Document:

ex10_1.htm

    

      EXHIBIT
10.1

      

      

      DOLLAR
TREE, INC.

      STOCK
INCENTIVE PLAN

      

      THIS
DOLLAR TREE, INC. INCENTIVE PLAN (“Plan”) is made by Dollar Tree, Inc. and its
member companies (“Company”).

      

      ARTICLE
1

      PURPOSE

      

      The
purpose of the Plan is to advance the interests of the Company and its
shareholders by enhancing the Company's ability to attract and retain qualified
persons to perform services for the Company, by providing incentives to such
persons to put forth maximum efforts for the Company and by rewarding persons
who contribute to the achievement of the Company's economic
objectives.

      

      ARTICLE
2

      DEFINITIONS

      

      The
following terms have the meanings set forth below, unless the context otherwise
requires:

      

      2.1           Affiliate.
With respect to any Person, (i) any Person directly or indirectly controlling,
controlled by, or under common control with such Person, (ii) any Person owning
or controlling ten percent (10%) or more of the outstanding voting interests of
such Person. (iii) any officer, director, or general partner of such Person, or
(iv) any Person who is an officer, director, general partner, trustee, or holder
of ten percent (10%) or more of the voting interests of any Person described in
clauses (i) through (iii) of this sentence. For purposes of this definition, the
term "controls," "is controlled by," or "is under common control with" shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person or entity, whether through
the ownership of voting securities, by contract or otherwise.

      

      2.2           Board.
The Board of Directors of the Company.

      

      2.3           Code.
The Internal Revenue Code of 1986, as amended.

      

      2.4           Committee.
The group of individuals administering the Plan, as provided in Article 3 of the
Plan.

      

      2.5           Common
Stock. The common stock $0.01 par value of the Company or the number and kind of
shares of stock or other securities into which such Common Stock may be changed
in accordance with Section 4.3 of the Plan.

      

      2.6           Disability.
The permanent and total disability of the Participant within the

      meaning
of Section 22(e)(3) of the Code.

      

      2.7           Eligible
Recipient. All employees (including, without limitation, officers and directors
who are also employees), Outside Directors, consultants and independent
contractors of the Company or any Member Company.

      

      2.8           Exchange
Act. The Securities Exchange Act of 1934, as amended.

      

      2.9           Fair
Market Value. The Fair Market Value of the Common Stock shall be:

      

      2.9.1           If
the Common Stock is listed or admitted to unlisted trading

      privileges
on any national securities exchange or is not so listed or admitted but
transactions in the Common Stock are reported on the Nasdaq National Market
System, the last sale price of the Common Stock on such exchange or reported by
the Nasdaq National Market system as of such date (or if no shares were traded
on such day, as of the next preceding day on which there was such a
trade).

      

      2.9.2           If
the Common Stock is not so listed or admitted to unlisted trading privileges or
reported on the Nasdaq National Market system, and bid and asked prices therefor
in the over-the-counter market are reported by the Nasdaq Small Cap Market® or
the National Quotation Bureau, Inc. (or any comparable reporting service), the
mean of the closing bid and asked prices as of such date, as so reported by the
Nasdaq System, or, if not so reported thereon, as reported by the National
Quotation Bureau, Inc. (or such comparable reporting service).

      

      2.9.3           If
the Common Stock is not so listed or admitted to unlisted trading privileges, or
reported on the Nasdaq National Market system, and such bid and asked prices are
not so reported, such price as the Committee determines in good faith in the
exercise of its reasonable discretion.

      

      2.10           Incentive
Stock Option. The right to purchase Common Stock granted to an Eligible
Recipient pursuant to Article 6 of the Plan that qualifies as an "incentive
stock option" within the meaning of Section 422 of the Code.

      

      2.11           Member
Company. Member Company
means any “parent corporation” or “subsidiary corporation” (within the meaning
of Section 424 of the Code) of the Company, including a corporation that becomes
a Member Company after the adoption of this Plan, that the Committee designates
as a participating employer in the Plan.

      

      2.12           Non-Statutory
Stock Option. The right to purchase Common Stock granted to an Eligible
Recipient pursuant to Article 6 or Article 7 of the Plan that does not qualify
as an Incentive Stock Option.

      

      2.13           Option.
An Incentive Stock Option or a Non-Statutory Stock Option.

      

      2.14           Outside
Director. A member of the Board who is not an employee of the Company, Saunders
Karp & Co., or any Affiliate thereof and who satisfies the definition of:
(i) a non-employee director pursuant to Rule 16b-3 of the Exchange Act, and (ii)
an "outside director" pursuant to Section 162(m) of the Code.

      

      2.15           Participant.
An Eligible Recipient who receives one or more Options under the
Plan.

      

      2.16           Person.  Any individual,
corporation, partnership, group, association or other "person" (as such term is
used in Section 14(d)(2) of the Exchange Act), other than the Company, any
Member Company or any employee benefit plan sponsored by the Company or a Member
Company.

      

      2.17           Previously
Acquired Shares. Shares of Common Stock that are already owned by the
Participant and shares of Common Stock that could be acquired by the Participant
pursuant to the exercise of an Option.

      

      2.18           Retirement.
The retirement of a Participant pursuant to and in accordance with the regular
or, if approved by the Board for purposes of the Plan, any early retirement plan
or practice of the Company or Member Company then covering the
Participant.

