which have become more focused on promotions
to increase sales. Competitive factors important to the Company's customers
include fashion, value, merchandise selection, brand name recognition and, to a
lesser degree, store location. In addition, because the Company purchases much
of its inventory opportunistically, the Company competes for merchandise with
other national and regional off-price apparel and other discount outlets. Also,
many of the Company's competitors handle identical or similar lines of
merchandise and have comparable locations, and some have greater financial
resources than the Company. The Company expects that the Marshalls acquisition
will enhance its competitiveness.
CREDIT
------
The Company's stores operate primarily on a cash-and-carry basis. Each
chain accepts credit sales through programs offered by banks and others.
BUYING AND DISTRIBUTION
-----------------------
The T.J. Maxx and Marshalls chains are serviced by a single centralized
buying organization while each of the other chains has its own centralized
buying organization. All of the Company's chains are serviced through their own
distribution network. Each T.J. Maxx store is serviced by one of the chain's
four distribution centers in Worcester,
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Massachusetts, Evansville, Indiana, Las Vegas, Nevada and Charlotte, North
Carolina. Shipments are made twice a week by contract carrier to each store.
Each Marshalls store is serviced by one of the chain's four main distribution
centers in Woburn, Massachusetts; Decatur, Georgia; Chatsworth, California; and
Bridgewater, Virginia. Winners Apparel Ltd. stores are serviced from a
distribution center in Mississaugau, Ontario, HomeGoods stores are serviced from
a distribution center in Mansfield, Massachusetts, and T.K. Maxx stores are
serviced from a distribution center in Milton Keynes, England. Chadwick's of
Boston's customers are serviced from its fulfillment center in West Bridgewater,
Massachusetts.
ITEM 2. Properties
----------
All of the Company's chains lease virtually all of their store
locations. Leases are generally for 10 years with options to extend for one or
more 5 year periods. The Company has the right to terminate certain leases
before the expiration date under certain circumstances and for a specified
payment.
The approximate average size of a T.J. Maxx store is 28,000 square feet,
Marshalls stores average approximately 32,000 square feet, Winners stores are
approximately 24,000 square feet on average and HomeGoods stores currently
average approximately 38,000 square feet. The Company owns four T.J. Maxx
distribution facilities - a 526,000 square foot facility in Worcester,
Massachusetts; a 983,000 square foot facility in Evansville, Indiana; a 400,000
square foot facility in Las Vegas, Nevada; and a 600,000 square foot facility in
Charlotte, North Carolina. The Company owns one of the Marshalls distribution
facilities, a 856,000 square foot facility in Decatur, Georgia. In addition,
Marshalls leases its other three main distribution facilities - a 837,000 square
foot facility in Woburn, Massachusetts; a 183,000 square foot facility in
Chatsworth, California; and a 700,000 square foot facility in Bridgewater,
Virginia. The Company also leases 26,000 square feet of temporary space in
California as well as a small regional facility, 47,000 square feet in Hawaii.
Chadwick's owns a 579,000 square foot fulfillment center and office facility in
West Bridgewater, Massachusetts. Chadwick's is also leasing a nearby 127,000
square foot warehouse and office facility. Winners leases 257,000 square feet of
warehouse and office space in Mississaugau, Ontario. HomeGoods leases a 205,000
square foot distribution center in Mansfield, Massachusetts. T.K. Maxx in the
United Kingdom has leased a 108,000 square foot office and distribution facility
in Milton Keynes, England and a 16,500 square foot office space in Watford,
England. The Company's, T.J. Maxx's and HomeGoods' executive and administrative
offices are located in a 517,000 square foot office facility, which the Company
leases in Framingham, Massachusetts. The Company is currently leasing
approximately 350,000 square feet of office space for Marshalls, most of which
is located in Andover, Massachusetts. The Company plans to close much of this
space during fiscal 1997 and move the Marshalls associates to Framingham,
Massachusetts. In anticipation of this move, the Company has plans to lease
approximately 100,000 additional square feet of office space in the Framingham
area.
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<TABLE>
The table below indicates the approximate gross square footage of stores
and distribution centers, by division, in operation as of January 27, 1996.
<CAPTION>
(In Thousands)
Stores Distribution Centers
------ --------------------
Leased Owned
------ -----
<S> <C> <C> <C>
T.J. Maxx 16,549 - 2,466
Marshalls 15,925 1,737 801
Winners 1,265 190 -
HomeGoods 832 205 -
T.K. Maxx 245 100 -
Chadwick's - 85 447
------ ----- -----
Total 34,816 2,317 3,714
====== ===== =====
</TABLE>
ITEM 3. Legal Proceedings
-----------------
The Company is a defendant in a class action lawsuit, IN RE TJX
COMPANIES, INC., Consolidated Civil Action No. 10514, in the Court of Chancery
of the State of Delaware (the "Court"). The former The TJX Companies, Inc. ("old
TJX"), formerly an 83%-owned subsidiary of the Company, and the directors of old
TJX are also named as defendants in this lawsuit. The lawsuit alleges that
certain actions of the defendants in respect of the merger in 1989 of old TJX
into The TJX Operating Companies, Inc., a wholly-owned subsidiary subsequently
merged into the Company, constituted self-dealing, deception, unfair dealing,
overreaching and a breach of fiduciary duties owed by the defendants to the then
public stockholders of old TJX. In particular, the amended complaint alleges
that the terms of the merger were unfair and offered inadequate consideration to
the then public stockholders of old TJX. The suit seeks to recover unspecified
monetary damages. The defendants have filed answers denying any wrongdoing, and
the case is in discovery phase. The parties have reached a settlement in
principle which is subject to the approval of the Court. The Company believes
that the substantive allegations of the case are without merit and that the case
will not have a material effect on the Company's financial position.
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
There was no matter submitted to a vote of the Company's security
holders during the fourth quarter of fiscal 1996.
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<TABLE>
ITEM 4A. Executive Officers of the Registrant
------------------------------------
The following persons are the executive officers of the Company as of
the date hereof:
<CAPTION>
Office and Employment
Name Age During Last Five Years
- ---- --- ----------------------
<S> <C> <C>
Bernard Cammarata 56 President, Chief Executive Officer and
Director since 1989, Chairman of the
Company's T.J. Maxx Division from 1986 to
1995 and of the Company's T.J. Maxx and
Marshalls Division ("The Marmaxx Group")
since 1995. Executive Vice President of the
Company from 1986 to 1989. President, Chief
Executive Officer and Director of the
Company's former TJX subsidiary from 1987 to
1989; President of T.J. Maxx, 1976 to 1986.
Donald G. Campbell 44 Executive Vice President - Finance since
1996. Senior Vice President - Finance, from
1989 to 1996. Senior Financial Executive of
the Company, 1988 to 1989; Senior Vice
President - Finance and Administration Zayre
Stores Division 1987-1988; Vice President and
Corporate Controller of the Company prior to
1987.
Richard Lesser 61 Executive Vice President of the Company since
1991 and Chief Operating Officer of the
Company since 1994 and President of The
Marmaxx Group since 1995. Senior Vice
President of the Company 1989-1991 and
President of the T.J. Maxx Division
from 1986 to 1994. Senior Executive Vice
President Merchandising and Distribution
1986. Executive Vice President - General
Merchandise Manager 1984 to 1986; Senior Vice
President - General Merchandise Manager 1981
to 1984.
</TABLE>
The foregoing were elected to their current Company offices by the Board
of Directors in June 1995, except for Donald G. Campbell who was elected to his
current office in April 1996. All officers hold office until the next annual
meeting of the Board in June 1996 and until their successors are elected and
qualified.
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PART II
-------
ITEM 5. Market for the Registrant's Common
Stock and Related Security Holder Matters
-----------------------------------------
The information required by this Item is incorporated herein by
reference from page 38 of the Annual Report, under the caption "Price Range of
Common Stock," and from inside the back cover of the Annual Report, under the
caption "Shareholder Information."
ITEM 6. Selected Financial Data
-----------------------
The information required by this Item is incorporated herein by
reference from page 33 of the Annual Report, under the caption "Selected
Financial Data."
ITEM 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
The information required by this Item is incorporated herein by
reference from pages 35 through 37 of the Annual Report, under the caption
"Management's Discussion and Analysis of Results of Operations and Financial
Condition."
ITEM 8. Financial Statements and Supplementary Data
--------------------------------------------
The information required by this Item and not filed with this report as
Financial Statement Schedules is incorporated herein by reference from pages 16
through 32 of the Annual Report, under the captions; "Consolidated Statements of
Income," "Consolidated Balance Sheets," "Consolidated Statements of Cash Flows,"
"Consolidated Statements of Shareholders' Equity," "Selected Information by
Major Business Segment" and "Notes to Consolidated Financial Statements."
ITEM 9. Disagreements on Accounting and
Financial Disclosure
--------------------
Not applicable.
PART III
--------
ITEM 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
The Company will file with the Securities and Exchange Commission a
definitive Proxy Statement no later than 120 days after the close of its fiscal
year ended January 27, 1996 (the "Proxy Statement"). The information required by
this Item and not given in Item 4A, Executive Officers of the Registrant, is
incorporated by reference to the Proxy Statement. However, information under the
captions "Executive Compensation Committee Report" and "Performance Graph" in
the Proxy Statement is not so incorporated.
ITEM 11. Executive Compensation
----------------------
The information required by this Item is incorporated by reference to
the Proxy Statement.
ITEM 12. Security Ownership of Certain
Beneficial Owners and Management
--------------------------------
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The information required by this Item is incorporated by reference to
the Proxy Statement.
ITEM 13. Certain Relationships and
Related Transactionsru
----------------------
The information required by this Item is incorporated by reference to
the Proxy Statement.
PART IV
-------
ITEM 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
-----------------------
(a) Financial Statement Schedules
-----------------------------
The Financial Statements and Financial Statement Schedules filed as part
of this report are listed and indexed at Page F-1.
(b) Reports on Form 8-K
-------------------
The Company filed a Current Report on Form 8-K dated as of October 14,
1995 regarding the Stock Purchase Agreement dated as of October 14, 1995 entered
into by the Company and Melville Corporation (Melville) regarding the purchase
of Marshalls by the Company from Melville.
The Company filed a Current Report on Form 8-K dated as of November 17,
1995 (and a related Form 8-KA) regarding the completion of the acquisition of
Marshalls by the Company from Melville and a Credit Agreement entered into by
the Company. Form 8-KA included the required Financial Statements of the
Business Acquired and the required Pro Forma Financial Information.
(c) Exhibits
--------
Listed below are all Exhibits filed as part of this report. Certain
Exhibits are incorporated by reference to documents previously filed by the
Registrant with the Securities and Exchange Commission pursuant to Rule 12b-32
under the Securities Exchange Act of 1934, as amended.
Exhibit
No. Description of Exhibit
- --- ----------------------
3(i).1 Second Restated Certificate of Incorporation filed June 5, 1985 is
incorporated herein by reference to Exhibit (3i)(a) to the Form 10-K
filed for the fiscal year ended January 28, 1995.
3(i).2 Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 3, 1986 is incorporated herein by reference
to Exhibit (3i)(b) to the Form 10-K filed for the fiscal year ended
January 28, 1995.
3(i).3 Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 2, 1987 is incorporated herein by reference
to Exhibit (3i)(c) to the Form 10-K filed for the fiscal year ended
January 28, 1995.
3(i).4 Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 20, 1989 is incorporated herein by
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reference to Exhibit (3i)(d) to the Form 10-K filed for the fiscal
year ended January 28, 1995.
3(i).5 Certificate of Designations, Preferences and Rights of New Series A
Cumulative Convertible Preferred Stock of the Company is incorporated
herein by reference to Exhibit (3i)(e) to the Form 10-K filed for the
fiscal year ended January 28, 1995.
3(i).6 Certificate of Designations, Preferences and Rights of $3.125 Series C
Cumulative Convertible Preferred Stock of the Company is incorporated
herein by reference to Exhibit (3i)(f) to the Form 10-K filed for the
fiscal year ended January 28, 1995.
3(i).7 Certificate of Designations, Preferences and Rights of Series D
Cumulative Convertible Preferred Stock is incorporated herein by
reference to Exhibit 10.1 of the Form 8-K dated November 17, 1995.
3(i).8 Certificate of Designations, Preferences and Rights of Series E
Cumulative Convertible Preferred Stock is incorporated herein by
reference to Exhibit 10.2 of the Form 8-K dated November 17, 1995.
3(ii).1 The by-laws of the Company, as amended, are incorporated herein by
reference to Exhibit (3ii)(a) to the Form 10-K filed for the fiscal
year ended January 28, 1995.
4.1 A composite copy of the Share Purchase Agreements dated as of April
15, 1992 regarding Series A Cumulative Convertible Preferred Stock is
incorporated by reference to Exhibit 4(c) to the Form 10-K filed for
the fiscal year ended January 25, 1992.
4.2 Exchange Agreement dated as of August 6, 1992 between the Company and
the holders of New Series A Cumulative Convertible Preferred Stock is
incorporated by reference to Exhibit 19.1 to the Form 10-Q filed for
the quarter ended July 25, 1992.
4.3 Credit Agreement dated as of November 17, 1995 among The First
National Bank of Chicago, Bank of America Illinois, The Bank of New
York, and Pearl Street L.P., as co-arrangers, the other financial
institution parties thereto, and the Company is incorporated by
reference to the Current Report on Form 8-K dated November 17, 1995.
Each other instrument relates to securities the total amount of which
does not exceed 10% of the total assets of the Company and its subsidiaries
on a consolidated basis. The Company agrees to furnish to the Securities
and Exchange Commission copies of each such instrument not otherwise filed
herewith or incorporated herein by reference.
10.1 The Amended and Restated Employment Agreement dated as of April 26,
1988 with Stanley Feldberg is incorporated herein by reference to
Exhibit 10(a) to the Form 10-K filed for the fiscal year ended January
30, 1988. The First Amendment to the 1988 Amended and Restated
Employment Agreement of Stanley Feldberg dated June 8, 1993 is
incorporated herein by reference to Exhibit 10(a) to the Form 10-K
filed for the fiscal year ended January 29, 1994. *
<PAGE> 15
PAGE 15
10.2 The Employment Agreement dated as of January 30, 1994 with Bernard
Cammarata is incorporated herein by reference to Exhibit (10)(d) to
the Form 10-K filed for the fiscal year ended January 28, 1995. *
10.3 The Amended and Restated Employment Agreement dated as of February 1,
1995 with Richard Lesser is incorporated herein by reference to
Exhibit (10)(e) to the Form 10-K for the fiscal year ended January
28, 1995. *
10.4 The Amended and Restated Employment Agreement dated as of February 1,
1995 with Donald G. Campbell is incorporated herein by reference to
Exhibit (10)(f) to the Form 10-K filed for the fiscal year ended
January 28, 1995. *
10.5 The Management Incentive Plan, as amended, is incorporated herein by
reference to Exhibit 10(g) to the Form 10-K filed for the fiscal year
ended January 29, 1994. *
10.6 The 1982 Long Range Management Incentive Plan, as amended, is
incorporated herein by reference to Exhibit 10(h) to the Form 10-K
filed for the fiscal year ended January 29, 1994. *
10.7 The 1986 Stock Incentive Plan, as amended, is incorporated herein by
reference to Exhibit 10(i) to the Form 10-K filed for the fiscal year
ended January 29, 1994. *
10.8 The TJX Companies, Inc. Long Range Performance Incentive Plan, as
amended, is incorporated herein by reference to Exhibit 10(j) to the
Form 10-K filed for the fiscal year ended January 29, 1994. *
10.9 The General Deferred Compensation Plan, as amended, is incorporated
herein by reference to Exhibit 10(n) to the Form 10-K filed for the
fiscal year ended January 27, 1990. *
10.10 The Supplemental Executive Retirement Plan, as amended, is
incorporated herein by reference to Exhibit 10(l) to the Form 10-K
filed for the fiscal year ended January 25, 1992. *
10.11 The 1993 Stock Option Plan for Non-Employee Directors is incorporated
herein by reference to Exhibit 10.1 to the Form 10-Q filed for the
quarter ended May 1, 1993. *
10.12 The Retirement Plan for Directors, as amended, is incorporated
herein by reference to Exhibit 10.2 to the Form 10-Q filed for the
quarter ended May 1, 1993. *
10.13 The form of Indemnification Agreement between the Company and each of
its officers and directors is incorporated herein by reference to
Exhibit 10(r) to the Form 10-K filed for the fiscal year ended
January 27, 1990. *
10.14 The Trust Agreement dated as of April 8, 1988 between the Company and
State Street Bank and Trust Company is incorporated herein by
reference to Exhibit 10(y) to the Form 10-K filed for the fiscal year
ended January 30, 1988.*
10.15 The Trust Agreement dated as of April 8, 1988 between the Company and
Shawmut Bank of Boston, N.A. is incorporated herein by
<PAGE> 16
PAGE 16
reference to Exhibit 10(z) to the Form 10-K filed for the fiscal
year ended January 30, 1988. *
10.16 Stock Purchase Agreement dated as of October 14, 1995 between the
Company and Melville Corporation is incorporated herein by reference
to the Current Report on Form 8-K dated October 14, 1995.
10.17 Amendment Number One dated as of November 17, 1995 to the Stock
Purchase Agreement dated as of October 14, 1995 between the Company
and Melville Corporation is incorporated herein by reference to the
Current Report on Form 8-K dated November 17, 1995.
10.18 Transitional Services Agreement dated as of November 17, 1995 between
the Company and Melville Corporation is incorporated herein by
reference to the Current Report on Form 8-K dated November 17, 1995.
10.19 Amendment Number Two dated as of February 1, 1996 to Stock Purchase
Agreement and Transitional Services Agreement between the Company and
Melville Corporation is filed herewith.
10.20 Standstill and Registration Rights Agreement dated as of November 17,
1995 between the Company and Melville Corporation is filed herewith.
11 Statement re computation of per share earnings.
-----------------------------------------------
This statement is filed herewith.
13 Annual Report to security holders.
----------------------------------
Portions of the Annual Report to Stockholders for the fiscal year
ended January 27, 1996 are filed herewith.
21 Subsidiaries.
-------------
A list of the Registrant's subsidiaries is filed herewith.
23 Consents of experts and counsel.
--------------------------------
The Consent of Coopers & Lybrand L.L.P. is contained on Page F-2 of
the Financial Statements filed herewith.
24 Power of Attorney.
------------------
The Power of Attorney given by the Directors and certain Executive
Officers of the Company is filed herewith.
* Management contract or compensatory plan or arrangement.
<PAGE> 17
PAGE 17
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE TJX COMPANIES, INC.
