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 28, 2023, 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 28, 2023, 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. and subsidiaries’ (the Company) internal control over financial reporting as of January 28, 2023, 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 28, 2023, 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 28, 2023 and January 29, 2022, the related consolidated income statements, statements of comprehensive income, shareholders’ equity, and cash flows for each of the years in the three‑year period ended January 28, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated March 10, 2023 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 10, 2023
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Item 9B. Other Information
On March 8, 2023, the Board of Directors of the Company approved an amendment to Article III, Section 2 of the Company’s Amended and Restated By-Laws to reduce the size of the Board from twelve directors to ten directors, effective immediately prior to the convening of the 2023 annual meeting of shareholders on June 13, 2023.
The above summary does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated By-Laws, effective June 13, 2023, a copy of which is filed as Exhibit 3.3 to this Annual Report on Form 10-K and is incorporated herein by reference.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not Applicable.
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 2023 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 “Board Governance - Code of Ethics.”
Item 11. Executive Compensation
Information set forth in the Proxy Statement under the captions “Compensation Committee Report on Executive Compensation,” “Compensation Discussion and Analysis,” “Annual Compensation of Executive Officers,” “Pay Ratio Disclosure,” and “Director 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 28, 2023, 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 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 10 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
1,240,339 $ 108.38 8,696,011
Plans not approved by security holders 2
2,252,587 $ 157.17 —
______________
(a) Amounts represent outstanding options, restricted stock units and deferred (“phantom”) shares as of January 28, 2023.
(b) Not included in the calculation of weighted-average exercise price are (i) 1,192,291 restricted stock units and (ii) 37,273 director deferred shares.
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(c) The 8,696,011 shares remaining available for future issuance under our equity-based plans approved by security holders includes 5,799,159 shares remaining under our 2021 Omnibus Incentive Plan, 2,507,678 shares remaining under our 2015 Employee Stock Purchase Plan and 389,174 shares remaining under our 2013 Director Deferred Compensation Plan.
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 2021 Omnibus Incentive Plan (which replaced the 2011 Omnibus Incentive Plan). As of March 17, 2021, the 2011 Omnibus Incentive Plan was no longer available for new grants of awards, but all outstanding awards that were granted under the plan prior to March 17, 2021 continue to be governed by the terms and conditions of the plan and applicable award agreements.
2 In connection with our employment of Richard W. Dreiling as Executive Chairman of the Board in March 2022, Mr. Dreiling was granted a one-time award of options to purchase 2,252,587 shares of Company common stock as an employment inducement grant within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules. The amount shown in the table does not include 13,575 shares to be issued upon the exercise of options with a weighted-average exercise price of $77.06 that were granted under the Family Dollar 2006 Incentive Plan and assumed by us in connection with our merger with Family Dollar.
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 and Restated Articles of Incorporation of Dollar Tree, Inc., effective October 14, 2022
10-Q 3.1 11/22/2022
3.2 Amended and Restated By-Laws of Dollar Tree, Inc., effective January 30, 2023
8-K 3.1 1/31/2023
3.3 Amended and Restated By-Laws of Dollar Tree, Inc., effective June 13, 2023
X
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
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Incorporated by Reference
Exhibit Exhibit Description Form Exhibit Filing Date Filed Herewith
4.2.3 Second Supplemental Indenture, dated as of December 1, 2021, between Dollar Tree, Inc. and U.S. Bank National Association, as trustee
8-K 4.1 12/1/2021
