Document:

Exhibit 10.1 Change in Control Retention Agreement

    Exhibit
      10.1

     

    
      Dollar
        Tree Stores, Inc.

      500
        Volvo Parkway

      Chesapeake,
        Virginia 23320

    

     

    [•]
      2007

     

    [NAME]

    [ADDRESS]
      

     

    Retention
      Agreement

     

    

     

    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:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (i)

            	
              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).

            

    

     

    
      	 	
              (ii)

            	
              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. 

            

    

     

    
      	 	
              (iii)

            	
              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. 

            

    

     

    (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: 

     

    
      	 	
              (i)

            	
              your
                felony conviction, whether following trial or by plea of guilty or
                nolo
                contendere
                (or similar plea);

            

    

     

    
      	 	
              (ii)

            	
              your
                engaging in any fraudulent or dishonest conduct with respect to the
                performance of your duties with the
                Companies;

            

    

     

    
      	 	
              (iii)

            	
              your
                engaging in any intentional act that is injurious in a material respect
                to
                the Companies;

            

    

     

    
      	 	
              (iv)

            	
              your
                engaging in any other act of moral
                turpitude;

            

    

     

    
      	 	
              (v)

            	
              your
                willful disclosure of material trade secrets or other material
                confidential information related to the business of the
                Companies;

            

    

     

    
      	 	
              (vi)

            	
              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.
                

            

    

     

    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:

     

    
      	(i)  	
              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;

            

    

     

    
      	(ii)  	
              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;

            

    

     

    
      	(iii)  	
              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

            

    

     

    
      	(iv)  	
              all
                or substantially all of the assets of the Company are sold, liquidated
                or
                distributed.

            

    

     

    “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:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              (i)

            	
              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); 

            

    

     

    
      	 	
              (ii)

            	
              A
                material, adverse change in your duties and responsibilities with
                the
                Company from those in effect prior to the Change in Control
                Date.

            

    

     

    
      	 	
              (iii)

            	
              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; 

            

    

     

    
      	 	
              (iv)

            	
              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;

            

    

     

    
      	 	
              (v)

            	
              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;

            

    

     

    
      	 	
              (vi)

            	
              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;

            

    

     

    
      	 	
              (vii)

            	
              Any
                termination (or purported termination) of your employment which is
                not
                effected pursuant to the terms of this Agreement;
                or

            

    

     

    
      	 	
              (viii)

            	
              Any
                material breach by the Company of this
                Agreement.

            

    

     

    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., 500 Volvo Parkway, Chesapeake, VA 23320, 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]

     

    
Back
      to Top of Agreement

     

    Back
      to Form 8K2006 SEVERANCE AGREEMENT

     THIS  AGREEMENT  entered into this 19th day of March,  2007, by and between
The Patapsco Bank (the "Bank"),  and Michael J. Dee (the "Employee"),  effective
on the date above (the "Effective Date").

     WHEREAS, the Employee has heretofore been employed by the Bank as President
and Chief Executive Officer; and

     WHEREAS,  the Bank deems it to be in its best  interest  to enter into this
Agreement  as  additional  incentive to the Employee to continue as an executive
employee of the Bank; and

     WHEREAS,   the  parties   desire  by  this   writing  to  set  forth  their
understanding  as to their  respective  rights and  obligations  in the event of
termination of a Change in Control of Patapsco Bancorp,  Inc. (the "Company") or
the Bank as set forth in this Agreement.

     NOW, THEREFORE, it is AGREED as follows:

1.  Change in Control
    -----------------

     (a) Payment in the Event of Change in Control.
         ------------------------------------------

     (1)  Immediately  upon the occurrence of a Change in Control of the Company
or the Bank, the Employee shall be paid  $125,000.00.  Said sum shall be paid in
one lump sum.

     (2) "Change in Control" shall mean any one of the following events: (1) the
acquisition  of ownership,  holding or power to vote more than 25% of the Bank's
or the Company's voting stock, (2) the acquisition of the ability to control the
election  of a  majority  of the  Bank's  or the  Company's  directors,  (3) the
acquisition  of a controlling  influence  over the management or policies of the
Bank or the Company by any person or by persons acting as a "group"  (within the
meaning of Section 13(d) of the Securities  Exchange Act of 1934) (provided that
in the case of (1), (2) and (3) hereof,  ownership or control of the Bank by the
Company  itself shall not  constitute a "Change in Control"),  or (4) during any
period of two consecutive years, individuals (the "Continuing Directors") who at
the beginning of such period constitute the Board of Directors of the Company or
the Bank (the  "Existing  Board")  cease for any reason to  constitute  at least
two-thirds  thereof,  provided that any individual  whose election or nomination
for  election  as a member of the  Existing  Board was  approved by a vote of at
least two-thirds of the Continuing  Directors then in office shall be considered
a Continuing Director. For purposes of this subparagraph only, the term "person"
refers to an individual or a corporation, partnership, trust, association, joint
venture, pool, syndicate,  sole proprietorship,  unincorporated  organization or
any other form of entity not  specifically  listed  herein.  The decision of the
Bank's  non-employee  directors  as to whether a Change in Control has  occurred
shall be conclusive and binding.

     (b) Compliance with 12 U.S.C. Section 1828(k).
         ------------------------------------------

     Any payments made to the Employee pursuant to this Agreement, or otherwise,
are subject to and  conditioned  upon their  compliance  with 12 U.S.C.  Section

<PAGE>
1828(k) and any regulations promulgated thereunder.

