Dollar Tree, Inc. Chesapeake, Virginia 23320
Exhibit
10.1
Dollar
Tree, Inc.
000
Xxxxx Xxxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
December
2, 2008
Xxxxx X.
Xxxxxxx
00000
Xxxxxxx Xxxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
Dear Xx.
Xxxxxxx:
Dollar
Tree, Inc., a Virginia corporation (the “Company”), considers
it in the best interests of the Company and its stockholders to take reasonable
steps to retain key management personnel. Further, the Board of
Directors of the Company (the “Board”) recognizes
that the uncertainty and questions which might arise among management in the
context of a Change in Control could result in the departure or distraction of
management personnel to the detriment of the Company and its
stockholders.
The Board
has determined, therefore, that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of key members of
management to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible Change in
Control.
The Board
has identified you as a key member of management. In order to induce
you to remain in the employ of the Company, the Company has determined to enter
into this letter agreement (this “Agreement”) which
addresses the terms and conditions of your employment in the event of a Change
in Control. Capitalized words which are not otherwise defined herein
shall have the meanings assigned to such words in Section 8 of this
Agreement.
1. Term of the
Agreement.
The term of your employment under this Agreement shall commence on the Change in
Control Date (after application of Section 2(e)) and shall continue until the
second anniversary of the Change in Control Date (the “Term”). Subject
to Section 2(e), you shall have no rights and obligations under this Agreement,
and no compensation or benefits will be payable to you hereunder, if your
employment with the Company ends for any reason prior to the Change in Control
Date.
2. Involuntary Termination
During the Term.
(a) Severance
Payment. In
the event of your Involuntary Termination during the Term, the Company will pay
you the following amounts:
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(i)
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Within
5 days of the date of such Involuntary Termination, the Company will pay
you in a cash lump sum: (1) the full amount of any earned but
unpaid base salary through the Date of Termination at the rate in effect
at the time such base salary was earned by you; plus (2) the
amount, if any, of any earned but unpaid cash bonus for the annual
performance year ended immediately prior to the Date of Termination; plus (3) the
amount of your accrued and unused vacation time as of the Date of
Termination (calculated in accordance with the Company’s vacation policy
for executives, as in effect on the Date of Termination or, if more
favorable to you, as in effect at any time within the two-year period
ending on the Date of Termination).
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(ii)
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The
Company will also pay you within 5 days of the Date of Termination a pro rata annual bonus
for the year in which your Involuntary Termination occurs, equal to the
product of A multiplied by B, where “A” is the
number of days in the performance year up to and including the Date of
Termination during which you were employed by the Company divided by the
number of days in such calendar year; and where “B” is your
Reference Bonus.
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(iii)
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In
addition, subject to the last sentence of this Section 2(a)(iii), the
Company will pay you an amount (the “Severance
Payment”) equal to the product of C multiplied by D, where “C” is the
Multiplier and where “D” is the
sum of your Reference Salary plus your
Reference Bonus. The Severance Payment shall be paid to you in
substantially equal payroll installments (payable no less frequently than
monthly) over the twelve-month period commencing immediately following
your Date of Termination.
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(b) Benefit
Payment. In
the event of your Involuntary Termination during the Term, you and your eligible
dependents shall continue to be eligible to participate during the Benefit
Continuation Period in the medical, dental, health and life insurance plans
applicable to you immediately prior to your Involuntary Termination on the same
terms and conditions in effect for you and your dependents immediately prior to
such Involuntary Termination. For purposes of the previous sentence,
“Benefit Continuation
Period” means the period beginning on the Date of Termination and ending
on the earliest to occur of (i) the last day of the Multiplier Period, (ii)
the date that you and your dependents are eligible for coverage under the plans
of a subsequent employer and (iii) the last day of the month, if any, in which
you deliver notice to the Company that you are exercising your right in
accordance with the definition of Restricted Period in Section 8 to cease
receiving Severance Payments under this Agreement.