Dated: April 26, 1996
/s/ Donald G. Campbell
----------------------------------
Donald G. Campbell
Executive Vice President - Finance
<PAGE> 18
PAGE 18
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
/s/ BERNARD CAMMARATA /s/ DONALD G. CAMPBELL
- -------------------------------- --------------------------------
Bernard Cammarata, President Donald G. Campbell, Executive
and Principal Executive Officer Vice President - Finance,
and Director Principal Financial and
Accounting Officer
PHYLLIS B. DAVIS* ROBERT F. SHAPIRO*
- -------------------------------- --------------------------------
Phyllis B. Davis, Director Robert F. Shapiro, Director
STANLEY H. FELDBERG* WILLOW B. SHIRE*
- -------------------------------- --------------------------------
Stanley H. Feldberg, Director Willow B. Shire, Director
RICHARD LESSER* BURTON S. STERN*
- -------------------------------- --------------------------------
Richard Lesser, Director Burton S. Stern, Director
ARTHUR F. LOEWY* FLETCHER H. WILEY*
- -------------------------------- --------------------------------
Arthur F. Loewy, Director Fletcher H. Wiley, Director
JOHN M. NELSON* ABRAHAM ZALEZNIK*
- -------------------------------- --------------------------------
John M. Nelson, Director Abraham Zaleznik, Director
Dated: April 26, 1996
* By /s/ DONALD G. CAMPBELL*
--------------------------------
Donald G. Campbell
as attorney-in-fact
<PAGE> 19
PAGE 19
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
THE TJX COMPANIES, INC.
FORM 10-K
ANNUAL REPORT
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND
FINANCIAL STATEMENT SCHEDULES
For the Fiscal Years Ended
January 27, 1996, January 28, 1995
and January 29, 1994
<PAGE> 20
THE TJX COMPANIES, INC. AND SUBSIDIARIES
<TABLE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
<CAPTION>
For Fiscal Years Ended January 27, 1996, January 28, 1995 and
January 29, 1994
<S> <C>
Report of Independent Accountants 34*
Consent of Independent Accountants F-2
Selected Quarterly Financial Data (Unaudited) 38*
Consolidated Financial Statements:
Consolidated Statements of Income for the fiscal
years ended January 27, 1996, January 28, 1995 and
January 29, 1994 16*
Consolidated Balance Sheets as of January 27, 1996
and January 28, 1995 17*
Consolidated Statements of Cash Flows for the fiscal
years ended January 27, 1996, January 28, 1995 and
January 29, 1994 18*
Consolidated Statements of Shareholders' Equity for
the fiscal years ended January 27, 1996, January 28,
1995 and January 29, 1994 19*
Notes to Consolidated Financial Statements 21-32*
Schedules
(II) Valuation and Qualifying Accounts F-3
- ----------
<FN>
* Refers to page numbers in the Company's Annual Report to Stockholders for the
fiscal year ended January 27, 1996, certain portions of which pages are
incorporated by reference in Part II, Item 8 of this report as indicated.
</TABLE>
F-1
<PAGE> 21
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements of
The TJX Companies, Inc. on Form S-3 (File No. 33-50259 and 33-60059) and on
Forms S-8 (File Nos. 33-12220 and 33-49747) of our report dated March 12, 1996,
on our audits of the consolidated financial statements of The TJX Companies,
Inc. as of January 27, 1996 and January 28, 1995 and for the years ended
January 27, 1996, January 28, 1995 and January 29, 1994 which report is
incorporated by reference in this Annual Report on Form 10-K.
Boston, Massachusetts
April 22, 1996 Coopers & Lybrand L.L.P.
F-2
<PAGE> 22
THE TJX COMPANIES, INC.
<TABLE>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
Column A Column B Column C Column D Column E
Additions
(1) (2)
Balance at Charged to Costs Charged to other Balance at
Description Beginning of Period and Expenses Accounts Deductions End of Period
- ----------- ------------------- ------------ -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Reserves for Discontinued Operations:
Fiscal year ended January 27, 1996 13,085,000 23,025,000 (A) - 10,857,000 (D) 25,253,000
Fiscal year ended January 28, 1995 17,618,000 - - 4,533,000 (D) 13,085,000
Fiscal year ended January 29, 1994 45,944,000 - - 28,326,000 (D) 17,618,000
Store Closing and Restructuring Reserves:
Fiscal year ended January 27, 1996 - 38,800,000 (B) 244,095,000 (C) 31,329,000 (E) 251,566,000
<FN>
- ----------
(A) Additions are primarily for the estimated costs associated with the sale of the Hit or Miss Division including costs to close
69 stores and to settle or otherwise dispose of related leases.
(B) Includes $35 million for estimated cost of closing approximately 30 T.J. Maxx stores in connection with the acquisition of
Marshalls and $3.8 million for certain restructuring costs of HomeGoods operation.
(C) Represents the reserve established in the allocation of the purchase price of Marshalls relating primarily to the anticipated
closing of approximately 170 Marshalls stores. The reserve also includes a reserve for markdowns on inventory acquired, legal
and professional fees and the cost associated with the closing of other non-store facilities.
(D) Deductions relate primarily to ongoing lease obligations, net of sublease income, as well as settlement costs on certain
leases.
(E) Deductions are primarily for inventory markdowns and for HomeGoods restructuring costs including one store closing and
downsizing expenditures.
</TABLE>
F-3
<PAGE> 23
EXHIBIT INDEX
Exhibit
No. Description of Exhibit
- --- ----------------------
3(i).1 Second Restated Certificate of Incorporation filed June 5, 1985 is
incorporated herein by reference to Exhibit (3i)(a) to the Form 10-K
filed for the fiscal year ended January 28, 1995.
3(i).2 Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 3, 1986 is incorporated herein by reference
to Exhibit (3i)(b) to the Form 10-K filed for the fiscal year ended
January 28, 1995.
3(i).3 Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 2, 1987 is incorporated herein by reference
to Exhibit (3i)(c) to the Form 10-K filed for the fiscal year ended
January 28, 1995.
3(i).4 Certificate of Amendment of Second Restated Certificate of
Incorporation filed June 20, 1989 is incorporated herein by reference
to Exhibit (3i)(d) to the Form 10-K filed for the fiscal year ended
January 28, 1995.
3(i).5 Certificate of Designations, Preferences and Rights of New Series A
Cumulative Convertible Preferred Stock of the Company is incorporated
herein by reference to Exhibit (3i)(e) to the Form 10-K filed for the
fiscal year ended January 28, 1995.
3(i).6 Certificate of Designations, Preferences and Rights of $3.125 Series C
Cumulative Convertible Preferred Stock of the Company is incorporated
herein by reference to Exhibit (3i)(f) to the Form 10-K filed for the
fiscal year ended January 28, 1995.
3(i).7 Certificate of Designations, Preferences and Rights of Series D
Cumulative Convertible Preferred Stock is incorporated herein by
reference to Exhibit 10.1 of the Form 8-K dated November 17, 1995.
3(i).8 Certificate of Designations, Preferences and Rights of Series E
Cumulative Convertible Preferred Stock is incorporated herein by
reference to Exhibit 10.2 of the Form 8-K dated November 17, 1995.
3(ii).1 The by-laws of the Company, as amended, are incorporated herein by
reference to Exhibit (3ii)(a)
<PAGE> 24
to the Form 10-K filed for the fiscal year ended January 28, 1995.
4.1 A composite copy of the Share Purchase Agreements dated as of April
15, 1992 regarding Series A Cumulative Convertible Preferred Stock is
incorporated by reference to Exhibit 4(c) to the Form 10-K filed for
the fiscal year ended January 25, 1992.
4.2 Exchange Agreement dated as of August 6, 1992 between the Company and
the holders of New Series A Cumulative Convertible Preferred Stock is
incorporated by reference to Exhibit 19.1 to the Form 10-Q filed for
the quarter ended July 25, 1992.
4.3 Credit Agreement dated as of November 17, 1995 among The First
National Bank of Chicago, Bank of America Illinois, The Bank of New
York, and Pearl Street L.P., as co-arrangers, the other financial
institution parties thereto, and the Company is incorporated by
reference to the Current Report on Form 8-K dated November 17, 1995.
Each other instrument relates to securities the total amount of which
does not exceed 10% of the total assets of the Company and its subsidiaries
on a consolidated basis. The Company agrees to furnish to the Securities
and Exchange Commission copies of each such instrument not otherwise filed
herewith or incorporated herein by reference.
10.1 The Amended and Restated Employment Agreement dated as of April 26,
1988 with Stanley Feldberg is incorporated herein by reference to
Exhibit 10(a) to the Form 10-K filed for the fiscal year ended January
30, 1988. The First Amendment to the 1988 Amended and Restated
Employment Agreement of Stanley Feldberg dated June 8, 1993 is
incorporated herein by reference to Exhibit 10(a) to the Form 10-K
filed for the fiscal year ended January 29, 1994. *
10.2 The Employment Agreement dated as of January 30, 1994 with Bernard
Cammarata is incorporated herein by reference to Exhibit (10)(d) to
the Form 10-K filed for the fiscal year ended January 28, 1995. *
10.3 The Amended and Restated Employment Agreement dated as of February 1,
1995 with Richard Lesser is incorporated herein by reference to
Exhibit (10)(e) to the Form 10-K for the fiscal year ended January 28,
1995. *
<PAGE> 25
10.4 The Amended and Restated Employment Agreement dated as of February 1,
1995 with Donald G. Campbell is incorporated herein by reference to
Exhibit (10)(f) to the Form 10-K filed for the fiscal year ended
January 28, 1995. *
10.5 The Management Incentive Plan, as amended, is incorporated herein by
reference to Exhibit 10(g) to the Form 10-K filed for the fiscal year
ended January 29, 1994. *
10.6 The 1982 Long Range Management Incentive Plan, as amended, is
incorporated herein by reference to Exhibit 10(h) to the Form 10-K
filed for the fiscal year ended January 29, 1994. *
10.7 The 1986 Stock Incentive Plan, as amended, is incorporated herein by
reference to Exhibit 10(i) to the Form 10-K filed for the fiscal year
ended January 29, 1994. *
10.8 The TJX Companies, Inc. Long Range Performance Incentive Plan, as
amended, is incorporated herein by reference to Exhibit 10(j) to the
Form 10-K filed for the fiscal year ended January 29, 1994. *
10.9 The General Deferred Compensation Plan, as amended, is incorporated
herein by reference to Exhibit 10(n) to the Form 10-K filed for the
fiscal year ended January 27, 1990. *
10.10 The Supplemental Executive Retirement Plan, as amended, is
incorporated herein by reference to Exhibit 10(l) to the Form 10-K
filed for the fiscal year ended January 25, 1992. *
10.11 The 1993 Stock Option Plan for Non-Employee Directors is incorporated
herein by reference to Exhibit 10.1 to the Form 10-Q filed for the
quarter ended May 1, 1993. *
10.12 The Retirement Plan for Directors, as amended, is incorporated herein
by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter
ended May 1, 1993. *
10.13 The form of Indemnification Agreement between the Company and each of
its officers and directors is incorporated herein by reference to
Exhibit 10(r) to the Form 10-K filed for the fiscal year ended January
27, 1990. *
10.14 The Trust Agreement dated as of April 8, 1988 between the Company and
State Street Bank and Trust
<PAGE> 26
Company is incorporated herein by reference to Exhibit 10(y) to the
Form 10-K filed for the fiscal year ended January 30, 1988. *
10.15 The Trust Agreement dated as of April 8, 1988 between the Company and
Shawmut Bank of Boston, N.A. is incorporated herein by reference to
Exhibit 10(z) to the Form 10-K filed for the fiscal year ended
January 30, 1988. *
10.16 Stock Purchase Agreement dated as of October 14, 1995 between the
Company and Melville Corporation is incorporated herein by reference
to the Current Report on Form 8-K dated October 14, 1995.
10.17 Amendment Number One dated as of November 17, 1995 to the Stock
Purchase Agreement dated as of October 14, 1995 between the Company
and Melville Corporation is incorporated herein by reference to the
Current Report on Form 8-K dated November 17, 1995.
10.18 Transitional Services Agreement dated as of November 17, 1995 between
the Company and Melville Corporation is incorporated herein by
reference to the Current Report on Form 8-K dated November 17, 1995.
10.19 Amendment Number Two dated as of February 1, 1996 to Stock Purchase
Agreement and Transitional Services Agreement between the Company and
Melville Corporation is filed herewith.
10.20 Standstill and Registration Rights Agreement dated as of November 17,
1995 between the Company and Melville Corporation is filed herewith.
11 Statement re computation of per share earnings.
-----------------------------------------------
This statement is filed herewith.
13 Annual Report to security holders.
----------------------------------
Portions of the Annual Report to Stockholders for the fiscal year
ended January 27, 1996 are filed herewith.
21 Subsidiaries.
-------------
A list of the Registrant's subsidiaries is filed herewith.
23 Consents of experts and counsel.
--------------------------------
<PAGE> 27
The Consent of Coopers & Lybrand L.L.P. is contained on Page F-2 of
the Financial Statements filed herewith.
24 Power of Attorney.
------------------
The Power of Attorney given by the Directors and certain Executive
Officers of the Company is filed herewith.
* Management contract or compensatory plan or arrangement.
<PAGE> 1
EXHIBIT 10.19
AMENDMENT NUMBER TWO
TO
STOCK PURCHASE AGREEMENT
AND
TRANSITIONAL SERVICES AGREEMENT
THIS AMENDMENT NUMBER TWO (this "AMENDMENT"), is made as of this 1st day
of February, 1996, by and among THE TJX COMPANIES, INC., a Delaware corporation
("BUYER"), MELVILLE CORPORATION, a New York corporation ("SELLER"), and
MARSHALLS, INC., a Massachusetts corporation ("COMPANY").
RECITALS
1. Seller and Buyer entered into that certain Stock Purchase Agreement,
dated as of October 14, 1995, as amended pursuant to that certain Amendment
Number One to Stock Purchase Agreement, dated as of November 17, 1995 (as
amended, the "PURCHASE AGREEMENT").
2. Seller, Buyer and Company entered into that certain Transitional
Services Agreement, dated as of November 17, 1995 (the "SERVICES AGREEMENT").
3. Seller, Buyer and Company are desirous of making certain amendments
and modifications to the Purchase Agreement and the Services Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements and covenants contained herein, together with other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. PURCHASE AGREEMENT AMENDMENT. Section 9.2 of the Purchase Agreement
is hereby amended by deleting the date "April 30, 1996" therein and substituting
the date "July 31, 1996" therefore.
2. SERVICES AGREEMENT AMENDMENTS. (a) Exhibit A-4 of the Services
Agreement is hereby amended by deleting the date "April 30, 1996" in the first
(1st) paragraph of the subsection captioned "Health, Medical and Other Employee
Benefit Services" and substituting the data "July 31, 1996" therefore.
3. EFFECT ON PURCHASE AGREEMENT AND SERVICES AGREEMENT. Except to the
extent of the amendments set forth specifically herein, all provisions of the
Purchase Agreement and the Services Agreement are and shall remain in full force
and effect and are hereby ratified and confirmed in all respects, and the
execution,
<PAGE> 2
delivery and effectiveness of this Amendment shall not operate as a
waiver or amendment of any provision of the Purchase Agreement or Services
Agreement not specifically amended herein.
4. EXECUTION IN COUNTERPARTS: EFFECTIVENESS. This Amendment may be executed
via facsimile transmissions in any number of counterparts, each of which shall
be deemed for all purposes to be an original, but all of which together shall
constitute one and the same Amendment. This Amendment shall become effective
immediately upon execution.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Amendment to be executed as of the date first above
written by their respective officer thereunto duly authorized.
BUYER:
------
THE TJX COMPANIES, INC.
By: /s/ Donald G. Campbell
-----------------------------
Name:
Title:
SELLER: COMPANY:
- ------- --------
MELVILLE CORPORATION MARSHALLS, INC.
By: /s/ Jerald L. Maurer By: /s/ Donald G. Campbell
---------------------------- -------------------------
Name: Name:
Title: Senior Vice Pres. Title:
<PAGE> 1
EXHIBIT 10.20
STANDSTILL AND REGISTRATION RIGHTS AGREEMENT
This Standstill Agreement (the "Agreement"), dated as of November 17,
1995, is between Melville Corporation, a New York corporation ("Subscriber"),
and The TJX Companies, Inc., a Delaware corporation ("Issuer").
WHEREAS, simultaneously with the execution of this Agreement,
Subscriber is acquiring shares of Issuer's Series D Cumulative Convertible
Preferred Stock, par value $1.00 per share (the "Series D Preferred Stock") and
shares of Issuer's Series E Cumulative Convertible Preferred Stock, par value
$1.00 per share (the "Series E Preferred Stock" and together with the Series D
Preferred Stock, the "Preferred Stock"), pursuant to a Preferred Stock
Subscription Agreement dated as of the date hereof (the "Subscription
Agreement") between Subscriber and Issuer;
WHEREAS, Subscriber and Issuer entered into the Subscription Agreement
pursuant to, and in connection with the transactions contemplated by, the Stock
Purchase Agreement dated as of October 14, 1995 (as amended, the "Purchase
Agreement") between Subscriber and Issuer; and
WHEREAS, Issuer and Subscriber desire to establish in this Agreement
certain conditions of Subscriber's relationship with Issuer;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Subscription Agreement and the Purchase Agreement,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; REPRESENTATIONS AND WARRANTIES
SECTION 1.01 Definitions. Except as otherwise specified herein, defined
terms used in this Agreement shall have the respective meanings assigned to such
terms in the Purchase Agreement. Unless otherwise specified all references to
"days" shall be deemed to be references to calendar days.
SECTION 1.02 Representations and Warranties of Issuer. Issuer
represents and warrants to Subscriber as follows:
<PAGE> 2
(a) The execution, delivery and performance by Issuer of this
Agreement and the consummation by Issuer of the transactions
contemplated by this Agreement are within its corporate powers and have
been duly authorized by all necessary corporate action on its part.
This Agreement constitutes a legal, valid and binding agreement of
Issuer enforceable against Issuer in accordance with its terms (i)
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally, including the effect of
statutory and other laws regarding fraudulent conveyances and
preferential transfers, and (ii) subject to the limitations imposed by
general equitable principles (regardless of whether such enforceability
is considered in a proceeding at law or in equity); and
(b) The execution, delivery and performance of this Agreement
by Issuer does not and will not contravene or conflict with or
constitute a default under Issuer's Charter or By-laws.
SECTION 1.03 Representations and Warranties of Subscriber. Subscriber
represents and warrants to Issuer as follows:
(a) The execution, delivery and performance by Subscriber of
this Agreement and the consummation by Subscriber of the transactions
contemplated by this Agreement are within its corporate powers and have
been duly authorized by all necessary corporate action on its part.
This Agreement constitutes a legal, valid and binding agreement of
Subscriber enforceable against Subscriber in accordance with its terms
(i) except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally, including
the effect of statutory and other laws regarding fraudulent conveyances
and preferential transfers, and (ii) subject to the limitations imposed
by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity);
(b) The execution, delivery and performance of this Agreement
by Subscriber does not and will not contravene or conflict with or
constitute a default under Subscriber's Charter or By-laws; and
(c) Subscriber "beneficially owns" (as such term is defined in
Rule 13d-3 under the Exchange Act) the shares of the Preferred Stock
issued to it pursuant to the Subscription Agreement and neither
Subscriber nor any "affiliate" or "associate" (such terms being used in
this Agreement as such terms are defined in Rule 12b-2 under the
Exchange Act), owns any other Voting Securities (as defined in Section
2.01 herein).
