Exhibit 99.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (
Agreement
),
effective as of April 23, 2010 (the
Effective Date
), is made and
entered into by and between
DOLLAR GENERAL
CORPORATION
(the
Company
) and Richard Dreiling (
Executive
).
W I T N E S S E T H:
WHEREAS,
the Company and Executive are parties to that certain Employment Agreement,
dated January 11, 2008, as amended on December 19, 2008 (the
Prior
Agreement
); and
WHEREAS, the Company wishes to assure itself of the
services of Executive and provide an inducement for Executive to remain in its
employ; and
WHEREAS,
in connection with the foregoing, the Company and Executive desire to amend the
Prior Agreement to read in its entirety as follows.
NOW, THEREFORE, for and in consideration of the
premises, the mutual promises, covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1.
Effective Date
. This
Agreement is effective as of the Effective Date.
2.
Employment; Term
.
Subject to the terms and conditions of this
Agreement, the Company agrees to employ Executive as Chief Executive Officer of
Dollar General Corporation. The term of
this Agreement shall begin on the Effective Date and shall continue until the
fifth anniversary of the Effective Date, on the terms and subject to the
conditions set forth in this Agreement;
provided
,
however
, that
commencing with the fifth anniversary of the Effective Date and on each such
successive anniversary thereof (each an
Extension Date
), Executives
period of employment hereunder shall be automatically extended for an
additional one-year period, unless the Company or Executive provides the other
party hereto 60 days prior written notice before the next Extension Date that
the period of employment shall not be so extended. The initial five-year period of employment as
may be extended hereunder shall be the
Term
.
3.
Position, Duties and Administrative Support
.
a.
Position
. While employed hereunder, Executive shall
serve as Chief Executive Officer. In
such position, Executive shall be the most senior executive of the Company and
all other senior executives of the Company (including the President of the
Company) shall report to Executive.
Executive shall report to the Board of Directors of the Company (the
Board
)
and perform such duties and responsibilities as may be prescribed from time to
time by the Board, which shall be consistent with the responsibilities of chief
executive officers of comparable companies in similar lines of business. During
the Term, the Company shall cause the nominating and corporate governance
committee of the Board (the
Nominating Committee
) to
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nominate Executive to serve as a member of
the Board each year Executive is slated for reelection to the Board. The Company shall also recommend to the Board
that Executive serve as the Chairman of the Board. If the Companys shareholders vote in favor
of the Nominating Committees nomination of Executive to serve as a member of
the Board, Executive agrees to serve in such capacity and also agrees that any
such Board service shall be without additional compensation.
b.
Full-Time Efforts
. Executive shall perform and discharge
faithfully, diligently and to the best of his ability such duties and
responsibilities and shall devote his full business-time and efforts to the
business and affairs of the Company. Executive agrees to promote the best
interests of the Company.
c.
Administrative Support
. Executive shall be provided with office space
and administrative support commensurate with his position as Chief Executive
Officer of the Company.
d.
No Interference With Duties
. Executive shall not devote time to other
activities which would inhibit or otherwise interfere with the proper
performance of Executives duties and shall not be directly or indirectly
concerned or interested in any other business occupation, activity or interest
other than by reason of holding a non-controlling interest as a shareholder,
securities holder or debenture holder in a corporation quoted on a nationally
recognized exchange (subject to any limitations in the Companys Code of Business
Conduct and Ethics). Executive may not
serve as a member of a board of directors of a for-profit company, other than
the Company or any of its subsidiaries or affiliates, without the express
approval of the Board of Directors;
provided
,
however
, that it
shall not be a violation of this Agreement for Executive to manage personal
business interests and investments and to engage in charitable and civic
activities, so long as such activities do not interfere with the performance of
Executives responsibilities under this Agreement.
4.
Work Standard
.
Executive hereby agrees that he shall at all
times comply with and abide by all terms and conditions set forth in this
Agreement, and all applicable work policies, procedures and rules as may
be issued by the Company. Executive also
agrees that he shall comply with all federal, state and local statutes,
regulations and public ordinances governing the performance of his duties
hereunder.
5.
Compensation and Benefits
.
a.
