Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management has carried out, with the participation of our Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this report. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of January 30, 2021, our disclosure controls and procedures were designed and functioning effectively to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Our management conducted an assessment of our internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013) . Based on this assessment, our management has concluded that, as of January 30, 2021, our internal control over financial reporting is effective.
Our independent registered public accounting firm, KPMG LLP, has audited our consolidated financial statements and has issued an attestation report on the effectiveness of our internal control over financial reporting. Their report appears below.
Changes in Internal Controls
There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Dollar Tree, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Dollar Tree, Inc.’s and subsidiaries (the Company) internal control over financial reporting as of January 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 30, 2021 and February 1, 2020, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended January 30, 2021, and the related notes (collectively, the consolidated financial statements), and our report dated March 16, 2021 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Norfolk, Virginia
March 16, 2021
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Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information concerning our Directors and Executive Officers required by this Item is incorporated by reference to Dollar Tree, Inc.’s Proxy Statement relating to our 2021 Annual Meeting (“Proxy Statement”), under the captions “Director Biographies” and “Executive Officers.”
To the extent disclosure of any delinquent report under Section 16(a) of the Securities Exchange Act of 1934 is made by us, such disclosure will be set forth under the caption “Delinquent Section 16(a) Reports” in our Proxy Statement, which is incorporated herein by reference.
The information concerning our audit committee and audit committee financial experts required by this Item is incorporated herein by reference to the Proxy Statement, under the caption “The Board and Its Committees.”
The information concerning our code of ethics required by this Item is incorporated by reference to the Proxy Statement, under the caption “Code of Ethics.”
Item 11. Executive Compensation
Information set forth in the Proxy Statement under the caption “Compensation of Executive Officers,” “Compensation Discussion and Analysis” and “Pay Ratio Disclosure” with respect to executive compensation, is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Equity Compensation Plans
The following table summarizes information regarding shares issuable as of January 30, 2021, under our equity compensation plans, including the number of shares of common stock subject to options, restricted stock units, deferred shares and other rights granted to employees, consultants and members of our Board of Directors; the weighted-average exercise price of outstanding options; and the number of shares remaining available for future award grants under these plans. Additional information regarding our equity compensation plans can be found in Note 11 to our consolidated financial statements.
Equity compensation plan category (a)
Number of securities to be issued upon exercise of outstanding options, warrants and rights (b)
Weighted-average exercise price of outstanding options, warrants and rights (c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plans approved by security holders 1
1,854,600 $ 97.47 19,062,707
Plans not approved by security holders 2
— — —
______________
(a) Amounts represent outstanding options, restricted stock units and deferred (“phantom”) shares as of January 30, 2021.
(b) Not included in the calculation of weighted-average exercise price are (i) 1,688,488 restricted stock units and (ii) 150,197 director deferred shares.
(c) Amounts represent shares remaining available for future awards under all of our equity-based plans, including shares remaining under our 2011 Omnibus Incentive Plan, our 2015 Employee Stock Purchase Plan and our 2013 Director Deferred Compensation Plan. Out of the 19,062,707 shares remaining available for future issuance, 2,707,188 represent the number of shares remaining available for future issuance under our Employee Stock Purchase Plan as of January 30, 2021. No awards may be granted under the Omnibus Plan after March 16, 2021.
1 Equity-based plans approved by our shareholders include: the 2013 Director Deferred Compensation Plan, the 2015 Employee Stock Purchase Plan (which replaced a predecessor plan), and the 2011 Omnibus Incentive Plan (which replaced the 2003 Equity Incentive Plan and the 2004 Executive Officer Equity Plan).
2 Does not include 101,142 shares to be issued upon the exercise of options with a weighted-average exercise price of $76.97 that were granted under the Family Dollar 2006 Incentive Plan and assumed by us in connection with our merger with Family Dollar.
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Information set forth in the Proxy Statement under the caption “Ownership of Common Stock,” with respect to security ownership of certain beneficial owners and management, is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information set forth in the Proxy Statement under the caption “Certain Relationships and Related Transactions,” is incorporated herein by reference.
The information concerning the independence of our directors required by this Item is incorporated by reference to the Proxy Statement under the caption “Board Governance - Independence.”
Item 14. Principal Accountant Fees and Services
Information set forth in the Proxy Statement under the caption “Ratification of Appointment of Independent Auditors,” is incorporated herein by reference.
PART IV
Item 15. Exhibit and Financial Statement Schedules
1. Documents filed as part of this report :
1. Financial Statements. Reference is made to the Index to the Consolidated Financial Statements set forth under Part II, Item 8 of this Form 10-K.
2. Financial Statement Schedules. All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions, are not applicable, or the information is included in the Consolidated Financial Statements, and therefore have been omitted.