-2-
<PAGE> 3
ARTICLE II
TERM
SECTION 2.01 Term. The term (the "Term") of this Agreement shall
commence on the date hereof and shall continue until the date on which the
Voting Power of the Voting Securities, on a fully diluted basis, beneficially
owned by Subscriber shall represent less than three percent (3%) of the Total
Voting Power. For the purposes of this Agreement (i) the term "Voting
Securities" shall mean any securities entitled to vote generally in the election
of directors of Issuer, or any direct or indirect rights or options to acquire
any such securities or any securities (including without limitation the
Preferred Stock) convertible or exercisable into or exchangeable for such
securities, whether or not such securities are so convertible, exercisable or
exchangeable at the time of determination, (ii) the term "Voting Power" shall
mean the voting power in the general election of directors of Issuer, and (iii)
the term "Total Voting Power" shall mean the total combined Voting Power of all
the Voting Securities then outstanding and entitled to vote; provided, however,
that for purposes of this Agreement, the Voting Power of the Preferred Stock on
any date shall mean the voting power of the shares of the Issuer's common stock,
par value $1.00 per share ("Common Stock"), into which the shares of Preferred
Stock would be convertible on such date, assuming for this purpose only that the
Automatic Conversion Date (as defined in the Series D Preferred Stock and the
Series E Preferred Stock, respectively) were such date, at the Exchange Rate (as
so defined) then in effect.
ARTICLE III
STANDSTILL AND VOTING PROVISIONS
SECTION 3.01 Restrictions of Certain Actions by Subscriber. During the
Term, Subscriber will not, and will cause each of its affiliates and associates
not to, singly or as part of a partnership, limited partnership, syndicate or
other group (as those terms are used in Section 13(d)(3) of the Exchange Act),
directly or indirectly:
(a) acquire, offer to acquire, or agree to acquire, by
purchase, gift or otherwise, any Voting Securities, except pursuant to
a stock split, stock dividend, rights offering, recapitalization,
reclassification or similar transaction;
(b) make or in any way participate in any "solicitation" of
"proxies" to vote (as such terms are defined in Rule 14a-1 under the
Exchange Act), solicit any consent or communicate with or seek to
advise or influence any person or entity with respect to the voting of
any Voting Securities or become a "participant" in any "election
contest" (as such terms are defined or used in Rule 14a-11 under the
Exchange Act) with respect to Issuer;
-3-
<PAGE> 4
(c) form, join or encourage the formation of, any "person"
within the meaning of Section 13(d)(3) of the Exchange Act with respect
to any Voting Securities; provided that this Section 3.01(c) shall not
prohibit any such arrangement solely among Subscriber and any of its
wholly-owned Subsidiaries;
(d) deposit any Voting Securities into a voting trust or
subject any such Voting Securities to any arrangement or agreement with
respect to the voting thereof; provided that this Section 3.01(d) shall
not prohibit any such arrangement solely among Subscriber and any of
its wholly-owned Subsidiaries;
(e) initiate, propose or otherwise solicit stockholders of the
Issuer for the approval of any stockholder proposal with respect to
Issuer as described in Rule 14a-8 under the Exchange Act, or induce or
attempt to induce any other person to initiate any such stockholder
proposal;
(f) seek election to or seek to place a representative on the
Board of Directors of Issuer or seek the removal of any member of the
Board of Directors of Issuer;
(g) call or seek to have called any meeting of the
stockholders of Issuer;
(h) otherwise act to seek to control, direct or influence the
management, policies or affairs of Issuer;
(i) except as otherwise provided in Section 4.02 or Article V,
sell or otherwise transfer in any manner any Voting Securities to any
"person" (within the meaning of Section 13(d)(3) of the Exchange Act)
who to the knowledge of Subscriber beneficially owns or who as a result
of such sale or transfer will beneficially own at least three percent
(3%) of the Total Voting Power or who, without the approval of the
Board of Directors of Issuer, has proposed a business combination or
similar transaction with, or a change of control of, Issuer or who has
proposed a tender offer for Voting Securities or who has discussed with
Subscriber the possibility of proposing a business combination or
similar transaction with, or a change in control of, Issuer or a tender
offer for Voting Securities; provided, however, that insofar as this
clause (i) has application to a sale or other transfer by Subscriber to
an institutional investor pursuant to Section 4.01, the reference to
the words "three percent (3%)" shall be deemed to be deleted from this
clause (i) and replaced with the words "five percent (5%)";
(j) solicit, seek to effect, negotiate with or provide any
information to any other party with respect to, or make any statement
or proposal, whether written or oral, to the Board of Directors of
Issuer or any director or officer of Issuer or otherwise
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make any public announcement or proposal whatsoever with respect to,
any form of business combination transaction involving Issuer,
including, without limitation, a merger, exchange offer or liquidation
of Issuer's assets, or any acquisition, disposition, restructuring,
recapitalization or similar transaction with respect to Issuer; or
(k) instigate or encourage any third party to do any of the
foregoing.
If Subscriber or any of its affiliates or associates owns or acquires
any Voting Securities in violation of this Agreement, such Voting Securities
shall immediately be disposed of to persons who are not affiliates or associates
thereof but only in compliance with the provisions of this Section 3.01;
provided, however, that Issuer may also pursue any other available remedy to
which it may be entitled as a result of such violation.
SECTION 3.02 Voting. (a) During the Term, whenever Subscriber (or any
of its affiliates or associates) shall have the right to vote their Voting
Securities, Subscriber (and any such affiliates or associates) shall (i) be
present, in person or represented by proxy, at all stockholder meetings of
Issuer so that all Voting Securities beneficially owned by it and its affiliates
and associates shall be counted for the purpose of determining the presence of a
quorum at such meetings, and (ii) subject to Section 3.02(b) below, vote or
cause to be voted, or consent with respect to, all Voting Securities
beneficially owned by it and its affiliates and associates in the manner
recommended by Issuer's Board of Directors, except that during any period or at
any time when there shall be in full force and effect a valid order or judgment
of a court of competent jurisdiction or a ruling, pronouncement or requirement
of the New York Stock Exchange, Inc. ("NYSE") to the effect that the foregoing
provisions of this Section 3.02 are invalid, void, enforceable or not in
accordance with NYSE policy, then Subscriber will, if so requested by the Board
of Directors of Issuer, vote or cause to be voted all of its Voting Securities
beneficially owned by it and its affiliates and associates in the same
proportion as the votes cast by or on behalf of the other holders of Issuer's
Voting Securities.
(b) Notwithstanding anything to the contrary contained in Section
3.02(a) above, Subscriber shall have the right to vote freely, without regard to
any request or recommendation of the Board of Directors of Issuer, with respect
to the matters specified in Section 7 of the Certificate of Designations
establishing the terms of the Series D Preferred Stock and Section 7 of the
Certificate of Designations establishing the terms of the Series E Preferred
Stock.
ARTICLE IV
TRANSFER RESTRICTIONS
SECTION 4.01 Right of First Offer. (a) If Subscriber desires to
transfer any Voting Securities, it shall in each case comply with the provisions
of Section 3.01 and give written notice ("Subscriber's Notice") to Issuer (i)
stating that it desires to make such transfer, and
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(ii) setting forth the number of shares of Voting Securities proposed to be
transferred (the "Offered Shares"), the cash price per share that Subscriber
proposes to be paid for such Offered Shares (the "Offer Price"), and the other
material terms and conditions of such transfer. Subscriber's Notice shall
constitute an irrevocable offer by Subscriber to sell to Issuer the Offered
Shares at the Offer Price in cash.
(b) Within 5 Business Days after receipt of Subscriber's Notice, Issuer
may elect to purchase all (but not less than all) of the Offered Shares at the
Offer Price in cash by delivery of a notice ("Issuer's Notice") to Subscriber
stating Issuer's irrevocable acceptance of the Offer.
(c) If Issuer fails to elect to purchase all of the Offered Shares
within the time period specified in Section 4.01(b), then Subscriber may,
subject to compliance with the provisions of Section 3.01, within a period of
120 days following the expiration of the time period specified in Section
4.01(b), transfer (or enter into an agreement to transfer) all or any Offered
Shares for cash; provided, that if the purchase price per share to be paid by
any purchaser of the Offered Shares is less than 90% of the Offer Price (the
"Reduced Transfer Price"), Subscriber shall promptly provide written notice (the
"Reduced Transfer Price Notice") to Issuer of such intended transfer (including
the material terms and conditions thereof) and Issuer shall have the right,
exercisable by delivery of a written election notice to Subscriber within five
Business Days of receipt of such notice, to purchase such Offered Shares at the
Reduced Transfer Price.
(d) If Issuer fails to elect to purchase the Offered Shares at the
Offer Price (or, if applicable, the Reduced Transfer Price) within the relevant
time period specified in Section 4.01(b) (or, if applicable, Section 4.01(c))
and Subscriber shall not have transferred or entered into an agreement to
transfer the Offered Shares prior to the expiration of the 120-day period
specified in Section 4.01(c), the right of the first offer under this Section
4.01 shall again apply in connection with any subsequent transfer of such
Offered Shares.
(e) Any purchase of Voting Securities by Issuer pursuant to this
Section 4.01 shall be on a mutually determined closing date which shall be not
less than 30 days nor more than 45 days after the last notice is given with
respect to such purchase. The closing shall be held at 10:00 A.M., local time,
at the principal office of Issuer, or at such other time or place as the parties
mutually agree.
(f) On the closing date, Subscriber shall deliver (i) certificates
representing the shares of Voting Securities being sold, free and clear of any
Lien, and (ii) such other documents, including evidence of ownership and
authority, as Issuer may reasonably request. The purchase price shall be paid by
wire transfer of immediately available funds no later than 2:00 P.M. on the
closing date.
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(g) This Section 4.01 shall not apply to Subscriber's sale of Voting
Securities in an underwritten public offering registered under the Securities
Act pursuant to Article V.
SECTION 4.02 Rights Pursuant to a Tender Offer. Subscriber shall have
the right to sell or exchange all its Voting Securities pursuant to a tender or
exchange offer for at least a majority of the Voting Securities (an "Offer").
However, prior to such sale or exchange, Subscriber shall give Issuer the
opportunity to purchase such Voting Securities in the following manner:
(i) Subscriber shall give notice (the "Tender Notice") to
Issuer in writing of its intention to sell or exchange Voting
Securities in response to an Offer no later than three calendar days
prior to the latest time (including any extensions) by which Voting
Securities must be tendered in order to be accepted pursuant to such
Offer, specifying the amount of Voting Securities proposed to be
tendered by Subscriber (the "Tendered Shares") and the purchase price
per share specified in the Offer at the time of the Tender Notice.
(ii) Issuer shall have the right to purchase all, but not
part, of the Tendered Shares exercisable by giving written notice (an
"Exercise Notice") to Subscriber at least two calendar days prior to
the latest time after delivery of the Tender Notice by which Voting
Securities must be tendered in order to be accepted pursuant to the
Offer (including any extensions thereof) and depositing in escrow (or
similar arrangement) a sum in cash sufficient to purchase all Tendered
Shares at the price then being offered in the Offer, without regard to
any provision thereof with respect to proration or conditions to the
offeror's obligation to purchase. The delivery by Issuer of an Exercise
Notice and deposit of funds as provided above in response to a Tender
Notice will, except as provided below, constitute an irrevocable
agreement by Issuer to purchase, and Subscriber to sell, the Tendered
Shares in accordance with the terms of this Section 4.02, whether or
not the Offer or any other tender or exchange offer (a "Competing
Tender Offer") for Voting Securities that was outstanding during the
Offer is consummated.
(iii) The purchase price to be paid by Issuer for any Voting
Securities purchased by it pursuant to this Section 4.02 shall be the
highest price offered or paid in the Offer or in any Competing Tender
Offer. For purposes hereof, the price offered or paid in a tender or
exchange offer for Voting Securities shall be deemed to be the price
offered or paid pursuant thereto, without regard to any provisions
thereof with respect to proration or conditions to the offeror's
obligation to purchase. If the purchase price per share specified in
the Offer includes any property other than cash (the "Offer Noncash
Property"), the purchase price per share at which Issuer shall be
entitled to purchase all, but not part, of the Tendered Shares shall be
(y) the amount of cash per share, if any, specified in such Offer (the
"Cash Portion"), plus (z) an amount
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of cash per share equal to the value of the Offer Noncash Property per
share (the "Cash Value of Offer Noncash Property"), as determined in
good faith by the mutual agreement of the parties hereto, or if the
parties cannot agree, by a nationally recognized investment banking
firm selected by mutual agreement of the parties. If Issuer exercises
its right of first refusal by giving an Exercise Notice, the closing of
the purchase of the Voting Securities with respect to such right (the
"Closing") shall take place at 3:00 p.m., local time (or, if earlier,
two hours before the latest time by which Voting Securities must be
tendered in order to be accepted pursuant to the Offer), on the last
day on which Voting Securities must be tendered in order to be accepted
pursuant to the Offer (including any extensions thereof) (the "Latest
Tender Date"), and Issuer shall pay the purchase price for the Voting
Securities specified above. Subscriber shall be entitled to rescind its
Tender Notice at any time prior to the Latest Tender Date by Notice in
writing to Issuer; provided, however, that if on or before the Latest
Tender Date, Issuer publicly announces that Issuer has approved,
proposed or entered into an agreement with respect to (either
individually or together with any other persons) a recapitalization,
reorganization or business combination with respect to Issuer or all or
substantially all of its assets, Subscriber shall be entitled to
rescind its Tender Notice by notice in writing to Issuer at any time
prior to the Closing on the Latest Tender Date. If Subscriber rescinds
its Tender Notice pursuant to the immediately preceding sentence,
Issuer's Exercise Notice with respect to such Offer shall be deemed to
be immediately rescinded and Subscriber's disposition of its Voting
Securities in response to the Offer with respect to which the Tender
Notice is rescinded or any other Offer shall again be subject to all of
the provisions of this Section 4.02.
(iv) If Issuer does not exercise its right of first refusal
set forth in this Section 4.02 within the time specified for such
exercise by giving an Exercise Notice, then Subscriber shall be free to
accept, for all its Voting Securities, the Offer with respect to which
the Tender Notice was given (including any increases and extensions
thereof).
SECTION 4.03 Assignment of Rights. Issuer may assign any of its rights
of first refusal under this Article IV to any Subsidiary or Affiliate of Issuer
without the consent of Subscriber, provided, however, that no such assignment
shall relieve Issuer of any of its obligations pursuant to this Article IV. In
the event that Issuer elects to exercise a right of first refusal under this
Article IV, Issuer may specify in its Exercise Notice (or thereafter prior to
purchase) another such Person as its designee to purchase the Voting Securities
to which such notice relates.
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ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01 Registration Upon Request. At any time commencing on the
date hereof and continuing thereafter, Subscriber shall have the right to make
written demand upon Issuer, on not more than two separate occasions (subject to
the provisions of this Section 5.01), to register under the Securities Act,
shares of Series E Preferred Stock or shares of Common Stock received by
Subscriber upon conversion or redemption of shares of Preferred Stock (such
shares of Series E Preferred Stock and Common Stock being referred to as the
"Subject Stock"), and Issuer shall use its best efforts to cause such shares to
be registered under the Securities Act as soon as reasonably practicable so as
to permit the sale thereof promptly; provided, however, that each such demand
shall cover at least $40 million liquidation preference of Series E Preferred
Stock (or any balance thereof exceeding $15 million) or 2 million shares of
Common Stock (subject to adjustment for stock splits, reverse stock splits,
stock dividends and similar events after the date hereof). In connection
therewith, Issuer shall prepare, and within 120 days of the receipt of the
request, file, on Form S-3 if permitted or otherwise on the appropriate form, a
registration statement under the Securities Act to effect such registration.
Subscriber agrees to provide all such information and materials and to take all
such action as may be reasonably required in order to permit Issuer to comply
with all applicable requirements of the Securities Act, the rules and
regulations thereunder and the Securities and Exchange Commission (the "SEC")
and to obtain any desired acceleration of the effective date of such
registration statement. If the offering to be registered is to be underwritten,
the managing underwriter shall be selected by Subscriber and shall be reasonably
satisfactory to Issuer and Subscriber shall enter into an underwriting agreement
containing customary terms and conditions. Notwithstanding the foregoing, Issuer
(i) shall not be obligated to prepare or file more than one registration
statement other than for purposes of a stock option or other employee benefit or
similar plan during any twelve-month period and (ii) shall be entitled to
postpone for a reasonable period of time, the filing of any registration
statement otherwise required to be prepared and filed by Issuer if (A) Issuer
is, at such time, conducting or about to conduct an underwritten public offering
of securities and is advised by its managing underwriter or underwriters in
writing (with a copy to Subscriber), that such offering would, in its or their
opinion, be materially adversely affected by the registration so requested, or
(B) Issuer determines in its reasonable judgment and in good faith that the
registration and distribution of the shares of Subject Stock would interfere
with any announced or imminent material financing, acquisition, disposition,
corporate reorganization or other material transaction of a similar type
involving Issuer. In the event of such postponement, Subscriber shall have the
right to withdraw the request for registration by giving written notice to
Issuer within 20 days after receipt of the notice of postponement (and, in the
event of such withdrawal, such request shall not be counted for purposes of
determining the number of registrations to which Subscriber is entitled pursuant
to this Section 5.01). Issuer shall not grant to any other holder of its
securities, whether currently outstanding or issued in the future (other than as
provided in the Share Purchase Agreement dated as of
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April 15, 1992 among Issuer and the other parties thereto and the Exchange
Agreement dated as of August 20, 1992 among the same parties, as presently in
effect, relating to Issuer's former Series A Cumulative Convertible Preferred
Stock and its New Series A Cumulative Convertible Preferred Stock (collectively,
the "Series A Agreements")), any incidental or piggyback registration rights
with respect to any registration statement filed pursuant to a demand
registration under this Section 5.01. Without the prior consent of Subscriber
(other than as provided in the Series A Agreements), Issuer will not permit any
other holder of its securities to participate in any offering made pursuant to a
demand registration under this Section 5.01.
In the event that Issuer does not redeem all of the then outstanding
shares of Series D Preferred Stock pursuant to Section 4(b) of the Certificate
of Designation of the Series D Preferred Stock (unless Subscriber shall have
elected to convert any such shares following receipt of notice of redemption
pursuant to Section 4(a) of such Certificate), (i) Subscriber shall be entitled
to an additional demand right under the first sentence of this Section 5.01,
subject to the minimum offering amounts requirement referred to above and (ii)
Issuer shall, from time to time, at Subscriber's reasonable request, provide an
opportunity for senior officers of Subscriber to meet with senior officers of
Issuer to discuss the business and affairs of Issuer.