Base Salary
. Subject to the terms and conditions set forth
in this Agreement, so long as Executive is employed hereunder, the Company
shall pay Executive, and Executive shall accept, an annual rate of base salary
(
Base Salary
) in the amount of $1,149,025.00, effective April 1,
2010. The Base Salary shall be paid in
accordance with the Companys normal payroll practices and may be increased
(and not decreased) from time to time at the sole discretion of the Board, and
each such increase (if any) shall thereafter be regarded as Executives Base
Salary for all purposes under this Agreement.
b.
Annual Bonus
. With respect to each full fiscal year of the
Company occurring during the Term, commencing with the 2010 fiscal year of the
Company, Executive shall be
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eligible to earn under the Companys annual
bonus plan in effect for senior executive officers of the Company (the
Bonus
Plan
) an annual bonus award (the
Annual Bonus
) in a target amount
equal to 125% of his Base Salary (the
Target Bonus
), based upon the
achievement by the Company of annual performance targets established by the
compensation committee of the Board (the
Compensation Committee
)
within the first three (3) months of each fiscal year occurring during the
Term and payable within two and one-half (2-1/2) months after the last day of
the performance year or such other date as is provided under the Bonus Plan and
conforms to the requirements of Section 409A of the Internal Revenue Code
of 1986, as amended (
Code
). As
the actual amount payable to Executive as an Annual Bonus will be dependent
upon the achievement of performance goals referred to in this Section 5(b),
Executives actual Annual Bonus may be less than, greater than or equal to the
Target Bonus;
provided
, that Executive shall be eligible for an Annual
Bonus of 50% of Executives Base Salary (the
Threshold Bonus
) upon
attainment of minimum annual performance targets and up to not less than 200%
of Executives Base Salary upon exceeding the performance targets (the
Maximum
Bonus
)
.
c.
Incentive, Savings and
Retirement Plans
. During the
Term, Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to
senior executive officers of the Company (
Peer Executives
), and on the
same basis as such Peer Executives, except as to benefits that are specifically
applicable to Executive pursuant to this Agreement.
d.
Welfare Benefit Plans
. During the Term, Executive and Executives
eligible dependents shall be eligible for participation in, and shall receive
all benefits under, the welfare benefit plans, practices, policies and programs
provided by the Company (including, without limitation, medical, prescription,
dental, disability, Executive life, group life, accidental death and travel
accident insurance plans and programs) (
Welfare Plans
) to the extent
applicable generally to Peer Executives.
The Company shall pay the premiums required to continue the long-term
disability insurance coverage for Executive under Executives existing portable
long-term disability insurance policy.
e.
Vacation
. Upon the Effective Date and each anniversary
thereafter for so long as Executive is employed hereunder, Executive shall be
granted four (4) weeks paid vacation.
f.
Business Expenses
. Executive shall be reimbursed for all
reasonable business expenses incurred in carrying out the work hereunder.
Executive shall follow the Companys expense procedures that generally apply to
other Company Executives in accordance with the policies, practices and
procedures of the Company to the extent applicable generally to Peer
Executives.
The Company shall pay Executives reasonable legal fees
incurred in connection with any consultation with an attorney regarding this
Agreement (up to $15,000), grossed up for all federal and state income and
employment taxes (and for such taxes on such gross-up payment), to the extent
any such amount is taxable to Executive, no later than the end of the
applicable calendar year in which the expenses were incurred.
g.
Perquisites
. Executive shall be entitled to receive such
executive perquisites, fringe and other benefits as are provided to Peer
Executives and their families under any of the Companys plans and/or programs
in effect from time to time and such other benefits as are customarily
available to executives of the Company and their families. Perquisites shall include
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reasonable non-exclusive use of the Companys
plane for personal travel for Executive and his spouse (any income from which
shall be imputed to Executive at SIFL rates in accordance with Treasury
Regulation Section 1.61-21(g)(5)).