(c) Outstanding Long-Term
Awards.
| (i) | In the event of your Involuntary Termination during the Term, then all Service-Based Conditions (as defined below) contained in all equity awards such as outstanding options, shares of restricted stock and restricted stock units granted to you prior to the Change in Control Date under the Long Term Plans which are outstanding as of your Date of Termination (“Outstanding Awards”) shall be deemed to have been satisfied on the Date of Termination. For purposes of this Agreement, "Service-Based Conditions" shall mean any conditions for exercise, settlement or payment contained in an award under the Long Term Plans that require that you continue to be employed by the Company through a stated date. |
| (ii) | Any acceleration of vesting upon a Change in Control for Outstanding Awards that are contingent on the Company achieving a performance goal shall not accelerate until and unless the relevant performance goal is satisfied, even if that does not occur until after the Change in Control. |
| (iii) | Notwithstanding anything in this Agreement or any award under the Long Term Plans to the contrary, you agree with the Company that all such awards shall be subject to the provisions of Section 3. |
(d) Date and Notice of
Termination. Any
termination of your employment by the Company or by you during the Term shall be
communicated by a notice of termination to the other party hereto (the “Notice of
Termination”). The Notice of Termination shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated. The
date of your termination of employment with the Company and its subsidiaries
(the “Date of
Termination”) shall be determined as follows: (i) if your
employment is terminated for Disability, 30 days after a Notice of Termination
is given (provided that you shall not have returned to the full-time performance
of your duties during such 30-day period), (ii) if your employment is terminated
by the Company in an Involuntary Termination, five days after the date the
Notice of Termination is received by you and (iii) if your employment is
terminated by the Company for Cause, the later of the date specified in the
Notice of Termination or ten days following the date such notice is received by
you. If the basis for your Involuntary Termination is your
resignation for Good Reason, the Date of Termination shall be ten days after the
date your Notice of Termination is received by the Company. The Date
of Termination for a resignation of employment other than for Good Reason shall
be the date set forth in the applicable notice, which shall be no earlier than
ten days after the date such notice is received by the Company.
(e) Early Commencement of the
Term. If your employment with the Company ends in an
Involuntary Termination within the six-month period ending on the Change in
Control Date (as such term is defined in Section 8 prior to application of this
Section 2(e)), and it is reasonably demonstrated that your Involuntary
Termination (i) was caused by, or at the request of, the third party who has
taken steps reasonably calculated to effect the Change in Control or (ii)
otherwise arose in connection with or in anticipation of the Change in Control,
then, for all purposes of this Agreement:
(A) the
Term shall be deemed to have commenced on the date immediately prior to the date
of such Involuntary Termination;
(B) any
payments required under Section 2(a)(ii) shall be made within 5
days after the Change in Control Date and any payments required under
Section 2(a)(iii) shall be made in substantially equal payroll installments
(payable no less frequently than monthly) over the twelve-month period
commencing immediately following the Change in Control Date;
(C) for
purposes of any Outstanding Award only, you shall be deemed to have continued in
service until the Change in Control Date and all Service-Based Conditions shall
be deemed to have been satisfied on the Change in Control Date; and
(D) with
respect to Outstanding Awards, the expiration date for exercise shall be
extended until on the earlier of the 90-day anniversary of the Change in Control
Date or the ten-year anniversary of the relevant grant date.
(f) Other Terminations or
Resignations. No amounts shall be payable to you under this
Agreement if your employment ends during the Term for any reason other than an
Involuntary Termination. If your employment ends during the Term for
any reason other than an Involuntary Termination, you shall be entitled to
receive only the compensation and benefits contemplated by the terms and
provisions of the Company’s plans and arrangements then in effect.
(g) No Mitigation or
Offset. You
will not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise, nor will the amount of any
payment or benefit provided for in this Agreement be reduced by any compensation
earned by you as the result of employment by another employer or by pension
benefits paid by the Company or another employer after the Date of Termination
or otherwise, except as specifically provided in clause (ii) of the last
sentence of Section 2(b).