      

      2.19           Securities
Act. The Securities Act of 1933, as amended.

      

      ARTICLE
3

      PLAN
ADMINISTRATION

      

      3.1           The
Committee. The Plan shall be administered by the Board or by a committee of the
Board consisting of not less than two persons. However, from and after the date
on which the Company first registers a class of its equity securities under
Section 12 of the Exchange Act, the Plan shall be administered by a committee
appointed by the Board consisting of not less than two Board members; provided,
that all of the members of the committee shall be "non-employee directors"
within the meaning of Rule 16b-3 under the Exchange Act. From and after the date
on which Section 162(m) of the Code becomes applicable to the Plan, all members
of the committee shall also be "outside directors" within the meaning of Section
162(m) of the Code. Members of such a committee, if established, shall be
appointed from time to time by the Board, shall serve at the pleasure of the
Board and may resign at any time upon written notice to the Board. In the event
one or more member(s) of the Board is both an employee of the Company and
permitted to serve on the committee under applicable provisions of Rule 16b-3 of
the Exchange Act and Section 162(m) of the Code, at least one such Board member
shall be a member of the committee. In the event one or more member(s) of the
Board is both an employee of Saunders Karp & Co. and permitted to serve on
the committee under applicable provisions of Rule 16b-3 of the Exchange Act and
Section 162(m) of the Code, at least one such Board member shall be a member of
the committee. A majority of the members of such a committee shall constitute a
quorum. Such a committee shall act by majority approval of the members, shall
keep minutes of its meetings and shall provide copies of such minutes to the
Board. Action of such a committee may be taken without a meeting if unanimous
written consent is given. Copies of minutes of such a committee's meetings and
of its actions by written consent shall be provided to the Board and kept with
the corporate records of the Company. As used in this Plan, the term "Committee"
will refer to the Board or to such a committee, if established.

      

      3.2           Authority
of the Committee.

      

      3.2.1           In
accordance with and subject to the provisions of the Plan, the Committee shall
have the authority to determine (i) the Eligible Recipients who shall be
selected as Participants, (ii) the nature and extent of the Options to be
granted to each Participant (including the number of shares of Common Stock to
be subject to each Option, the exercise price and the manner in which Options
will vest or become exercisable), (iii) the time or times when Options will be
granted, (iv) the duration of each Option, (v) the restrictions and other
conditions to which the exercisability or vesting of Options may be subject, and
(vi) such other provisions of the Options as the Committee may deem necessary or
desirable and as consistent with the terms of the Plan. The Committee shall
determine the form or forms of the option agreements with Participants which
shall evidence the particular terms, conditions, rights and duties of the
Company and the Participants with respect to Options granted pursuant to the
Plan, which agreements shall be consistent with the provisions of the
Plan.

      

      3.2.2           With
the consent of the Participant affected thereby, the Committee may amend or
modify the terms of any outstanding Option in any manner, provided that the
amended or modified terms are permitted by the Plan as then in effect. Without
limiting the generality of the foregoing sentence, the Committee may, with the
consent of the Participant affected thereby, modify the exercise price, number
of shares or other terms and conditions of an Option, extend the term of an
Option, accelerate the exercisability or vesting or otherwise terminate any
restrictions relating to an Option, accept the surrender of any outstanding
Option, or, to the extent not previously exercised or vested, authorize the
grant of new Options in substitution for surrendered Options.

      

      3.2.3           The
Committee shall have the authority to interpret the Plan and, subject to the
provisions of the Plan, to establish, adopt and revise such rules and
regulations relating to the Plan as it may deem necessary or advisable for the
administration of the Plan. The Committee's decisions and determinations under
the Plan need not be uniform and may be made selectively among Participants,
whether or not such Participants are similarly situated. Each determination,
interpretation or other action made or taken by the Committee pursuant to the
provisions of the Plan shall be conclusive and binding for all purposes and on
all persons, including, without limitation, the Company and its Member
Companies, the shareholders of the Company, the Committee and each of its
members, the directors, officers and employees of the Company and its Member
Companies, and the Participants and their successors in interest. No member of
the Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option granted under the Plan.

      

      ARTICLE
4

      STOCK
SUBJECT TO THE PLAN

      

      4.1           Number
of Shares. Subject to adjustment as provided in Section 4.3 below, the maximum
number of shares of Common Stock that shall be authorized and reserved for
issuance under the Plan shall be 8,400,000 shares of Common Stock. No options
for more than 60,000 shares may be granted to any one Participant in any
calendar year. The maximum number of shares authorized may also be increased
from time to time by approval of the Board and, if required pursuant to any tax
or regulatory requirement the Board deems it desirable to comply with or seek
relief under, the shareholders of the Company.

      

      4.2           Shares
Available for Use. Shares of Common Stock that may be issued upon exercise of
Options shall be applied to reduce the maximum number of shares of Common Stock
remaining available for use under the Plan. Any shares of Common Stock that are
subject to an Option (or any portion thereof) that lapses, expires or for any
reason is terminated unexercised shall become available for use under the Plan.
Also, Previously Acquired Shares which are tendered to the Company in
satisfaction or partial satisfaction of the Exercise Price pursuant to Section
6.6 or in satisfaction or partial satisfaction of withholding obligations
pursuant to Article 10 shall become available for use under the Plan to the
extent permitted by Rule 16b-3 of the Exchange Act.

