ex10_1.htm


    EXHIBIT
10.1

    


    


    DOLLAR
TREE, INC.

    2003
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

    


    1. PLAN
ADMINISTRATION AND ELIGIBILITY.

    


         1.1.   PURPOSE.
The purpose of the Dollar Tree, Inc. (the "Company") 2003 Non-Employee Director
Stock Option 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 Non-Employee Directors and to further align the interests of the
Non-Employee Directors with the interests of the Company's
shareholders.

    


         1.2.   ADMINISTRATION.
The award of Options under the Plan shall be as described in Section 3. 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 prescribe the form of the agreement applicable to evidence the award
of Options under the Plan, to construe the Plan, to determine all questions
arising under the Plan, and to adopt and amend rules and regulations for the
administration of the Plan as it may deem desirable. 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.

    


         1.3.   PARTICIPATION
IN THE PLAN. Individuals who, as of the day following each year's annual meeting
date ("Eligibility Date"), are directors of the Company and who are not
employees of the Company or any of its subsidiaries, are eligible to receive
grants of options in accordance with Section 3.1 of this Plan ("Eligible
Directors"). Grant awards to any Eligible Director who was an employee of the
company or any of its subsidiaries at any time during the same calendar year as
the Eligibility Date shall be at the discretion of the Board.

    


    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 options
granted under this Plan shall be 500,000 Shares, subject to adjustment as
provided in Section 4.4.

    


         2.2.   NON-EXERCISED
SHARES. If any outstanding option under this Plan for any reason expires or is
forfeited or terminated without having been exercised in full, the Shares
allocable to the unexercised portion of the option shall again become available
for issuance under options granted pursuant to this Plan.

    


         2.3.   SHARE
ISSUANCE. Upon the exercise of an option, the Company may issue new Shares or
reissue Shares previously repurchased by or on behalf of the
Company.

    


         2.4.   GENERAL
RESTRICTIONS. Delivery of Shares under 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.

    


         2.5.   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
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.
OPTIONS.

    


         3.1.   OPTION
GRANT DATES. Unless otherwise determined by the Board, and subject to
shareholder approval, as may be required by law, options shall be granted
automatically to each Eligible Director on the business day following each
year's annual meeting date (the "Grant Date"). Any non-employee director first
elected as a director after the Eligibility Date but before the next annual
meeting shall be granted an option as the Board shall determine in its sole
discretion, but in any case covering no more than twice the number of shares
granted to Eligible Directors on the most recent Grant Date. The Grant Date for
an option granted to a newly elected director hereunder shall be the date of
such director's election to the Board, and the Option Price of such option shall
be determined as of such Grant Date.

    


         3.2.   OPTION
PRICE. The purchase price per share for the Shares covered by each option shall
be the closing sale price on the Grant Date (the "Option Price") for a share of
Common Stock as reported on the principal exchange or market on which the Common
Stock is then listed or admitted to trading, or, if the Common Stock is not then
so listed, as determined in good faith by the Board. Repricing of options after
the date of grant shall not be permitted.

    


         3.3.   NUMBER
OF OPTION SHARES. The number of Shares subject to options ranted to each
participating director on each Grant Date shall be 9,000; provided however that
the Board of Directors may reduce this amount or adopt a formula to determine
the number of Shares subject to options to be granted, provided however that the
number of such Shares may not be increased over 9,000 without shareholder
approval. Options which may be granted to participating directors pursuant to
this Section 3 are in addition to any Options which may be issued to such
directors in lieu of annual fee payments pursuant to other applicable Company
plans.

    


         3.4.   PERIOD
OF OPTION. Unless otherwise determined by the Board, Options shall vest and
become exercisable immediately, subject to the provisions of the Plan. The
options will expire ten years after the Grant Date or three years after the date
the Non-employee Director is no longer a director of the Company, whichever
occurs earlier.

    


         3.5.   DIRECTOR
TERMINATIONS. In the event that a Director's service on the Board ceases due to
death, disability or retirement, all outstanding options then held by the
Director shall remain exercisable for a period of three years following the
cessation of service. Except as otherwise provided by the Board, in the event
that a Director's service on the Board ceases due to resignation, or other
voluntary removal, vested and exercisable shares shall remain exercisable for a
period of one year following the cessation of service. In any event, if a
Director is involuntarily removed for breach of duty, dishonesty or any other
cause, all vested and exercisable shares of options awarded under this plan are
immediately forfeit.

    


         3.6.   WRITTEN
DOCUMENTATION. Each grant of an option under this Plan shall be evidenced in
writing, which shall comply with and be subject to the terms and conditions
contained in this Plan.

    


         3.7.   NON-STATUTORY
STOCK OPTIONS. Options granted under this Plan shall not be entitled to special
tax treatment under Section 422A of the Internal Revenue Code of
1986.

    


         3.8.   EXERCISE
OF OPTIONS. Options may be exercised only by written notice to the secretary of
the Company and payment of the exercise price in (i) cash, (ii) Shares, or (iii)
delivery of an irrevocable written notice instructing the Company to deliver the
Shares being purchased to a broker, who may be selected by the Company, subject
to the broker's written guarantee to deliver cash to the Company, in each case
equal to the full consideration of the Option Price for the Shares which are
being exercised and any required tax withholding. Options

    may be
exercised in whole or in part. The Board may impose other restrictions or
requirements on the permissible method of exercise.