(h) Effective of Breach of
Section 4. Except for rights and benefits described in Section
2(a)(i), you shall immediately forfeit your right to any payments of benefits
under this Section 2 if you violate the provisions of Section 4. Such
forfeiture by you shall be in addition to, and not in substitution for, any
remedies otherwise available to the Company at law or in equity as a result of
such violation by you.
3. Limitation of
Payments.
(a) Claw-back. Notwithstanding
anything herein to the contrary, if any Payments to you would be subject to the
excise tax imposed by Section 4999 of the Code (the “Excise Tax”), the
Company shall take such action as shall be reasonably necessary to reduce the
aggregate amount of Payments due to you (the “Claw-back Amount”)
such that the present value of all such Payments (as determined under the Code
and regulations) is equal to 2.99 times your “base amount” (as
defined in Section 280G(b)(3) of the Code). No Claw-back Amount shall
be necessary hereunder if the Accounting Firm determines that none of the
Payments are subject to the Excise Tax. The Company shall reduce
Payments in a manner that is reasonably intended to maximize the aggregate
amount of the compensation and benefits retained by you under this Agreement and
under any other compensation and benefit arrangements that result in Payments to
you, including the Long-Term Plans. The Company and the Accounting
Firm shall implement the provisions of this Section 3 in a manner that is
consistent with any claw-back provisions in the Long-Term Plans.
(b) Determination of Claw-back
Amount.
Subject to the provisions of Section 3(c), all determinations required under
this Section 3, including the amount of the Payments constituting excess
parachute payments, within the meaning of Section 280G(b)(1) of the Code, the
Claw-back Amount, and the Payments to which the Claw-back Amount shall be
applied in accordance with the last sentence of Section 3(a), shall be made by
the Accounting Firm, which shall provide detailed supporting calculations both
to you and the Company within 90 days of the Change in Control Date, your Date
of Termination or any other date reasonably requested by you or the Company on
which a determination under this Section 3 is necessary or
advisable. Any determination by the Accounting Firm shall be binding
upon you and the Company.
(c) Procedures. You
shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment of the Excise
Tax. Such notice shall be given as soon as practicable after you know
of such claim and shall apprise the Company of the nature of the claim and the
date on which the claim is requested to be paid. You agree not to pay
the claim until the expiration of the 30-day period following the date on which
you notify the Company, or such shorter period ending on the date the taxes with
respect to such claim are due (the “Notice
Period”). If the Company notifies you in writing prior to the
expiration of the Notice Period that it desires to contest the claim, you
shall: (i) give the Company any information reasonably requested by
the Company relating to the claim; (ii) take such action in connection with the
claim as the Company may reasonably request, including accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company and reasonably acceptable to you; (iii) cooperate with
the Company in good faith in contesting the claim; and (iv) permit the Company
to participate in any proceedings relating to the claim. You shall
permit the Company to control all proceedings related to the claim and, at its
option, permit the Company to pursue or forgo any and all administrative
appeals, proceedings, hearings, and conferences with the taxing authority in
respect of such claim.
(d) Further
Assurances. The
Company shall indemnify you and hold you harmless, on an after-tax basis, from
any costs, expenses, penalties, fines, interest or other liabilities (“Losses”) incurred by
you with respect to the exercise by the Company of any of its rights under this
Section 3(c), including any Losses related to the Company’s decision to contest
a claim or any action taken on your behalf by the Company
hereunder. The Company shall pay all legal fees and expenses incurred
under this Section 3, and shall promptly reimburse you for the reasonable
expenses incurred by you in connection with any actions taken by the Company or
required to be taken by you under this Section 3. The Company shall
also pay all of the fees and expenses of the Accounting Firm.
4. Protective
Covenants.