      

      4.3           Adjustments
to Shares.

      

      4.3.1           All
shares reserved or held for issuance under the Plan, as well as shares of Common
Stock covered by each outstanding Option, shall be proportionately adjusted for
any increase or decrease in the Company's outstanding shares of Common Stock
resulting from any stock split, reverse stock split, stock dividend,
combination, or reclassification of Common Stock or any similar transaction
effected without the receipt of consideration by the Company. Such adjustment
shall be made by the Board, whose determination shall be final, binding, and
conclusive. The Board shall also have the right to substitute or assume options
in connection with mergers, reorganizations, or other transactions to which
Section 424(a) of the Internal Revenue Code applies. The Board may increase the
number of shares of Common Stock reserved for issuance under the Plan by the
corresponding number of Options assumed, or in the case of substitution, by the
net increase in the number of shares subject to Options before and after
substitution.

      

      4.3.2           Notwithstanding
Section 4.3.1, there shall be no adjustment to the shares authorized pursuant to
this Plan for an event described in Section 4.3.1 which occurs before or
simultaneously with the date of closing of a public offering of the Common Stock
of the Company pursuant to an effective registration statement under the
Securities Act of 1933, as amended, which results in the Company or selling
shareholders receiving aggregate proceeds from the public offering of at least
$15,000,000.

      

      ARTICLE
5

      PARTICIPATION

      

      Except
with respect to Outside Directors the terms of whose Options are governed by
Article 7, Participants in the Plan shall be those Eligible Recipients who, in
the judgment of the Committee, have performed, are performing, or during the
term of an Option will perform, services in the management, operation and
development of the Company or any Member Company, and significantly contributed,
are significantly contributing or are expected to significantly contribute to
the achievement of corporate economic objectives. Eligible Recipients may be
granted from time to time one or more Options, as may be determined by the
Committee in its sole discretion. The number, type, terms and conditions of
Options granted to various Eligible Recipients need not be uniform, consistent
or in accordance with any plan, regardless of whether such Eligible Recipients
are similarly situated. Upon determination by the Committee that an Option is to
be granted to an Eligible Recipient, written notice shall be given such person,
specifying the terms, conditions, rights and duties related thereto. Each
Eligible Recipient to whom an Option is to be granted shall enter into an
agreement with the Company, in such form as the Committee shall determine and
which is consistent with the provisions of the Plan, specifying such terms,
conditions, rights and duties. Options shall be deemed to be granted as of the
date specified in the grant resolution of the Committee, and the related option
agreements shall be dated as of such date.

      

      ARTICLE
6

      STOCK
OPTIONS

      

      6.1           Grant.
An Eligible Recipient may be granted one or more Options under the Plan, and
such Options shall be subject to such terms and conditions, consistent with the
other provisions of the Plan, as shall be determined by the Committee in its
sole discretion. The Committee may designate whether an Option is to be
considered an Incentive Stock Option or a Non-Statutory Stock Option; provided,
however, that an Incentive Stock Option shall be granted only to an Eligible
Recipient who is an employee of the Company or a Member Company. The terms of
the agreement relating to a Non-Statutory Stock Option shall expressly provide
that such Option shall not be treated as an Incentive Stock Option. No Options
shall be granted to an Outside Director pursuant to this Article 6. Options
shall be granted for no cash consideration unless minimal cash consideration is
required by applicable law.

      

      6.2           Exercise.
An Option shall become exercisable at such times and in such installments (which
may be cumulative) as shall be determined by the Committee in its sole
discretion at the time the Option is granted. Upon the completion of its
exercise period, an Option, to the extent not then exercised, shall
expire.

      

      6.3           Exercise
Price.

      

      6.3.1           Incentive
Stock Options. The per share price to be paid by the Participant at the time an
Incentive Stock Option is exercised shall be determined by the Committee, in its
discretion, at the date of its grant; provided; however, that such price shall
not be less than (i) 100% of the Fair Market Value of one share of Common Stock
on the date the Option is granted, or (ii) 110% of the Fair Market Value of one
share of Common Stock on the date the Option is granted if, at that time the
Option is granted, the Participant owns, directly or indirectly (as determined
pursuant to Section 424(d) of the Code), more than 10% of the total combined
voting power of all classes of stock of the Company or any subsidiary or parent
corporation of the Company (within the meaning of Sections 424(f) and 424(e),
respectively, of the Code).

      

      6.3.2           Non-Statutory
Stock Options. The per share price to be paid by the Participant at the time a
Non-Statutory Stock Option is exercised shall be determined by the Committee in
its sole discretion at the time the Option is granted; provided, however, that
such price shall not be less than 100% of the Fair Market Value of one share of
Common Stock on the date the Option is granted.

      

      6.4           Duration.

      

      6.4.1           Incentive
Stock Options. The period during which an Incentive Stock Option may be
exercised shall be fixed by the Committee in its sole discretion at the time
such Option is granted; provided, however, that in no event shall such period
exceed 10 years from its date of grant or, in the case of a Participant who
owns, directly or indirectly (as determined pursuant to Section 424(d) of the
Code), more than 10% of the total combined voting power of all classes of stock
of the Company or any subsidiary or parent corporation of the Company (within
the meaning of Section 424(f) and 424(e), respectively, of the Code), five years
from its date of grant.

      

      6.4.2           Non-Statutory
Stock Options. The period during which a Non-Statutory Stock Option may be
exercised shall be fixed by the Committee in its sole discretion at its date of
grant.