SECTION 5.02 Incidental Registration Rights. If Issuer proposes to
register any of its Common Stock under the Securities Act (other than (i)
pursuant to Section 5.01 hereof, (ii) securities to be issued pursuant to a
stock option or other employee benefit or similar plan, and (iii) securities
proposed to be issued in exchange for other securities or assets (other than
cash) or in connection with a merger or consolidation with another corporation),
Issuer shall, as promptly as practicable, give written notice to Subscriber of
Issuer's intention to effect such registration. If, within 15 days after receipt
of such notice, Subscriber submits a written request to Issuer specifying not
less than one million shares of Common Stock constituting Subject Stock that are
then beneficially owned by Subscriber and that Subscriber proposes to sell or
otherwise dispose of in accordance with this Section 5.02, Issuer shall use its
best efforts to include the shares specified in Subscriber's request in such
registration. Subscriber may exercise its rights under this Section 5.02 on no
more than three separate occasions; provided that if the number of securities
that Subscriber had initially requested be included in a registration under this
Section 5.02 is reduced pursuant to clause (C) below and Subscriber withdraws
from such registration, then Subscriber's request shall not be counted as one of
such three requests. If the offering pursuant to such registration statement is
to be made by or through underwriters, the Subscriber and such underwriter shall
execute an underwriting agreement in customary form. If the managing underwriter
reasonably determines in good faith and advises Subscriber that the inclusion in
the registration statement of all the Common Stock proposed to be included by
all holders of Common Stock entitled to participate (other than on a demand
basis) would interfere with the successful marketing of the securities proposed
to be registered, then Issuer will include in such registration that number of
such shares of Common Stock which does not exceed the number which such managing
underwriter
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reasonably determines in good faith can be sold without interfering with the
successful marketing of the securities proposed to be registered based upon the
following order of priority: (A) first, the securities Issuer proposes to sell,
(B) second, the securities any participant exercising demand registration rights
proposes to sell and (C) third, the securities of each other Person who is
entitled to participate (other than on a demand basis) in such registration
(including Subscriber) on a pro rata basis based on the number of shares of
Common Stock owned by each such Person; provided that if the number of
securities that Subscriber had initially requested be included in a registration
under this Section 5.02 is reduced pursuant to clause (C), Subscriber may
withdraw all securities from such registration. No registration effected under
this Section 5.02 shall relieve Issuer of its obligation to effect any
registration upon request under Section 5.01. If Subscriber has been permitted
to participate in a proposed offering pursuant to this Section 5.02, Issuer
thereafter may determine either not to file a registration statement relating
thereto, or to withdraw such registration statement, or otherwise not to
consummate such offering, without any liability hereunder. Any underwriters
participating in a distribution of Subject Stock pursuant to Sections 5.01 and
5.02 hereof shall use all reasonable efforts to effect as wide a distribution as
is reasonably practicable, and in no event shall any sale (other than a sale to
underwriters making such a distribution) of shares of Subject Stock be made
knowingly to any person (including its affiliates or associates and any group in
which that person or its affiliates or associates shall be a member if
Subscriber or underwriters know of the existence of such a group or affiliate or
associate) that, after giving effect to such sale, would beneficially own at
least three percent (3%) of the Total Voting Power. Subscriber shall use all
reasonable efforts to secure the agreement of the underwriters, in connection
with any underwritten offering of its Subject Stock, to comply with the
foregoing.
SECTION 5.03 Registration Mechanics. In connection with any offering of
shares of Subject Stock registered pursuant to Section 5.01 and 5.02 herein,
Issuer shall (i) furnish to Subscriber such number of copies of any prospectus
(including preliminary and summary prospectuses) and conformed copies of the
registration statement (including amendments or supplements thereto and, in each
case, all exhibits) and such other documents as it may reasonably request, but
only while Issuer shall be required under the provisions hereof to cause the
registration statement to remain current; (ii)(A) use its best efforts to
register or qualify the Subject Stock covered by such registration statement
under such blue sky or other state securities laws for offer and sale as
Subscriber shall reasonably request and (B) keep such registration or
qualification in effect for so long as the registration statement remains in
effect; provided, however, that Issuer shall not be obligated to qualify to do
business as a foreign corporation under the laws of any jurisdiction in which it
shall not then be qualified or to file any general consent to service of process
in any jurisdiction in which such a consent has not been previously filed or
subject itself to taxation in any jurisdiction wherein it would not otherwise be
subject to tax but for the requirements of this Section 5.03; (iii) use its best
efforts to cause all shares of Subject Stock covered by such registration
statement to be registered with or approved by such other federal or state
government agencies or authorities as may be necessary in the opinion of counsel
to Issuer to enable Subscriber to consummate
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the disposition of such shares of Subject Stock; (iv) at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
notify Subscriber upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, in the light of the circumstances under which they were
made, and (subject to the good faith determination of Issuer's Board of
Directors as to whether to permit sales under such registration statement), at
the request of Subscriber promptly prepare and furnish to it a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, in the light of the circumstances under which
they were made; (v) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC; (vi) use its best efforts to list, if required
by the rules of the applicable securities exchange or, if securities of the same
class are then so listed, the Subject Stock covered by such registration
statement on the New York Stock Exchange or on any other securities exchange on
which Subject Stock is then listed; and (vii) before filing any registration
statement or any amendment or supplement thereto, and as far in advance as is
reasonably practicable, furnish to Subscriber and its counsel copies of such
documents. In connection with the closing of any offering of Subject Stock
registered pursuant to Section 5.01 or 5.02, Issuer shall (x) furnish to the
underwriter, if any, unlegended certificates representing ownership of the
Subject Stock being sold in such denominations as requested and (y) instruct any
transfer agent and registrar of the Subject Stock to release any stop transfer
orders with respect to such Subject Stock. Upon any registration becoming
effective pursuant to Section 5.01 or 5.02, Issuer shall use its best efforts to
keep such registration statement effective for a period of 60 days (or 90 days,
if Issuer is eligible to use a Form S-3, or successor form) or such shorter
period as shall be necessary to effect the distribution of the Subject Stock.
Subscriber agrees that upon receipt of any notice from Issuer of the
happening of any event of the kind described in subdivision (iv) of this Section
5.03, it will forthwith discontinue its disposition of Subject Stock pursuant to
the registration statement relating to such Subject Stock until its receipt of
the copies of the supplemented or amended prospectus contemplated by subdivision
(iv) of this Section 5.03 and, if so directed by Issuer, will deliver to Issuer
all copies then in its possession of the prospectus relating to such Subject
Stock current at the time of receipt of such notice. If Subscriber's disposition
of Subject Stock is discontinued pursuant to the foregoing sentence, unless
Issuer thereafter extends the effectiveness of the registration statement to
permit dispositions of Subject Stock by Subscriber for an aggregate of 60 days
(or 90 days, if Issuer is eligible to use a Form S-3, or successor form),
whether or not consecutive, the registration statement shall not be counted for
purposes of determining the number of registrations to which Subscriber is
entitled pursuant to Section 5.01.
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SECTION 5.04 Expenses. Subscriber shall pay all agent fees and
commissions and underwriting discounts and commissions related to shares of
Subject Stock being sold by Subscriber and the fees and disbursements of its
counsel and accountants and Issuer shall pay all fees and disbursements of its
counsel and accountants in connection with any registration pursuant to this
Article V. All other fees and expenses in connection with any registration
statement (including, without limitation, all registration and filing fees, all
printing costs, all fees and expenses of complying with securities or blue sky
laws) shall (i) in the case of a registration pursuant to Section 5.01, be borne
by Issuer and (ii) in the case of a registration pursuant to Section 5.02, be
shared pro rata based upon the respective market values of the securities to be
sold by Issuer, Subscriber and any other holders participating in such offering
provided, that Subscriber shall not pay any expenses relating to work that would
otherwise be incurred by Issuer including, but not limited to, the preparation
and filing of periodic reports with the SEC.
SECTION 5.05 Indemnification and Contribution. In the case of any
offering registered pursuant to this Article V, Issuer agrees to indemnify and
hold Subscriber, each underwriter, if any, of the Subject Stock under such
registration and each person who controls any of the foregoing within the
meaning of Section 15 of the Securities Act, and any officer, employee or
partner of the foregoing, harmless against any and all losses, claims, damages
or liabilities (including reasonable legal fees and other reasonable expenses
incurred in the investigation and defense thereof) to which they or any of them
may become subject under the Securities Act or otherwise (collectively
"Losses"), insofar as any such Losses shall arise out of or shall be based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the registration statement relating to the sale of such Subject
Stock (as amended if Issuer shall have filed with the SEC any amendment
thereof), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the prospectus relating to the sale of such Subject
Stock (as amended or supplemented if Issuer shall have filed with the SEC any
amendment thereof or supplement thereto), or the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading,
provided, however, that the indemnification contained in this Section 5.05 shall
not apply to such Losses which shall arise out of or shall be based upon any
such untrue statement or alleged untrue statement, or any such omission or
alleged omission, which shall have been made in reliance upon and in conformity
with information furnished in writing to Issuer by Subscriber or any such
underwriter, as the case may be, specifically for use in connection with the
preparation of the registration statement or prospectus contained in the
registration statement or any such amendment thereof or supplement therein.
In the case of each offering registered pursuant to this Article V,
Subscriber agrees and each underwriter, if any, participating therein shall
severally agree, substantially in the same manner and to the same extent as set
forth in the preceding paragraph, to indemnify and hold harmless Issuer and each
person, if any, who controls Issuer within the meaning of Section 15
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of the Securities Act, and the directors and officers of Issuer, with respect to
any statement in or omission from such registration statement or prospectus
contained in such registration statement (as amended or as supplemented, if
amended or supplemented as aforesaid) if such statement or omission shall have
been made in reliance upon and in conformity with information furnished in
writing to Issuer by Subscriber or such underwriter, as the case may be,
specifically for use in connection with the preparation of such registration
statement or prospectus contained in such registration statement or any such
amendment thereof or supplement thereto.
Notwithstanding the provisions of this Section 5.05, no underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and the Subscriber
registering shares pursuant to Section 5.01 or Section 5.02 shall not be
required to contribute any amount in excess of the amount by which the total
price at which the securities of the Subscriber were offered to the public (less
underwriters' discounts and commissions) exceeds the amount of any damages which
the Subscriber has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
Each party indemnified under this Section 5.05 shall, promptly after
receipt of notice of the commencement of any claim against such indemnified
party in respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the commencement thereof. The failure of any
indemnified party to so notify an indemnifying party shall not relieve the
indemnifying party from any liability in respect of such action which it may
have to such indemnified party on account of the indemnity contained in this
Section 5.05, unless (and only to the extent) the indemnifying party was
prejudiced by such failure, and in no event shall such failure relieve the
indemnifying party from any other liability which it may have to such
indemnified party. In case any action in respect of which indemnification may be
sought hereunder shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it may desire,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof through counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party under this Section 5.05 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, other than reasonable costs of investigation (unless
such indemnified party reasonably objects to such assumption on the grounds that
there may be defenses available to it which are different from or in addition to
those available to such indemnifying party in which event such indemnified
party, and any other indemnified party to which any different or additional
defenses apply, shall be reimbursed by the indemnifying party for the reasonable
expenses incurred in connection with retaining one separate legal counsel for
all such indemnified
-14-
<PAGE> 15
parties). No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any claim or pending or threatened proceeding in respect of which
the indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability arising
out of such claim or proceeding.
If the indemnification provided for in this Section 5.05 is unavailable
to an indemnified party or is insufficient to hold such indemnified party
harmless from any Losses in respect of which this Section 5.05 would otherwise
apply by its terms (other than by reason of exceptions provided herein), then
each applicable indemnifying party, in lieu of indemnifying such an indemnified
party, shall have a joint and several obligation to contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative benefits received by and
fault of the indemnifying party, on the one hand, and such indemnified party, on
the other hand, in connection with the offering to which such contribution
relates as well as any other relevant equitable considerations. The relative
benefit shall be determined by reference to, among other things, the amount of
proceeds received by each party from the offering to which such contribution
relates. The relative fault shall be determined by reference to, among other
things, each party's relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, and the opportunity to
correct and prevent any statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include any legal or other
fees or expenses incurred by such party is connection with any investigation or
proceeding, to the extent such party would have been indemnified for such
expenses if the indemnification provided for in this Section 5.05 was available
to such party.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.05 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1993 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
SECTION 5.06 Limitations on Registration Rights. Notwithstanding
anything to the contrary in this Article V, all rights of Subscriber under this
Article V shall be subject to the provisions of the Series A Agreements. To the
extent that any of the provisions of this Article V conflict with any provisions
of the Series A Agreements, the provisions of the Series A Agreements shall
control and there shall be no breach of or default under Article V of this
Agreement to the extent the performance of any term of Article V of this
Agreement would cause a breach of or default under either of the Series A
Agreements.
SECTION 5.07 Holdback Agreements. If and to the extent requested by the
managing underwriter or underwriters, in the case of any underwritten public
offering, Subscriber agrees
-15-
<PAGE> 16
not to effect, except as part of such registration, any sale of shares of Common
Stock or Preferred Stock during the 14 days prior to, and during the 90-day
period beginning on, the effective date of such registration statement.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 Enforcement. Subscriber, on the one hand, and Issuer, on
the other, acknowledge and agree that irreparable damage would occur if any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically its provisions in any court having jurisdiction,
this being in addition to any other remedy to which they may be entitled at law
or in equity.
SECTION 6.02 Entire Agreement; Waivers. This Agreement, the other
Closing Agreements, the Confidentiality Agreement and the Purchase Agreement
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and thereof and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties with respect to such subject matter. No waiver of any
provision of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), shall constitute a continuing
waiver unless otherwise expressly provided nor shall be effective unless in
writing and executed (i) in the case of a waiver by Issuer, by Issuer and (ii)
in the case of a waiver by Subscriber, by Subscriber.
SECTION 6.03 Amendment or Modification. The parties hereto may not
amend or modify this Agreement except in such manner as may be agreed upon by a
written instrument executed by Issuer and Subscriber.
SECTION 6.04 Survival. All representations, warranties, covenants and
agreements made by or on behalf of any party hereto in this Agreement shall
survive the execution and delivery of this Agreement and the Closing.
SECTION 6.05 Successors and Assigns. All the terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective transferees, successors and assigns (each of
which such transferees, successors and assigns shall be deemed to be a party
hereto for all purposes hereof); provided, however, that (i) neither Issuer nor
Subscriber may assign or transfer any of its rights or obligations hereunder
without the prior written consent of the other (except as set forth in Section
4.03) and (iii) no transfer or assignment by any party shall relieve such party
of any of its obligations hereunder.
-16-
<PAGE> 17
SECTION 6.06 Severability. If any provision of this Agreement is held
by a court of competent jurisdiction to be unenforceable, the remaining
provisions shall remain in full force and effect. It is declared to be the
intention of the parties that they would have executed the remaining provisions
without including any that may be declared unenforceable.
SECTION 6.07 Headings. Descriptive headings are for convenience only
and will not control or affect the meaning or construction of any provision of
this Agreement.
SECTION 6.08 Counterparts. For the convenience of the parties, any
number of counterparts of this Agreement may be executed by the parties, and
each such executed counterpart will be an original instrument.
SECTION 6.09 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
<TABLE>
<S> <C>
If to Seller, to it at: Melville Corporation
One Theall Road
Rye, New York 10580
Telecopier: 914-925-4052
Attention: Chief Executive Officer, Chief Financial
Officer and General Counsel
With a copy to: Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopier: 212-450-5744
Attention: Dennis S. Hersch
If to Issuer to it at: The TJX Companies, Inc.
770 Cochituate Road
Framingham, MA 01701
Telecopier: 508-390-2457
Attn: President and General Counsel
With a copy to: Ropes & Gray
One International Place
Boston, MA 02110
Telecopier: 617-951-7050
Attention: Arthur G. Siler, Esq.
</TABLE>
-17-
<PAGE> 18
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three Business
Days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
SECTION 6.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic substantive law of the State of
Delaware, without giving effect to any choice or conflict of law provision or
rule that would cause the application of the law of any other jurisdiction.
SECTION 6.11 Termination. This Agreement may be terminated by Issuer
and Subscriber by mutual written consent at any time prior to the Closing, and
this Agreement shall automatically terminate immediately upon the termination of
the Purchase Agreement in accordance with its terms.
-18-
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this Standstill and
Registration Rights Agreement to be executed as of the date first referred to
above.
THE TJX COMPANIES, INC.
By: /s/ Donald G. Campbell
------------------------------------
Name:
Title:
MELVILLE CORPORATION
By: /s/ Gary L. Crittenden
------------------------------------
Name:
Title:
-19-
<PAGE> 1
EXHIBIT 11
----------
<TABLE>
THE TJX COMPANIES, INC.
DETAILED COMPUTATIONS OF NET INCOME PER COMMON SHARE
PRIMARY AND FULLY DILUTED
($000's)
<CAPTION>
Fiscal Year Ended
-------------------------------------------------------------------
January 27, January 28, January 29, January 30, January 25,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
The computation of net income
available and adjusted shares
outstanding follows:
Net income $ 26,261 $ 82,619 $ 124,379 $ 102,846 $ 20,114
Add (where dilutive):
Tax effected interest and
amortization of debt expense
on convertible debt - - - 3,069 -
Less:
Preferred stock dividends (9,314) (7,156) (7,156) (3,939) -
----------- ----------- ----------- ----------- -----------
Net income used for primary and
fully diluted earnings per share
computation $ 16,947 $ 75,463 $ 117,223 $ 101,976 $ 20,114
=========== =========== =========== =========== ===========
Weighted average number of common
shares outstanding 72,480,593 73,150,681 73,458,973 70,234,156 69,801,734
Add:
Actual and assumed exercise of
options that are common stock
equivalents, net of treasury
shares deemed to have been
repurchased 253,521 316,322 733,385 659,896 249,101
Assumed exercise of convertible
preferred stock for the
period outstanding 399,235 - - - -
Assumed exercise of convertible
subordinated debentures for the
period outstanding - - - 2,979,224 -
----------- ----------- ----------- ----------- -----------
Weighted average number of common and
common equivalent shares outstanding,
used for primary and fully diluted
earnings per share calculation 73,133,349 73,467,003 74,192,358 73,873,276 70,050,835
=========== =========== =========== =========== ===========
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 13
CONSOLIDATED STATEMENTS OF INCOME The TJX Companies, Inc.