(a) Nondisparagement. You
shall not, during the Restricted Period, make any statement, in written, oral or
electronic form, in disparagement of the Companies or of any of the officers,
shareholders, directors, employees, agents, or associates of any of the
Companies (including, but not limited to, negative references to any of the
Companies and the products, services, or corporate policies of any of the
Companies) to the general public or the employees, employees, customers,
suppliers, potential suppliers, business partners or potential business partners
of any of the Companies.
(b) Nonsolicitation. You
shall not, during the Restricted Period, either directly or indirectly, for
yourself or on behalf of any other person or entity, solicit, induce, recruit,
or encourage any employees of any of the Companies to leave their employment, or
take away such employees, or attempt to solicit, induce, recruit, encourage,
take-away, or hire any such employees either for your benefit or for the benefit
of any other person or entity.
(c) Noncompetition. You
shall not, during the Restricted Period, either directly or indirectly, provide
services to any Competitor, including as a spokesperson, endorser, creditor,
guarantor, financial backer, investor, stockholder, director, officer,
consultant, adviser, employee, member, trustee or agent, or in any similar
capacity. Notwithstanding the foregoing, the provisions of this
Section 4(c) shall not be deemed to prohibit your purchase or ownership, as a
passive investment, of not more than 5% of the issued and outstanding stock or
other securities of a corporation listed on a national securities exchange or
traded in the over-the-counter market.
(d) Confidential
Information. You
shall not, during the Restricted Period, disclose any confidential information
or trade secrets related to the business or operations of any of the Companies
that you acquired in connection with your employment by or association with any
of the Companies.
5. Indemnification. If
you are made a party, are threatened to be made a party to, or otherwise receive
any other legal process in, any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a “Proceeding”), by
reason of the fact that you are or were a director, officer or employee of any
of the Companies or are or were serving at the request of the Company as a
director, officer, member, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether or not the basis of such Proceeding
is your alleged action in an official capacity while serving as director,
officer, member, employee or agent of any of the Companies, the Company shall
indemnify you and hold you harmless to the fullest extent permitted or
authorized by the Company’s Articles of Incorporation, By Laws or under the laws
of the Commonwealth of Virginia, but in no event greater than permitted by
applicable state law, against all cost, expense, liability and loss (including
attorney’s fees, judgments, fines, excise taxes or penalties and amounts paid or
to be paid in settlement and any cost and fees incurred in enforcing your rights
to indemnification or contribution) reasonably incurred or suffered by you in
connection therewith. To the extent that the Company maintains
officers’ and directors’ liability insurance, you will be covered under such
policy subject to the exclusions and limitations set forth therein.
6. Legal Fees and
Expenses. The
Company shall pay or reimburse you on an after-tax basis for all reasonable
legal fees and expenses (including court costs) incurred by you as a result of
any claim by you (or on your behalf) that is successful on the merits or settled
in your favor (i) arising out of your termination of employment during the Term,
(ii) contesting, disputing or enforcing any right, benefits or obligations under
this Agreement or (iii) arising out of or challenging the validity, advisability
or enforceability of this Agreement or any provision thereof. You
shall be responsible to reimburse the Company for all reasonable legal fees and
expenses (including court costs) incurred by the Company as a result of any
claim by you that is determined by a court having final jurisdiction over such
claim, to have been frivolous.
7. Successors; Binding
Agreement.
(a) Assumption by
Successor. The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company expressly to assume and to agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place; provided, however, that no such
assumption shall relieve the Company of its obligations hereunder without your
prior written consent.
(b) Enforceability;
Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of you and the Company
and any organization which succeeds to substantially all of the business or
assets of the Company, whether by means of merger, consolidation, acquisition of
all or substantially all of the assets of the Company or otherwise, including as
a result of a Change in Control or by operation of law. This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any
amount would still be payable to you hereunder if you had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to your devisee, legatee or other designee or, if
there is no such designee, to your estate.
8. Definitions and Rules of
Construction.
(a) For
purposes of this Agreement, the following capitalized words shall have the
meanings set forth below:
“Accounting Firm”
shall mean a nationally recognized accounting firm designated by the Company and
approved by you, which approval shall not be unreasonably withheld.
