8-KLeadership ChangesExhibits & Filings

DOLLAR TREE, INC. 8-K Report, Executive Changes (Oct 9, 2018)

Filed October 9, 2018For Securities:DLTR

Summary

On October 3, 2018, Dollar Tree, Inc. (DLTR) filed an 8-K report detailing amendments to its change in control Retention Agreements for certain executive officers. These revisions primarily update tax provisions and make clarifying changes to the original agreements from March 2007. The core provisions remain that severance payments are contingent upon both a change in control of the Company and a subsequent termination without cause or resignation for good reason. The most significant change highlighted is the upward adjustment of the severance multiplier for CEO Gary Philbin to 2.5 times his Reference Salary and Reference Bonus, aligning it with the highest tier previously established for CEO and Executive Chairman. Additionally, two other named executive officers, Mike Witynski and Duncan Mac Naughton, along with other executives, have entered into these revised agreements for the first time, with a severance benefit of 1.5 times their Reference Salary and Reference Bonus. Furthermore, the Compensation Committee approved new Executive Agreements for certain executives, including named executive officers. These agreements include standard restrictive covenants (non-competition, non-solicitation, etc.) and provide for a salary continuation benefit of up to 12 months upon termination without cause, irrespective of a change in control. This benefit is offset by any severance received under the change in control Retention Agreement. Investors should note these changes as they relate to executive compensation and potential payouts in specific termination scenarios.

Key Highlights

  • 1Dollar Tree revised its Change in Control Retention Agreements for certain executives, primarily to update tax provisions and clarify terms.
  • 2Severance under these agreements is payable only if a change in control occurs AND the executive is terminated without cause or resigns for good reason.
  • 3CEO Gary Philbin's severance multiplier was increased to 2.5 times his Reference Salary and Reference Bonus.
  • 4Named executive officers Mike Witynski and Duncan Mac Naughton, along with other executives, have entered into these revised agreements for the first time with a 1.5x multiplier.
  • 5New Executive Agreements were approved for certain executives, including named executive officers, containing restrictive covenants.
  • 6These Executive Agreements provide for salary continuation of up to 12 months upon termination without cause, independent of a change in control, and are offset by change-in-control severance.
  • 7The filing includes Exhibit 10.1, the Form of Change in Control Retention Agreement, which provides the detailed terms.

Frequently Asked Questions

The primary purpose of the revised agreements is to update the tax provisions applicable to severance payments and make other non-material clarifying and technical changes to the existing agreements. The core conditions for receiving severance—a change in control followed by a qualifying termination—remain the same.

CEO Gary Philbin's severance benefit multiplier was increased to 2.5 times his Reference Salary and Reference Bonus. Other named executive officers like Mike Witynski and Duncan Mac Naughton, along with certain other executives, will receive a severance benefit of 1.5 times their Reference Salary and Reference Bonus under the revised agreements.

The new Executive Agreements include restrictive covenants (like non-competition and non-solicitation) and a salary continuation benefit of up to 12 months for termination without cause, which is not contingent on a change in control. This salary continuation benefit will be offset by any severance payment received under the Change in Control Retention Agreement, preventing double-dipping.

No, severance payments under the Change in Control Retention Agreement are not guaranteed. They are contingent upon two events occurring: first, a change in control of the Company, and second, the executive's termination of employment without 'cause' or resignation for 'good reason' as defined in the agreements.