Such use shall be subject to such hourly limits as set by the Compensation
Committee on an annual basis, but in no event shall such annual limit be less
than 80 hours. During the Term, the Company shall pay on behalf of
Executive, the monthly membership fees and costs related to Executives
membership in professional clubs selected by Executive. To the extent the Companys payment or
reimbursement of Executives expenses in relation to his professional club
memberships are required to be included in Executives income for income tax
purposes or as wages for employment tax purposes, the Company will pay to
Executive an amount necessary to gross-up Executive for state and federal
income and employment tax purposes (and for such taxes on such gross-up
payment), which gross-up amount shall be paid to Executive no later than the
end of the applicable calendar year in which the expenses were incurred.
6.
Termination for Cause
.
This Agreement may be terminated immediately
at any time by the Company without any liability owing to Executive or
Executives beneficiaries under this Agreement, except Base Salary through the
date of termination and benefits under any plan or agreement covering Executive
which shall be governed by the terms of such plan or agreement, under the
following conditions, each of which shall constitute
Cause
or
Termination
for Cause
:
a.
Any act (other than a de
minimis act) of fraud or dishonesty in connection with Executives performance
of his duties;
b.
Any material breach of any
securities or other law or regulation or any Company policy governing trading
or dealing with stocks, securities, investments and the like or with
inappropriate disclosure or tipping relating to any stock, security or
investment;
c.
Other than as required by
law, the carrying out of any activity or the making of any public statement
which prejudices or reduces the good name and standing of the Company or any of
its affiliates (including any limited partner of any parent entity of the
Company) or would bring any one of these into public contempt or ridicule;
d.
Attendance at work in a
state of intoxication or being found with any drug or substance possession of
which would amount to a criminal offense;
e.
Assault or other act of
violence; or
f.
Conviction of or plea of
guilty or
nolo contendere
to a
crime constituting (i) any felony whatsoever or (ii) any misdemeanor
that would preclude employment under the Companys hiring policy.
A
termination for Cause shall be effective when the Company has given Executive
written notice of its intention for Cause, describing those acts or omissions
that are believed to constitute Cause, and has given Executive an opportunity
to respond.
7.
Termination Upon Death
.
Notwithstanding anything herein to the
contrary, this Agreement shall terminate immediately upon Executives death,
and the Company shall have no
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further liability to
Executive or his beneficiaries under this Agreement, other than for payment of
Accrued Obligations (as defined in Section 9(a)(i)), the timely payment or
provision of Other Benefits (as defined in Section 9(a)(vi)), including
without limitation benefits under such plans, programs, practices and policies
relating to death benefits, if any, as are applicable to Executive on the date
of his death, and for any rights of indemnification set forth in this
Agreement.
8.
Disability
.
a.
If the Company determines in
good faith that the Disability of Executive has occurred during the Term
(pursuant to the definition of Disability set forth below), the Company may
give to Executive written notice of its intention to terminate Executives
employment. In such event, Executives
employment with the Company shall terminate effective on the date provided in
such notice (the
Disability Effective Date
). If Executives employment is terminated by
reason of his Disability, this Agreement shall terminate without further
obligations to Executive, except that the Company shall provide Executive with
the following: (a) payment of Accrued Obligations (as defined in Section 9(a)(i));
(b) the payment or provision of Other Benefits (as defined in Section 9(a)(vi)),
including without limitation benefits under such plans, programs, practices and
policies relating to disability benefits, if any, as are applicable to
Executive on the Disability Effective Date; (c) a lump sum payment, in
cash, payable at such time as annual bonuses are paid to other senior
executives of the Company, of a pro-rata portion of the Annual Bonus, if any,
that Executive would have been entitled to receive pursuant to Section 5(b) hereof
for the fiscal year of termination, if such termination had not occurred,
multiplied by a fraction, the numerator of which is the number of days during
which Executive was employed by the Company in the fiscal year of Executives
termination, and the denominator of which is 365 (the
Pro-Rata Bonus
);
and (d) for any rights of indemnification set forth in this Agreement
.
b.