“Agreement” shall have
the meaning set forth in the third paragraph of this Agreement.
“Benefit Continuation
Period” shall have the meaning set forth in Section 2(b).
“Board” shall have the
meaning set forth in the second paragraph of this Agreement.
“Catch-Up Amount”
shall have the meaning set forth in Section 10.
“Cause” shall mean a
termination of your employment during the Term by the Company as a result of any
of the following occurring during the Term:
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(i)
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your
felony conviction, whether following trial or by plea of guilty or nolo contendere (or
similar plea);
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(ii)
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your
engaging in any fraudulent or dishonest conduct with respect to the
performance of your duties with the
Companies;
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(iii)
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your
engaging in any intentional act that is injurious in a material respect to
the Companies;
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(iv)
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your
engaging in any other act of moral
turpitude;
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(v)
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your
willful disclosure of material trade secrets or other material
confidential information related to the business of the
Companies;
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(vi)
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your
willful and continued failure substantially to perform your duties with
the Companies (other than any such failure resulting from your incapacity
due to physical or mental illness or any such actual or anticipated
failure resulting from a resignation by you for Good Reason) after a
written demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, and which
performance is not substantially corrected by you within thirty days of
receipt of such demand. For purposes of this clause (v), no act
or failure to act on your part shall be deemed “willful” unless done, or
omitted to be done, by you not in good faith and without reasonable belief
that your action or omission was in the best interest of the
Company.
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Notwithstanding
the foregoing, you shall not be deemed to have been terminated for Cause unless
and until there shall have been delivered to you a copy of a resolution duly
adopted by the affirmative vote of not less than three-fourths (3/4ths) of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in the
good faith opinion of the Board you were guilty of conduct set forth above
constituting Cause and specifying the particulars thereof. For
purposes of this definition, “Board” shall mean the
Board of Directors of the Company or of any successor to the
Company.
“Change in Control”
shall mean a change in control of the Company of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, whether or not the Company is then subject
to such reporting requirement; provided, however, that,
anything in this Agreement to the contrary notwithstanding, a Change in Control
shall be deemed to have occurred if:
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(i)
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any
individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity or person, or any syndicate or
group deemed to be a person under Section 14(d)(2) of the Exchange Act, is
or becomes the “beneficial owner” (as defined in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting
power of the Company’s then outstanding securities entitled to vote in the
election of directors of the
Company;
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(ii)
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during
any period of two (2) consecutive years (not including any period prior to
the execution of this Agreement), individuals who at the beginning of such
period constituted the Board and any new directors, whose election by the
Board or nomination for election by the Company’s stockholders was
approved by a vote of at least three-fourths (3/4ths) of the directors
then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved (the “Incumbent
Directors”), cease for any reason to constitute a majority
thereof;
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(iii)
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there
occurs a Transaction with respect to which the stockholders of the Company
immediately prior to such Transaction do not, immediately after the
Transaction, own more than 50% of the combined voting power of the Company
or other corporation resulting from such Transaction;
or
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(iv)
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all
or substantially all of the assets of the Company are sold, liquidated or
distributed.