<CAPTION>
January 27, January 28, January 29,
Fiscal Year Ended 1996 1995 1994
- -----------------------------------------------------------------------------------
Dollars in Thousands Except Per Share Amounts
<S> <C> <C> <C>
Net sales $4,447,549 $3,489,146 $3,253,471
---------- ---------- ----------
Cost of sales, including buying and
occupancy costs 3,429,401 2,643,323 2,430,990
Selling, general and administrative
expenses 830,019 673,187 597,397
Store closing costs 35,000 - -
Interest expense, net 44,226 24,484 17,899
---------- ---------- ----------
Income from continuing operations before
income taxes, extraordinary item and
cumulative effect of accounting changes 108,903 148,152 207,185
Provision for income taxes 45,304 61,573 82,568
---------- ---------- ----------
Income from continuing operations before
extraordinary item and cumulative
effect of accounting changes 63,599 86,579 124,617
Income (loss) from discontinued
operations, net of income taxes (2,300) (3,960) 2,429
(Loss) on disposal of discontinued
operations, net of income taxes (31,700) - -
Extraordinary (charge), net of
income taxes (3,338) - -
Cumulative effect of accounting
changes, net of income taxes - - (2,667)
---------- ---------- ----------
Net income 26,261 82,619 124,379
Preferred stock dividends 9,407 7,156 7,156
---------- ---------- ----------
Net income available to common
shareholders $ 16,854 $ 75,463 $ 117,223
========== ========== ==========
Number of common shares for primary
and fully diluted earnings per
share computations 73,133,349 73,467,003 74,192,358
Primary and fully diluted earnings
per common share:
Continuing operations $ .74 $ 1.08 $ 1.58
Discontinued operations (.46) (.05) .04
Extraordinary (charge) (.05) - -
Cumulative effect of accounting
changes - - (.04)
---------- ---------- ----------
Net income $ .23 $ 1.03 $ 1.58
========== ========== ==========
Cash dividends per common share $ .49 $ .56 $ .50
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE> 2
<TABLE>
CONSOLIDATED BALANCE SHEETS The TJX Companies, Inc.
<CAPTION>
January 27, January 28,
1996 1995
- --------------------------------------------------------------------------------
ASSETS In Thousands
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 209,226 $ 41,569
Accounts receivable 98,409 41,749
Merchandise inventories 1,343,852 890,593
Prepaid expenses 35,235 22,881
Net current assets of discontinued operations - 10,731
--------- ---------
Total current assets 1,686,722 1,007,523
--------- ---------
Property at cost:
Land and buildings 141,009 114,736
Leasehold costs and improvements 429,715 251,387
Furniture, fixtures and equipment 580,959 380,806
--------- ---------
1,151,683 746,929
Less accumulated depreciation and amortization 366,191 297,019
--------- ---------
785,492 449,910
Other assets 37,325 14,244
Goodwill and tradename, net of amortization 236,043 89,877
Net noncurrent assets of discontinued operations - 37,990
--------- ---------
Total Assets $2,745,582 $1,599,544
========== ==========
LIABILITIES
Current liabilities:
Short-term debt $ - $ 20,000
Current installments of long-term debt 78,670 31,306
Accounts payable 473,523 415,861
Accrued expenses and other current liabilities 725,378 252,424
--------- ---------
Total current liabilities 1,277,571 719,591
--------- ---------
Long-term debt, exclusive of current installments 690,713 239,478
Deferred income taxes 12,664 33,523
SHAREHOLDERS' EQUITY
Preferred stock at face value, authorized
5,000,000 shares, par value $1, issued and
outstanding cumulative convertible stock of:
250,000 shares of 8% Series A 25,000 25,000
1,650,000 shares of 6.25% Series C 82,500 82,500
250,000 shares of 1.81% Series D 25,000 -
1,500,000 shares of 7% Series E 150,000 -
Common stock, authorized 150,000,000 shares,
par value $1, issued and outstanding
72,485,776 and 72,401,254 shares 72,486 72,401
Additional paid-in capital 269,159 267,937
Retained earnings 140,489 159,114
--------- ---------
Total shareholders' equity 764,634 606,952
--------- ---------
Total Liabilities and Shareholders' Equity $2,745,582 $1,599,544
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 3
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY The TJX Companies, Inc.
<CAPTION>
Preferred Common Additional
Stock, Stock,Par Paid-in Retained
Face Value Value $1 Capital Earnings Total
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C> <C> <C> <C>
Balance,January 30, 1993 $107,500 $ 73,222 $279,800 $ 44,662 $505,184
Net income - - - 124,379 124,379
Cash dividends:
Preferred stock - - - (7,156) (7,156)
Common stock - - - (36,660) (36,660)
Sale and issuance of
common stock, net
of shares repurchased,
under stock
incentive plans - 209 4,563 - 4,772
Other - - 381 - 381
-------- -------- -------- -------- --------
Balance, January 29, 1994 107,500 73,431 284,744 125,225 590,900
Net income - - - 82,619 82,619
Cash dividends:
Preferred stock - - - (7,156) (7,156)
Common stock - - - (41,574) (41,574)
Sale and issuance of
common stock, net
of shares repurchased,
under stock
incentive plans - 29 807 - 836
Common stock repurchased - (1,059) (18,202) - (19,261)
Other - - 588 - 588
-------- -------- -------- -------- --------
Balance, January 28, 1995 107,500 72,401 267,937 159,114 606,952
Net income - - - 26,261 26,261
Cash dividends:
Preferred stock - - - (9,407) (9,407)
Common stock - - - (35,479) (35,479)
Issuance of cumulative
convertible preferred
stock
Series D 25,000 - - - 25,000
Series E 150,000 - - - 150,000
Sale and issuance of
common stock, net
of shares repurchased,
under stock
incentive plans - 85 754 - 839
Other - - 468 - 468
-------- -------- -------- -------- --------
Balance, January 27, 1996 $282,500 $ 72,486 $269,159 $140,489 $764,634
======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS The TJX Companies, Inc.
<CAPTION>
January 27, January 28, January 29,
Fiscal Year Ended 1996 1995 1994
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 26,261 $ 82,619 $124,379
Adjustments to reconcile net income
to net cash provided by operating
activities:
Loss (income) from discontinued
operations 2,300 3,960 (2,429)
Loss on disposal of discontinued
operations 31,700 - -
Extraordinary charge 3,338 - -
Cumulative effect of accounting
changes - - 2,667
Depreciation and amortization 85,945 66,281 57,153
Loss on property disposals 3,561 5,157 883
Other, net (382) 1,151 259
Changes in assets and liabilities,
net of effect from acquisition of
Marshalls:
(Increase) in accounts receivable (33,281) (13,110) (5,819)
(Increase) decrease in
merchandise inventories 229,826 (170,351) (93,647)
(Increase) in prepaid expenses (2,458) (2,919) (5,658)
Increase (decrease) in
accounts payable (152,085) 107,196 12,482
Increase (decrease) in accrued
expenses and other current
liabilities 53,035 23,870 (12,267)
(Decrease) in deferred income taxes (14,143) (440) (3,000)
-------- -------- --------
Net cash provided by operating activities 233,617 103,414 75,003
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (111,827) (120,022) (118,482)
Acquisition of Marshalls, net of cash
acquired (378,733) - -
Proceeds from sale of discontinued
operations 3,000 - -
-------- -------- --------
Net cash (used in) investing activities (487,560) (120,022) (118,482)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments on) short-
term debt (20,000) 20,000 -
Proceeds from borrowings of
long-term debt 574,861 65,500 37,000
Principal payments on
long-term debt (31,271) (6,057) (4,201)
Prepayment of long-term
debt (50,534) (5,449) -
Payment of debt issue expenses (14,776) (239) (496)
Proceeds from sale and issuance
of common stock, net 1,040 741 3,828
Common stock repurchased - (19,261) -
Cash dividends paid (44,886) (48,730) (43,816)
-------- -------- --------
Net cash provided by (used in)
financing activities 414,434 6,505 (7,685)
-------- -------- --------
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C> <C>
Net cash provided by (used in)
continuing operations 160,491 (10,103) (51,164)
Net cash provided by (used in)
discontinued operations 7,166 (6,430) 2,575
-------- -------- --------
Net increase (decrease) in cash and
cash equivalents 167,657 (16,533) (48,589)
Cash and cash equivalents at
beginning of year 41,569 58,102 106,691
-------- -------- --------
Cash and cash equivalents at end of year $ 209,226 $ 41,569 $ 58,102
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 6
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT The TJX Companies, Inc.
<TABLE>
The following selected information by major business segment reflects the
results of Marshalls in the off-price family apparel segment for the period
following its acquisition on November 17, 1995. Prior year data has been
restated to reflect Hit or Miss as a discontinued operation.
<CAPTION>
January 27, January 28, January 29,
Fiscal Year Ended 1996 1995 1994
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C> <C>
Net sales:
Off-price family apparel stores $3,896,710 $3,055,573 $2,832,070
Off-price catalog operation 472,434 433,573 421,401
Off-price home fashion stores 78,405 - -
---------- ---------- ----------
$4,447,549 $3,489,146 $3,253,471
========== ========== ==========
Operating income (loss):
Off-price family apparel stores (1) $ 187,974 $ 208,648 $ 236,988
Off-price catalog operation 26,608 6,056 24,651
Off-price home fashion stores (2) (13,375) - -
---------- ---------- ----------
201,207 214,704 261,639
General corporate expense (3) 45,464 39,454 33,938
Goodwill amortization 2,614 2,614 2,617
Interest expense, net 44,226 24,484 17,899
---------- ---------- ----------
Income from continuing operations
before income taxes, extraordinary
item and cumulative effect of
accounting changes $ 108,903 $ 148,152 $ 207,185
========== ========== ==========
Identifiable assets:
Off-price family apparel stores $2,116,127 $1,154,258 $ 963,750
Off-price catalog operation 202,046 179,752 162,424
Off-price home fashion stores 46,861 - -
Corporate, primarily cash and goodwill 380,548 216,813 204,790
---------- ---------- ----------
$2,745,582 $1,550,823 $1,330,964
========== ========== ==========
Capital expenditures:
Off-price family apparel stores $ 87,037 $ 91,801 $ 91,723
Off-price catalog operation 6,183 11,311 16,676
Off-price home fashion stores 7,932 - -
Corporate 10,675 16,910 10,083
---------- ---------- ----------
$ 111,827 $ 120,022 $ 118,482
========== ========== ==========
Depreciation and amortization:
Off-price family apparel stores $ 69,596 $ 53,601 $ 47,369
Off-price catalog operation 7,130 6,280 5,055
Off-price home fashion stores 1,777 - -
Corporate, including goodwill 7,442 6,400 4,729
---------- ---------- ----------
$ 85,945 $ 66,281 $ 57,153
========== ========== ==========
<FN>
- -----------
(1) The period ended January 27, 1996 includes a charge of $35 million relating
to the closing of approximately 30 T.J. Maxx stores.
(2) The period ended January 27, 1996 includes a charge of $3.8 million for
certain restructuring costs of the HomeGoods operation. Prior years results
for HomeGoods are classified in general corporate expense.
</TABLE>
<PAGE> 7
(3) The fiscal year ended January 27, 1996 includes the net operating results
of T.K. Maxx as well as the Cosmopolitan catalog, which ceased catalog
operations in the fourth quarter of fiscal 1996. The fiscal years ended
January 28, 1995 and January 29, 1994 include the net operating results of
HomeGoods and T.K. Maxx.
5
<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The TJX Companies, Inc.
SUMMARY OF ACCOUNTING POLICIES
FISCAL YEAR: The Company's fiscal year ends on the last Saturday in
January.
BASIS OF PRESENTATION: The consolidated financial statements of The TJX
Companies, Inc. include the financial statements of all the Company's
wholly-owned subsidiaries, including its foreign subsidiaries. The financial
statements for the applicable periods present the Company's former Hit or Miss
division as discontinued operations. The notes pertain to continuing operations
except where otherwise noted. Estimates are used, where necessary, in the
preparation of the consolidated financial statements.
CASH EQUIVALENTS: The Company generally considers highly liquid investments with
an initial maturity of three months or less to be cash equivalents. The
Company's investments are primarily high grade commercial paper or time deposits
with major banks. Fair value of cash equivalents approximates carrying value.
MERCHANDISE INVENTORIES: Inventories are stated at the lower of cost or
market. The Company primarily uses the retail method for valuing
inventories on the first-in first-out basis.
DEPRECIATION AND AMORTIZATION: For financial reporting purposes, the Company
provides for depreciation and amortization of property principally by the use of
the straight-line method over the estimated useful lives of the assets.
Leasehold costs and improvements are generally amortized over the lease term or
their estimated useful life, whichever is shorter. Maintenance and repairs are
charged to expense as incurred. Upon retirement or sale, the cost of disposed
assets and the related depreciation are eliminated and any gain or loss is
included in net income. Debt discount and related issue expenses are amortized
over the lives of the related debt issues. Pre-opening costs are charged to
operations within the fiscal year that a new store or facility opens.
GOODWILL AND TRADENAME: Goodwill is primarily the excess of the purchase price
incurred over the carrying value of the minority interest in the Company's
former 83%-owned subsidiary. The minority interest was acquired pursuant to the
Company's fiscal 1990 restructuring. In addition, goodwill includes the excess
of cost over the estimated fair market value of the net assets of Winners
Apparel Ltd., acquired by the Company effective May 31, 1990. Goodwill totalled
$87.3 million, net of amortization, as of January 27, 1996 and is being
amortized over 40 years. Annual amortization of goodwill was $2.6 million in
fiscal years 1996, 1995 and 1994. Cumulative amortization as of January 27, 1996
and January 28, 1995 was $17.3 million and $14.7 million, respectively.
Tradename is the value assigned to the name "Marshalls" as a result of the
Company's acquisition of the Marshalls chain on November 17, 1995. Under the
purchase accounting method, $149.4 million of the purchase price was allocated
to tradename which is deemed to have an indefinite life and
6
<PAGE> 9
accordingly is being amortized over 40 years. Amortization expense for the
fiscal year ended January 27, 1996 totalled $0.7 million.
The Company periodically reviews the value of these intangible assets in
relation to the current and expected operating results of the related business
segments in order to assess whether there has been a permanent impairment of
their carrying values.
ADVERTISING COSTS: The Company expenses advertising costs as incurred except for
the costs associated with catalogs for the Chadwick's division. The cost of a
catalog is expensed pro rata over the period that the catalog generates revenue.
NET INCOME PER COMMON SHARE: Primary and fully diluted net income per common
share is based upon the weighted average number of common and common equivalent
shares and other dilutive securities outstanding in each year after adjusting
net income for preferred stock dividends of $9.3 million in fiscal 1996 and $7.2
million in fiscal years 1995 and 1994.
FOREIGN CURRENCY TRANSLATION: The Company's foreign assets and liabilities are
translated at the year-end exchange rate and the income statement items are
translated at the average exchange rates prevailing during the year. Cumulative
foreign currency translation losses amounted to $1.7 million as of January 27,
1996 and $1.6 million as of January 28, 1995 and are recorded as a component of
additional paid-in capital.
NEW ACCOUNTING STANDARDS: During 1995, the Financial Accounting Standards Board
(FASB) issued FASB Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of" and FASB
Statement No. 123, "Accounting for Stock-Based Compensation." The Company will
implement the new standards in its fiscal year ending January 25, 1997 and it
expects that the impact of implementation will be immaterial.
OTHER: Certain amounts in prior years' financial statements have been
reclassified for comparative purposes.
A. DISPOSITIONS AND ACQUISITIONS
SALE OF HIT OR MISS DIVISION: Effective September 30, 1995, the Company sold its
Hit or Miss division to members of Hit or Miss management and outside investors.
The Company received $3 million in cash and a 7-year, $10 million note with
interest at 10%. Prior to October 2, 1997, interest may be paid-in-kind at the
election of Hit or Miss.
The Hit or Miss division had net sales of $165.4 million and recorded an
operating loss of $2.3 million, after taxes, for the fiscal year end January 27,
1996, which represents results through July 29, 1995, the measurement date of
the transaction. Hit or Miss' operating results for all prior periods have been
reclassified to discontinued operations. The sale of the division resulted in a
loss on disposal of $31.7 million, (net of tax benefits of $19.8 million) and
includes the operating results from July 30, 1995 through the closing date, as
well as the cost to the Company of closing 69 Hit or Miss stores. Interest
expense was allocated to discontinued operations based on their respective
proportion of assets to total assets.
7
<PAGE> 10
ACQUISITION OF MARSHALLS: On November 17, 1995, the Company acquired the
Marshalls family apparel chain from Melville Corporation. The Company paid $375
million in cash and $175 million in junior convertible preferred stock on the
closing date. An additional amount, up to $50 million, may be payable to
Melville if the final net assets, as of the closing date, exceed amounts
specified in the agreement. The estimated purchase price of Marshalls, reflected
in these financials, including acquisition costs, totals $606 million. The
Company has assumed the maximum additional amount is payable to Melville, but
the final purchase price is still subject to change.
<TABLE>
The acquisition has been accounted for using the purchase method of accounting
and accordingly, the purchase price has been allocated to the assets purchased
and the liabilities assumed based upon their fair values at the date of
acquisition. The fair value of the net assets acquired exceeded the estimated
purchase price, resulting in negative goodwill of $10.8 million. The negative
goodwill was allocated to the long-term assets acquired. The net estimated
purchase price was allocated as follows:
<CAPTION>
In Thousands
<S> <C>
Current assets $ 718,627
Property, plant and equipment 307,795
Tradename 149,431
Current liabilities (569,853)
---------
$ 606,000
=========
</TABLE>
<TABLE>
The operating results of Marshalls have been included in the consolidated
results of the Company from the date of acquisition on November 17, 1995.
Unaudited pro forma consolidated financial results, for the last two fiscal
years, are presented below as if the acquisition had taken place at the
beginning of the periods presented:
<CAPTION>
Fiscal Year Ended January 1996 1995
- --------------------------------------------------------------------------------
Dollars In Thousands Except Per Share Amounts
<S> <C> <C>
Net sales $6,557,943 $6,269,077
Income from continuing operations $30,220 $154,782
Average shares outstanding for per
common share calculations 74,758,406 89,579,093
Income from continuing operations
per common share $.17 $1.73
</TABLE>
The foregoing unaudited pro forma consolidated financial results give effect to,
among other pro forma adjustments, the following:
(i) Interest expense, and amortization of the related debt expenses, on
debt incurred to finance the acquisition .
(ii) Depreciation and amortization adjustments related to fair market
value of assets acquired.
(iii) Amortization of tradename acquired over 40 years.
(iv) Adjustments to income tax expense related to the above.
8
<PAGE> 11
(v) Impact of preferred stock issued on earnings per common share
calculations.
The foregoing unaudited pro forma consolidated financial information is provided
for illustrative purposes only and does not purport to be indicative of results
that actually would have been achieved had the acquisition taken place on the
first day of the period presented or of future results.
