Family Dollar 2006 Annual Report Download - page 84

meeting. The Lead Director of the Board received an additional annual cash retainer of $12,000. Pursuant to the Family Dollar 2000
Outside Directors Plan (the “Directors Stock Plan”), in fiscal 2006, directors (other than Mr. Levine) received an annual grant of
shares of the Company’s common stock with a fair market value at the time of the grant of $20,000. The Board of Directors believes
that the payment of a portion of the director’s fees in the form of an annual grant of shares of the Company’s common stock supports
the alignment of the directors’ interests with the interests of the Company’s stockholders. Each of the current non−employee directors
received a grant of 831 shares of the Company’s common stock upon their re−election as directors in January 2006 (except for Mr.
Pond, who was not a director at the time). Mr. Pond received a grant of 605 shares of the Company’s common stock upon his
appointment to the Board in April 2006. Additionally, non−employee directors were reimbursed for reasonable expenses incurred by
them in connection with attendance at Board and related functions.
The following table summarizes compensation paid by the Company to non−employee directors in fiscal 2006:
Name Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Total ($)
Mark R. Bernstein 42,500 20,000 62,500
Sharon Allred Decker 29,500 20,000 49,500
Edward C. Dolby 26,500 20,000 46,500
Glenn A. Eisenberg 28,750 20,000 48,750
George A. Mahoney, Jr. 17,500 20,000 37,500
James G. Martin 36,250 20,000 56,250
Dale C. Pond 13,500 15,666 29,166
(1) The amounts shown in this column indicate the dollar amount of compensation cost recognized by the Company in fiscal 2006
pursuant to FAS 123R for stock awards granted in fiscal 2006. See Note 9 to the Consolidated Financial Statements included in
this Report for a discussion of the relevant assumptions made in these valuations. For each director, the grant date fair value of
stock awards granted in fiscal 2006 computed in accordance with FAS 123R was identical to the total compensation cost
recognized. For the total number of shares of common stock held by each non−employee director as of March 3, 2007, see
“Ownership of the Company’s Securities” in Item 12 below.
Non−employee directors are required to maintain a level of equity interest in the Company equal to at least one−half of the
cumulative number of shares of the Company’s common stock awarded under the Directors Stock Plan since August 2004. The
Company encourages, but does not require, that directors maintain an equity interest in the Company in excess of such minimum
amounts.
In August 2006, the Board of Directors adjusted the compensation arrangements for non−employee directors. Beginning in
fiscal 2007, directors (other than Mr. Levine) will be paid an annual retainer of $40,000 per fiscal year, payable quarterly in arrears.
The Chairman of each of the Nominating/Corporate Governance Committee and the Compensation Committee will receive an
additional annual retainer of $5,000, and the Chairman of the Audit Committee will receive an additional annual retainer of $10,000,
payable quarterly in arrears. The Company’s Lead Director will be paid an additional annual retainer of $10,000 per fiscal year,
payable quarterly in arrears. Non−employee directors will be paid $1,500 for each meeting of the Board attended and $1,000 for each
committee meeting attended, except that a director will receive $500 for any meeting attended telephonically. Additionally, such
non−employee directors will receive an annual grant of the Company’s common stock with a value of $30,000 pursuant to the Family
Dollar Stores, Inc. 2006 Incentive Plan (the “2006 Plan”) and in accordance with the terms of the Directors’ Share Awards Guidelines,
which were adopted pursuant to the 2006 Plan, beginning with the Annual Meeting. The Company will reimburse directors for all
reasonable expenses incurred by them in connection with attendance at any meeting of the Board or its committees and for travel and
other expenses incurred in connection with their duties as directors.
Compensation Committee Report
The Compensation Committee of the Board of Directors has reviewed and discussed the above section titled “Executive
Compensation—Compensation Discussion and Analysis” with management, and, based on such review and discussions,
recommended to the Board of Directors that the section be included in the Annual Report on Form 10−K for the fiscal year ended
August 26, 2006.
This report is submitted by Sharon Allred Decker, Edward C. Dolby, James G. Martin and Dale C. Pond as the members of
the Compensation Committee, and Mark R. Bernstein who was a member of the Compensation Committee until April 2006.
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Source: FAMILY DOLLAR STORES, 10−K, March 28, 2007