3. Exhibits. The following exhibits are filed as part of, or incorporated by reference into, this report.
Incorporated by Reference
Exhibit Exhibit Description Form Exhibit Filing Date Filed Herewith
3.1 Amended Articles of Incorporation of Dollar Tree, Inc., effective June 20, 2013
8-K 3.1 6/21/2013
3.2 Amended By- L aws of Dollar Tree, Inc., effective December 3, 2020
8-K 3.1 12/3/2020
4.1 Form of Common Stock Certificate
8-K 4.1 3/13/2008
4.2.1 Indenture, dated as of April 2, 2018, between Dollar Tree, Inc., as issuer, and U.S. Bank National Association, as trustee
S-3 ASR 4.1 4/2/2018
4.2.2 First Supplemental Indenture, dated as of April 19, 2018, between Dollar Tree, Inc. and U.S. Bank National Association, as trustee
8-K 4.1 4/20/2018
4.3 Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934
10-K 4.3 3/20/2020
10.1 * Form of Change in Control Retention Agreement, to be executed between Dollar Tree Stores, Inc. and the Chief Executive Officer; Chief Financial Officer; Sr. Vice President, Stores; Chief Merchandising Officer; Chief Logistics Officer; Chief People Officer; and Chief Information Officer
8-K 10.1 3/20/2007
10.2 * Policy for director compensation (as described under the caption “ Director Co mpensation ” )
DEF 14A N/A 4/24/2020
10.3.1 * Change in Control Retention Agreement between Dollar Tree, Inc. and Kevin Wampler, Chief Financial Officer
8-K 10.1 12/5/2008
10.3.2 * Amendment to Change in Control Retention Agreement between Dollar Tree, Inc. and Kevin Wampler, Chief Financial Officer
8-K 10.1 10/11/2011
10.4 * Description of Dollar Tree, Inc. Management Incentive Compensation Plan
10-Q 10.1 5/19/2011
10.5.1 * 2011 Omnibus Incentive Plan effective as of March 17, 2011
8-K 10.1 6/22/2011
10.5.2 * First Amendment to the 2011 Omnibus Incentive Plan dated June 16, 2016
10-Q 10.1 9/2/2016
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Incorporated by Reference
Exhibit Exhibit Description Form Exhibit Filing Date Filed Herewith
10.5.3 * 2011 Omnibus Incentive Plan, as amended and restated effective June 12, 2019
10-Q 10.1 8/29/2019
10.6 * Form of Non-employee Director Option Agreement under the 2011 Omnibus Incentive Plan
8-K 10.4 6/22/2011
10.7 * Form of Restricted Stock Unit Agreement under the 2011 Omnibus Incentive Plan
8-K 10.2 3/21/2012
10.8 * Form of Long-Term Performance Plan Award Agreement under the 2011 Omnibus Incentive Plan
10-K 10.32 3/27/2019
10.9 * Form of Performance Stock Unit Agreement under the 2011 Omnibus Incentive Plan
10-K 10.33 3/27/2019
10.10 * Form of Restricted Stock Unit Agreement under the 2011 Omnibus Incentive Plan
10-K 10.34 3/27/2019
10.11 * Change in Control Retention Agreement between Dollar Tree, Inc. and David Jacobs, Chief Strategy Officer
10-Q 10.2 8/16/2012
10.12 * Change in Control Retention Agreement between Dollar Tree, Inc. and William A. Old, Jr, Chief Legal Officer
10-Q 10.2 8/22/2013
10.13 * Dollar Tree, Inc. 2015 Employee Stock Purchase Plan, effective September 1, 2015
S-8 4.0 10/28/2015
10.14 * Form of Executive Officer Nonstatutory Stock Option Agreement under the 2011 Omnibus Incentive Plan
10-K 10.54 3/28/2017
10.15 * Dollar Tree and Family Dollar Supplemental Deferred Compensation Plan
10-Q 10.1 8/24/2017
10.16 * 2013 Director Deferred Compensation Plan, as amended and restated effective December 31, 2016
10-K 10.35 3/16/2018
10.17 Credit Agreement, dated as of April 19, 2018, among Dollar Tree, Inc., JPMorgan Chase Bank, N.A., as administrative agent and the lenders and other parties thereto
8-K 10.1 4/20/2018
10.18 * Form of Change in Control Retention Agreement for Executive Officers (portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10-Q 10.1 11/29/2018
10.19 * Form of Executive Agreement (portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10-Q 10.2 11/29/2018
10.20 * Form of Long-Term Performance Plan Award Agreement under the 2011 Omnibus Incentive Plan
10-Q 10.1 5/28/2020
21.1 Subsidiaries of the Registrant
X
23.1 Consent of Independent Registered Public Accounting Firm
X
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101 The following financial statements from our Form 10-K for the fiscal year ended January 30, 2021, formatted in Inline XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Shareholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements X
104 The cover page from our Form 10-K for the fiscal year ended January 30, 2021, formatted in Inline XBRL and contained in Exhibit 101 X
*Management contract or compensatory plan or arrangement
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Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DOLLAR TREE, INC.
DATE: March 16, 2021 By: /s/ Michael A. Witynski
Michael A. Witynski
President and Chief Executive Officer
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Michael A. Witynski
Michael A. Witynski President and Chief Executive Officer; Director March 16, 2021
(principal executive officer)
/s/ Bob Sasser
Bob Sasser Executive Chairman; Director March 16, 2021
/s/ Gregory M. Bridgeford
Gregory M. Bridgeford Lead Independent Director March 16, 2021
/s/ Arnold S. Barron
Arnold S. Barron Director March 16, 2021
/s/ Thomas W. Dickson
Thomas W. Dickson Director March 16, 2021
/s/ Lemuel E. Lewis
Lemuel E. Lewis Director March 16, 2021
/s/ Kathleen E. Mallas
Kathleen E. Mallas Senior Vice President - Principal Accounting Officer March 16, 2021
(principal accounting officer)
/s/ Jeffrey Naylor
Jeffrey Naylor Director March 16, 2021
/s/ Winnie Park
Winnie Park Director March 16, 2021
/s/ Thomas A. Saunders III
Thomas A. Saunders III Director March 16, 2021
/s/ Stephanie Stahl
Stephanie Stahl Director March 16, 2021
/s/ Kevin S. Wampler
Kevin S. Wampler Chief Financial Officer March 16, 2021
(principal financial officer)
/s/ Carrie A. Wheeler
Carrie A. Wheeler Director March 16, 2021
/s/ Thomas E. Whiddon
Thomas E. Whiddon Director March 16, 2021
/s/ Dr. Carl P. Zeithaml
Dr. Carl P. Zeithaml Director March 16, 2021
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