For purposes of this
Agreement,
Disability
shall mean: (i) a long-term disability
entitling Executive to receive benefits under the Companys long-term
disability plan as then in effect or under Executives portable long-term
disability insurance policy; or (ii) if no such plan or Executives
portable long-term disability insurance policy is then in effect or, in the
case of the plan, the plan is in effect but does not apply to Executive,
Executives inability to perform the duties under this Agreement in accordance
with the Companys expectations because of a medically determinable physical or
mental impairment that (x) can reasonably be expected to result in death
or (y) has lasted or can reasonably be expected to last longer than ninety
(90) consecutive days. Under this Section 8,
unless otherwise required by law, the existence of a Disability shall be
determined by the Company, only upon receipt of a written medical opinion from
a qualified physician selected by or acceptable to the Company. In this circumstance, to the extent permitted
by law, Executive shall, if reasonably requested by the Company, submit to a physical
examination by that qualified physician. Nothing in this Section 8 is
intended to nor shall it be deemed to broaden or modify the definition of disability
in the Companys long-term disability plan.
9.
Termination by the Company without Cause or by Executive for Good Reason
.
If Executives employment is
terminated by the Company without Cause or by Executive for Good Reason (as
defined below) prior to the expiration of the Term (it being understood by the
parties that termination by death or Disability shall not constitute a
termination without Cause), then
5
Executive shall be entitled
to the following benefits upon the execution and effectiveness of the Release
attached hereto and made a part hereof (the
Release
). For all purposes under Section 8 and
this Section 9, any payments due to Executive solely as a result of a
termination of his employment that is not a separation from service shall be
postponed until the occurrence of a separation from service (or such earlier
permitted event) to the extent necessary to satisfy Section 409A of the
Code.
a.
On the 60
th
day after Executives termination of
employment, but contingent upon the execution and effectiveness of the Release
attached hereto prior to such date, and subject to Section 20(r) below,
Executive shall be entitled to the following:
(i)
A lump sum in
cash equal to the sum of (A) Executives Base Salary and unused vacation
accrued through the date of termination to the extent not theretofore paid,
payable within 30 days after such date, (B) to the extent earned, but not
yet paid, the Annual Bonus accrued in respect of the previously completed
fiscal year of the Company, payable when annual bonuses are paid to other
senior executives of the Company, (C) any expenses but not theretofore
paid, payable in accordance with applicable Company expense reimbursement
policy, and (D) unless Executive has elected a different payout date in a
prior deferral election, any compensation previously deferred by Executive
(together with any accrued interest or earnings thereon) to the extent not
theretofore paid, payable in accordance with the terms thereof, (the sum of the
amounts described in subsections (A), (B), (C) and (D) shall be
referred to in this Agreement as the
Accrued Obligations
);
(ii)
Payment in
installments ratably over twenty-four (24) months after such date in accordance
with the Companys normal payroll cycle and procedures, with the first such
payment on the first such payroll date after the effective date of the Release,
an amount equal to the product of (x) two (2) multiplied by (y) the
sum of (A) Executives annual Base Salary in effect as of the date of
termination, and (B) Executives Target Bonus;
(iii)
A Pro-Rata
Bonus;
(iv)
Benefits, on the same basis as provided to senior
executives of the Company who are actively employed during the Severance Period
(as defined below) under the Companys group health plans, to Executive, his
spouse and eligible dependents (to the extent covered immediately prior to such
termination) until the earlier of (x) two years from the date of
termination of Executives employment (the
Severance Period
), to the
extent that Executive was eligible to participate in such plans immediately
prior to the date of termination, or (y) until Executive is, or becomes,
eligible for comparable coverage (determined on a coverage-by-coverage basis)
under the group health plans of a subsequent employer.
The COBRA health care
continuation coverage period under Section 4980B of the Code, or any
replacement or successor provision of United States tax law, shall run
concurrently with the Severance Period;
6
(v)
Outplacement
services, provided by the Company, with a senior executive-level outplacement
firm, for one year after such date or until other employment is secured,
whichever comes first; and
(vi)
To the extent
not theretofore paid or provided to Executive any other accrued amounts or
accrued benefits required to be paid or provided or which Executive is eligible
to receive under any plan, program, policy or practice or contract or agreement
of the Company (such other amounts and benefits shall be referred to in this
Agreement as the
Other Benefits
).
b.
In the event that there is a
material breach by Executive of any continuing obligations under this Agreement
or the Release after termination of employment, any unpaid amounts under this Section 9
shall be forfeited. Any payments or
reimbursements under this Section 9 shall not be deemed the continuation
of Executives employment for any purpose.
