<PAGE>
EXHIBIT 10.1
FORM OF SEVERANCE AGREEMENT
1. Recitals
(a) This
Severance Agreement ("Agreement") is between The Town and
Country
Trust (the "Company") and ____________ (the
"Executive") and is effective as of
January ___, 2005.
(b) The
address of the Company is 300 East Lombard Street, Baltimore,
Maryland 21202. The address of the
Executive is_______________________________.
(c) The
Executive is currently employed by the Company in the capacity
of
___________________ and the Executive is
one of the key executives of the
Company.
(d) In
consideration of the mutual promises contained herein and other
good and valuable consideration, the
Executive and the Company have entered into
this Agreement.
2. Term of Agreement
The Term
of this Agreement shall commence on the date hereof and
continue
until December 31, 2007; provided, however,
that commencing on January 1, 2006
and each January 1st thereafter, the
above-referenced date and the Term of this
Agreement shall automatically be extended
for one additional year unless at
least thirty days prior to such January 1st
date, the Company or the Executive
shall have given notice that it or he does
not wish to extend this Agreement;
and further provided, however, that if a
Change in Control (as defined in
Section 3 hereof) shall have occurred
during the Term of this Agreement, the
Term of this Agreement shall expire no
earlier than twenty-four (24) months
following the month in which such Change in
Control occurred. The phrase "Term
of this Agreement" shall refer to the
period commencing on the date hereof and
ending on December 31, 2007 (or any
extension thereof pursuant to the preceding
sentence).
Nothing
contained in this Agreement shall prevent the Company at any
time
from terminating the Executive's right and
obligation to perform services for
the Company or prevent the Company from
removing the Executive from any position
which the Executive holds in the Company,
subject to the obligation of the
Company to make payments and provide
benefits if and to the extent required
under this Agreement, which payments and
benefits shall be full and complete
liquidated damages, insofar as the
obligations of the Company pursuant to this
Agreement are concerned, for any such
action taken by the Company. The Executive
specifically acknowledges that, except for
this Agreement, his employment by the
Company is employment-at-will, subject to
termination by the Executive, or by
the Company, at any time with or without
cause. The Executive acknowledges that
such employment-at-will status cannot be
modified except in a specific writing
which has been authorized or ratified by
the Board of Directors of the Company
(the "Board").
3. Change in Control
(a) No
benefit shall be payable under this Agreement unless a Change
in
Control of the Company shall be deemed to
have occurred. For purposes of this
Agreement, a "Change in Control" of the
Company shall be deemed to have occurred
if:
(i) any Person
(as defined in Section 3(b) hereof) is or becomes
the beneficial owner (as set forth in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended ("Exchange Act"))
("Beneficial Owner"), directly or indirectly, of securities of
the Company (not including in the securities beneficially
owned by such Person any securities acquired directly from the
Company or its affiliates (as set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act)
("Affiliates")) representing 25% or more of the
-5-
<PAGE>
combined voting power of the Company's then outstanding
securities, excluding any Person who becomes such a Beneficial
Owner in connection with a transaction described in clause (B)
of paragraph (iii) below; or
(ii) the following
individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for
election by the Company's shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on
the date hereof or whose appointment, election or nomination
for election was previously so approved or recommended; or
(iii) there is consummated a merger or consolidation of the
Company
or any direct or indirect subsidiary of the Company with any
other corporation or other entity, other than (A) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities
Beneficially Owned by such Person any securities acquired
directly from the Company or its Affiliates) representing 25%
or more of the combined voting power of the Company's then
outstanding securities, or (B) a merger or consolidation which
results in (1) the voting securities of the Company
outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity
or any parent thereof) at least 55% of the combined voting
power of the securities of the Company or such surviving
entity or any parent thereof outstanding immediately after
such merger or consolidation and (2) the individuals who
comprise the Board immediately prior to the merger or ---
consolidation constitute at least a majority of the board of
directors of the Company, the entity surviving such merger or
consolidation or, if the Company or the entity surviving such
merger is then a subsidiary, the ultimate parent thereof; or
(iv) the shareholders
of the Company approve a plan of complete
liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or
substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity where
(A) at least 55% of the combined voting power of the voting
securities of which are owned by shareholders of the Company
in substantially the same proportions as their ownership of
the Company immediately prior to such sale and (B) immediately
following such sale the individuals who comprise the Board
immediately prior thereto constitute at least a majority of
the board of directors of the entity to which such assets are
sold or disposed or any parent thereof; or
(v) a
transaction is consummated following which the Company
ceases to be the Beneficial Owner, directly or indirectly, of
the majority of the partnership interests in the TC Operating
Limited Partnership (the "OP").
