Family Dollar 2011 Annual Report Download - page 64

All shares are purchased pursuant to share repurchase authorizations approved by the Board of Directors. On
November 18, 2009, the Board of Directors authorized the Company to purchase up to $400 million of the
Company’s outstanding common stock from time to time as market conditions warrant. On September 29, 2010,
the Company announced that the Board of Directors authorized the Company to purchase up to $750 million of
the Company’s outstanding common stock (the “2010 authorization”). The remaining amount under the previous
authorization was cancelled. As of August 27, 2011, the Company had $87.3 million remaining under the 2010
authorization.
On September 26, 2011, the Company announced that the Board of Directors authorized the Company to
purchase up to an additional $250 million of the Company’s outstanding common stock. As such, after the
announcement, the Company has $337.3 million remaining under current authorizations.
There is no expiration date related to the above referenced authorizations. Shares purchased under the share
repurchase authorizations are generally held in treasury or are cancelled and returned to the status of authorized
but unissued shares.
13. Stockholders’ Rights Plan
On March 2, 2011, the Company adopted a stockholders’ rights plan whereby the Board of Directors of the
Company authorized and declared a dividend distribution of one right for each outstanding share of common
stock of the Company to stockholders of record at the close of business on March 2, 2011. Each right entitles the
registered holder to purchase from the Company a unit consisting of one one-thousandth of a share of Series A
Junior Participating Preferred Stock, par value $1.00 per share, at a price of $250.00 per unit, subject to
adjustment. The rights are not presently exercisable and remain attached to the shares of common stock until the
occurrence of certain triggering events. Subject to certain exceptions, the rights will separate from the shares of
common stock and a distribution date will be deemed to occur on the earlier of (i) the 10th business day after a
person or group becomes a beneficial owner of at least 10% of the Company’s outstanding common stock or
(ii) the 10th business day after the date that a tender or exchange offer is launched that would, if completed, result
in a person or group becoming a beneficial owner of at least 10% of the Company’s outstanding common stock.
Upon such an event, each holder of a right, other than the person or group becoming a beneficial owner of at least
10% of the Company’s outstanding common stock, will thereafter have the right to receive, upon exercise,
common stock (or, in certain circumstances, cash, property or other securities of the Company) having a value
equal to two times the exercise price of the right. The Company may redeem the rights in whole at a price of
$0.001 per right. The rights will expire on March 2, 2012, unless exercised, redeemed or exchanged prior to that
time. The Board may terminate the rights plan before the expiration date or extend the expiration date. The rights
have no voting or dividend privileges, and, unless and until they become exercisable, have no dilutive effect on
the earnings of the Company.
14. Earnings per Share:
Basic net income per common share is computed by dividing net income by the weighted average number of
shares outstanding during each period. Diluted net income per common share gives effect to all securities
representing potential common shares that were dilutive and outstanding during the period. Certain stock options
and performance share rights were excluded from the calculation of diluted net income per common share
because their effects were antidilutive (0.3 million, 0.6 million and 1.7 million shares for fiscal 2011, fiscal 2010
and fiscal 2009, respectively). In the calculation of diluted net income per common share, the denominator
includes the number of additional common shares that would have been outstanding if the Company’s
outstanding dilutive stock options and performance share rights had been exercised, as determined pursuant to
the treasury stock method.
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