Except as specifically enumerated in the Release, the Companys payment
obligations under this Section 9 will not negate or reduce (i) any
amounts otherwise due but not yet paid to Executive by the Company, (ii) any
other amounts payable to Executive outside this Agreement, (iii) those
benefits owed under any other plan or agreement covering Executive which shall
be governed by the terms of such plan or agreement or (iv) any amounts due
to Executive under his rights of indemnification hereunder or otherwise.
c.
For purposes of this
Agreement,
Good Reason
shall mean:
(i)
A reduction by
the Company in Executives Base Salary or Target Bonus;
(ii)
The Company
shall fail to continue in effect any significant Company-sponsored compensation
plan or benefit (without replacing it with a similar plan or with a
compensation equivalent), unless such action is in connection with
across-the-board plan changes or terminations similarly affecting at least
ninety-five percent (95%) of all executive employees of the Company;
(iii)
The Companys
principal executive offices shall be moved to a location outside the
middle-Tennessee area, or Executive is required to be based anywhere other than
the Companys principal executive offices;
(iv)
Without
Executives written consent, the assignment to Executive by the Company of
duties inconsistent with, or the significant reduction of the title, powers and
functions associated with, Executives position, titles or offices as described
in Section 3 above;
(v)
Any material
breach by the Company of this Agreement; or
(vi)
The failure of
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.
7
Good Reason shall not
include Executives death, Disability or Termination for Cause or any isolated,
insubstantial and inadvertent failure by the Company that is not in bad faith
and is cured within ten (10) business days after Executive gives the
Company notice of such event.
d.
Respecting all amounts due
to Executive under this Section 9 or under Section 10, Executive
shall not be obliged to seek other employment or take any other action by way
of mitigation of the amounts payable to Executive under any of the provisions
of this Agreement, nor shall the amount of any payment hereunder be reduced by
any compensation earned by Executive as a result of employment by another
employer, except as specifically set forth in this Agreement.
10.
Non-Renewal
of Term
.
In the event the Company
elects not to extend the Term pursuant to Section 2, unless Executives
employment is earlier terminated pursuant to Sections 6, 7, 8 or 9 of this
Agreement, the expiration of the Term and Executives termination of employment
hereunder shall occur on the close of business on the day immediately preceding
the next scheduled Extension Date and Executive shall be entitled to receive
the payments and benefits applicable to an involuntary termination of Executives
employment without Cause pursuant to Section 9. Executive shall have no further rights to any
compensation or any other benefits under this Agreement.
11.
Publicity;
No Disparaging Statement
.
Except as otherwise provided in Section 12
hereof, Executive and the Company covenant and agree that they shall not engage
in any communications to persons outside the Company which shall disparage one
another or interfere with their existing or prospective business relationships.
12.
[Intentionally
Omitted]
13.
Business
Protection Provision Definitions
.
a.
Preamble
. As a material inducement to the Company to
enter into this Agreement, and in recognition of the valuable experience,
knowledge and proprietary information Executive has gained or will gain while
employed, Executive agrees to abide by and adhere to the business protection
provisions in Sections 13, 14, 15, 16, 17 and 18 herein.
b.
Definitions
. For purposes of Sections 13, 14, 15, 16 and
17 herein:
(i)
Competitive
Position
shall mean any employment, consulting, advisory, directorship,
agency, promotional or independent contractor arrangement between Executive and
(x) any person or Entity engaged wholly or in material part in the
business in which the Company is engaged (i.e., the deep discount consumable
basics retail business), including but not limited to such other similar
businesses as WalMart, Target, K-Mart, Family Dollar Stores, Freds, the 99
Cents Stores, Dollar Tree Stores, Costco, BJs Wholesale Club, Caseys General
Stores, Inc., and Pantry Inc. or (y) any person or Entity then
attempting or planning to enter the deep discount consumable basics retail
business, whereby Executive is required to perform services on behalf of or for
the
8
benefit
of such person or Entity which are substantially similar to the services
Executive provided or directed at any time while employed by the Company or any
of its affiliates.