      

      6.4.3           Effect
of Termination of Employment or Other Service. Notwithstanding this Section 6.4,
except as provided in Articles 8 and 9 of the Plan, all Options granted to a
Participant shall terminate and may no longer be exercised upon the termination
of the Participant's employment or other status with the Company and all Member
Companies.

      

      6.5           Manner
of Exercise. An Option may be exercised by a Participant in whole or in part
from time to time, subject to the conditions contained herein and in the
agreement evidencing such Option, by delivery, in person or through certified or
registered mail, of written notice of exercise to the Company at its principal
executive office (Attention: Chief Financial Officer), and by paying in full the
total Option exercise price for the shares of Common Stock purchased. Such
notice shall be in a form satisfactory to the Committee and shall specify the
particular Option (or portion thereof) that is being exercised and the number of
shares with respect to which the Option is being exercised. Subject to
compliance with Section 12.1 of the Plan, the exercise of the Option shall be
deemed effective upon receipt of such notice and payment complying with the
terms of the Plan and the agreement evidencing such Option. As soon as
practicable after the effective exercise of the Option, the Participant shall be
recorded on the stock transfer books of the Company as the owner of the shares
purchased, and the Company shall deliver to the Participant one or more duly
issued stock certificates evidencing such ownership. If a Participant exercises
any Option with respect to some, but not all, of the shares of Common Stock
subject to such Option, the right to exercise such Option with respect to the
remaining shares shall continue until its expires or terminates in accordance
with its terms. An Option shall only be exercisable with respect to whole
shares.

      

      6.6           Payment
of Exercise Price. The total purchase price of the shares to be purchased upon
exercise of an Option shall be paid entirely in cash (including check, bank
draft or money order); provided, however, that the Committee, in its sole
discretion, may allow such payments to be made, in whole or in part, by transfer
from the Participant to the Company of Previously Acquired Shares. In
determining whether or upon what terms and conditions a Participant will be
permitted to pay the purchase price of an Option in a form other than cash, the
Committee may consider all relevant facts and circumstances, including, without
limitation, the tax and securities law consequences to the Participant and the
Company and the financial accounting consequences to the Company. In the event
the Participant is permitted to pay the purchase price of an Option in whole or
in part with Previously Acquired Shares, the value of such shares shall be equal
to their Fair Market Value on the date of exercise of the Option. No shares of
Common Stock shall be delivered pursuant to exercise of any Option until payment
in full of any amount required to be paid pursuant to the Plan or the applicable
option agreement is, or is arranged to be, received by the Company.

      

      6.7           Rights
as a Shareholder. The Participant shall have no rights as a shareholder with
respect to any shares of Common Stock covered by an Option until the Participant
shall have become the holder of record of such shares, and no adjustments shall
be made for dividends or other distributions or other rights as to which there
is a record date preceding the date the Participant becomes the holder of record
of such shares, except as the Committee may determine pursuant to Section 4.3 of
the Plan.

      

      6.8           Disposition
of Common Stock Acquired Pursuant to the Exercise of Incentive Stock Options.
Prior to making a disposition (as defined in Section 424(c) of the Code) of any
shares of Common Stock acquired pursuant to the exercise of an Incentive Stock
Option granted under the Plan before the expiration of two years after its date
of grant or before the expiration of one year after its date of exercise and the
date on which such shares of Common Stock were transferred to the Participant
pursuant to exercise of the Option, the Participant shall send written notice to
the Company of the proposed date of such disposition, the number of shares to be
disposed of, the amount of proceeds to be received from such disposition and any
other information relating to such disposition that the Company may reasonably
request. The right of a Participant to make any such disposition shall be
conditioned on the receipt by the Company of all amounts necessary to satisfy
any federal, state or local withholding and employment-related tax requirements
attributable to such disposition. The Committee shall have the right, in its
sole discretion, to endorse the certificates representing such shares with a
legend restricting transfer and to cause a stop transfer order to be entered
with the Company's transfer agent until such time as the Company receives the
amounts necessary to satisfy such withholding and employment-related tax
requirements or until the later of the expiration of two years from its date of
grant or one year from its date of exercise and the date on which such shares
were transferred to the Participant pursuant to the exercise of the
Option.

      

      6.9           Aggregate
Limitation of Stock Subject to Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined as of the date an Incentive Stock Option
is granted) of the shares of Common Stock with respect to which incentive stock
options (within the meaning of Section 422 of the Code) are exercisable for the
first time by a Participant during any calendar year (under the Plan and any
other incentive stock option plans of the Company or any subsidiary or any
parent corporation of the Company (within the meaning of Sections 424(f) and
424(e), respectively, of the Code)) exceeds $100,000 (or such other amount as
may be prescribed by the Code from time to time), such excess Options shall be
treated as Non-Statutory Stock Options. The determination shall be made by
taking incentive stock options into account in the order in which they were
granted. If such excess only applies to a portion of an incentive stock option,
the Committee, in its discretion, shall designate which shares shall be treated
as shares to be acquired upon exercise of an incentive stock
option.

      

      ARTICLE
7

      TERMS AND
CONDITIONS OF OUTSIDE DIRECTOR OPTIONS

      

      7.1           Grant.
Subject to the terms and conditions of the Plan (other than Article 6), Options
shall be granted to each Outside Director on the terms and conditions set forth
in this Article 7. During the term of the Plan and provided that sufficient
shares of Common Stock are available pursuant to Article 4:

      

      7.1.1           An
Outside Director shall be granted a Non-Statutory Stock Option for 7,500 shares
of Common Stock upon his initial election to the Board.

