ex10_1.htm


    EXHIBIT
10.1

    


    


    DOLLAR
TREE, INC.

    2003
DIRECTOR DEFERRED COMPENSATION PLAN

    


    1. PLAN
ADMINISTRATION AND ELIGIBILITY.

    


    1.1.
PURPOSE. The purpose of the Dollar Tree, Inc. (the "Company") 2003 Director
Deferred Compensation Plan (the "Plan") is to advance the interests of the
Company and its shareholders by attracting and retaining the highest quality of
experienced persons as Directors and to further align the interests of the
Directors with the interests of the Company's shareholders.

    


    1.2.
ELIGIBILITY. Each member of the Board of Directors (an "Eligible Director") of
Dollar Tree, Inc. (the "Company") is eligible to participate in the
Plan.

    


    1.3.
ADMINISTRATION. The Plan shall be administered, construed and interpreted by the
Board of Directors of the Company. Pursuant to such authorization, the Board of
Directors shall have the responsibility for carrying out the terms of the Plan,
including but not limited to the determination of the amount and form of payment
of the annual retainer and any additional fees payable by the Company to an
Eligible Director for his or her services as a director (the "Fees," which shall
not include reimbursements or other payments not for services rendered). To the
extent permitted under the securities laws applicable to compensation plans
including, without limitation, the requirements of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or under the
Internal Revenue Code of 1986, as amended (the "Code"), a committee of the Board
of Directors, or a subcommittee of any committee, may exercise the discretion
granted to the Board under the Plan, provided that the composition of such
committee or subcommittee shall satisfy the requirements of Rule 16b-3 under the
Exchange Act, or any successor rule or regulation. The Board of Directors may
also designate a plan administrator to manage the record keeping and other
routine administrative duties under the Plan.

    


    2. STOCK
SUBJECT TO THE PLAN.

    


    2.1.
NUMBER OF SHARES. The maximum number of shares of the Company's $0.01 par value
Common Stock ("Common Stock" or "Shares") which may be issued pursuant to this
Plan shall be 250,000 Shares, subject to adjustment as provided in Section 5.4.
Such amount does not include Shares issuable upon exercise of stock options
which may be granted pursuant to Section 4, which are subject to the limits
contained in the respective plans under which such options are
granted.

    


    2.2.
SHARE ISSUANCE. To satisfy the requirements of Section 3, the Company may issue
new Shares or reissue Shares previously repurchased by or on behalf of the
Company.

    


    2.3.
GENERAL RESTRICTIONS. Delivery of Shares under Section 3 of the Plan shall be
subject to the following:

    


    (a)
Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any Shares under the Plan or make any other distribution of
benefits under the Plan unless such delivery or distribution would comply with
all applicable laws (including, without limitation, the requirements of the
Securities Act of 1933), and the applicable requirements of any securities
exchange or similar entity.

    


    (b) To
the extent that the Plan provides for issuance of stock certificates to reflect
the issuance of Shares, the issuance may be effected on a non-certificated
basis, to the extent not prohibited by applicable law or the applicable rules of
any stock exchange.

    


    2.4. TAX
WITHHOLDING. The Board may condition the delivery of any shares or other
benefits under the Plan on satisfaction of any applicable withholding
obligations. The Board, in its discretion, and subject to such requirements as
the Board may impose prior to the occurrence of such withholding, may permit
such withholding obligations to be satisfied through cash payment by the
participating Eligible Director ("Participant"), through the surrender of Shares
which the Participant already owns, or through the surrender of Shares to which
the participant is otherwise entitled under the Plan.

    


    3.
DEFERRED COMPENSATION.

    


    3.1.
DEFERRAL OF FEES.

    


    (a) Any
Eligible Director may elect to defer in either cash or Shares all or a portion
of the Fees earned during any calendar year by delivering a deferral election to
the Company not later than (i) December 31 of the year immediately preceding the
year to which the deferral election relates, or (ii) with respect to an Eligible
Director's first year or partial year of service as a director, thirty days
following the date on which such director first became a director, but only for
Fees earned after such election is made. The election form shall specify the
amount or portion of the Fees to be deferred; whether and to what extent such
Fees are to be deferred in cash or in Shares; the manner of payment with respect
to such deferred amounts; and the date on which the deferred amounts shall be
paid and whether paid in a lump sum or in which installment payments shall
commence. Such election shall remain in force for such calendar year and for
each year thereafter until changed or revoked by the director by written notice
to the Company not later than December 31 immediately preceding the year to
which such change or revocation relates. A deferral election may not be changed
or revoked after the beginning of the year to which it relates.