(ii)
Confidential
Information
shall mean the proprietary or confidential data, information,
documents or materials (whether oral, written, electronic or otherwise)
belonging to or pertaining to the Company, other than Trade Secrets (as
defined below), which is of tangible or intangible value to the Company and the
details of which are not generally known to the competitors of the
Company. Confidential Information shall
also include any items marked CONFIDENTIAL or some similar designation or
which are otherwise identified as being confidential.
(iii)
Entity
or
Entities
shall mean any business, individual, partnership, joint
venture, agency, governmental agency, body or subdivision, association, firm,
corporation, limited liability company or other entity of any kind.
(iv)
Restricted
Period
shall mean two (2) years following Executives termination
date.
(v)
Territory
shall include those states in which the Company maintains stores at Executives
termination date or those states in which the Company has specific and
demonstrable plans to open stores within six months of Executives termination
date.
(vi)
Trade
Secrets
shall mean information or data of or about the Company, including,
but not limited to, technical or non-technical data, formulas, patterns,
compilations, programs, devices, methods, techniques, drawings, processes,
financial data, financial plans, product plans or lists of actual or potential
customers or suppliers that: (A) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; (B) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy; and (C) includes
any other information which is defined as a trade secret under applicable
law.
(vii)
Work
Product
shall mean all tangible work product, property, data,
documentation, know-how, concepts or plans, inventions, improvements,
techniques and processes relating to the Company that were conceived,
discovered, created, written, revised or developed by Executive while employed
by the Company.
14.
Nondisclosure: Ownership of Proprietary Property
.
a.
In recognition of the
Companys need to protect its legitimate business interests, Executive hereby
covenants and agrees that, for the Term and thereafter (as described below),
Executive shall regard and treat Trade Secrets and Confidential Information as
strictly confidential and wholly-owned by the Company and shall not, for any
reason, in any fashion, either directly or indirectly, use, sell, lend, lease,
distribute, license, give, transfer, assign, show, disclose, disseminate,
reproduce, copy, misappropriate or otherwise communicate any Trade Secrets or
Confidential Information to any person or Entity for any purpose other than in
accordance with Executives duties under this Agreement or as required by
applicable law. This provision shall apply to each item constituting a
Trade Secret at all times it remains a trade
9
secret under applicable law and shall apply
to any Confidential Information, during employment and for the Restricted
Period thereafter.
b.
Executive shall exercise
best efforts to ensure the continued confidentiality of all Trade Secrets and
Confidential Information and shall immediately notify the Company of any
unauthorized disclosure or use of any Trade Secrets or Confidential Information
of which Executive becomes aware.
Executive shall assist the Company, to the extent reasonably requested,
in the protection or procurement of any intellectual property protection or
other rights in any of the Trade Secrets or Confidential Information.
c.
All Work Product shall be
owned exclusively by the Company. To the
greatest extent possible, any Work Product shall be deemed to be work made for
hire (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as
amended), and Executive hereby unconditionally and irrevocably transfers and
assigns to the Company all right, title and interest Executive currently has or
may have by operation of law or otherwise in or to any Work Product, including,
without limitation, all patents, copyrights, trademarks (and the goodwill
associated therewith), trade secrets, service marks (and the goodwill associated
therewith) and other intellectual property rights. Executive agrees to execute and deliver to
the Company any transfers, assignments, documents or other instruments which
the Company may deem necessary or appropriate, from time to time, to protect
the rights granted herein or to vest complete title and ownership of any and
all Work Product, and all associated intellectual property and other rights
therein, exclusively in the Company.
15.
Non-Interference
with Executives
.
Through the Term and thereafter throughout
the Restricted Period, Executive will not, either directly or indirectly, alone
or in conjunction with any other person or Entity: actively recruit, solicit, attempt to
solicit, induce or attempt to induce any person who is an exempt Executive of
the Company or any of its subsidiaries or affiliates to leave or cease such
employment for any reason whatsoever;
16.
Non-Interference
with Business Relationships
.
a.
Executive acknowledges that,
in the course of employment, Executive will learn about the Companys business,
services, materials, programs and products and the manner in which they are
developed, marketed, serviced and provided.
