Dollar Tree Stores, Inc. Chesapeake, Virginia 23320
Dollar
Tree Stores, Inc.
000
Xxxxx Xxxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
[•]
2007
[NAME]
[ADDRESS]
Dear
[•]:
Dollar
Tree Stores, 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.
Subject
to the provisions of Section 3, in the event of your Involuntary Termination
during the Term, all 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 shall,
to the extent not previously vested, vest and become exercisable as of such
Date
of Termination.
(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,
“Change in Control Date” shall mean the date immediately prior to the date of
such Involuntary Termination.
(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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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 30% 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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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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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 70% of the combined voting power of the
Company
or other corporation resulting from such Transaction;
or
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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 [TITLE]
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 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 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 [2.5]/[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 Stores,
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 STORES, INC.
By:______________________
Name:
Title:
Agreed
to
as of this _____ day of __________, 2007
______________________
[NAME]