    


    (b) For
the year in which the Plan is first implemented, any Eligible Director may make
an election to defer Fees for services to be performed subsequent to such
election within 30 days after the effective date set forth in Section
5.1.

    


    3.2.
ACCOUNTS; INTEREST AND DIVIDEND CREDITS. On the first day of each calendar
quarter (the "Credit Date"), an Eligible Director who elects to defer his or her
Fees shall receive a credit to his or her deferred compensation accounts (the
"Deferred Compensation Accounts") under the Plan as hereinafter provided. Any
portion of a Participant's Fees which are deferred in cash shall be credited to
the Participant's Cash Deferral Account. The amount of the credit shall equal
the amount of Fees deferred in cash by the Participant during the immediately
preceding calendar quarter. Any portion of a Participant's Fees which are
deferred in Shares shall be credited to the Participant's Deferred Stock
Account. The amount of the credit to such Deferred Stock Account shall be the
number of Shares (rounded to the nearest one hundredth of a Share) determined by
dividing the amount of the Participant's Fees deferred in Shares during the
immediately preceding quarter by the closing price of a Share as reported on the
principal stock exchange where the Common Stock is listed on the Credit Date, or
if there is no trading on such exchange on the Credit Date, on the immediately
preceding trading day.

    


    On the
first day of each calendar quarter, an amount shall be credited to each
Participant's Cash Deferral Account equal to the Interest Rate (as hereinafter
defined) on the balance credited to the Cash Deferral Account during the
immediately preceding calendar quarter. Interest shall accrue on the balance of
each Participant's Cash Deferral Account commencing with the date the first
payment is credited thereto and ending with the final payment therefrom. For
this purpose, "Interest Rate" shall mean, with respect to any calendar quarter,
30-year Treasury Bond Rate then in effect.

    


    Each time
any dividend is paid on the Stock, a Participant who has a positive balance in
his or her Deferred Stock Account shall receive a credit to such Account. The
amount of the dividend credit shall be the number of Shares (rounded to the
nearest one-hundredth of a Share) determined by multiplying the dividend amount
per Share by the number of Shares credited to the Participant's Deferred Stock
Account as of the record date for the dividend and dividing the product by the
closing price per Share reported on the principal stock exchange where the
Common Stock is listed on the dividend payment date.

    


    3.3.
PAYMENT.

    


    (a)           An
Eligible Director's Deferred Compensation Accounts shall be paid to the director
(or, in the event of death, to his or her designated beneficiary or estate) as
follows: at the director's option, either (i) in a single lump sum as soon as
practicable following the earlier of (x) the date on which the director ceases
to serve as a director of the Company or (y) the date specified by the director
as the distribution date (such earlier date shall be referred to as the
"Distribution Date"), or (ii) in annual installments over a period, to be
specified by the director, not to exceed five years commencing as soon as
practicable after the Distribution Date. If an Eligible Director's Cash Deferral
Account is paid in installments, the amount of each installment shall be (l) the
balance of the Cash Deferral Account on the Distribution Date divided by the
number of installments plus (2) interest credits.  A cash payment will
be made with the final installment for any fraction of a share of Common Stock
credited to the Eligible Director's Deferred Stock Account.

    


    (b)           Upon
the death of an Eligible Director, the Company shall pay any remaining benefits
as a single lump sum within 90 days following the date of death.

    


    (c)           A
lump sum payment and the first payment in a series of installment payments shall
be paid no later than: (i) the end of the calendar year in which the
Distribution Date occurs, or (ii) if later, the 15th day of
the third month following the Distribution Date.   Subsequent
installment payments shall be paid on the anniversary date of the first
payment.

    


    (d)           An
Eligible Director’s continued service as an employee of the Company is not taken
into account in determining whether such director is entitled to a payment under
this Plan upon his resignation from the Board.

    


    (e)           Except
as provided in Treasury Regulation section 1.409A-3(j), no acceleration in the
time or schedule of any payment or amount scheduled to be paid from an Eligible
Director’s Account is permitted.

    


    3.4.
DESIGNATION OF BENEFICIARY. Each Eligible Director may designate in writing a
beneficiary to receive such portion, if any, of the director's Deferred
Compensation Accounts as remains unpaid at the director's death. In the absence
of a valid beneficiary designation, that portion, if any, of an Account
remaining unpaid at the director's death shall be paid to his or her
estate.