4.3 Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934
X
10.1 * Terms of director compensation (as described under the caption “Director Compensation”)
DEF 14A N/A 5/18/2022
10.2.1 * Change in Control Retention Agreement between Dollar Tree, Inc. and Kevin Wampler, Chief Financial Officer
8-K 10.1 12/5/2008
10.2.2 * Amendment to Change in Control Retention Agreement between Dollar Tree, Inc. and Kevin Wampler, Chief Financial Officer
8-K 10.1 10/11/2011
10.3 * Description of Dollar Tree, Inc. Management Incentive Compensation Plan, effective for the fiscal year ending January 29, 2022 and thereafter
10-Q 10.1 5/27/2021
10.4.1 * 2011 Omnibus Incentive Plan effective as of March 17, 2011
8-K 10.1 6/22/2011
10.4.2 * First Amendment to the 2011 Omnibus Incentive Plan dated June 16, 2016
10-Q 10.1 9/2/2016
10.4.3 * 2011 Omnibus Incentive Plan, as amended and restated effective June 12, 2019
10-Q 10.1 8/29/2019
10.5 * Form of Non-employee Director Option Agreement under the 2011 Omnibus Incentive Plan
8-K 10.4 6/22/2011
10.6.1 * Form of Restricted Stock Unit Agreement under the 2011 Omnibus Incentive Plan
8-K 10.2 3/21/2012
10.6.2 * Form of Restricted Stock Unit Agreement under the 2011 Omnibus Incentive Plan
10-K 10.34 3/27/2019
10.7 * Form of Executive Officer Nonstatutory Stock Option Agreement under the 2011 Omnibus Incentive Plan
10-K 10.54 3/28/2017
10.8 * Form of Long-Term Performance Plan Award Agreement under the 2011 Omnibus Incentive Plan
10-Q 10.1 5/28/2020
10.9 * Form of Performance Stock Unit Agreement under the 2011 Omnibus Incentive Plan
10-K 10.33 3/27/2019
10.10 * Dollar Tree, Inc. 2015 Employee Stock Purchase Plan, effective September 1, 2015
S-8 4.0 10/28/2015
10.11 * Dollar Tree and Family Dollar Supplemental Deferred Compensation Plan
10-Q 10.1 8/24/2017
10.12.1 * 2013 Director Deferred Compensation Plan, as amended and restated effective December 31, 2016
10-K 10.35 3/16/2018
10.12.2 * 2013 Director Deferred Compensation Plan, as amended and restated effective June 10, 2021
8-K 10.6 6/11/2021
10.12.3 * Amendment to the Dollar Tree, Inc. 2013 Director Deferred Compensation Plan, effective March 8, 2023
X
10.13 * 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
10.14.1 * 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
10.14.2 * Form of letter agreement amending Executive Agreements for Executive Officers at the level of Chiefs (EVP)
8-K 10.1 3/7/2022
10.14.3 * Revised Form of Executive Agreement for Executive Officers at the level of Chiefs (EVP) (portions of the exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K)
10-Q 10.1 8/25/2022
10.15.1 * Dollar Tree, Inc. 2021 Omnibus Incentive Plan
8-K 10.1 6/11/2021
10.15.2 * First Amendment to the Dollar Tree, Inc. 2021 Omnibus Incentive Plan, effective November 29, 2022
X
10.16 * Form of Performance-Based Restricted Stock Unit Agreement under the 2021 Omnibus Incentive Plan
8-K 10.2 6/11/2021
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Incorporated by Reference
Exhibit Exhibit Description Form Exhibit Filing Date Filed Herewith
10.17 * Form of Long-Term Performance Plan Award Agreement under the 2021 Omnibus Incentive Plan
8-K 10.3 6/11/2021
10.18 * Form of Restricted Stock Unit Agreement (Standard) under the 2021 Omnibus Incentive Plan
8-K 10.4 6/11/2021
10.19 * Form of Non-Employee Director Nonstatutory Stock Option Agreement under the 2021 Omnibus Incentive Plan
8-K 10.5 6/11/2021
10.20 Credit Agreement, dated as of December 8, 2021, among Dollar Tree, Inc., JPMorgan Chase Bank, N.A., as agent and the lenders and other parties thereto
8-K 10.1 12/9/2021
10.21 * Addendum to Executive Agreement, by and between Dollar Tree, Inc. and Michael Witynski, dated March 1, 2022
8-K 10.2 3/7/2022
10.22 * Post-Retirement Benefits Agreement, by and between Dollar Tree, Inc. and Bob Sasser, dated March 2, 2022
8-K 10.3 3/7/2022
10.23 * Form of Indemnification Agreement for Directors and Executive Officers
8-K 10.1 3/7/2022
10.24 Stewardship Framework Agreement, by and between Dollar Tree, Inc. and MR Cobalt Advisor LLC, on behalf of itself and its affiliates and associates, dated March 8, 2022
8-K 10.1 3/8/2022
10.25.1 * Executive Agreement, effective March 19, 2022, by Richard W. Dreiling and Dollar Tree, Inc. (portions of the exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K)
8-K 10.1 3/21/2022
10.25.2 * Amendment to Executive Agreement, dated January 25, 2023, by the Company and Richard W. Dreiling
8-K/A 10.1 1/27/2023
10.26 * Nonstatutory Stock Option Agreement, effective March 19, 2022, by Richard W. Dreiling and Dollar Tree, Inc.