B. LONG-TERM DEBT AND CREDIT LINES
<TABLE>
At January 27, 1996 and January 28, 1995, long-term debt, exclusive of current
installments, consisted of the following (information as to interest rates and
maturity dates as of January 27, 1996 only):
<CAPTION>
January 27, January 28,
1996 1995
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C>
Real estate mortgages, interest at 8.25% to
10.4% maturing February 1, 1997
to December 30, 2004 $ 27,241 $ 77,550
-------- --------
Equipment notes, interest at 11% to 11.25%
maturing December 12, 2000 to
December 30, 2001 3,272 4,598
-------- --------
General corporate debt:
9 1/2% sinking fund debentures, maturing
May 1, 2016 with $4,400,000 annual sinking
fund requirement beginning May 1, 1997 99,830 99,830
Medium term notes, interest at 5.87% to
7.97%, maturing September 19, 1997 to
September 20, 2004 35,500 57,500
6 5/8% unsecured notes, maturing June 15, 2000 100,000 -
7% unsecured notes, maturing June 15, 2005
(effective interest rate of 7.02% after
reduction of the unamortized debt
discount of $130,000) 99,870 -
Term loan, variable interest rate, 6.87% at
January 27, 1996, maturing November 17, 2000 325,000 -
-------- --------
Total general corporate debt 660,200 157,330
-------- --------
Long-term debt, exclusive of current installments $690,713 $239,478
======== ========
</TABLE>
9
<PAGE> 12
<TABLE>
The aggregate maturities of long-term debt, exclusive of current installments,
outstanding at January 27, 1996 are as follows:
<CAPTION>
Real Estate General
Mortgages and Corporate
Fiscal Year Equipment Notes Debt Total
- --------------------------------------------------------------------
In Thousands
<S> <C> <C> <C>
1998 $ 6,032 $ 94,730 $100,762
1999 23,354 79,400 102,754
2000 697 79,400 80,097
2001 430 200,000 200,430
Later years - 206,670 206,670
------- -------- --------
Aggregate maturities
of long-term debt $30,513 $660,200 $690,713
======= ======== ========
</TABLE>
Real estate mortgages are collateralized by land and buildings. While the parent
company is not directly obligated with respect to the real estate mortgages, it
or a wholly-owned subsidiary has either guaranteed the debt or has guaranteed a
lease, if applicable, which has been assigned as collateral for such debt.
In June 1995, the Company filed a shelf registration statement with the
Securities and Exchange Commission which provides for the issuance of up to $250
million of long-term debt. This shelf registration statement replaced the
Company's former $75 million shelf registration statement under which the
Company issued Medium Term Notes (MTN) as discussed below. In June 1995, the
Company issued $200 million of long-term notes under the registration statement;
$100 million of 6 5/8% Notes due June 15, 2000 and $100 million of 7% Notes due
June 15, 2005. The proceeds were used in part to repay short-term borrowings and
for general corporate purposes including the repayment of scheduled maturities
of other outstanding long-term debt and for new store and other capital
expenditures.
On November 17, 1995, the Company entered into an unsecured $875 million bank
credit agreement under which the Company borrowed $375 million on a term loan
basis to fund the cash portion of the Marshalls purchase price and may borrow up
to an additional $500 million on a revolving loan basis to fund the working
capital needs of the Company. Interest is payable on borrowings at rates equal
to or less than prime. The term loan matures on November 17, 2000, and the
revolving loan facility expires on November 17, 1998. The Company cancelled its
former committed U.S. short-term credit lines, effective November 17, 1995. The
new agreement has certain financial covenants which include a minimum net worth
requirement, and certain leverage and fixed charge covenants.
On December 30, 1994, the Company secured a $45 million real estate mortgage on
its Chadwick's fulfillment center. The proceeds were used to prepay the $5.4
million outstanding mortgage on the Chadwick's facility, with the balance of the
proceeds used for general corporate purposes. Costs for the early retirement of
the $5.4 million mortgage were immaterial. In connection with the $875 million
bank credit agreement, the Company prepaid its $45 million real estate mortgage
on the Chadwick's
10
<PAGE> 13
fulfillment center and incurred an extraordinary after-tax
charge of $3.3 million, on the early retirement of this debt.
<TABLE>
Under the Company's former shelf registration statement which provided for the
issuance of up to $75 million of Medium Term Notes (MTN), the Company issued an
aggregate of $57.5 million Series A Notes during fiscal 1995 and fiscal 1994
under five separate pricing supplements. The borrowings under this program are
to support the Company's international and domestic new business development and
capital expenditures. The interest rate and maturity information of the Series A
notes issued are as follows:
<CAPTION>
Interest Maturity
Series A Notes: Issue Date Principal Rate Date
- ---------------------------------------------------------------------
In Thousands
<S> <C> <C> <C> <C>
Supplement No. 1 10/21/93 $15,000 5.87% 10/21/03
Supplement No. 2 10/21/93 12,000 4.53% 10/21/96
Supplement No. 3 10/21/93 10,000 4.55% 10/21/96
Supplement No. 4 09/19/94 15,500 6.97% 09/19/97
Supplement No. 5 09/19/94 5,000 7.97% 09/20/04
</TABLE>
The aggregate borrowings of $57.5 million have been used entirely to fund the
Company's investment in its Canadian and United Kingdom operations. To hedge the
Company's investment in its foreign subsidiaries, it entered into foreign
currency swap agreements in both Canadian dollars and British pounds sterling,
in amounts equivalent to the MTN borrowings. The interest rate payable on the
foreign currency is slightly higher than the interest received on the currency
exchanged, resulting in deferred interest costs, which are being amortized to
interest expense over the related terms of the swap agreements. See Note C for
further information on these transactions. The unamortized balance of deferred
interest costs as of January 27, 1996 and January 28, 1995 amounted to $3.4
million and $4.4 million, respectively.
The Company has the ability to borrow up to $500 million on a revolving loan
basis under its bank agreement. As of January 27, 1996, the entire $500 million
was available for use. Interest is payable at rates equal to or less than prime.
Actual short-term borrowings during the fiscal year ended January 27, 1996 were
at rates below prime. The revolving loan capability is used as backup to the
Company's commercial paper program. The weighted average interest rate on the
Company's short-term borrowings was 6.25%, 4.98% and 3.36% in fiscal 1996, 1995
and 1994, respectively. The Company does not have any compensating balance
requirements under these arrangements. The Company also has C$20 million of
committed lines for its Canadian operation, all of which were available as of
January 27, 1996.
C. FINANCIAL INSTRUMENTS
The Company periodically enters into forward foreign exchange contracts to hedge
firm U.S. dollar merchandise purchase commitments made by its Canadian
subsidiary. Any gain or loss on the contracts is ultimately reflected in the
cost of the merchandise. As of January 27, 1996, there were no contracts
outstanding.
11
<PAGE> 14
The Company also has entered into foreign currency swap agreements in both
Canadian dollars and British pounds sterling in amounts equivalent to borrowings
under the Company's MTN program. The aggregate borrowings of $57.5 million under
the MTN program approximated the Company's combined investment in its United
Kingdom and Canadian operations at the time of the borrowings. As of January 27,
1996, the Company had swap agreements whereby it exchanged $20.0 million for
Canadian dollars and $37.5 million for British pounds sterling. The swap
agreements are accounted for as a hedge against the Company's investment in
foreign subsidiaries; thus foreign exchange gains and losses on the agreements
are recognized in shareholders' equity, offsetting translation adjustments
associated with the Company's investment in foreign operations. The swap
agreements contain rights of offset which minimize the Company's exposure to
credit loss in the event of nonperformance by one of the counterparties.
Subsequent to year-end, the Company entered into two interest rate swap
agreements on an aggregate notional amount of $200 million ($100 million for one
year and $100 million for two years). Under the agreements, the Company pays a
fixed rate of 4.9% on the $200 million and in exchange receives variable
interest income indexed to the 3 month LIBOR. The agreement is intended to
provide a fixed rate of approximately 5.9% on $200 million of the $375 million
variable rate term loan.
The counterparties to the exchange contracts and swap agreements are major
international financial institutions. The Company periodically monitors its
position and the credit ratings of the counterparties and does not anticipate
losses resulting from the nonperformance of these institutions.
Pursuant to SFAS No. 107 "Disclosures About Fair Value of Financial
Instruments," the Company has estimated the fair value of its long-term debt,
including current installments. The fair value of the Company's long-term debt
was estimated by using the quoted market price, if available, or by using
discounted cash flow analysis based upon the Company's current incremental
borrowing rates for similar types of borrowing arrangements. The fair value of
long-term debt, including current installments at January 27, 1996 is estimated
to be $784.0 million versus a carrying value of $769.4 million. These estimates
do not necessarily reflect certain provisions or restrictions in the various
debt agreements which might affect the Company's ability to settle these
obligations. The fair value of all other financial instruments of the Company,
including cash equivalents and the swap agreements, approximate carrying value.
D. COMMITMENTS
The Company is committed under long-term leases related to its continuing
operations for the rental of real estate and fixtures and equipment. T.J. Maxx
leases are generally for a 10 year initial term with options to extend for one
or more 5 year periods. Marshalls leases acquired have remaining terms ranging
up to 25 years. In addition, the Company is generally required to pay insurance,
real estate taxes and other operating expenses and in some cases rentals based
on a percentage of sales.
The following schedule of future minimum lease payments for continuing
operations as of January 27, 1996 includes the lease commitments for the
12
<PAGE> 15
estimated 30 T.J. Maxx stores and the 170 Marshalls stores that the Company
anticipates closing and for which reserves have been established as discussed in
Note H.
<TABLE>
<CAPTION>
Operating
Fiscal Years Leases
- ----------------------------------------------------------------------
In Thousands
<S> <C>
1997 $ 272,224
1998 260,875
1999 241,562
2000 224,637
2001 199,238
Later years 1,006,519
----------
Total minimum lease payments $2,205,055
==========
</TABLE>
The rental expense under operating leases for continuing operations amounted to
$163.7 million, $118.3 million and $96.5 million for fiscal years 1996, 1995 and
1994, respectively. The present value of the Company's operating lease
obligations approximates $1,372.7 million as of January 27, 1996, including
$144.8 million payable in fiscal 1997.
The Company had outstanding letters of credit in the amount of $54.0 million as
of January 27, 1996. The letters of credit are issued for the purchase of
inventory.
E. STOCK OPTIONS, STOCK PURCHASE PLANS AND CAPITAL STOCK
Under its stock option plan, the Company has granted certain officers and key
employees options for the purchase of common stock, generally within ten years
from the grant date at option prices of 100% of market price on the grant date.
Most options outstanding are exercisable at various percentages starting one
year after the grant, while certain options are exercisable in their entirety
three years after the grant date. There were approximately 1,748,000 shares
exercisable under the option plans as of January 27, 1996.
During June 1993, the Company amended its 1986 Stock Incentive Plan to increase
shares issuable under the plan by 3,000,000 and to extend the period during
which awards may be made under the plan through April 7, 2003.
On April 8, 1993, the Company adopted a stock option plan for non-employee
directors. Pursuant to the plan, each continuing or newly elected director who
is not a present or former employee of the Company will receive an option to
purchase 1,000 shares of common stock. On the date of each subsequent annual
meeting, each continuing non-employee director will be granted an option to
acquire an additional 500 shares of common stock and newly elected directors
will each receive an option to purchase 1,000 shares of common stock. The
exercise price of the options will be the fair market value of the common stock
on the date of grant. The option will expire ten years after the date of grant
and will become fully exercisable one year after the date of grant. The plan
will expire after five years, but options outstanding will continue in effect
according to their terms.
13
<PAGE> 16
<TABLE>
A total of 50,000 shares have been reserved for issuance under this plan
subject to adjustment for stock splits and similar events. Option activity
during the past three fiscal years was as follows:
<CAPTION>
Shares Reserved for
Options Future
Option Prices Granted Grants
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at January 30, 1993 $10.250-$29.00 1,912,465 407,192
Additional options authorized
under 1986 plan - 3,000,000
Authorized under 1993 stock
option plan for non-employee
directors - 50,000
Options or other stock awards
granted 25.250- 32.875 566,790 (569,290)
Options exercised 10.250- 24.500 (249,719) -
Cancellations 10.250- 28.000 (46,568) 3,300
--------- ---------
Outstanding at January 29, 1994 10.250- 32.875 2,182,968 2,891,202
Options or other stock awards
granted 13.250- 26.875 631,940 (631,940)
Options exercised 10.250- 21.250 (50,498) -
Cancellations 10.250- 25.250 (69,955) 29,000
--------- ---------
Outstanding at January 28, 1995 10.250- 32.875 2,694,455 2,288,262
Options or other stock awards
granted 12.875- 13.125 596,400 (606,400)
Options exercised 10.250- 18.875 (81,653) -
Cancellations 10.250- 29.000 (396,785) 238,380
--------- ---------
Outstanding at January 27, 1996 10.250- 32.875 2,812,417 1,920,242
========= =========
</TABLE>
The shares reserved for future grants have been reduced by restricted stock
awards issued under the 1986 Stock Incentive Plan, net of certain shares
forfeited, which are returned to the Company. Through fiscal 1996, there have
been a total of 496,001 shares issued and 80,625 shares forfeited. The shares
were issued at par value, or at no cost, and have restrictions which generally
lapse over three to five years from date of grant, with the exception of
performance accelerated shares. These shares have restrictions which generally
lapse equally over four to eight years, with a provision for accelerated vesting
depending upon the Company's earnings, or other specified criteria. The market
price in excess of cost is charged to income ratably over the period during
which the restrictions lapse. Such pre-tax charges amounted to $0.4 million,
$0.6 million, and $1.7 million in fiscal years 1996, 1995 and 1994,
respectively.
On August 16, 1994, the Company authorized the repurchase of up to $100 million
of TJX common stock. During fiscal 1995, the Company repurchased 1.1 million of
its common shares, totalling $19.3 million, representing approximately 1.5% of
the Company's outstanding common shares. In connection with the Marshalls
acquisition, the Company terminated the share repurchase program.
14
<PAGE> 17
In April 1992, the Company issued 250,000 shares of Series A cumulative
convertible preferred stock in a private offering. The shares have a face value
of $100 per share and are convertible into common stock at a price per common
share of $21. There are 1,190,476 common shares reserved for the conversion of
the Series A preferred stock. The Company may redeem the Series A stock for a
price of $104.80 per share, as of January 27, 1996, declining by $.80 per share
each April 1 thereafter to $100 per share on April 1, 2001. The liquidation
preference for Series A preferred stock as of January 27, 1996 is $104.80 per
share and also declines $.80 per share each April 1 to $100 per share on
April 1, 2001.
In August 1992, the Company issued 1,650,000 shares of Series C cumulative
convertible preferred stock in a public offering. The shares have a face value
of $50 per share and are convertible into common stock at a price per common
share of $25.9375. There are 3,180,723 common shares reserved for the conversion
of the Series C preferred stock. The Company may redeem the stock for $52.1875
per share, as of January 27, 1996 declining by $.3125 per share each September 1
thereafter to $50 per share on September 1, 2002. The liquidation preference for
the Series C preferred stock is $50 per share.
<TABLE>
On November 17, 1995, the Company issued preferred stock to Melville Corporation
in two separate series, both of which are convertible into shares of common
stock. The common shares issuable on conversion will vary depending on the
market price of common stock at time of conversion. A summary of certain
provisions of these preferred issues follows:
<CAPTION>
Preferred Common Shares
Shares Face Annual Issuable at
Issued Value Dividend Conversion
------ ----- -------- ----------
<S> <C> <C> <C> <C>
Series D 250,000 $ 25 Million $1.81/Share 1.3-2.0 Million
Series E 1,500,000 $150 Million $7.00/Share 8.1-9.7 Million
</TABLE>
The Series D preferred stock is mandatorily converted into common stock on
November 17, 1996 unless redeemed for cash or converted earlier. The Series E
preferred stock is mandatorily converted into common shares on November 17, 1998
unless converted earlier. The Series D and Series E have an aggregate
liquidation preference of $175 million. There is an aggregate of 11,740,825
common shares reserved for the conversion of Series D and Series E preferred
stock, the maximum number of shares that may be issued.
Dividends on all of the preferred stock issued are payable quarterly on the
first business day of each calendar quarter and accrue from date of issuance.
The Company accrues the dividends evenly throughout the year. The Company
recorded aggregate dividends on its preferred stock of $9.4 million in fiscal
1996 and $7.2 million in fiscal 1995 and in fiscal 1994. The preferred dividends
reduce net income in computing net income available to common shareholders.
The Series A and Series C preferred stock rank in parity with each other, the
Series D and Series E are junior to the Series A and Series C and all are senior
to all other capital stock of the Company with respect to payment of dividends
and upon liquidation. There are no voting rights for
15
<PAGE> 18
preferred stock unless dividends are in arrears for a specified number of
periods.
During fiscal 1995, the Company's shareholder rights plan was redeemed at a
price of $.01 per common share. This redemption cost of $0.7 million is included
with common stock dividends as a direct reduction to shareholders' equity.
F. INCOME TAXES
<TABLE>
The provision for income taxes includes the following:
<CAPTION>
Fiscal Year Ended January 1996 1995 1994
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C> <C>
Current:
Federal $54,434 $52,094 $68,729
State 13,237 8,174 16,359
Foreign 2,843 1,425 90
Deferred:
Federal (21,521) (1,755) (1,859)
State (4,097) 98 (751)
Foreign 408 1,537 -
------- ------- -------
Provision for income taxes $45,304 $61,573 $82,568
======= ======= =======
</TABLE>
The fiscal 1994 deferred provision above reflects a $1.1 million benefit from a
Canadian net operating loss carryforward as well as a charge of $0.4 million for
the adjustment of the Company's net deferred tax liability due to the increase
in the statutory federal income tax rate enacted during the year.
16
<PAGE> 19
<TABLE>
The Company had a net deferred tax liability as follows:
<CAPTION>
January 27, January 28,
1996 1995
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C>
Deferred tax assets:
Capital loss carryforward $ 48,629 $ 49,107
Foreign net operating loss carryforward 34,011 4,191
Reserves for discontinued operations 10,652 6,054
Reserve for closed stores and restructuring
costs 95,020 -
Insurance costs not currently deductible
for tax purposes 18,743 14,782
Pension, postretirement and employee benefits 17,535 15,950
Leases 3,827 4,961
Other 14,344 11,906
Valuation allowance (82,727) (53,968)
-------- --------
Total deferred tax assets 160,034 52,983
-------- --------
Deferred tax liabilities:
Property, plant and equipment 47,229 26,072
Safe harbor leases 48,818 51,386
Tradename 59,179 -
Other 17,472 9,048
-------- --------
Total deferred tax liabilities 172,698 86,506
-------- --------
Net deferred tax liability $ 12,664 $ 33,523
======== ========
</TABLE>
The capital loss carryforward tax asset, which expires in fiscal 1998, relates
to the surrendering of the Ames preferred stock upon consummation of the Ames
reorganization plan. Utilization of this pre-tax capital loss of $138.9 million
is only available to the extent of future capital gains and thus this deferred
tax asset is fully reserved for in the valuation allowance.
The change in the valuation allowance during the year is the result of changes
in foreign net operating loss carryforwards including the foreign net operating
loss carryforward acquired as part of the Marshalls acquisition, and utilization
of a portion of the capital loss carryforward.
The Company does not provide for U.S. deferred income taxes on the undistributed
earnings of its foreign subsidiaries, as the earnings are considered to be
permanently reinvested. The undistributed earnings of its foreign subsidiaries
as of January 27, 1996 were immaterial.
