8-KMaterial Agreements

DOLLAR TREE, INC. 8-K Report, Material Agreement (Sep 24, 2004)

Filed September 24, 2004For Securities:DLTR

Summary

This Form 8-K filing from Dollar Tree Stores, Inc. (DLTR) on September 24, 2004, announces a significant update to its director compensation policy, effective for the 2005 annual meeting of shareholders. The primary change involves a substantial increase in the annual retainer for non-employee directors, from $16,000 to $80,000. This move is intended to align director compensation with that of other public retailers and better align director and shareholder interests. While the annual cash retainer is increasing significantly, the policy is also suspending annual stock option grants to current non-employee directors. However, new directors appointed after the 2005 annual meeting may receive an option for up to 9,000 shares or an equivalent cash award. The company also highlighted its existing Deferred Compensation Plan, allowing directors to defer cash fees into stock, options, or cash accounts, and stated the Board will monitor director equity ownership to ensure alignment with shareholder interests.

Key Highlights

  • 1Dollar Tree's Board of Directors has approved a new director compensation policy, effective from the 2005 annual shareholder meeting.
  • 2The annual retainer for non-employee directors will increase significantly from $16,000 to $80,000.
  • 3This increase aims to make director compensation competitive with other public retailers and better align director and shareholder interests.
  • 4Annual stock option grants to current non-employee directors will be suspended.
  • 5New directors joining after the 2005 annual meeting may receive stock options (up to 9,000 shares) or an equivalent cash award.
  • 6The company's 2003 Director Deferred Compensation Plan allows directors to invest cash fees in stock, options, or cash accounts.
  • 7The Board will monitor director equity ownership to ensure alignment with shareholder interests, potentially requiring investment in company stock or options on a case-by-case basis.

Frequently Asked Questions

Dollar Tree is increasing the annual retainer for its non-employee directors from $16,000 to $80,000 to ensure its compensation is competitive with other public retailers and to better align the interests of its directors with those of its shareholders.

Annual stock option grants to *current* non-employee directors are being suspended. However, new directors appointed after the 2005 annual meeting may receive an option for up to 9,000 shares or an equivalent cash award, which could be subject to investment in company stock or options.

The company has a Director Deferred Compensation Plan that allows directors to defer cash fees into company stock or options. Additionally, the Board will monitor director equity ownership and may require directors to invest in Dollar Tree stock or options on a case-by-case basis to ensure alignment.

Before the 2005 changes, non-employee directors received an annual retainer of $16,000, with additional fees for committee chairs ($6,000 for Audit Chair, $4,000 for others) and members ($4,000 for Audit, $2,000 for others). They also received an annual grant of 6,000 stock options.