    


    3.5.
NATURE OF PROMISE. The Company shall not be required to segregate or earmark any
funds or Shares in respect of its obligations under Section 3 of the Plan. No
Eligible Director nor any other person shall have any rights to any assets of
the Company by reason of amounts deferred or benefits accrued under this Plan,
other than as a general unsecured creditor of the Company. The Plan constitutes
a mere promise by the Company to make payments in the future and is unfunded for
purposes of Title I of ERISA and for tax purposes. The Company shall make
available as and when required a sufficient number of shares of Common Stock to
meet the requirements arising under the Plan.

    


    3.6. NO
ASSIGNMENT. Rights to benefits under this Section 3 of the Plan may not be
assigned, sold, transferred, encumbered, pledged or otherwise alienated,
attached, garnished, or anticipated, other than in accordance with the
beneficiary designation provisions of Section 3.4 above.

    


    4. STOCK
OPTIONS.

    


    4.1
ELECTION TO RECEIVE OPTIONS. An Eligible Director may elect that any portion of
his or her Fees not deferred under Section 3 above shall be paid in the form of
options to purchase the Company's Common Stock ("Options").

    


    4.2 TIME
AND METHOD OF ELECTION, CHANGE OR REVOCATION. An election pursuant to Section
4.1 or any decision to change or revoke such election shall be governed by the
same timing and other requirements set forth in Section 3 with respect to
deferral of Fees.

    


    4.3
OPTION TERMS. Options shall be "non-qualified" stock options made under, and
pursuant to the terms and conditions of, (i) the 2003 Equity Incentive Plan, for
Eligible Directors who are employees of the Company or a subsidiary, and (ii)
the 2003 Non-Employee Director Stock Option Plan, for all other Eligible
Directors. Options shall be issued as of the Credit Date and reflect an exercise
price and other terms established according to the provisions of such plans. The
Options shall be fully vested when issued and the term of such Options shall be
ten (10) years.

    


    4.4
DETERMINATION OF OPTION AMOUNT. The number of Options issued to an Eligible
Director under this Section 4 as of any Credit Date shall equal (i) the dollar
amount of portion of his or her Fee which is to be paid in Options on such
Credit Date divided by (ii) thirty-three percent (33%) of the closing price of a
Share as reported on the principal stock exchange where the Common Stock is
listed on the Credit Date, or if there is no trading on such exchange on the
Credit Date, on the immediately preceding trading day.

    


    5.
GENERAL PROVISIONS.

    


    5.1
EFFECTIVE DATE OF THIS PLAN. This Plan is effective June 19, 2003 and the
shareholders of Dollar Tree Stores, Inc. approved the Plan on June 19,
2003.

    


    5.2
DURATION OF THIS PLAN. This Plan shall remain in effect, unless earlier
terminated or superceded, until June 30, 2013.

    


    5.3
AMENDMENT OF THIS PLAN. The Board of Directors may suspend or discontinue this
Plan or revise or amend it in any respect, provided, however, that: (i) without
approval of the Company's shareholders, no revision or amendment shall (x)
change the total number of Shares subject to this Plan (except as provided in
Section 5.4), (y) change the designation of the class of directors eligible to
participate in the Plan, or (z) materially increase the benefits accruing to
participants under or the cost of this Plan to the Company and (ii) the Plan
shall not be terminated unless such termination is permitted and administered in
accordance with Treasury Regulation section 1.409A-3(j)(4)(ix). Moreover, in no
event may Plan provisions be amended more than once every 6 months, other than
to comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act, or the rules and regulations thereunder.

    


    5.4
CHANGES IN SHARES. To prevent the dilution or enlargement of benefits or
potential benefits intended to be made available under the Plan, in the event of
any corporate transaction or event such as a stock dividend, recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
spin-off, combination or other similar corporate transaction or event affecting
the Shares which have been or may be issued under the Plan (any such transaction
or event, a “Transaction”), then the Board shall, in such manner as the Board
deems equitable:  (A) make a proportionate adjustment in 1) the
maximum number and type of securities which may be issued under this Plan, and
2) the number and type of securities subject to outstanding accounts (any such
adjustment, an “Antidilution Adjustment”); provided, in each case, that the
number of Shares subject to any account denominated in shares shall always be a
whole number; or (B) cause any right to receive Shares outstanding as of the
effective date of the Transaction to be cancelled in consideration of a cash
payment or alternate form of equity settlement (whether from the Company or
another entity that is a participant in the Transaction) or a combination
thereof made to the holder of such cancelled right substantially equivalent in
value to the fair market value of such cancelled right.  The
determination of fair market value shall be made by the Board of Directors in
their sole discretion.  Any adjustments made hereunder shall be
binding on all Participants. Notwithstanding the foregoing, any Antidilution
Adjustments to be made to outstanding Options shall be as provided for in the
terms of the appropriate plan. A cancellation of a stock right or shares in
exchange for a cash payment or other settlement is only permitted if such
payment or settlement does not result in an impermissible acceleration of
benefits under Section 409A.