2.  Term.
    -----

     This  Agreement  shall  remain in effect for the period  commencing  on the
Effective Date and ending on the earlier of (i) the date thirty-six months after
the Effective Date, or (ii) the date on which the Employee terminates employment
with the Bank;  provided that the  Employee's  rights  hereunder  shall continue
following  the  termination  of this  employment  with the Bank under any of the
circumstances  described in Section 1(a)  hereof.  Additionally,  on each annual
anniversary  date from the Effective  Date, the term of this Agreement  shall be
extended for an additional one-year period beyond the then effective  expiration
date  provided the Board of Directors of the Bank  determines  in a duly adopted
resolution that the performance of the Employee has met the Board's requirements
and standards, and that this Agreement shall be extended.

3.  Termination or Suspension Under Federal Law.
    --------------------------------------------

     (a) Termination for "Just Cause" shall mean termination  because of, in the
good  faith  determination  of the Bank's  Board of  Directors,  the  Employee's
personal  dishonesty,  willful  misconduct,  breach of fiduciary  duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law,  rule or  regulation  (other  than  traffic  violations  or  similar
offenses) or final  cease-and-desist  order, or material breach of any provision
of this Agreement.  The Employee shall have no right to receive  compensation or
other benefits under this  Agreement for any period after  termination  for Just
Cause.  No act, or failure to act, on the  Employee's  part shall be  considered
"willful"  unless he has acted,  or failed to act, with an absence of good faith
and  without a  reasonable  belief  that his action or failure to act was in the
best interest of the Bank.

     (b)  If  the  Employee  is  removed  and/or  permanently   prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Sections  8(e)(3) or 8(g)(1) of the Federal  Deposit  Insurance Act ("FDIA") (12
U.S.C.  1818(e)(3) or (g)(1)),  all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.

     (c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA),  all
obligations  under this  Agreement  shall  terminate  as of the date of default;
however, this Paragraph shall not affect the vested rights of the parties.

       (d) All obligations under this Agreement shall terminate, except to the
     extent that continuation of this Agreement is necessary for the continued
operation of the Company: (i) by the Commissioner of Financial Regulation of the
State of Maryland ("Commissioner") at the time that the Federal Deposit
Insurance Corporation ("FDIC") enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of FDIA;
or (ii) by the Commissioner at the time that the Commissioner approves a
supervisory merger to resolve problems related to operation of the Bank or when
the Bank is determined by the Commissioner to be in an unsafe or unsound
condition. Such action shall not affect any vested rights of the parties.

                                       2
<PAGE>

     (e) If a notice  served  under  Section  8(e)(3)  or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits the Employee
from participating in the conduct of the Bank's affairs,  the Bank's obligations
under this Agreement  shall be suspended as of the date of such service,  unless
stayed by appropriate  proceedings.  If the charges in the notice are dismissed,
the Bank shall (i) pay the  Employee  all or part of the  compensation  withheld
while its contract  obligations were suspended,  and (ii) reinstate (in whole or
in part) any of its obligations which were suspended.

     (f) The terms of this Section 3 shall prevail over any other  provisions of
this Agreement.

4.  Expense Reimbursement.
    ----------------------

     In the event that any dispute  arises  between the Employee and the Bank as
to the terms or interpretation of this Agreement,  whether  instituted by formal
legal proceedings or otherwise,  including any action that the Employee takes to
enforce the terms of this Agreement or to defend against any action taken by the
Bank or the Company,  the Employee shall be reimbursed by the Bank for all costs
and expenses,  including reasonable  attorneys' fees, arising from such dispute,
proceedings  or actions,  provided  (other than as set forth in Section  1(d)(2)
above) that the Employee  shall obtain a final judgment in favor of the Employee
in a court of competent  jurisdiction or in binding  arbitration under the rules
of the American Arbitration Association. Such reimbursement shall be paid within
ten (10)  days of  Employee's  furnishing  to the Bank and the  Company  written
evidence,  which may be in the form, among other things,  of a canceled check or
receipt, of any costs or expenses incurred by the Employee.

5.  Successors and Assigns.
    -----------------------

     (a) This  Agreement  shall inure to the benefit of and be binding  upon any
corporate  or  other  successor  of the Bank or  Company  which  shall  acquire,
directly or indirectly, by merger, consolidation,  purchase or otherwise, all or
substantially all of the assets or stock of the Bank or Company.

     (b) Since the Bank and the  Company  are  contracting  for the  unique  and
personal skills of the Employee,  the Employee shall be precluded from assigning
or delegating his rights or duties hereunder without first obtaining the written
consent of the Bank and the Company.

6.  Amendments.
    -----------

     No amendments or additions to this  Agreement  shall be binding unless made
in  writing  and  signed  by all of the  parties,  except  as  herein  otherwise
specifically provided.

7.  Applicable Law.
    ---------------

     Except to the extent  preempted  by Federal  law,  the laws of the State of
Maryland  shall  govern  this  Agreement  in  all  respects,  whether  as to its
validity, construction, capacity, performance or otherwise.

                                       3
<PAGE>

8.  Severability.
    -------------

     The  provisions  of  this  Agreement  shall  be  deemed  severable  and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

9.  Entire Agreement.
    -----------------

     This Agreement, together with any understanding or modifications thereof as
agreed to in writing  by the  parties,  shall  constitute  the entire  agreement
between the parties  hereto.  Notwithstanding  the foregoing,  the parties agree
that the existing Amended and Restated  Severance  Agreement,  dated October 30,
2003,  by and between  the Bank and the  Employee  shall  continue in effect and
shall not be affected by this Agreement.

                                       4
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.

ATTEST:                                THE PATAPSCO BANK

                                       By:
/s/ Douglas Ludwig                         /s/ Thomas O'Neill
------------------                         ------------------
Secretary                                  It's Chairman of the Board

WITNESS:

/s/ William Boyan                           /s/ Michael J. Dee
-----------------                           ------------------
                                            Michael J. Dee

                                       5

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