      

      7.1.2           Upon
the conclusion of each Annual Meeting of the Shareholders of the Company
("Applicable Annual Meeting"), an Outside Director who was initially elected to
the Board before the Applicable Annual Meeting shall be granted a Non-Statutory
Stock Option pursuant to Section 7.1.2.1 or Section 7.1.2.2, as the case may
be:

      

      7.1.2.1        Each
Outside Director who was initially elected to the Board after the Annual Meeting
immediately preceding the Applicable Annual Meeting shall be granted a
Non-Statutory Stock Option. The number of shares of Common Stock covered by each
such Option shall be 7,500 multiplied by a fraction, the numerator of which
shall be the number of calendar days that have elapsed between the date of
initial election of such Outside Director and the Applicable Annual Meeting but
not to exceed 365, and the denominator of which shall be 365; or

      

      7.1.2.2        Each
Outside Director who was initially elected to the Board on or before the Annual
Meeting immediately preceding the Applicable Annual Meeting shall be granted a
Non-Statutory Stock Option. The number of shares of Common Stock covered by each
such Option, shall be 7,500.

      

      7.1.3           Options
shall be granted for no cash consideration unless minimal cash consideration is
required by applicable law.

      

      7.1.4           For
purposes of Section 7.1.1, the date of an Outside Director's initial election to
the Board shall be the date of grant for such Option. For purposes of Section
7.1.2, the date of the Applicable Annual Meeting shall be the date of grant for
such Option.

      

      7.1.5           When
Non-Statutory Stock Options are granted to Outside Directors pursuant to this
Section 7.1, the number of shares of Common Stock initially covered by such
Options, which is stated in Section 7.1.1 and Section 7.1.2 above, shall not be
subject to adjustment on account of any stock split, reverse stock split, stock
dividend, combination, or reclassification of Common Stock or any similar
transaction effected without the receipt of consideration by the
Company.

      

      7.2           Exercise
Price. The purchase price of each share of Common Stock subject to an Option
granted to an Outside Director pursuant to this Article 7 shall be 100% of the
Fair Market Value of a share of Common Stock on the date of grant.

      

      7.3           Exercise.
Subject to the provisions of Section 7.4 hereof, Options granted to Outside
Directors pursuant to Section 7.1 shall vest and become exercisable immediately,
unless

      the
Company is not subject to the requirement to file reports pursuant to Section 13
or 15(d) of the Exchange Act, in which case said Options shall vest and become
exercisable immediately after the Company becomes subject to such
requirement.

      

      7.4            Duration
Period. Each Option granted to an Outside Director pursuant to this Article 7
and all rights to purchase Common Stock thereunder shall terminate on the
earliest of:

      

      7.4.1           Ten
years after the date such Option is granted;

      

      7.4.2           Three
years after the Outside Director is no longer a director of the Company;
and

      

      7.4.3           The
expiration of the period specified in Section 8.5, whichever is applicable,
after an Outside Director ceases to be a member of the Board.

      

      In no
event shall an Option be exercisable at any time after its original expiration
date.

      

      7.5           Manner
of Exercise; Payment of Exercise Price; Rights as a Shareholder. The provisions
of Sections 6.5, 6.6 and 6.7 regarding manner of exercise, payment of exercise
price and rights of a shareholder, respectively, shall govern with respect to
Outside Director Options.

      

      ARTICLE
8

      EFFECT OF
TERMINATION OF EMPLOYMENT OR OTHER SERVICE

      

      8.1           Termination
of Employment or Other Service Due to Death, Disability or Retirement. Subject
to Section 8.5 relating to Outside Directors, except as otherwise provided in
Article 9 of the Plan, in the event a Participant's employment or other service
with the Company and all Member Companies is terminated by reason of such
Participant's death, Disability or Retirement, all outstanding Options then held
by the Participant shall become immediately exercisable in full and remain
exercisable after such termination for a period of three months in the case of
Retirement and one year in the case of death or Disability (but in no event
after the expiration date of any such Option).

      

      8.2           Termination
of Employment or Other Service for Reasons Other than Death, Disability or
Retirement. Subject to Section 8.5 relating to Outside Directors, except as
otherwise provided in Article 9 of the Plan or as otherwise determined by the
Committee either at the time an Option is granted or thereafter, in the event of
termination of the Participant's employment or other status with the Company and
all Member Companies in relation to which the Option was granted for any reason
other than death, Disability or Retirement, all rights of the Participant under
the Plan shall immediately terminate without notice of any kind, and no Options
then held by the Participant shall thereafter be exercisable; provided, however,
that if such termination is due to any reason other than termination by the
Company or any Member Company for "cause," all outstanding Options then held by
such Participant shall remain exercisable to the extent exercisable as of such
termination for a period of three months after such termination (but in no event
after the expiration date of any such Option). For purposes of this Section 8.2,
"cause" shall be as defined in any employment or other agreement or policy
applicable to the Participant or, if no such agreement or policy exists, shall
mean (a) dishonesty, fraud, misrepresentation, embezzlement or material or
deliberate injury or attempted injury, in each case related to the Company or
any Member Company, (b) any unlawful or criminal activity of a serious nature,
(c) any willful breach of duty, habitual neglect of duty or unreasonable job
performance, or (d) any material breach of a confidentiality or noncompetition
agreement entered into with the Company or any Member Company.

