NEO employment agreements
BJ’s Wholesale Club, Inc. has entered into employment agreements with each of Mr. Eddy, dated as of January 30, 2011; Ms. Felice, dated May 10, 2021, Mr. Cichocki, dated as of January 30, 2020; Mr. Desroches, dated as of April 18, 2018; Mr. Werner dated as of May 10, 2021 and Mr. Luce on March 22, 2023. On November 23, 2024, BJ’s Wholesale Club, Inc. entered into amendments to the employment agreements with each NEO (except Mr. Desroches).
The initial term of Mr. Eddy’s employment agreement was for a period of five years, ending on January 30, 2016, after which he was to remain employed by the company subject to the termination provisions of his agreement; none of Ms. Felice’s or Messrs. Cichocki’s, Desroches’, Luce's or Werner’s employment agreements specified a term of employment. Mr. Eddy is subject to a 24-month post termination non-competition covenant, a 24-month post-termination non-solicitation covenant, and a perpetual confidentiality covenant. Ms. Felice and Messrs. Cichocki, Desroches and Werner are each subject to a 12-month post termination non-competition covenant, a 24-month post-termination non-solicitation covenant, and a perpetual confidentiality covenant.
Pursuant to each employment agreement (except for Mr. Eddy), the company has certain obligations that become due in the event of termination. If any of Ms. Felice and Messrs. Cichocki, Desroches, Luce and Werner are terminated by the company without cause (as defined in the applicable employment agreement), then, subject to the executive entering into a binding and irrevocable release of claims and the executive’s continued compliance with the applicable post-termination non-competition, non-solicitation and confidentiality provisions, each executive is entitled to receive (i) a continuation of his or her base salary for a period of 24 months after termination, (ii) an amount equal to the difference between the executive’s actual COBRA premium costs and the amount the executive would have paid had he continued coverage as an employee under the company’s applicable health plans for up to 24 months, subject to earlier termination in specified instances and payable over such period, (iii) a pro rata portion of any amounts the executive would have been entitled to receive under the company’s Annual Incentive Plan had she or he remained employed by the company until the end of the fiscal year during which termination occurred, payable in lump sum and (iv) any other payments or benefits arising from the executive’s participation in other company plans to the extent such plans provide for post-termination employment benefits.
Upon a termination due to death or disability, in addition to the accrued amounts, subject to the execution of a release of claims, each of the executives is eligible to receive (i) the annual cash incentive the executive would have been entitled to receive had he or she remained employed until the end of the fiscal year (prorated for the period of active employment during the fiscal year), and (ii) any other payments or benefits arising from the executive’s participation in other company plans to the extent such plans provide for post-termination employment benefits.
On May 10, 2021, the company entered into an employment agreement with Mr. Eddy, in connection with his promotion to the office of president and chief executive officer of the company, effective April 19, 2021, which superseded his previous employment agreement described above. In fiscal year 2024, Mr. Eddy’s annual base salary remained at $1.35 million. The compensation committee approved a fiscal year 2024 target annual cash incentive award opportunity equal to 175% of his annual base salary, and annual long-term incentive awards in the amount of $9.5 million, consisting of 50% performance-based restricted stock units and 50% restricted stock, for a target total direct compensation for fiscal year 2024 equal to $13.213 million. Mr. Eddy’s current employment agreement also provides that on or after April 19, 2021, to the extent Mr. Eddy’s employment is terminated without cause (as defined in such employment agreement), he is entitled to receive, in addition to any accrued amounts, subject to his entering into a binding and irrevocable release of claims and his continue compliance with the applicable post-termination non-competition, non-solicitation and confidentiality provisions, (i) an amount equal to the sum of (a) his base salary for a period of 12 months after termination and (b) his target annual cash incentive, payable in substantially equal installments in such manner and at such times as Mr. Eddy’s base salary was being paid immediately prior to such termination (or if such termination occurs upon or following the occurrence of a change in control, such amount will be paid in a single lump sum); (ii) an amount equal to the difference between Mr. Eddy’s actual COBRA premium costs and the amount he would have paid had he continued coverage as an employee under the company’s applicable health plans for up to 12 months, subject to earlier termination in specified instances, (iii) if such termination had occurred on or after July 1st of a fiscal year, a pro rata portion of the annual cash incentive to which Mr. Eddy would have been entitled had he remained employed by the company until the end of the fiscal year, (iv) full accelerated vesting of any stock awards or stock options that are unvested and held by him as of the termination date and (v) any other payments or benefits arising from Mr. Eddy’s participation in other company plans to the extent such plans provide for post-termination employment benefits. The employment agreement also includes provisions regarding termination due to death or disability that are the same as those contained in Mr. Eddy’s prior employment agreement.
The amendment to each NEO’s employment agreement clarified the “for cause” termination definition and added standard 409A provisions to protect trigger of penalty taxes tied to severance payments. The amendment with Mr. Eddy includes these changes and also revises the “Good Reason” definition to include Mr. Eddy’s removal from the role of chairman of the board of BJ’s Wholesale Club Holdings, Inc. or his ineligibility to serve in the role due to an amendment to the bylaws or corporate governance policies of BJ’s Wholesale Club Holdings, Inc.
Effective November 5, 2024, Mr. Desroches tendered his resignation from the position of Executive Vice President, Chief Operations Officer, and in the interest of effectuating a smooth transition of his duties to his successor, BJ’s Wholesale Club, Inc. entered into a Post-Resignation Agreement with Mr. Desroches under the terms of which Mr. Desroches agreed to remain employed through April 2, 2025 as an “Executive Advisor”. For performance of certain outlined duties during this period, Mr. Desroches received a salary of
