Dollar Tree Stores, Inc. Form 8K 03-20-07
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON
D.C. 20549
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): March 14, 2007
DOLLAR
TREE STORES, INC.
(Exact
name of registrant as specified in its charter)
VIRGINIA
(State
or
Other Jurisdiction of Incorporation)
|
0-25464
|
54-1387365
|
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
500
Volvo
Parkway
Chesapeake,
VA 23320
(Address
of Principal Executive Offices and Zip Code)
(757)
321-5000
(Registrant’s
Telephone Number, Including Area Code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into Material Definitive Agreements.
As
part
of a year-long review of executive compensation programs, the Compensation
Committee has been studying whether to adopt change in control Retention
Agreements for its executives. After this lengthy study, on March 14, 2007,
the
Compensation Committee adopted, and on March 15, 2007, the Board of Directors
of
Dollar Tree Stores, Inc., adopted change in control Retention Agreements (filed
as Exhibit 10.1 to this Form 8-K). The agreements are to be executed with
the following officers: Chief Executive Officer; Chief Financial Officer; Sr.
Vice President, Stores; Chief Merchandising Officer; Chief Logistics Officer;
Chief People Officer; and Chief Information Officer. The terms of the
Agreements are further discussed below in Item 5.02.
Item
5.02. Departures of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Compensatory
Arrangements.
On
March
14, 2007, the Compensation Committee of the Board of Directors of Dollar Tree
Stores, Inc. conducted its annual review of the base salaries and incentive
compensation of the Company’s executive officers. In addition, based on a 2006
review of compensation structures and practices in retail and general industry,
the Committee adopted or revised certain compensation programs. Each of these
items is addressed below.
Base
Salaries:
For
fiscal 2007, the Committee established annual base salaries for the Company’s
Named Executive Officers as shown in the following table. The Named Executive
Officers are those officers who will be disclosed in the Company’s proxy to be
filed in 2007.
|
Name
|
Position
|
Base
Salary
|
|
Bob
Sasser
|
President,
Chief Executive Officer
|
$750,000
|
|
Macon
F. Brock, Jr.
|
Chairman
of the Board
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$400,000
|
|
Kent
A. Kleeberger
|
Chief
Financial Officer
|
$435,000
|
|
Gary
M. Philbin
|
Sr.
Vice President, Stores
|
$460,000
|
|
Robert
H. Rudman
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Chief
Merchandising Officer
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$375,000
|
Annual
Incentive Bonus:
The
Committee authorized the payment of annual cash bonus awards to each of the
Company’s Named Executive Officers for fiscal year 2006 which ended on February
3, 2007. The Committee also established the target bonus levels of 100% of
salary for the CEO, and 50% of salary for the other Named Executive Officers,
and established the potential bonus and performance goals for fiscal year 2007.
Consistent with past practice, 85% of the potential award is based on the
Company’s earnings per share and 15% is based on the officer achieving personal
performance goals. The following table sets forth the bonus payments for fiscal
2006 and bonus potential for fiscal 2007:
|
Name
|
Position
|
Bonus
Potential
Fiscal
2007
|
Bonus
Payments
Fiscal
2006
|
|
Bob
Sasser
|
President,
Chief Executive Officer
|
$750,000
|
$497,540
|
|
Macon
F. Brock, Jr.
|
Chairman
of the Board
|
$200,000
|
$285,430
|
|
Kent
A. Kleeberger
|
Chief
Financial Officer
|
$217,500
|
$206,640
|
|
Gary
M. Philbin
|
Sr.
Vice President, Stores
|
$230,000
|
$200,010
|
|
Robert
H. Rudman
|
Chief
Merchandising Officer
|
$187,500
|
$162,340
|
The
bonus
potential for fiscal 2007 assumes that the Company achieves 100% of its earnings
per share goal and the executive achieves 100% of his personal performance
goal.
Within certain limits, if the Company exceeds (or does not meet) its earnings
per share goal, the executive’s bonus can exceed (or fall below) the bonus
potential set forth above. The bonuses were made pursuant to the Executive
Officer Cash Bonus Plan which was approved by the shareholders in
2004.
Prior
Year Equity Awards: The
Committee reviewed the performance requirements relating to performance-based
restricted stock units previously awarded in fiscal 2005 and fiscal 2006. The
Committee determined that the target level of earnings per share and service
requirements had been met. Accordingly, the Committee authorized the issuance
of
10,000 restricted stock units and 1,500 restricted stock units to Bob Sasser,
and 1,000 restricted stock units each to Kent Kleeberger, Gary Philbin and
Bob
Rudman.
Current
Year Equity Awards:
The
Committee approved the grant, effective March 30, 2007, of 64,000 options and
28,500 restricted stock units to Bob Sasser; 18,000 options and 8,000 restricted
stock units to Kent Kleeberger; 19,000 options and 8,500 restricted stock units
to Gary Philbin; and 18,000 options and 8,000 restricted stock units to Bob
Rudman.
Each
of
the above-referenced shares, for both prior and current years, was awarded
under
either the Company’s 2004 Executive Officer Equity Plan or the 2003 Equity
Incentive Plan, as applicable, both approved by the shareholders.
Change
in Control Retention Agreements: On
March
14, 2007, the Committee considered and adopted change in control Retention
Agreements (filed as Exhibit 10.1 to this Form 8-K) to be executed by each
of the Named Executive Officers, except the Chairman. Among other benefits,
these agreements provide for a severance payment of up to 2 ½ times Reference
Salary and Reference Bonus (as defined in the agreement) for the CEO, and
up to
1 ½ times for other executives. Any potential payments would be made only upon
the satisfaction of a “double trigger,” i.e., the occurrence of both a change in
control and the executive’s termination without cause or resignation for “good
cause” (as defined in the agreement). These agreements also contain protective
covenants which apply under certain circumstances.
Company-Paid
Executive Term Life Insurance: The
Committee agreed, in addition to the current company-paid life insurance of
$50,000, to provide coverage of one times salary (up to $700,000) for officers,
including the Named Executives. The approximate annual cost to the Company
is
$40,000 for all officers.
Item
7.01. Regulation FD Disclosure.
On
March
19, 2007, Dollar Tree Stores, Inc. issued a press release regarding the
Company’s participation in
Merrill
Lynch Retailing Leaders Conference being held on March 21 - 22, 2007 in New
York
City. A
copy of
the press release is attached to this Form 8-K as Exhibit 99.1 and is
incorporated herein by this reference.
The
information contained in this item is being furnished to the Securities and
Exchange Commission. Such information shall not be deemed "filed" for purposes
of Section 18 of the Securities and Exchange Act of 1934 or otherwise subject
to
the liabilities of that Section. The information shall not be deemed
incorporated by reference into any registration statement or other document
filed pursuant to the Securities Act of 1933, except as expressly set forth
by
specific reference in such filing.
Item
9.01. Financial
Statements and Exhibits.
(c)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
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DOLLAR
TREE STORES, INC.
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Date:
March 20, 2007
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By:
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/s/
James A. Gorry, III
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James
A. Gorry, III
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General
Counsel/Corporate Secretary
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EXHIBITS
6