Dollar Tree 2009 Annual Report Download - page 46

Notes to Consolidated Financial Statements
NOTE 9—STOCK-BASED COMPENSATION
PLANS
At฀January฀30,฀2010,฀the฀Company฀has฀eight฀stock-based฀
compensation plans. Each plan and the accounting
method are described below.
Fixed Stock Option Compensation Plans
Under฀the฀Non-Qualied฀Stock฀Option฀Plan฀(SOP),฀
the Company granted options to its employees for
1,047,264฀shares฀of฀Common฀Stock฀in฀1993฀and฀
1,048,289฀shares฀in฀1994.฀Options฀granted฀under฀the฀
SOP฀have฀an฀exercise฀price฀of฀$0.86฀and฀are฀fully฀vested฀
at the date of grant.
Under฀the฀1995฀Stock฀Incentive฀Plan฀(SIP),฀the฀
Company granted options to its employees for the
purchase฀of฀up฀to฀12.6฀million฀shares฀of฀Common฀
Stock. The exercise price of each option equaled the
market฀price฀of฀the฀Company’s฀stock฀at฀the฀date฀of฀
grant, unless a higher price was established by the
Board฀of฀Directors,฀and฀an฀option’s฀maximum฀term฀is฀10฀
years.฀Options฀granted฀under฀the฀SIP฀generally฀vested฀
over a three-year period. This plan was terminated on
July฀1,฀2003฀and฀replaced฀with฀the฀Company’s฀2003฀
Equity฀Incentive฀Plan฀(EIP).฀
Under฀the฀EIP,฀the฀Company฀may฀grant฀up฀to฀
6.0฀million฀shares฀of฀its฀Common฀Stock,฀plus฀any฀
shares฀available฀for฀future฀awards฀under฀the฀SIP,฀to฀the฀
Company’s฀employees,฀including฀executive฀ofcers฀
and฀independent฀contractors.฀The฀EIP฀permits฀the฀
Company to grant equity awards in the form of stock
options, stock appreciation rights and restricted stock.
The exercise price of each stock option granted equals
the฀market฀price฀of฀the฀Company’s฀stock฀at฀the฀date฀
of grant. The options generally vest over a three-year
period฀and฀have฀a฀maximum฀term฀of฀10฀years.฀
The฀Executive฀Ofcer฀Equity฀Incentive฀Plan฀
(EOEP)฀is฀available฀only฀to฀the฀Chief฀Executive฀Ofcer฀
and฀certain฀other฀executive฀ofcers.฀These฀ofcers฀no฀
longer฀receive฀awards฀under฀the฀EIP.฀The฀EOEP฀allows฀
the Company to grant the same type of equity awards
as฀does฀the฀EIP.฀These฀awards฀generally฀vest฀over฀a฀
three-year฀period,฀with฀a฀maximum฀term฀of฀10฀years.฀
Stock appreciation rights may be awarded alone
or฀in฀tandem฀with฀stock฀options.฀When฀the฀stock฀
appreciation rights are exercisable, the holder may
surrender all or a portion of the unexercised stock
appreciation right and receive in exchange an amount
equal to the excess of the fair market value at the date
of exercise over the fair market value at the date of the
grant. No stock appreciation rights have been granted
to date.
Any฀restricted฀stock฀or฀RSUs฀awarded฀are฀subject฀
to certain general restrictions. The restricted stock
shares or units may not be sold, transferred, pledged or
disposed of until the restrictions on the shares or units
have lapsed or have been removed under the provisions
of฀the฀plan.฀In฀addition,฀if฀a฀holder฀of฀restricted฀shares฀
or units ceases to be employed by the Company, any
shares or units in which the restrictions have not lapsed
will be forfeited.
The฀2003฀Non-Employee฀Director฀Stock฀Option฀
Plan฀(NEDP)฀provides฀non-qualied฀stock฀options฀to฀
non-employee฀members฀of฀the฀Company’s฀Board฀of฀
Directors.฀The฀stock฀options฀are฀functionally฀equivalent฀
to฀such฀options฀issued฀under฀the฀EIP฀discussed฀above.฀
The exercise price of each stock option granted equals
the฀market฀price฀of฀the฀Company’s฀stock฀at฀the฀date฀of฀
grant. The options generally vest immediately.
The฀2003฀Director฀Deferred฀Compensation฀Plan฀
permits฀any฀of฀the฀Company’s฀directors฀who฀receive฀
a retainer or other fees for Board or Board committee
service to defer all or a portion of such fees until a
future date, at which time they may be paid in cash or
shares฀of฀the฀Company’s฀common฀stock,฀or฀receive฀all฀
or a portion of such fees in non-statutory stock options.
Deferred฀fees฀that฀are฀paid฀out฀in฀cash฀will฀earn฀interest฀
at฀the฀30-year฀Treasury฀Bond฀Rate.฀If฀a฀director฀elects฀
to be paid in common stock, the number of shares will
be determined by dividing the deferred fee amount by
the฀current฀market฀price฀of฀a฀share฀of฀the฀Company’s฀
common stock on the date of deferral. The number
of options issued to a director will equal the deferred
fee฀amount฀divided฀by฀33%฀of฀the฀price฀of฀a฀share฀of฀
the฀Company’s฀common฀stock.฀The฀exercise฀price฀will฀
equal฀the฀fair฀market฀value฀of฀the฀Company’s฀common฀
stock at the date the option is issued. The options are
fully฀vested฀when฀issued฀and฀have฀a฀term฀of฀10฀years.฀
44฀฀฀DOLLAR฀TREE,฀INC.฀•฀2009฀Annual฀Report