      

      8.3           Modification
of Effect of Termination. Notwithstanding the provisions of this Article 8, upon
a Participant's termination of employment or other status with the Company and
all Member Companies with respect to which Options were granted, the Committee
may, in its sole discretion (which may be exercised before or following such
termination) cause Options, or any portions thereof, then held by such
Participant to become exercisable and remain exercisable following such
termination in the manner determined by the Committee; provided, however, that
no Option shall be exercisable after the expiration date thereof and any
Incentive Stock Option that remains unexercised more than three months following
employment termination by reason of Retirement or more than one year following
employment termination by reason of death or Disability shall thereafter be
deemed to be a Non-Statutory Stock Option.

      

      8.4           Date
of Termination. Unless the Committee shall otherwise determine in its sole
discretion, a Participant's employment or other service shall, for purposes of
the Plan, be deemed to have terminated on the date such Participant ceases to
perform services for the Company and all Member Companies, as determined in good
faith by the Committee.

      

      8.5           Cessation
of Participant as an Outside Director. In the event that an Outside Director's
service on the Board ceases due to death, disability or retirement, all
outstanding options then held by the Outside 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 an Outside 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 an Outside Director is involuntarily
removed for breach of duty, dishonesty or any other cause, all vested and
exercisable shares of options awarded under the Plan are immediately
forfeited.

      

      ARTICLE
9

      CHANGE OF
CONTROL

      

      9.1           Change
in Control. For purposes of this Article 9, a "Change in Control" of the Company
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.

      

      9.2           Acceleration
of Vesting. If a Change of Control of the Company shall occur, the Committee, in
its sole discretion, may determine that all outstanding Options shall become
immediately exercisable in full and shall remain exercisable during the
remaining term thereof, regardless of whether the employment or other status of
the Participants with respect to which Options have been granted shall continue
with the Company or any Member Company. This provision regarding acceleration of
vesting shall not apply to Options granted to Outside Directors pursuant to
Article 7.

      

      9.3           Cash
Payment. If a Change of Control of the Company shall occur, then the Committee,
in its sole discretion, and without the consent of any Participant affected
thereby, may determine that some or all Participants holding outstanding Options
shall receive, with respect to some or all of the shares of Common Stock subject
to such Options, as of the effective date of any such Change in Control of the
Company, cash in an amount equal to the excess of the Fair Market Value of such
shares immediately prior to the effective date of such Change of Control of the
Company over the exercise price per share of such Options. This provision
regarding cash payment shall not apply to Options granted to Outside Directors
pursuant to Article 7.

      

      9.4           Limitation
on Change in Control Payments. Notwithstanding anything in Section 9.2 or 9.3
above to the contrary, if, with respect to a Participant, the acceleration of
the exercisability of an Option as provided in Section 9.2 or the payment of
cash in exchange for all or part of an Option as provided in Section 9.3 above
(which acceleration or payment could be deemed a "payment" within the meaning of
Section 280G(b)(2) of the Code), together with any other payments which such
Participant has the right to receive from the Company or any corporation which
is a member of an "affiliated group" as defined in Section 1504(a) of the Code
without regard to Section 1504(b) of the Code) of which the Company is a member,
would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the
Code), then the acceleration of exercisability and the payments to such
Participant pursuant to Sections 9.2 and 9.3 above shall be reduced to the
largest extent or amount as, in the sole judgment of the Committee, will result
in no portion of such payments being subject to the excise tax imposed by
Section 4999 of the Code.

      

      ARTICLE
10

      RIGHT TO
WITHHOLD; PAYMENT OF WITHHOLDING TAXES

      

      The
Company is entitled to (a) withhold and deduct from future wages of the
Participant (or from other amounts which may be due and owing to the Participant
from the Company) or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all federal, state and local
withholding and employment-related tax requirements (i) attributable to the
grant or exercise of an Option or to a disqualifying disposition of stock
received upon exercise of an Incentive Stock Option, or (ii) otherwise incurred
with respect to an Option, or (b) require the Participant promptly to remit the
amount of such withholding liability to the Company before taking any action
with respect to the exercise of an Option or the issuance of any stock
certificate either to the Participant or any transferee. The Committee, in its
sole discretion, may permit a Participant to pay all or a portion of such
withholding liability either by surrendering Previously Acquired Shares already
owned by the Participant or by electing to have the Company retain shares
subject to the Option, provided that the Committee determines that the fair
market value of the surrendered Previously Acquired Share or the retained shares
is equal to such withholding liability.

      

      ARTICLE
11

      RIGHTS OF
ELIGIBLE RECIPIENTS AND PARTICIPANTS;

      TRANSFERABILITY

      

      11.1           Employment
or Service. Nothing in the Plan shall interfere with or limit in any way the
right of the Company or any Member Company to terminate the employment or
service of any Eligible Recipient or Participant at any time, or confer upon any
Eligible Recipient or Participant any right to continue in the employ or service
of the Company or any Member Company.

      

      11.2           Restrictions
on Transfer. Other than as explicitly permitted in this Section 11.2, no right
or interest of any Participant in an Option prior to the exercise of such
Options shall be assignable or transferrable, or subjected to any lien, during
the lifetime of the Participant, either voluntarily or involuntarily, directly
or indirectly, by operation of law or otherwise, including execution, levy,
garnishment, attachment, pledge, divorce or bankruptcy.

