Dollar Tree 2004 Annual Report Download - page 50

46 DOLLAR TREE STORES, INC. • 2004 ANNUAL REPORT
Restricted Stock
In 2002, the Company adopted a restricted stock plan,
under which a maximum of 4,500 shares of common
stock may be awarded to certain employees with no cash
payments required by the recipient. Under this plan, the
Company awarded 4,500 shares of common stock to an
employee during 2002, which vest ratably over a three-
year period. The $150 market value of the shares awarded
was recorded as unearned compensation and is shown as
a separate component of shareholders’equity. The
unearned compensation is being amortized to
compensation expense over the three-year vesting period.
In 2004, the Company awarded an employee 5,000
restricted stock units from the 2003 Equity Incentive
Plan, which vest ratably over a five-year period. The
$165 market value of the units awarded was recorded
as unearned compensation and is shown as a separate
component of shareholders’equity. The unearned
compensation is being amortized to compensation
expense over the five-year vesting period.
Total amortization for these awards for the years
ended January 29, 2005 and January 31, 2004, the one-
month period ended February 1, 2003 and the year ended
December 2002 was approximately $126, $50, $5 and
$33, respectively.
In 2002, the Company issued 4,000 shares of
restricted stock to non-employees in recognition of past
services provided to the Company. The shares vested
immediately upon issuance. The market value of the
shares awarded was approximately $125 and was recorded
as a component of operating expenses during 2002.
Options Outstanding Options Exercisable
Options Weighted Weighted Options Weighted
Range of Outstanding Average Average Exercisable Average
Exercise at January 29, Remaining Exercise at January 29, Exercise
Prices 2005 Contractual Life Price 2005 Price
0.86 15,923 (1) $ 0.86 15,923 $ 0.86
$2.95 to $10.98 67,208 2.2 9.43 67,208 9.43
$10.99 to $21.28 2,073,488 7.2 19.21 951,914 18.59
$21.29 to $29.79 2,951,662 7.0 24.83 1,337,427 24.27
$29.80 to $42.56 1,439,138 6.9 32.29 909,630 32.61
$0.86 to $42.56 6,547,419 3,282,102
(1) Represents options granted under the SOP in 1993 and 1994. These options have no expiration date.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Employee Stock Purchase Plan
Under the Dollar Tree Stores, Inc. Employee Stock
Purchase Plan (ESPP), the Company is authorized to
issue up to 759,375 shares of common stock to eligible
employees. Under the terms of the ESPP, employees can
choose to have up to 10% of their annual base earnings
withheld to purchase the Company’s common stock. The
purchase price of the stock is 85% of the lower of the
price at the beginning or the end of the quarterly offering
period. Under the ESPP, the Company has sold 645,097
shares as of January 29, 2005.
The fair value of the employees’purchase rights is
estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted
average assumptions:
Fiscal Fiscal Fiscal
2004 2003 2002
Expected term 3 months 3 months 3 months
Expected volatility 15.6% 19.8% 28.2%
Annual dividend yield ———
Risk free interest rate 2.1% 1.1% 1.6%
The weighted average per share fair value of those
purchase rights granted in 2004, 2003 and 2002 was
$4.93, $4.60 and $5.02, respectively.
NOTE 10 – ACQUISITION
On June 29, 2003, the Company acquired 100% of the
outstanding capital stock of Greenbacks, Inc. (Greenbacks).
The results of Greenbacks’operations are included in the
accompanying consolidated financial statements since