Notwithstanding the foregoing, any event or
transaction which would otherwise
constitute a Change in Control (a
"Transaction") shall not constitute a Change
in Control for purposes of this Agreement
if, in connection with the
Transaction, the Executive participates as
an equity investor in the acquiring
entity or any of its affiliates (the
"Acquiror"). For purposes of the preceding
sentence, the Executive shall not be deemed
to have participated as an equity
investor in the Acquiror by virtue of (i)
obtaining beneficial ownership of any
equity interest in the Acquiror as a result
of the grant to the Executive of an
incentive compensation award under one or
more incentive plans of the Acquiror
(including, but not limited to, the
conversion in connection with the
Transaction of incentive compensation
awards of the Company into incentive
compensation awards of the Acquiror), on
terms and conditions substantially
equivalent to those applicable to other
executives of the Company immediately
prior to the Transaction, after taking
-6-
<PAGE>
into account normal differences
attributable to job responsibilities, title and
the like, or (ii) obtaining beneficial
ownership of any equity interest in the
Acquiror on terms and conditions
substantially equivalent to those obtained in
the Transaction by all other stockholders
of the Company or all other holders of
interests in the OP.
(b) Person
shall have the meaning given in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d)
thereof, except that such term shall
not include (i) the Company or any of its
Affiliates, (ii) a trustee or other
fiduciary holding securities under an
employee benefit plan of the Company or
any of its Affiliates, (iii) an underwriter
temporarily holding securities
pursuant to an offering of such securities,
(iv) a corporation owned, directly
or indirectly, by the shareholders of the
Company in substantially the same
proportions as their ownership of stock of
the Company, (v) Harvey Schulweis,
individually, or his estate, heirs or
personal representatives or any trust
created for the benefit of his wife or
children, or any corporation or other
entity which such persons control, or (vi)
the estate of Alfred Lerner, his
heirs or personal representatives or any
trust created for the benefit of his
wife or children, or any corporation or
other entity which such persons control.
(c) For
purposes of this Agreement, the Executive's employment shall be
deemed to have been terminated following a
Change in Control by the Company
without Cause or by the Executive for Good
Reason, if (i) the Executive's
employment is terminated by the Company
without Cause prior to a Change in
Control (whether or not a Change in Control
ever occurs) and such termination
was at the request or direction of a Person
with whom, at the time of
termination of the Executive's employment,
the Company was actively engaged in
negotiations or other activities for the
purpose of effecting a Change in
Control, or (ii) the Executive terminates
his employment for Good Reason prior
to a Change in Control (whether or not a
Change in Control ever occurs) and the
circumstance or event which constitutes
Good Reason occurs at the request or
direction of such Person.
4. Notice of Termination;
Date of Termination
(a) Any
termination of the Executive's employment by the Company or by
the
Executive shall be communicated by written
Notice of Termination to the other
party thereto. For purposes of this
Agreement, a "Notice of Termination" shall
mean a notice that 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 employment under the
provision so indicated. Furthermore, either
the Executive or the Company may
give a Notice of Termination to the other
party for the purpose of terminating
this Agreement, as such, without
terminating the Executive's employment with the
Company, which Notice of Termination shall
have the effect of terminating this
Agreement at the expiration of the Term of
this Agreement as in effect on the
date of giving such Notice of
Termination.
(b) "Date
of Termination" shall mean:
(i) If the
Agreement is terminated for Disability (as defined in
Section 8 hereof), thirty (30) days after Notice of
Termination is given (provided that the Executive shall not
have returned to the performance of his duties on a full-time
basis during such thirty (30) day period),
(ii) If the
Executive's employment terminates due to death, the
date of death,
(iii) The expiration or termination of the Term of this
Agreement,
and
(iv) If the
Executive's employment is terminated for any other
reason, the date set forth in the applicable Notice of
Termination which shall not be less than 30 days after the
date Notice of Termination is given.
5. Compensation After
Change in Control
Immediately after any Change in Control of the Company shall be
deemed to
have occurred, the Executive shall be
entitled to receive for the remainder of
the Term of this Agreement (as extended
from time to time) an annual base salary
(the "Base Salary"), payable in
installments in accordance with the current
practice of the
-7-
<PAGE>
Company, at an annual rate at least equal
to the aggregate annual base salary
payable to the Executive as of the date
hereof. The Base Salary may be increased
(but may not be decreased) at any time and
from time to time by action of the
Board, any committee thereof, or any
individual having authority to take such
action, in accordance with the Company's
regular practices, and, if so
increased, such increased Base Salary shall
thereafter be the Base Salary for
the purposes of this Agreement. Any
increase in the Base Salary shall not serve
to limit or reduce any other obligation of
the Company hereunder.