The Company has a United Kingdom net operating loss carryforward of
approximately $27 million for tax purposes and $22 million for financial
reporting purposes. The United Kingdom operating loss does not expire under
current United Kingdom tax law. The Company also has a Puerto Rico net operating
loss carryforward of approximately $64 million for tax and financial reporting
purposes which was acquired in the Marshalls acquisition and expires in fiscal
1997 through fiscal 2003. Future utilization of these operating loss
carryforwards is dependent upon future
17
<PAGE> 20
earnings of the Company's foreign subsidiaries. Future recognition of the net
operating loss in Puerto Rico will result in an adjustment to the allocation
of the purchase price for Marshalls.
<TABLE>
The Company's worldwide effective tax rate was 42% for the fiscal years ended
January 27, 1996 and January 28, 1995 and 40% for the fiscal year ended January
29, 1994. The difference between the U.S. federal statutory income tax rate and
the Company's worldwide effective income tax rate is summarized as follows:
<CAPTION>
Fiscal Year Ended January 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. federal statutory income tax rate 35% 35% 35%
Effective state income tax rate 5 5 5
Impact of foreign operations 3 3 -
All other (1) (1) -
-- -- --
Worldwide effective income tax rate 42% 42% 40%
== == ==
</TABLE>
In fiscal 1994, the benefit of the Canadian net operating loss carryforward was
offset by the impact of the Company's entry into the United Kingdom.
G. PENSION PLANS AND OTHER RETIREMENT BENEFITS
The Company has a non-contributory defined benefit retirement plan covering the
majority of full-time employees, excluding Marshalls associates. Employees who
have attained twenty-one years of age and have completed one year of service are
covered under the plan. Benefits are based on compensation earned in each year
of service. The Company also has an unfunded supplemental retirement plan which
covers certain key employees of the Company and provides additional retirement
benefits based on average compensation.
<TABLE>
Net periodic pension cost for all operations of the Company's plans includes the
following components:
<CAPTION>
Fiscal Year Ended January 1996 1995 1994
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C> <C>
Service cost $ 3,920 $ 4,554 $ 3,375
Interest cost on projected benefit
obligation 6,915 6,526 5,995
Actual return on assets (15,215) 4,545 (12,188)
Net amortization and deferrals 9,384 (11,600) 5,760
-------- -------- --------
Net periodic pension cost $ 5,004 $ 4,025 $ 2,942
======== ======== ========
</TABLE>
Net pension cost includes $0.3 million in fiscal years 1996 and 1995 and $0.2
million in fiscal year 1994 allocated to discontinued operations.
18
<PAGE> 21
<TABLE>
The following table sets forth the funded status of the Company's pension plans
and the amounts recognized in the Company's statements of financial position:
<CAPTION>
January 27, January 28,
1996 1995
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C>
Accumulated benefit obligation, including
vested benefits of $81,296 and $71,592 $91,606 $77,256
------- -------
Projected benefit obligation $97,891 $82,297
Plan assets at fair market value 71,792 66,454
------- -------
Projected benefit obligation in excess of
plan assets 26,099 15,843
Unrecognized net gain (loss) from past experience
different from that assumed and
effects of changes in assumptions (7,563) (1,897)
Prior service cost not yet recognized in net
periodic pension cost (1,035) (1,127)
Unrecognized net asset (obligation) as of initial
date of application of SFAS No.87 (745) (568)
------- -------
Accrued pension cost included in accrued expenses $16,756 $12,251
======= =======
</TABLE>
The projected benefit obligation in excess of plan assets includes the Company's
unfunded supplemental retirement plan.
The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligation was 7.00% and 8.25% for fiscal years
1996 and 1995, respectively. The rate of increase on future compensation levels
was 4.0% and 4.5% in fiscal years 1996 and 1995, respectively, and the expected
long-term rate of return on assets was 9.0% and 9.5% in fiscal years 1996 and
1995, respectively. The Company's funding policy is to contribute annually an
amount allowable for federal income tax purposes. Pension plan assets consist
primarily of fixed income and equity securities.
In fiscal 1994, the Company adopted the Statement of Financial Accounting
Standards No. 106 "Employers' Accounting for Postretirement Benefits Other Than
Pensions." This standard requires accrual for the cost of postretirement health
care and life insurance benefits during the years that an employee provides
services to the Company. The Company elected to recognize the transition
obligation in full as of January 31, 1993, and accordingly recorded a one-time
implementation charge of $6,145,000, net of a tax benefit of $3,937,000, as a
cumulative effect of an accounting change.
The Company's postretirement benefit plan is unfunded and provides limited
postretirement medical and life insurance benefits to associates who participate
in the Company's retirement plan and who retire at age 55 or older with 10 years
or more of service.
19
<PAGE> 22
<TABLE>
Net periodic postretirement benefit cost of the Company's plan includes the
following components:
<CAPTION>
Fiscal Year Ended January 1996 1995 1994
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C> <C>
Service cost $ 757 $ 952 $ 476
Interest cost on accumulated
benefit obligation 1,046 963 820
Net amortization - 88 -
------ ------ ------
Net periodic postretirement
benefit cost $1,803 $2,003 $1,296
====== ====== ======
</TABLE>
Net periodic postretirement benefit costs includes $0.2 million in fiscal years
1996 and 1995 and $0.1 million in fiscal year 1994 allocated to discontinued
operations.
<TABLE>
The components of the accumulated postretirement benefit obligation and the
amount recognized in the Company's statements of financial position are as
follows:
<CAPTION>
January 27, January 28,
1996 1995
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C>
Accumulated postretirement obligation:
Retired associates $ 6,731 $ 6,394
Fully eligible active associates 1,146 712
Other active associates 7,861 5,168
------- -------
Accumulated postretirement obligation 15,738 12,274
Unrecognized net gain (loss) due to change
in assumptions (2,676) (149)
------- -------
Accrued postretirement benefits included in
accrued expenses $13,062 $12,125
======= =======
</TABLE>
Assumptions used in determining the actuarial present value of the accumulated
postretirement obligation include a discount rate of 7.00% and 8.25% in fiscal
years 1996 and 1995, respectively. A medical inflation rate of 5% was assumed in
both periods for all future years. Due to the nature of the plan, the Company's
exposure to medical inflation is primarily limited to increases in the Medicare
deductible. A 1% increase in the medical inflation assumption would increase the
postretirement benefit cost for fiscal 1996 by $0.2 million and the accumulated
postretirement obligation as of January 27, 1996 by approximately $1.2 million.
Marshalls associates are not currently eligible for the retirement plan or the
postretirement medical plan. Marshalls associates participate in a Section
401(k) savings plan under which employees may contribute up to 10% of eligible
pay. The Company matches employee contributions up to 4% at a minimum rate of
25% or 50%, depending on length of service.
20
<PAGE> 23
The Company also sponsors employee savings plans under Section 401(k) of the
Internal Revenue Code for all other eligible employees. Employees may
contribute up to 15% of eligible pay. The Company matches employee contributions
up to 5% of eligible pay at rates ranging from 25% to 50% based upon Company
performance. The Company contributed for all 401(k) plans $2.2 million in fiscal
1996, $2.0 million in fiscal year 1995 and $1.9 million for fiscal year 1994.
H. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
<TABLE>
The major components of accrued expenses and other current liabilities are as
follows:
<CAPTION>
January 27, January 28,
1996 1995
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C>
Employee compensation and benefits $ 86,904 $ 61,427
Reserves for discontinued
operations 25,253 13,085
Store closing and restructuring reserves,
continuing operations 251,566 -
Insurance, rent, utilities, advertising
and other 361,655 177,912
-------- --------
Accrued expenses and other current liabilities $725,378 $252,424
======== ========
</TABLE>
The reserves for discontinued operations relate primarily to lease obligations
associated with the Company's former Zayre and Hit or Miss divisions. The change
in the reserve balance is due to additions of $23.0 million primarily due to
costs associated with the sale of Hit or Miss, offset by deductions of $10.8
million primarily for payments of lease obligations, net of sublease income, as
well as settlement costs on certain leases.
The Company established a $244.1 million reserve in the allocation of the
purchase price of Marshalls relating primarily to the anticipated closing of
approximately 170 Marshalls stores. In addition, the Company recorded a charge
of $35 million for the closing of approximately 30 T.J. Maxx stores and $3.8
million for certain restructuring costs for the HomeGoods operation. The total
reserve consists primarily of the estimated cost to settle lease obligations.
Other items included in the reserve are the estimated book value of fixed assets
to be disposed of, a reserve for markdowns on inventory acquired, legal and
professional fees, and the cost associated with closing of other non-store
facilities. The reduction in the reserve as of January 27, 1996 is primarily due
to inventory markdowns. The Company anticipates the T.J. Maxx store closings
will take place during fiscal 1997, while the Marshalls store closings will
occur over the next two years.
21
<PAGE> 24
I. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
The Company's cash payments for interest expense and income taxes, including
discontinued operations, and its non-cash investing and financing activities for
the past three years are as follows:
<CAPTION>
January 27, January 28, January 29,
Fiscal Year Ended 1996 1995 1994
- --------------------------------------------------------------------------------
In Thousands
<S> <C> <C> <C>
Cash paid for:
Interest expense $ 41,924 $25,051 $18,573
Income taxes 17,275 68,940 94,580
Non-cash investing and financing
activities:
Issuance of preferred stock for
acquisition of Marshalls $175,000 - -
Note receivable from sale of
Hit or Miss division 10,000 - -
</TABLE>
J. DISCONTINUED OPERATIONS AND RELATED CONTINGENT LIABILITIES
In October 1988, the Company completed the sale of its former Zayre Stores
division to Ames Department Stores, Inc. ("Ames"). On April 25, 1990, Ames filed
for protection under Chapter 11 of the Federal Bankruptcy Code and on December
30, 1992, Ames emerged from bankruptcy under a plan of reorganization. The
Company is liable for certain amounts to be distributed under the plan for
certain unassigned landlord claims under certain former Zayre store leases on
which Zayre Corp. was liable as of the date of acquisition and which Ames has
rejected.
The Company remains contingently liable for the leases of most of the former
Zayre stores still operated by Ames. In addition, the Company is contingently
liable on a number of leases of Waban Inc., a division spun-off in fiscal 1990,
and of the Hit or Miss division, the Company's former off-price women's
specialty stores, sold on September 30, 1995. The Company believes that in view
of the nature of the leases and the fact that Ames, Waban and Hit or Miss are
primarily liable, the Company's contingent liability on these leases will not
have a material effect on the Company's financial condition. Accordingly, the
Company believes its available reserves of $25.3 million as of January 27, 1996
should be adequate to cover all reasonably expected liabilities associated with
discontinued operations that it may incur.
K. SEGMENT INFORMATION
For data on business segments for fiscal 1996, 1995 and 1994, see page 20.
22
<PAGE> 25
SELECTED FINANCIAL DATA (CONTINUING OPERATIONS)
<TABLE>
The following selected financial data includes the results of Marshalls for the
period following its acquisition on November 17, 1995. All prior year data has
been restated to reflect Hit or Miss as a discontinued operation.
<CAPTION>
Fiscal Year Ended January 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------
Dollars in Thousands Except Per Share Amounts
<S> <C> <C> <C> <C> <C>
Income statement and
per common share data:
Net sales $4,447,549 $3,489,146 $3,253,471 $2,879,261 $2,380,606
Income from
continuing
operations
before extra-
ordinary item and
cumulative effect of
accounting changes 63,599(1) 86,579 124,617 110,708 89,997
Number of common
shares for
primary and fully
diluted earnings
per common share
computations 73,133,349 73,467,003 74,192,358 73,873,276 70,050,835
Earnings per common
share from continuing
operations $ .74(1) $ 1.08 $ 1.58 $ 1.49 $ 1.28
Dividends per common
share .49 .56 .50 .46 .46
Balance sheet data:
Working capital $ 409,151 $ 277,201 $ 285,447 $ 244,226 $ 158,914
Total assets 2,745,582 1,550,823 1,330,964 1,209,136 1,003,951
Capital expenditures 111,827 120,022 118,482 102,062 78,028
Long-term debt 690,713 239,478 210,854 179,787 307,385
Shareholders' equity 764,634 606,952 590,900 505,184 260,517
Stores in operation end
of year:
T.J. Maxx 587 551 512 479 437
Marshalls 496 - - - -
Winners 52 37 27 15 9
HomeGoods 22 15 10 6 -
T.K. Maxx 9 5 - - -
<FN>
- ----------
(1) Includes an after-tax charge of $21.0 million, or $.29 per share, for the
estimated cost of closing approximately 30 T.J. Maxx stores in connection
with the acquisition of Marshalls.
</TABLE>
23
<PAGE> 26
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of The TJX Companies, Inc.:
We have audited the accompanying consolidated balance sheets of The TJX
Companies, Inc. and subsidiaries as of January 27, 1996 and January 28, 1995 and
the related consolidated statements of income, shareholders' equity, and cash
flows for each of the three fiscal years in the period ended January 27, 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of The TJX Companies,
Inc. and subsidiaries as of January 27, 1996 and January 28, 1995 and the
consolidated results of their operations and their cash flows for each of the
three fiscal years in the period ended January 27, 1996 in conformity with
generally accepted accounting principles.
Coopers & Lybrand, L.L.P.
Boston, Massachusetts
March 12, 1996
<PAGE> 27
REPORT OF MANAGEMENT
The financial statements and related financial information in this annual report
have been prepared by management which is responsible for their integrity,
objectivity and consistency. The financial statements were prepared in
accordance with generally accepted accounting principles and necessarily include
amounts which are based upon judgments and estimates made by management.
The Company maintains a system of internal controls designed to provide,
at appropriate cost, reasonable assurance that assets are safeguarded,
transactions are executed in accordance with management's authorization and the
accounting records may be relied upon for the preparation of financial
statements. The system of controls includes the careful selection and training
of associates, and the communication and application of formal policies and
procedures that are consistent with high standards of accounting and
administrative practices. The accounting and control systems are continually
reviewed, evaluated and where appropriate, modified to accommodate changing
business conditions and the recommendations of the Company's internal auditors
and the independent public accountants.
An Audit Committee, comprised of members of the Board of Directors who
are neither officers nor employees of the Company, meets periodically with
management, internal auditors and the independent public accountants to review
matters relating to the Company's financial reporting, the adequacy of internal
accounting controls and the scope and results of audit work. The Committee is
responsible for reporting the results of its activities and for recommending the
selection of independent auditors to the full Board of Directors. The internal
auditors and the independent public accountants have free access to the
Committee and the Board of Directors.
The financial statements have been examined by Coopers & Lybrand L.L.P.,
whose report appears separately. Their report expresses an opinion as to the
fair presentation of the consolidated financial statements and is based on an
independent examination performed in accordance with generally accepted auditing
standards.
Bernard Cammarata Donald G. Campbell
President and Chief Executive Officer Senior Vice President - Finance and
Chief Financial Officer
March 12, 1996
<PAGE> 28
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE TJX COMPANIES, INC.
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On September 30, 1995, the Company sold its Hit or Miss division. This
transaction was accounted for as a discontinued operation and all historical
results of the Hit or Miss division have been reclassified to discontinued
operations for comparative purposes.
On November 17, 1995, the Company acquired the Marshalls off-price family
apparel chain from Melville Corporation. Under the purchase method of
accounting, the assets and liabilities and results of operations associated with
the acquired business have been included in the Company's financial position and
results of operations since the date acquired. Accordingly, the financial
position and results of operations of the Company as of, and for the period
ending, January 27, 1996, are not directly comparable to the financial position
and results of operations of the Company for prior fiscal years, and are not
necessarily indicative of the financial position and results of operations that
may be reported by the Company for future periods. The following discussion
should be read in conjunction with the consolidated financial statements and
notes thereto contained elsewhere in this report.
RESULTS OF OPERATIONS
CONTINUING OPERATIONS: Income from continuing operations before extraordinary
item and cumulative effect of accounting changes ("income from continuing
operations") was $63.6 million in fiscal 1996 versus $86.6 million and $124.6
million in fiscal 1995 and 1994, respectively. Income from continuing operations
per common share, on a fully diluted basis, was $.74 in fiscal 1996, versus
$1.08 in fiscal 1995 and $1.58 in fiscal 1994. The results for fiscal 1996
include a $35 million pre-tax ($21.0 million after-tax) charge for closing
certain T.J. Maxx stores in connection with the acquisition of Marshalls.
Excluding the $35 million pre-tax charge, income from continuing operations for
fiscal 1996 would have been $84.6 million, or $1.03 per share.
Net sales for fiscal 1996 increased 27.5% to $4.45 billion from $3.49 billion in
1995. Net sales for fiscal 1995 increased 7.2% to $3.49 billion from $3.25
billion in fiscal 1994. Same store sales, on a consolidated basis, decreased 2%
in fiscal 1996, and were flat in fiscal 1995. The above consolidated sales and
same store sales results include those for Marshalls for the post-acquisition
period.
On a divisional basis, same store sales at T.J. Maxx were down 2% in fiscal 1996
and flat in fiscal 1995. Same store sales for Marshalls from the date of
acquisition in mid-November decreased 1%. Winners achieved same store sales
increases of 7% in fiscal 1996 and 10% in fiscal 1995. The continuation of weak
apparel sales in the U.S. as well as the highly promotional retail environment
were factors affecting sales in both fiscal 1995 and fiscal 1996 for the
off-price family apparel segment. Sales for
26
<PAGE> 29
Chadwick's increased 9% in fiscal 1996 and 3% in fiscal 1995. This division had
experienced rapid growth in the years prior to fiscal 1995 which
put a strain on its operations and in fiscal 1995, had a negative impact on the
division's ability to service its customers. Chadwick's made considerable
progress in correcting these difficulties and improving its profitability in
fiscal 1996. Lastly, HomeGoods, whose results are reported as a separate segment
beginning in fiscal 1996, experienced a same store sales increase of 1%.
Cost of sales, including buying and occupancy costs, as a percentage of net
sales, was 77.1%, 75.8% and 74.7% in fiscal 1996, 1995 and 1994, respectively.
The increase in this percentage in both fiscal 1996 and 1995 reflects higher
than planned markdowns taken as a result of the weak apparel environment and the
highly promotional retail environment. In addition, the increase in fiscal 1996
reflects the inclusion of HomeGoods in the detailed consolidated results of the
Company as HomeGoods operated at a lower margin in fiscal 1996 than the other
divisions.
Selling, general and administrative expenses as a percentage of net sales were
18.7% in fiscal 1996, 19.3% in fiscal 1995 and 18.4% in fiscal 1994. The
decrease in the ratio in fiscal 1996 versus 1995 reflects the inclusion of
Marshalls in the Company's consolidated results, as Marshalls operates at an
expense ratio closer to that of T.J. Maxx versus the other divisions. The
expense ratio for fiscal 1996 also reflects the benefits realized by Chadwick's
due to operational improvements made at this division. The increase in fiscal
1995 in this expense ratio, versus fiscal 1994, is primarily attributable to the
Chadwick's division. Chadwick's had an expense ratio increase in fiscal 1995
primarily due to increased production and postage costs of its catalogs and
order processing costs.