8-K 10.2 3/21/2022
10.27 * Employment Agreement between Dollar Tree Distribution, Inc. and John Flanigan, effective May 9, 2022 (portions of the exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K)
10-Q 10.2 8/25/2022
10.28 * Letter Agreement amending the Executive Agreement between Dollar Tree, Inc. and Kevin Wampler
10-Q 10.1 11/22/2022
10.29 * Form of Performance-Based Restricted Stock Unit Agreement under the 2021 Omnibus Incentive Plan
X
10.30 * Form of Restricted Stock Unit Agreement (Standard) under the 2021 Omnibus Incentive Plan
X
10.31 * Form of Nonstatutory Stock Option Agreement under the 2021 Omnibus Incentive Plan
X
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 28, 2023, formatted in Inline XBRL: (i) Consolidated Income Statements, (ii) Consolidated Statements of Comprehensive Income, (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 28, 2023, 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.
(Registrant)
March 10, 2023 By: /s/ Richard W. Dreiling
Date Richard W. Dreiling
Chairman and Chief Executive Officer
(Principal Executive Officer)
March 10, 2023 By: /s/ Jeffrey A. Davis
Date Jeffrey A. Davis
Chief Financial Officer
(Principal Financial Officer)
March 10, 2023 By: /s/ Kathleen E. Mallas
Date Kathleen E. Mallas
Senior Vice President - Chief Accounting Officer and Treasurer
(Principal Accounting 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. Each of the directors of the registrant whose signature appears below hereby appoints Jeffrey A. Davis, Kathleen E. Mallas, and John S. Mitchell, and each of them severally, as his or her attorney-in-fact to sign in his or her name and behalf, in any and all capacities stated below, and to file with the Securities and Exchange Commission any and all amendments to this report, making such changes in this report as appropriate, and generally to do all such things on their behalf in their capacities as directors and/or officers to enable the registrant to comply with the provisions of the Securities Exchange Act of 1934, and all requirements of the Securities and Exchange Commission.
/s/ Richard W. Dreiling Chairman and Chief Executive Officer March 10, 2023
Richard W. Dreiling (Principal Executive Officer) Date
/s/ Paul C. Hilal Vice Chairman March 10, 2023
Paul C. Hilal Date
/s/ Edward J. Kelly, III Lead Independent Director March 10, 2023
Edward J. Kelly, III Date
/s/ Thomas W. Dickson Director March 10, 2023
Thomas W. Dickson Date
/s/ Cheryl W. Grisé Director March 10, 2023
Cheryl W. Grisé Date
/s/ Daniel J. Heinrich Director March 10, 2023
Daniel J. Heinrich Date
/s/ Mary A. Laschinger Director March 10, 2023
Mary A. Laschinger Date
/s/ Jeffrey G. Naylor Director March 10, 2023
Jeffrey G. Naylor Date
/s/ Winnie Y. Park Director March 10, 2023
Winnie Y. Park Date
/s/ Bertram L. Scott Director March 10, 2023
Bertram L. Scott Date
/s/ Stephanie P. Stahl Director March 10, 2023
Stephanie P. Stahl Date
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