Family Dollar provides update on stock option review

08 Mar '07

3 min read

As a result, the Company has selected the date of the delivery of stock option agreements to its employees as the measurement date for accounting purposes for most annual grants rather than the original grant date selected by the Company. Beginning in fiscal 2005, the Company's stock option practices for the annual grants were revised, and therefore, the measurement dates for such grants were correctly determined.

The Company expects to record approximately $12 million during the second quarter for legal, accounting and related expenses incurred in connection with the Special Committee's review and related matters. As a result of such previously unplanned expense, the Company currently expects earnings for the fiscal 2007 second quarter will be at or near the low end of the Company's previously provided guidance of $0.58 to $0.64 per share.

The Special Committee is continuing its consideration of various matters relating to the Company's option granting practices, including consideration of appropriate remedial measures and what actions the Company should take with respect to the pending shareholder derivative litigation.

The Company's accounting determinations were reviewed with the Company's independent registered public accountants, PricewaterhouseCoopers, LLP. The Company expects to file its annual report on Form 10-K for the 2006 fiscal year and its fiscal 2007 first quarter report on Form 10-Q within the next several weeks. The Company is continuing to address related tax issues.

Family Dollar Stores Inc

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