      

      11.2.1         
In the event of a Participant's death, such Participant's rights and interest in
Options shall be transferrable by testamentary will or the laws of descent and
distribution, and payment of any amounts due under the Plan shall be made to,
and exercise of any Options (to the extent permitted pursuant to Article 8 of
the Plan) may be made by, the Participant's legal representatives, heirs or
legatees.

      

      11.2.2          If
in the opinion of the Committee a Participant holding an Option is disabled from
caring for his or her affairs because of mental condition, physical condition or
age, any payments due the Participant may be made to, and any rights of the
Participant under the Plan shall be exercised by, such Participant's guardian,
conservator or other legal personal representative upon furnishing the Committee
with evidence satisfactory to the Committee of such status.

      

      11.2.3          Options
may be transferred to a Participant's family member who has acquired the options
from the employee through a gift or a qualified domestic relations order (as
defined by the Code). For purposes of this Section, "family member" includes any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the employee's household (other than a tenant
or employee), a trust in which these persons have more than fifty percent of the
beneficial interest, a foundation in which these persons (or the employee)
control the management of assets, and any other entity in which these persons
(or the employee) own more than fifty percent of the voting interests. Options
may not be transferred for value, provided that the following transactions are
not prohibited transfers for value: (i) a transfer under a domestic relations
order in settlement of marital property rights; and (ii) a transfer to an entity
in which more than fifty percent of the voting interests are owned by family
members (or the Participant) in exchange for an interest in that entity. This
Section 11.2.3 shall not apply to Incentive Stock Options.

      

      11.3           Non-Exclusivity
of the Plan. Nothing contained in the Plan is intended to amend, modify or
rescind any previously approved compensation plans or programs entered into by
the Company. The Plan will be construed to be in addition to any and all such
other plans or programs. Neither the adoption of the Plan nor the submission of
the Plan to the shareholders of the Company for approval will be construed as
creating any limitations on the power or authority of the Board to adopt such
additional or other compensation arrangements as the Board may deem necessary or
desirable.

      

      ARTICLE
12

      SECURITIES
LAW RESTRICTIONS

      

      12.1           Share
Issuances. Notwithstanding any other provision of the Plan or any agreements
entered into pursuant hereto, the Company shall not be required to issue or
deliver any certificate for shares of Common Stock under this Plan, and an
Option shall not be considered to be exercised notwithstanding the tender by the
Participant of any consideration therefor, unless and until each of the
following conditions has been fulfilled:

      

      12.1.1          (i)
There shall be in effect with respect to such shares a registration statement
under the Securities Act and any applicable state securities laws if the
Committee, in its sole discretion, shall have determined to file, cause to
become effective and maintain the effectiveness of such registration statement;
or (ii) if the Committee has determined not to so register the shares of Common
Stock to be issued under the Plan, (A) exemptions from registration under the
Securities Act and applicable state securities laws shall be available for such
issuance (as determined by counsel to the Company) and (B) there shall have been
received from the Participant (or, in the event of death or disability, the
Participant's heir(s) or legal representative(s)) any representations or
agreements requested by the Company in order to permit such issuance to be made
pursuant to such exemptions; and

      

      12.1.2          There
shall have been obtained any other consent, approval or permit from any state or
federal governmental agency which the Committee shall, in its sole discretion
upon the advice of counsel, deem necessary or advisable.

      

      12.2           Share
Transfers. Shares of Common Stock issued pursuant to Options granted under the
Plan may not be sold, assigned, transferred, pledged, encumbered or otherwise
disposed of, whether voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise, except pursuant to registration under the
Securities Act and applicable state securities laws or pursuant to exemptions
from such registrations. The Company may condition the sale, assignment,
transfer, pledge, encumbrance or other disposition of such shares not issued
pursuant to an effective and current registration statement under the Securities
Act and all applicable state securities laws on the receipt from the party to
whom the shares of Common Stock are to be so transferred of any representations
or agreement requested by the Company in order to permit such transfer to be
made pursuant to exemptions from registration under the Securities Act and
applicable state securities laws.

      

      12.3           Holding
Period Requirement. The Options granted and any Common Stock acquired pursuant
to the exercise of Options under this Plan may be subject to a six-month holding
requirement from the grant date pursuant to Rule 16b-3(d)(3) under the Exchange
Act.

      

      12.4           Legends.

      

      12.4.1          Unless
a registration statement under the Securities Act and applicable state
securities laws is in effect with respect to the issuance or transfer of shares
of Common Stock under the Plan, each certificate representing any such shares
shall be endorsed with a legend in substantially the following form, unless
counsel for the Company is of the opinion as to any such certificate that such
legend is unnecessary:

      

      THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED ("THE ACT"), OR UNDER APPLICABLE STATE SECURITIES LAWS. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SUCH STATE
LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH STATE
LAWS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.

      

      12.4.2          The
Committee, in its sole discretion, may endorse certificates representing shares
issued pursuant to the exercise of Incentive Stock Options with a legend in
substantially the following form:

      

      THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF ON OR BEFORE [THE LATER OF THE ONE-YEAR OR
TWO-YEAR INCENTIVE STOCK OPTION HOLDING PERIODS], WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMPANY.