6. Benefit Plans
After a
Change in Control of the Company shall be deemed to have
occurred,
(a) The
Company agrees to continue in effect the benefit plans
(including,
without limitation, any life, health,
dental, short term and long term
disability insurance coverages, or
retirement plans) in which the Executive was
participating or, with continued service or
retirement would be eligible for
participation as of immediately prior to
the Change in Control (collectively
referred to as the "Benefit Plans"); or to
maintain plans providing
substantially similar benefits; and
(b) The Company agrees not to take
any action that would adversely affect
the Executive's participation in, or
materially reduce the benefits under, any
of the Benefit Plans or deprive the
Executive of any material fringe benefit
enjoyed by him as of immediately prior to
the Change in Control.
7. Termination for
Cause
(a) The
Company may terminate the Executive's employment for Cause. For
the purposes of this Agreement, the Company
shall have "Cause" to terminate
employment hereunder only (i) if
termination shall have been the result of an
act or acts of dishonesty by the Executive
constituting a felony or an act or
acts resulting or intended to result
directly or indirectly in substantial gain
or personal enrichment to the Executive at
the expense of the Company; or (ii)
upon the willful and continued failure by
the Executive substantially to perform
his duties with the Company (other than any
such failure resulting from
incapacity due to mental or physical
illness) after a demand in writing for
substantial performance is delivered by the
Board, which demand specifically
identifies the manner in which the Board
believes that the Executive has not
substantially performed his duties, and
such failure results in demonstrably
material injury to the Company. The
Executive's employment shall in no event be
considered to have been terminated by the
Company for Cause if such termination
took place as the result of (i) bad
judgment or negligence, or (ii) any act or
omission without intent of gaining
therefrom directly or indirectly a profit to
which the Executive was not legally
entitled, or (iii) any act or omission
believed in good faith to have been in or
not opposed to the interest of the
Company, or (iv) any act or omission in
respect of which a determination is made
that the Executive met the applicable
standard of conduct prescribed for
indemnification or reimbursement or payment
of expenses under the By-Laws of the
Company or the laws of the State of
Maryland, in each case as in effect at the
time of such act or omission. The Executive
shall not be deemed to have been
terminated for Cause unless and until there
shall have been delivered to him a
copy of a resolution duly adopted by the
affirmative vote of a majority of the
entire membership of the Board at a meeting
of the Board called and held for the
purpose (after reasonable notice to the
Executive and an opportunity for him,
together with his counsel, to be heard
before the Board), finding that in the
good faith opinion of the Board the
Executive was guilty of conduct set forth
above in clauses (i) or (ii) of the first
sentence of this paragraph and
specifying the particulars thereof in
detail.
(b) If the
Executive's employment shall be terminated for Cause, the
Company shall pay the Executive his full
Base Salary through the Date of
Termination at the rate in effect at the
time Notice of Termination is given and
the Company shall have no further
obligations to the Executive under this
Agreement.
8. Disability
For
purposes of this Agreement, the Executive shall be considered to
be
suffering from a "Disability" only if, as a
result of his incapacity due to
physical or mental illness, he shall have
been absent from his duties with the
Company on a full-time basis for a period
of one year and a physician selected
by him is of the opinion that (i) he is
suffering from "Total Disability" as
defined in the Company's long term
disability plan, or any successor plan or
-8-
<PAGE>
program and (ii) he will qualify for social
security disability payment and
(iii) within thirty (30) days after written
Notice of Termination is given, he
shall not have returned to the full-time
performance of his duties.
9. Compensation Upon
Certain Terminations
(a) The
Company shall pay to the Executive in a lump sum on the fifth
business day following the later of the
Date of Termination and the expiration
of the revocation period referenced in
Section 9(f) hereof, the following
amounts if during the Term of this
Agreement (A) the Company shall terminate the
Executive's employment within the two-year
period subsequent to a Change in
Control other than for Cause or due to
death or Disability; (B) the Executive
shall terminate his employment for Good
Reason (as defined in Section 9(g)
hereof) within the two-year period
subsequent to a Change in Control; or (C) the
Executive voluntarily terminates his