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“Change in Control
Date” shall mean, subject to Section 2(e), the earliest of (i) the
date on which the Change in Control occurs, (ii) the date on which the Company
executes an agreement, the consummation of which would result in the occurrence
of a Change in Control, (iii) the date the Board approves a transaction or
series of transactions, the consummation of which would result in a Change in
Control, and (iv) the date the Company fails to satisfy its obligations to have
this Agreement assumed by any successor to the Company in accordance with
Section 7(a) of this Agreement. If the Change in Control Date occurs
as a result of an agreement described in clause (ii) of the previous sentence or
as a result of the approval of the Board described in clause (iii) of the
previous sentence and the Change in Control to which such agreement or approval
relates (the “Contemplated Change in
Control”) subsequently does not occur, then the Term shall expire on the
sixtieth day (the “Reset Date”)
following the date the Board certifies by resolution duly adopted by
three-fourths (3/4ths) of the Incumbent Directors then in office that the
Contemplated Change in Control is not reasonably likely to occur; provided, however, that this
sentence shall not apply if (A) an Involuntary Termination of your employment
with the Company has occurred on and after the Change in Control Date and on or
prior to the Reset Date or (B) the Contemplated Change in Control subsequently
occurs within three months following the Reset Date. Following the
Reset Date, the provisions of this Agreement shall remain in effect and a new
Term shall commence upon the occurrence of a subsequent Change in Control
Date. If the Change in Control Date occurs without the subsequent
occurrence of a Reset Date, then the Term shall be determined in accordance with
Section 1 and no subsequent Change in Control Date shall occur hereunder, even
if a subsequent Change in Control occurs during the Term or
thereafter.
“Claw-back Account”
shall have the meaning set forth in Section 3(a).
“Code” shall mean the
Internal Revenue Code of 1986, as amended, and the applicable rulings and
regulations thereunder.
“Companies” shall mean
the Company and each subsidiary corporation of the Company (as such term is
defined in Section 424(f) of the Code).
“Company” shall have
the meaning set forth in the first paragraph of the Agreement.
“Competitor” shall be
limited to Family Dollar Stores, Inc., a Delaware corporation, Dollar General
Corporation, a Tennessee corporation, and 99¢ Only Stores, a California
corporation (collectively, the “Named Competitors”),
and any successor by sale, consolidation, reorganization, merger or otherwise to
all or substantial all of the business or assets of a Named Competitor; provided, however, that, if any
such successor engages in one or more businesses that are separate and apart
from the business of the Named Competitor, the term “Competitor” shall be
limited to only that portion of such successor’s organization that engages in
the Named Competitor’s business.
“Date of Termination”
shall have the meaning set forth in Section 2(d).
“Disability” shall
mean (i) your incapacity due to physical or mental illness which causes you to
be absent from the full-time performance of your duties with the Company for six
(6) consecutive months and (ii) your failure to return to full-time performance
of your duties for the Company within thirty (30) days after written Notice of
Termination due to Disability is given to you. Any question as to the
existence of your Disability upon which you and the Company cannot agree shall
be determined by a qualified independent physician selected by you (or, if you
are unable to make such selection, such selection shall be made by any adult
member of your immediate family), and approved by the Company. The
determination of such physician made in writing to the Company and to you shall
be final and conclusive for all purposes of this Agreement.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the applicable rulings
and regulations thereunder.
“Excise Tax” shall
have the meaning set forth in Section 3(a).
“Good Reason” shall
mean your resignation of employment during the Term with the Company as a result
of any of the following occurring during the Term:
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(i)
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Your
ceasing to hold the position of Chief Financial Officer of the Company (or
the surviving entity resulting from the merger or consolidation, through
one or more related transactions, of the Company with another
entity);
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(ii)
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A
material, adverse change in your duties and responsibilities with the
Company from those in effect prior to the Change in Control
Date.
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(iii)
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A
reduction that is more than immaterial in your annual base salary as in
effect immediately prior to the Change in Control Date or as the same may
be increased from time to time
thereafter;
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(iv)
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A
reduction that is more than immaterial in your target annual bonus
(expressed as a percentage of base salary) below the target in effect for
you prior to the Change in Control
Date;
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(v)
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The
relocation of the office of the Company where you are primarily employed
to a location which is more than 50 miles from the place where you are
primarily employed by the Company immediately prior to the Change in
Control Date;
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(vi)
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The
failure of the Company to obtain an agreement reasonably satisfactory to
you from any successor to assume and agree to perform this Agreement or,
if the business for which your services are principally performed is sold
at any time after a Change in Control, the failure of the Company to
obtain such an agreement from the purchaser of such
business;
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(vii)
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Any
termination (or purported termination) of your employment which is not
effected pursuant to the terms of this Agreement;
or
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(viii)
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Any
material breach by the Company of this
Agreement.
