8-KMaterial AgreementsExhibits & Filings

TJX COMPANIES INC /DE/ 8-K Report, Material Agreement (Apr 2, 2008)

Filed April 2, 2008For Securities:TJX

Summary

TJX Companies, Inc. (TJX) announced on April 2, 2008, a settlement agreement with MasterCard International Incorporated to resolve disputes arising from TJX's previously disclosed computer intrusion. This agreement aims to address potential claims from TJX, MasterCard, and worldwide MasterCard issuers related to the theft of MasterCard payment card data. The settlement involves MasterCard making alternative recovery offers to eligible MasterCard issuers who submitted claims related to the data breach. TJX will fund up to $24 million pre-tax for these payments, with the costs already factored into a reserve established in the fiscal year ending January 26, 2008. The effectiveness of the settlement is contingent upon at least 90% of eligible issuers accepting the settlement offers by May 2, 2008. Upon consummation, issuers accepting the settlement will release TJX from further claims related to the intrusion and alleged data security non-compliance.

Key Highlights

  • 1TJX entered into a settlement agreement with MasterCard on April 2, 2008, to resolve disputes stemming from a prior computer intrusion.
  • 2The settlement addresses potential claims from TJX, MasterCard, and worldwide MasterCard issuers regarding stolen payment card data.
  • 3MasterCard will offer alternative recovery options to eligible issuers who filed claims related to the data breach.
  • 4TJX will fund up to $24 million pre-tax for these recovery payments.
  • 5The estimated costs of this settlement are already accounted for in TJX's existing reserve for the computer intrusion.
  • 6The settlement requires acceptance by issuers representing at least 90% of the affected MasterCard accounts by May 2, 2008.
  • 7Accepting issuers will release TJX from claims related to the computer intrusion and alleged data security non-compliance.

Frequently Asked Questions

The primary purpose is to resolve potential claims and disputes between TJX, MasterCard, and MasterCard issuers that arose from TJX's unauthorized computer intrusion, during which MasterCard payment card data was believed to have been stolen.

TJX will fund up to $24 million pre-tax in alternative recovery payments to eligible MasterCard issuers. Importantly, these costs are already reflected in a reserve that TJX established in its fiscal year ended January 26, 2008, meaning there is no new unbudgeted financial impact from this settlement.

The settlement is conditioned on the acceptance of the 'Settlement Offers' by issuers representing at least 90% of the claimed-on MasterCard accounts. This acceptance must occur by May 2, 2008.

If the settlement is consummated and eligible MasterCard issuers accept the Settlement Offers, they will irrevocably release TJX and its acquiring banks from all claims related to the computer intrusion and alleged non-compliance with MasterCard's data security requirements. They will also covenant not to sue TJX.