    


    5.5
CHANGE OF CONTROL. Upon a Change of Control (as defined below), any outstanding
balance in an Eligible Director’s Cash Deferral Account shall be paid in a lump
sum and any outstanding balance in an Eligible Director’s Deferred Stock Account
shall be distributed in shares of Common Stock if the Eligible Director ceases
to serve as a director of the Company or a surviving company after the date of
the Change of Control.   For purposes of the Plan, the term
Change of Control includes:  (i) a change in the ownership of the
Company, (ii) a change in effective control of the Company, or (iii) a change in
the ownership of a substantial portion of the assets of the
Company.   A change in the ownership of the Company occurs on the
date that any one person, or more than one person, acting as a group, acquires
ownership of stock of the Company that, together with stock held by such person
or group constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company.   A change in the
effective control of the Company occurs only on (i) the date any on person or
group acquires ownership of stock of the Company possessing 30% or more of the
total voting power of the stock, or (ii) the date a majority of the members of
the Company’s Board is replaced during any 12 month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Company’s Board before the date of the appointment or election.  A
change in the ownership of a substantial portion of the assets of the Company
occurs on the date that any one person or group acquires assets from the Company
that have a total gross fair market value equal to or more than 40% of the total
gross fair market value of all the assets of the Company immediately before such
acquisition.  This definition of Change in Control shall be
interpreted in a manner that is consistent with Treasury Regulation section
1.409A-3(i)(5).

    


    5.6    LIMITATION
OF RIGHTS.

    


    (a) NO
RIGHT TO CONTINUE AS A DIRECTOR. Neither this Plan, nor the granting of an
Option under this Plan, nor any other action taken pursuant to this Plan shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time, or at any
particular rate of compensation.

    


    (b) NO
SHAREHOLDERS' RIGHTS. Except as specifically provided by the Plan, a participant
in the Plan shall have no rights as a shareholder with respect to the Deferred
Stock Account until the date of the issuance to him or her of a stock
certificate therefore.

    


    5.7
NOTICE. Any written notice to the Company required by any of the provisions of
this Plan shall be addressed to the secretary of the Company and shall become
effective when it is received.

    


    5.8
SHAREHOLDER APPROVAL AND REGISTRATION STATEMENT. This Plan shall be approved by
the Board of Directors and submitted to the Company's shareholders for approval.
Any options granted under this Plan prior to effectiveness of a registration
statement filed with the Securities and Exchange Commission

    covering
the Shares to be issued hereunder shall not be exercisable until, and are
expressly conditional upon, the effectiveness of a registration statement
covering the Shares.

    


    5.9
GOVERNING LAW. This Plan and all determinations made and actions taken pursuant
hereto shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia.

    


    5.10
SEVERABILITY. If any term or provision of this Plan or the application thereof
to any person or circumstances shall, to any extent, be invalid or
unenforceable, then the remainder of the Plan, or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision hereof shall be valid and be enforced to the fullest extent permitted
by applicable law.

    


    5.11  SECTION
409A OF THE CODE.

    


    (a)           Any
benefit, payment or other right provided by the Plan shall be provided or made
in a manner, and at such time, in such form and subject to such election
procedures (if any), as complies with the applicable requirements of Code
section 409A to avoid a plan failure described in Code section 409A(a)(1),
including without limitation, deferring payment until the occurrence of a
specified payment event described in Code section
409A(a)(2).  Notwithstanding any other provision hereof or document
pertaining hereto, the Plan shall be so construed and interpreted to meet the
applicable requirements of Code section 409A to avoid a plan failure described
in Code section 409A(a)(1).

    


    (b)           It
is specifically intended that all elections, consents and modifications thereto
under the Plan will comply with the requirements of Code section 409A (including
any transition or grandfather rules thereunder).  The Company is
authorized to adopt rules or regulations deemed necessary or appropriate in
connection therewith to anticipate and/or comply the requirements of Code
section 409A (including any transition or grandfather rules thereunder and to
declare any election, consent or modification thereto void if non-compliant with
Code section 409A.

    


    (c)           Pursuant
to Section 3.01(B)(1).02 of Internal Revenue Notice 2007-86 (“Transition
Relief”), the Company shall permit Participants to modify their existing
deferral elections previously made pursuant to the Plan to reflect new deferral
elections regarding the time and form of payment of benefits under the Plan to
the full extent permitted by, and in accordance with, the Transition
Relief.