    


         3.9.   OPTIONS
NOT TRANSFERABLE. Except as otherwise permitted by the Board, each option
granted under this Plan shall not be transferable by the optionee other than by
will or by the laws of descent and distribution. However, subject to Board
approval, the Board may provide that all or a portion of an Option may be
granted to an optionee upon terms that permit transfer of the Option in a form
and manner determined by the Board. Any person to whom an Option is transferred
pursuant to this Section 3.9 shall agree in writing to be bound by the terms of
the Plan and the stock option agreement for such Option as if such transferee
had been an original signatory thereto, and to execute and/or deliver to the
Board any documents as may be requested by the Board from time to
time.

    


    3.10.  EXERCISE
BY REPRESENTATIVE FOLLOWING DEATH OF DIRECTOR. A director, by written notice to
the Company, may designate one or more persons (and from time to time change
such designation), including his or her legal representative, who, by reason of
the director's death, shall acquire the right to exercise all or a portion of an
option granted under this Plan. Any exercise by a representative shall be
subject to the provisions of this Plan.

    


    4.
GENERAL PROVISIONS.

    


         4.1    EFFECTIVE
DATE OF THIS PLAN. This Plan is effective July 1, 2003 (the “Effective Date”)
and the shareholders of Dollar Tree Stores, Inc. approved the Plan on June 19,
2003.

    


         4.2    DURATION
OF THIS PLAN. This Plan shall remain in effect until all Shares subject to
option grants have been purchased or all unexercised options have expired.
Notwithstanding the foregoing, no options may be granted pursuant to this Plan
on or after the 10th anniversary of this Plan's effective date.

    


         4.3    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, without approval of
the Company's shareholders, no revision or amendment shall (i) change the total
number of Shares subject to this Plan (except as provided in Section 4.4), (ii)
change the designation of the class of directors eligible to participate in the
Plan, (iii) change the exercise price of the options, or (iv) materially
increase the benefits accruing to participants under or the cost of this Plan to
the Company. 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. No amendment, modification, or termination of this Plan shall in any
manner adversely affect the rights of any director holding options granted under
this Plan without his or her consent.

    


         4.4    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 Common
Stock with respect to which Options 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 as to which Options
may be granted under this Plan, 2) the number and type of securities subject to
outstanding Options, 3) the grant or exercise price with respect to any such
Options, and 4) the per individual limitations on the number of securities that
may be awarded under the Plan (any such adjustment, an “Antidilution
Adjustment”); provided, in each case, that with respect to all Options, no such
adjustment shall be authorized to the extent that such adjustment violates the
provisions of Treasury Regulation 1.424-1 and Section 409A of the Code or any
successor provisions; and the number of shares of Common Stock subject to any
Options denominated in shares shall always be a whole number; or (B) cause any
Options outstanding as of the effective date of the Transaction to be cancelled
in consideration of a cash payment or alternate equity award (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 Option substantially
equivalent in value to the fair market value of such cancelled
Option.  The determination of fair market value shall be made by the
Board, as the case may be, in their sole discretion.  Any adjustments
made hereunder shall be binding on all Holders.

    


         4.5    CHANGE
OF CONTROL. If a Change of Control of the Company shall occur, then the Board
may, in its discretion, determine that all outstanding Options shall become
fully exercisable. If the Board determines to accelerate any such outstanding
Options, then such Options shall remain vested and/or exercisable during the
remaining term thereof, regardless of whether the Director shall continue with
the Company or any Subsidiary. The Board, in its sole discretion, and without
the consent of any Director affected thereby, may determine that some or all
Directors holding outstanding Options shall receive cash settlements in exchange
for redemption of all or a part of such Options. For purposes of the Plan, the
term "Change of Control" shall mean (a) the sale, lease, exchange or other
transfer of all or substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to a corporation that is not
controlled by the Company, (b) the approval by the shareholders of the Company
of any plan or proposal for the liquidation or dissolution of the Company, (c) a
successful tender offer for the Common Stock of the Company, after which
the  tendering party holds more than 30% of the issued and outstanding
Common Stock of the Company, or (d) a merger, consolidation, share exchange, or
other transaction to which the Company is a party pursuant to

    which the
holders of all of the shares of the Company outstanding prior to such
transaction do not hold, directly or indirectly, at least 70% of the outstanding
shares of the surviving company after the transaction.

    


         4.6    LIMITATION
OF RIGHTS.

    


                4.6.1   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.

    


                4.6.2   NO
SHAREHOLDERS' RIGHTS FOR OPTIONS. An optionee shall have no rights as a
shareholder with respect to the Shares covered by his or her options until the
date of the issuance to him or her of a stock certificate
therefore.

    


         4.7    ASSIGNMENTS.
The rights and benefits under this Plan may not be assigned except as provided
in Sections 3.9 and 3.10.

    


         4.8    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.

    


         4.9    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.

    


         4.10   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.

    


         4.11   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.