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Notwithstanding
the above, an event shall not constitute Good Reason unless it is communicated
by you to the Company in writing within 90 days following the date you know of
the occurrence of such event, and such event is not corrected by the Company in
a manner which is reasonably satisfactory to you (including full retroactive
correction with respect to any monetary matter) within 10 days of the Company’s
receipt of such written notice from you.
“Involuntary
Termination” shall mean (i) your termination of employment by the Company
and its subsidiaries during the Term other than for Cause or Disability or (ii)
your resignation of employment with the Company and its subsidiaries during the
Term for Good Reason.
“Long-Term Plans”
shall mean the Company’s 2004 Executive Officer Equity Plan, as amended, the
Company’s 2003 Equity Incentive Plan, as amended, and any other plan or
arrangement of the Company applicable to you that provides for the grant of
long-term equity incentive compensation.
“Losses” shall have
the meaning set forth in Section 3(d).
“Multiplier” shall
mean 1.5.
“Multiplier Period”
shall mean a period of years equal to the Multiplier and commencing on the Date
of Termination.
“Notice of
Termination” shall have the meaning set forth in Section
2(d).
“Notice Period” shall
have the meaning set forth in Section 3(c).
“Payment” shall mean a
“payment,” as defined in Section 280G(b)(2) of the Code, to you from the Company
or any corporation which is a member of an “affiliate group” (as defined in
Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of
which the Company is a member, which would reasonably constitute a “parachute
payment,” as defined in Section 280G(b)(2) of the Code.
“Proceeding” shall
have the meaning set forth in Section 5.
“Reference Bonus”
shall mean the average of the actual cash bonuses earned and paid (or payable)
to you for the three performance years ended prior to the year in which occurs
your Date of Termination (but in no event greater than the target bonus for the
year in which the Date of Termination occurs). If there are fewer
than three performance years ended prior to the year in which occurs your Date
of Termination, the actual number of performance years (and the bonuses for such
years) shall be used in calculating such average and, in the event that you are
first employed by the Company in the year in which occurs your Date of
Termination, your reference bonus shall equal 75% of your target bonus for such
year. For purposes of calculating your Reference Bonus, the Company
shall disregard any signing or similar-type payment to you and shall exclude
from the calculation of the average a performance year if you were not employed
by the Company during all of that year.
“Reference Salary”
shall mean the highest annual rate of base salary paid to you by the Company at
any time during the three-year period ending on the Date of
Termination.
“Restricted Period”
shall mean the period beginning on the date you become entitled to a Severance
Payment and ending on the earlier of twelve-months thereafter or the date you
deliver notice to the Company electing to terminate your right to continue to
receive Severance Payments.
“Severance Payment”
shall have the meaning set forth in Section 2(a)(iii).
“Term” shall have the
meaning set forth in Section 1.
“Transaction” shall
mean a reorganization, merger, consolidation or other similar corporate
transaction involving the Company.
(b) Rules of
Construction. All references to dates and times refer to dates
and times in Chesapeake, Virginia. Use of the masculine pronoun or
the feminine pronoun shall be deemed to encompass the use of the opposite
gender, and the use of the singular shall be deemed to encompass the plural,
unless the context clearly requires otherwise. Unless otherwise
expressly noted herein, paragraph, section and exhibit references are to the
paragraphs, sections and exhibits of this Agreement. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they are
deemed to be followed by the words “without limitation,” unless the context
clearly requires otherwise. The headings contained in this Agreement
are intended solely for convenience of reference and shall not affect the rights
of the parties to this Agreement.