The Company recorded a pre-tax charge of $35 million in fiscal 1996 for the
closing of approximately 30 T.J. Maxx stores in connection with the acquisition
of Marshalls. The Company also expects to close approximately 170 Marshalls
stores for which a reserve was established in the allocation of the purchase
price under the purchase accounting method. These reserves are primarily
estimates for the costs associated with subletting or otherwise disposing of
store leases.
Interest expense was $44.2 million in fiscal 1996, $24.5 million in fiscal 1995
and $17.9 million in fiscal 1994. The increase in fiscal 1996 versus fiscal 1995
is primarily due to additional borrowings, including a $45 million real estate
mortgage, issued in December 1994, but which was prepaid as a result of the
Marshalls acquisition, a $375 million term loan to fund the cash portion of the
purchase price of the Marshalls acquisition and $200 million of notes issued in
June 1995 under the Company's shelf registration statement. The increase in
fiscal 1995 versus fiscal 1994 also reflects increased borrowing levels as well
as increased rates. The comparison of fiscal 1995 to fiscal 1994 is impacted by
$2 million of interest income included in fiscal 1994 associated with a federal
tax refund.
27
<PAGE> 30
The Company's effective income tax rate was 42% in fiscal 1996 and 1995 and
40% in fiscal 1994. The increase in the effective rate in fiscal 1996 and 1995
is primarily attributable to the Company's entry into the United Kingdom where a
net operating loss carryforward has been incurred. The difference in the U.S.
federal statutory tax rate and the Company's worldwide effective income tax rate
in each fiscal year is primarily attributable to the effective state income tax
rate, with the additional impact in fiscal 1996 and 1995 of the aforementioned
net operating loss carryforward attributable to the Company's entry into the
United Kingdom.
DISCONTINUED OPERATIONS AND NET INCOME: Net income for fiscal 1996 includes a
loss on the disposal of the Hit or Miss discontinued operation, net of income
taxes, of $31.7 million. The results of the Hit or Miss division prior to the
sale have been reclassified as income (loss) from discontinued operations, net
of income taxes, which includes a loss of $2.3 million in fiscal 1996, a loss of
$4.0 million in fiscal 1995 and income of $2.4 million in fiscal 1994.
In addition, in fiscal 1996, in connection with the Marshalls acquisition and
the new bank credit agreement (see Notes A and B to the consolidated financial
statements), the Company prepaid its $45 million real estate mortgage on its
Chadwick's fulfillment center and incurred an after-tax extraordinary charge for
the early retirement of debt of $3.3 million, or $.05 per common share. In
fiscal 1994, the Company recorded an after-tax charge of $2.7 million, or $.04
per common share, for the cumulative effect of accounting changes.
Net income, after reflecting the above items, was $26.3 million, or $.23 per
common share, in fiscal 1996, $82.6 million, or $1.03 per common share, in
fiscal 1995 and $124.4 million, or $1.58 per common share, in fiscal 1994.
CAPITAL SOURCES AND LIQUIDITY
Net cash provided by operating activities was $233.6 million, $103.4 million and
$75.0 million in fiscal 1996, 1995 and 1994, respectively. The increase in cash
provided by operating activities in fiscal 1996 versus that of fiscal 1995 was
primarily attributable to the timing of the Marshalls acquisition and the
resulting favorable cash flow of the holiday selling season. The Company also
experienced an increase in cash provided by operations in fiscal 1995 versus
fiscal 1994 despite reduced net income in fiscal 1995. The impact of the lower
net income in fiscal 1995 was offset by an increase in consolidated accounts
payable to merchandise inventory ratio and lower payments against the Company's
discontinued operations reserve. Cash flows from operating activities over the
next several years will be impacted by the settlements and disposition of leases
associated with both the Company's discontinued operations reserve and the store
closing and restructuring reserves. See Note H to the consolidated financial
statements for further information.
Inventories as a percentage of net sales were 30.2% in fiscal 1996, 25.5% in
fiscal 1995 and 22.1% in fiscal 1994. The fiscal 1996 percentage is not
28
<PAGE> 31
comparable since Marshalls net sales are included only from November 18, 1995.
Using pro forma net sales for fiscal 1996 (see Note A to the consolidated
financial statements), which assumes Marshalls was acquired at the beginning of
the fiscal year, inventories as a percentage of net sales in fiscal 1996 would
be 20.5%. The higher percentage in fiscal 1995 versus fiscal 1994 and the lower
pro forma percentage for fiscal 1996 versus fiscal 1995 reflect higher warehouse
inventory related to opportunistic merchandise purchases and a larger percentage
of spring merchandise on hand at the end of fiscal 1995. Working capital was
$409.2 million in fiscal 1996, $277.2 million in fiscal 1995 and $285.4 million
in fiscal 1994. The increase in working capital in fiscal 1996 is primarily
attributable to the acquisition of Marshalls.
<TABLE>
The Company's cash flows for investing activities include capital expenditures
for the last two years as set forth in the table below:
<CAPTION>
Fiscal Year Ended January 1996 1995
- --------------------------------------------------------------------------------
In Millions
<S> <C> <C>
New stores $ 44.6 $ 53.2
Store renovations and improvements 36.5 40.0
Office and distribution centers 30.7 26.8
------- ------
Capital expenditures $ 111.8 $120.0
======= ======
</TABLE>
Capital expenditures for both fiscal 1996 and 1995 emphasized new stores and
store renovations.
The Company expects that capital expenditures will approximate $150 million for
fiscal 1997 including approximately $46 million for new stores, primarily T.J.
Maxx and Marshalls; $69 million for improvements to existing stores, primarily
T.J. Maxx and Marshalls; and approximately $35 million for office and
distribution centers.
Investing activities for fiscal 1996 include $378.7 million paid for the
acquisition of Marshalls. In addition to the cash outlay for the acquisition of
Marshalls, the Company issued $175 million of convertible junior preferred
stock. See Note E to the consolidated financial statements for further
information on the preferred stock issued. The total purchase price for
Marshalls reflected in these financials, including acquisition costs and an
estimated contingent payment, totals $606 million. See Note A to the
consolidated financial statements for further information on the acquisition of
Marshalls.
Lastly, investing activities for fiscal 1996 reflect proceeds of $3 million for
the sale of the Hit or Miss division. The Company also received a $10 million
note, due in seven years with 10% interest.
FINANCING ACTIVITIES: In June 1995, the Company filed a shelf registration
statement with the Securities and Exchange Commission, which provides for the
issuance of up to $250 million of long-term debt. In June 1995, the Company
issued $200 million of long-term notes under the registration statement. The
proceeds were used, in part, to repay short-term borrowings
29
<PAGE> 32
and for general corporate purposes, including new store and capital
expenditures, and the repayment of scheduled maturities of other outstanding
long-term debt. During fiscal 1995 and fiscal 1994, the Company borrowed an
aggregate of $57.5 million under its medium term note program, (which was
replaced by the shelf registration statement mentioned above). The aggregate
borrowings under the medium term note program were used entirely to fund the
Company's investments in its Canadian and United Kingdom operations. See Notes B
and C of the consolidated financial statements for further information regarding
these transactions.
In connection with the purchase of Marshalls, the Company entered into an
unsecured $875 million bank credit agreement under which the Company borrowed
$375 million on a term loan basis to fund the cash portion of the Marshalls
purchase price. The Company may also borrow up to an additional $500 million on
a revolving loan basis for the working capital needs of the Company. Interest is
payable on the borrowings at rates equal to or less than prime. Subsequent to
year-end, the Company entered into two interest rate swap agreements which in
essence provide for a fixed rate of 5.9% on $200 million of the $375 million
term loan. The term loan matures on November 17, 2000, and the revolving loan
expires on November 17, 1998. The new agreement has certain financial covenants
which include a minimum net worth requirement and certain leverage and fixed
charge ratios. In connection with this financing arrangement, the Company
cancelled its former committed U.S. short-term credit lines and prepaid its $45
million real estate mortgage on its Chadwick's fulfillment center, issued in
December 1994. The Company incurred an after-tax extraordinary charge of $3.3
million on the early retirement of this debt.
The Company declared quarterly dividends on its common stock of $.14 per share
in fiscal 1995 and for the first three quarters of fiscal 1996. In connection
with the acquisition of Marshalls, the Company reduced the quarterly dividend to
$.07 per common share effective with the dividend payable for the fourth quarter
of fiscal 1996. Annual dividends on common stock totalled $35.5 million in
fiscal 1996 and $41.6 million in fiscal 1995. The Company also has dividend
requirements on its outstanding Series A and Series C preferred stock which
totalled $7.2 million in each of fiscal 1996 and 1995, as well as dividend
requirements on the new Series D and Series E junior preferred stock issued in
the acquisition of Marshalls. Series D preferred stock carries an annual
dividend of $0.5 million and the Series E preferred stock carries an annual
dividend of $10.5 million. An aggregate of $9.4 million of preferred dividends
is reflected in investing activities for fiscal 1996. During fiscal 1995, the
Company repurchased 1.1 million shares of the Company's common stock for a cost
of $19.3 million under a stock buy-back program, which the Company terminated
due to the acquisition of Marshalls.
The Company has traditionally funded its seasonal merchandise requirements
through short-term bank borrowings and the issuance of short-term commercial
paper. The Company has the ability to borrow up to $500 million on a revolving
loan basis under its bank agreement. As of January 27, 1996, the entire $500
million was available for use. The maximum amount of short-term borrowings
outstanding during fiscal 1996, 1995 and 1994 was
30
<PAGE> 33
$200 million, $181.5 million and $133.0 million, respectively. The Company
also has C$20 million of committed lines for its Canadian operations, all of
which were available as of January 27, 1996. Management believes that the
Company's internally generated funds along with the available credit facility
and credit lines and existing cash balances, are adequate to meet its needs. See
Notes B and E to the consolidated financial statements for further information
regarding the Company's long-term debt and capital stock transactions.
31
<PAGE> 34
<TABLE>
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The TJX Companies, Inc.
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
- -------------------------------------------------------------------------------------------
In Thousands Except Per Share Amounts
<S> <C> <C> <C> <C>
Fiscal year ended January 27, 1996
Net sales $830,430 $848,945 $1,012,672 $1,755,502
Gross earnings* 195,993 191,263 264,667 366,225
Income from continuing operations
before extraordinary item and
cumulative effect of accounting
changes 9,510 7,713 33,877 12,499
Per common share, fully diluted .11 .08 .44 .11
Net income (loss) 8,065 (24,842) 33,877 9,161
Per common share, fully diluted .09 (.37) .44 .07
Fiscal year ended January 28, 1995
Net sales $762,260 $775,240 $ 924,606 $1,027,040
Gross earnings* 196,212 191,854 244,241 213,516
Income from continuing operations
before extraordinary item and
cumulative effect of accounting
changes 19,468 19,795 34,596 12,720
Per common share, fully diluted .24 .24 .44 .15
Net income 19,369 18,796 32,788 11,666
Per common share, fully diluted .24 .23 .42 .14
<FN>
- ----------
* Gross earnings equal net sales less cost of sales, including buying and
occupancy costs.
</TABLE>
The financial data for the fourth quarter of fiscal 1996 includes the results of
Marshalls since the date of acquisition on November 17, 1995. Income from
continuing operations and net income for the fourth quarter of fiscal 1996
includes an after-tax charge of $21.0 million, or $.29 per common share, for the
estimated cost of closing approximately 30 T.J. Maxx stores in connection with
the acquisition of Marshalls. Net income for the fourth quarter of fiscal 1996
includes an after-tax extraordinary charge of $3.3 million for the early
retirement of debt.
Net income for the second quarter of fiscal 1996 includes an after-tax loss on
the sale of the discontinued Hit or Miss operation of $31.7 million, or $.43 per
common share. The operating results for Hit or Miss for all prior periods have
been reflected as a discontinued operation.
PRICE RANGE OF COMMON STOCK
<TABLE>
The common stock of the Company is listed on the New York Stock Exchange
(Symbol:TJX). The quarterly high and low stock prices for fiscal 1996 and fiscal
1995 are as follows:
<CAPTION>
Fiscal 1996 Fiscal 1995
Quarter High Low High Low
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First $14 $11 1/8 $29 3/8 $22 7/8
Second 15 1/2 11 3/8 24 7/8 18 1/8
</TABLE>
<PAGE> 35
<TABLE>
<S> <C> <C> <C> <C>
Third 15 3/4 11 1/2 23 1/4 15 5/8
Fourth 19 7/8 13 1/2 16 1/4 13 3/16
</TABLE>
The approximate number of common shareholders at January 27, 1996 was 22,700.
The Company declared quarterly dividends of $.14 per share for the first three
quarters of fiscal 1996 and a quarterly dividend of $.07 per share for the
fourth quarter of fiscal 1996. The Company declared four quarterly dividends of
$.14 per share for fiscal 1995.
<PAGE> 36
SHAREHOLDER INFORMATION
TRANSFER AGENT AND REGISTRAR,
COMMON AND SERIES C PREFERRED STOCK
State Street Bank and Trust Company
Boston, Massachusetts
1-800-426-5523
TRUSTEES
PUBLIC DEBENTURES
9 1/2% Sinking Fund Debentures
Chase Manhattan Bank
New York, New York
6 5/8% Promissory Notes
7% Promissory Notes
The First National Bank of Chicago
Chicago, Illinois
AUDITORS
Coopers & Lybrand L.L.P.
INDEPENDENT COUNSEL
Ropes & Gray
FORM 10-K
Information concerning the Company's operations and financial position is
provided in this report and in the Form 10-K filed with the Securities and
Exchange Commission. A copy of the 10-K may be obtained without charge by
writing or calling:
The TJX Companies, Inc.
Investor Relations
770 Cochituate Road
Framingham, Massachusetts 01701
(508)390-2323
INVESTOR RELATIONS
Analysts and investors seeking financial data about the Company are asked to
contact:
Sherry Lang, Investor and Public
Relations Director
(508)390-2323
ANNUAL MEETING
The 1996 annual meeting will be held at 11:00
a.m. on Tuesday, June 4, 1996 in the
Enterprise Room, 5th Floor at State Street
Bank, 225 Franklin Street, Boston,
Massachusetts.
EXECUTIVE OFFICES
Framingham, Massachusetts 01701
<PAGE> 1
EXHIBIT 21
<TABLE>
SUBSIDIARIES
------------
<CAPTION>
State or Jurisdiction Name Under Which
of Incorporation Does Business
Operating Subsidaries or organization (if Different)
- --------------------- --------------------- ----------------
<S> <C> <C>
Chadwick's of Boston, Ltd. Massachusetts
Commonwealth Direct Marketing, Inc. Massachusetts
Newton Buying Corp. Delaware
NBC Distributors Inc. Massachusetts
NBC Merchants, Inc. Indiana
NBC Charlotte Merchants, Inc. North Carolina
NBC Nevada Merchants, Inc. Nevada
T.J. Maxx of Illinois, Inc. Illinois T.J. Maxx
T.J. Maxx of PA, Inc. Delaware T.J. Maxx
T.J. Maxx of Texas, Inc. Delaware T.J. Maxx
Marshalls of Roseville, MN., Inc. Minnesota Marshalls
Marshalls, Inc. Massachusetts Marshalls
New York Department Stores de
Puerto Rico Puerto Rico Marshalls
Marshalls of Richfield, MN., Inc. Minnesota
(Owner of 481 subsidiaries
operating Marshalls stores
in the United States) Marshalls
Marshalls of Nevada, Inc. Nevada
Winners Apparel Ltd. Ontario, Canada
Winners Investments Limited Ontario, Canada
Winners Merchants Ltd. Ontario, Canada
Strathmex Corp. Delaware
HomeGoods, Inc. Delaware
H.G. Merchants, Inc. Massachusetts
CDM Corp. Nevada
NBC Apparel, Inc. Delaware
TKM Holding Corp. Delaware
NBC Apparel United Kingdom T.K. Maxx
NBC Apparel Group United Kingdom
T.K. Maxx United Kingdom T.K. Maxx
NBC Apparel Management Limited United Kingdom T.K. Maxx
Leasing Subsidiaries
- --------------------
Cochituate Realty, Inc. Massachusetts
NBC First Realty Corp. Indiana
NBC Second Realty Corp. Massachusetts
NBC Fourth Realty Corp. Nevada
NBC Fifth Realty Corp. Illinois
NBC Sixth Realty Corp. North Carolina
NBC 195 Realty Corp. New York
</TABLE>
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Bernard Cammarata and Donald G. Campbell and each
of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign the form 10-K to be filed by
The TJX Companies, Inc. for the fiscal year ended January 27, 1996 and any or
all amendments thereto and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
/s/ Bernard Cammarata /s/ Donald G. Campbell
- ------------------------------- -----------------------------
Bernard Cammarata, President, Donald G. Campbell, Senior
Principal Executive Officer and Vice President-Finance,
Director Principal Financial and
Accounting Officer
/s/ Phyllis B. Davis /s/ Robert F. Shapiro
- ------------------------------- -----------------------------
Phyllis B. Davis, Director Robert F. Shapiro, Director
/s/ Stanley H. Feldberg /s/ Willow B. Shire
- ------------------------------- -----------------------------
Stanley H. Feldberg, Director Willow B. Shire, Director
/s/ Richard Lesser /s/ Burton S. Stern
- ------------------------------- -----------------------------
Richard Lesser, Director Burton S. Stern, Director
/s/ Arthur F. Loewy /s/ Fletcher H. Wiley
- ------------------------------- -----------------------------
Arthur F. Loewy, Director Fletcher H. Wiley, Director
/s/ John M. Nelson /s/ Abraham Zaleznik
- ------------------------------- -----------------------------
John M. Nelson, Director Abraham Zaleznik, Director
Dated: April 10, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
statements of income and balance sheets and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-27-1996
<PERIOD-END> JAN-27-1996
<CASH> 209,226,000
<SECURITIES> 0
<RECEIVABLES> 98,409,000
<ALLOWANCES> 0
<INVENTORY> 1,343,852,000
<CURRENT-ASSETS> 1,686,722,000
<PP&E> 1,151,683,000
<DEPRECIATION> 366,191,000
<TOTAL-ASSETS> 2,745,582,000
<CURRENT-LIABILITIES> 1,277,571,000
<BONDS> 690,713,000
<COMMON> 72,486,000
175,000,000
107,500,000
<OTHER-SE> 409,648,000
<TOTAL-LIABILITY-AND-EQUITY> 2,745,582,000
<SALES> 4,447,549,000
<TOTAL-REVENUES> 4,447,549,000
<CGS> 3,429,401,000
<TOTAL-COSTS> 3,429,401,000
<OTHER-EXPENSES> 865,019,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 44,226,000
<INCOME-PRETAX> 108,903,000
<INCOME-TAX> 45,304,000
<INCOME-CONTINUING> 63,599,000
<DISCONTINUED> (34,000,000)
<EXTRAORDINARY> (3,338,000)
<CHANGES> 0
<NET-INCOME> 26,261,000
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0.23
</TABLE>