      

      ARTICLE
13

      PLAN
AMENDMENT; MODIFICATION AND TERMINATION

      

      The Board
may suspend or terminate the Plan or any portion thereof at any time, and may
amend the Plan from time to time in such respects as the Board may deem
advisable in order that Options under the Plan shall conform to any change in
applicable laws or regulations or in any other respect the Board may deem to be
in the best interests of the Company; provided, however, that no such amendment
shall be effective, without approval of the shareholders of the Company, if
shareholder approval of the amendment is then required to comply with or obtain
exemptive relief under any tax or regulatory requirement the Board deems
desirable to comply with or obtain exemptive relief under, including without
limitation, Rule 16b-3 under the Exchange Act or any successor rule or Section
422 of the Code or under the applicable rules or regulations of any securities
exchange or the NASD.

      

      ARTICLE
14

      EFFECTIVE
DATE OF THE PLAN

      

      14.1           Effective
Date. The Plan is effective January 1, 1995 and the Plan was adopted by the
Board and approved by the shareholders by unanimous written consent on January
12, 1995, and ratified and confirmed by the shareholders on January 30,
1995.

      

      14.2           Duration
of the Plan. The Plan shall terminate at midnight on the tenth anniversary from
the effective date, and may be terminated prior thereto by Board action, and no
Option shall be granted after such termination. Options outstanding upon
termination of the Plan may continue to be exercised in accordance with their
terms.

      

      ARTICLE
15

      MISCELLANEOUS

      

      15.1           Construction
and Headings. The use of the masculine gender shall also include within its
meaning the feminine, and the singular may include the plural and the plural may
include the singular, unless the context clearly indicates to the contrary. The
headings of the Articles and Sections of the Plan are for convenience of reading
only and are not meant to be of substantive significance and shall not add or
detract from the meaning of such Article or Section.

      

      15.2           Governing
Law. The place of administration of the Plan shall be conclusively deemed to be
within the Commonwealth of Virginia, and the rights and obligations of any and
all persons having or claiming to have had an interest under the Plan or under
any agreements evidencing Options shall be governed by and construed exclusively
and solely in accordance with the laws of the Commonwealth of Virginia without
regard to conflict of laws provisions of any jurisdictions. All parties agree to
submit to the jurisdiction of the state and federal courts of Virginia with
respect to matters relating to the Plan and agree not to raise or assert the
defense that such forum is not convenient for such party.

      

      15.3           Successors
and Assigns. This Plan shall be binding upon and inure to the benefit of the
successors and permitted assigns of the Company, including, without limitation,
whether by way of merger, consolidation, operation of law, assignment, purchase
or other acquisition of substantially all of the assets or business of the
Company, and any and all such successors and assigns shall absolutely and
unconditionally assume all of the Company's obligations under the
Plan.

      

      15.4           Survival
of Provisions. The rights, remedies, agreements, obligations and covenants
contained in or made pursuant to the Plan, any agreement evidencing an Option
and any other notices or agreements in connection therewith, including, without
limitation, any notice of exercise of an Option, shall survive the execution and
delivery of such notices and agreements and the delivery and receipt of shares
of Common Stock and shall remain in full force and
effect.ex10_1.htm

    EXHIBIT
10.1

    

    

    DOLLAR
TREE, INC.

    1998
SPECIAL STOCK OPTION PLAN

    

    THIS
DOLLAR TREE, INC. 1998 SPECIAL STOCK OPTION PLAN ("Plan") is adopted by Dollar
Tree, Inc. ("Company").

    

    1.       Number
of Shares.  Subject to adjustment in the event of any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering, extraordinary
dividend or divesture (including a spin-off) or any other change in the
corporate structure or shares of the Company, the maximum number of shares of
Common Stock that shall be authorized and reserved for issuance under the Plan
shall be 165,000 shares of Common Stock.

    

    2.       Participants.  Participation
in the Plan shall be limited to Gary L. Cino, Eric Stauss, Eric Leon, Anthony
Leon and William Coyle.

    

    3.       Grant.  Each
Participant shall be granted an option under the Plan to purchase shares of
Common Stock in the form attached hereto ("Options").  The terms and
conditions of each such Option (including vesting, exercise price, lapses, and
duration) shall be as set forth therein.

    

    4.       Duration
of the Plan. The Plan shall terminate at midnight on the tenth anniversary from
the effective date. Options outstanding upon termination of the Plan may
continue to be exercised in accordance with their terms.

    

    5.       Governing
Law.  The place of administration of the Plan shall be conclusively
deemed to be within the Commonwealth of Virginia, and the rights and obligations
of any and all  persons having  or claiming to have had an
interest under the Plan or under any agreements evidencing Options shall be
governed by and construed exclusively and solely in accordance with the laws of
the  Commonwealth of Virginia without regard to conflict of laws
provisions of any jurisdictions.  All parties agree to submit to the
jurisdiction of the state and federal courts of Virginia with respect to matters
relating to the Plan and agree not to raise or assert the defense that such
forum is not convenient for such party.

    

    6.       Successors
and Assigns.  This Plan shall be binding upon and inure to the benefit
of the successors and permitted assigns of the Company, including, without
limitation, whether by way of merger, consolidation, operation of law,
assignment, purchase or other acquisition of substantially all of the assets or
business of the Company, and any and all such successors and assigns shall
absolutely and unconditionally assume all of the Company's obligations under the
Plan.

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