9. Notice. All
notices, requests, consents and other communications required or permitted under
this Agreement shall be in writing (including electronic transmission) and
shall be (as elected by the person giving such notice) hand delivered by
messenger or courier service, electronically transmitted, or mailed (airmail if
international) by registered or certified mail (postage prepaid), return
receipt requested, addressed to the Board of Directors, Dollar Tree, Inc., 000
Xxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000, with a copy to the General Counsel of the
Company, or to you at the address set forth on the first page of this Agreement
or to such other address as any party may designate by notice complying with the
provisions of this Section 9. Each such notice shall be deemed
delivered (a) on the date delivered if by personal delivery; (b) on
the date of transmission with confirmed answer back if by electronic
transmission; and (c) on the date upon which the return receipt is signed
or delivery is refused or the notice is designated by the postal authorities as
not deliverable, as the case may be, if mailed.
10. Section 409A
Compliance. Solely to the extent necessary to comply with
Section 409A of the Code, any amounts payable to you pursuant this Agreement
during the period beginning on your Date of Termination and ending on the
six-month anniversary of such date shall be delayed and not paid to you until
the first business day following such sixth-month anniversary date, at which
time such delayed amounts will be paid to you in a cash lump sum (the “Catch-up
Amount”). If payment of an amount is delayed as a result of
this Section 10, such amount shall be increased with interest from the date
on which such amount would otherwise have been paid to you but for this Section
10 to the day prior to the date the Catch-up Amount is paid. The rate
of interest shall be the applicable short-term federal rate applicable under
Section 7872(f)(2)(A) of the Code for the month in which occurs your Date of
Termination. Such interest shall be paid at the same time that the
Catch-up Amount is paid. If you die on or after your Date of
Termination and prior to the sixth-month anniversary of such date, any amount
delayed pursuant to this Section 10 shall be paid to your estate or beneficiary,
as applicable, together with interest, within 30 days following the date of your
death. The provisions of this Section 10 shall apply notwithstanding
any provision of this Agreement related to the timing of payments following your
Date of Termination.
11. Miscellaneous.
(a) Amendments, Waivers,
Etc. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in a writing signed by you and
the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement
and this Agreement shall supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
with respect to the subject matter hereof; provided, however, that, except
as expressly set forth herein, this Agreement shall not supersede the terms of
Long-Term Plans and applicable award documents thereunder.
(b) Validity. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
(c) Severability. In
the event that any provision or term of this Agreement is held to be invalid,
prohibited or unenforceable for any reason, such provision or term shall be
deemed severed from this Agreement, without invalidating the remaining
provisions, which shall remain in full force and effect.
(d) Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.
(e) No Contract of
Employment. Nothing
in this Agreement shall be construed as giving you any right to be retained in
the employ of the Company or shall affect the terms and conditions of your
employment with the Company prior to the commencement of the Term hereof or, if
your employment with the Company continues after the Term, following the
expiration of the Term.
(f) Withholding. Amounts
paid to you hereunder shall be subject to all applicable federal, state and
local withholding taxes.
(g) Source of
Payments. All
payments provided under this Agreement, other than payments made pursuant to a
plan which provides otherwise, shall be paid in cash from the general funds of
the Company, and no special or separate fund shall be established, and no other
segregation of assets made, to assure payment. You will have no
right, title or interest whatsoever in or to any investments which the Company
may make to aid it in meeting its obligations hereunder. To the
extent that any person acquires a right to receive payments from the Company
hereunder, such right shall be no greater than the right of an unsecured
creditor of the Company.
(h) Governing
Law. The
validity, interpretation, construction, and performance of this Agreement shall
be governed by the laws of the Commonwealth of Virginia applicable to contracts
entered into and performed in such Commonwealth.
If this
letter sets forth our agreement on the subject matter hereof, kindly sign and
return to the Company the enclosed copy of this letter which will then
constitute our agreement on this subject.
Sincerely,
DOLLAR
TREE, INC.
By:_/s/ Xxx
Sasser__________________
Xxx
Xxxxxx
President
and CEO
Agreed to
as of this 2nd day of
December, 2008
_/s/ Xxxxx X.
Wampler_________
Xxxxx X.
Xxxxxxx