Executive knows and acknowledges that the Company has invested
considerable time and money in developing its product sales and real estate
development programs and relationships, vendor and other service provider
relationships and agreements, store layouts and fixtures, and marketing
techniques and that those things are unique and original. Executive further acknowledges that the
Company has a strong business reason to keep secret information relating to the
Companys business concepts, ideas, programs, plans and processes, so as not to
aid the Companys competitors.
Accordingly, Executive acknowledges and agrees that the protection
outlined in (b) below is necessary and reasonable.
b.
During the
Restricted Period, Executive will not, on Executives own behalf or on behalf
of any other person or Entity, solicit, contact, call upon, or communicate with
any person or entity or any representative of any person or entity who has a
business relationship with the Company and with whom Executive had contact
while employed, if such contact or
10
communication would likely interfere with the Companys business
relationships or result in unfair competitive advantage over the Company.
17.
Agreement
Not to Work in Competitive Position
.
Executive covenants and agrees not to accept,
obtain or work in a Competitive Position within the Territory for the
Restricted Period.
18.
Acknowledgements
Regarding Sections 12 17
.
a.
Executive and the Company
expressly covenant and agree that the scope, territorial, time and other
restrictions contained in Sections 12 through 17 of this Agreement constitute
the most reasonable and equitable restrictions possible to protect the business
interests of the Company given: (i) the business of the Company; (ii) the
competitive nature of the Companys industry; and (iii) that Executives
skills are such that Executive could easily find alternative, commensurate
employment or consulting work in Executives field which would not violate any
of the provisions of this Agreement.
b.
Executive acknowledges that
the compensation and benefits described in Sections 5 and 9 are also in
consideration of his/her covenants and agreements contained in Sections 12
through 17 hereof.
c.
Executive acknowledges and
agrees that a breach by Executive of the obligations set forth in Sections 12
through 17 will likely cause the Company irreparable injury and that, in such
event, the Company shall be entitled to injunctive relief in addition to such
other and further relief as may be proper.
d.
The parties agree that if,
at any time, a court of competent jurisdiction determines that any of the
provisions of Section 12 through 17 are unreasonable under Tennessee law
as to time or area or both, the Company shall be entitled to enforce this
Agreement for such period of time or within such area as may be determined reasonable
by such court.
19.
Return of
Materials
.
Upon Executives termination, Executive shall
return to the Company all written, electronic, recorded or graphic materials of
any kind belonging or relating to the Company or its affiliates, including any originals,
copies and abstracts in Executives possession or control. Executives rolodex (or other tangible or
electronic address book) and his cellular telephone number are Executives
personal property.
20.
General
Provisions
.
a.
Amendment
. This Agreement may be amended or modified
only by a writing signed by both of the parties hereto.
b.
Binding Agreement
. This Agreement shall inure to the benefit of
and be binding upon Executive, his/her heirs and personal representatives, and
the Company and its successors and assigns.
In the event of Executives death prior to payment of all amounts due to
Executive under this Agreement, the remaining unpaid amounts shall be paid to
Executives estate as and when such amounts would have been paid to Executive had
he survived.
11
c.
Waiver Of Breach
. The waiver of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other
breach.
d.
Indemnification
.
(i)
The Company agrees
that if Executive is made a party or threatened to be made a party to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a
Proceeding
) relating to a claim by Executives prior
employer (the
Prior Employer
) that Executive has breached or attempted
to breach the covenants (e.g., covenants not to compete and not to disclose
confidential information) to which Executive is bound as a result of his
employment arrangements with the Prior Employer, Executive shall be indemnified
and held harmless by the Company to the fullest extent authorized by applicable
law from and against any and all liabilities, amounts paid in settlement,
costs, claims and expenses, including all costs and expenses incurred in
defense of any such Proceeding (including attorneys fees). Costs and expenses incurred by Executive in
defense of such Proceeding (including attorneys fees) shall be paid by the
Company in advance of the final disposition of such litigation upon receipt by
the Company of (a) a written request for payment, (b) appropriate
documentation evidencing the incurrence, amount and nature of the costs and
expenses for which payment is being sought, and (c) an undertaking
adequate under applicable law made by or on behalf of Executive to repay the
amounts so paid if it shall ultimately be determined that Executive is not
entitled to be indemnified by the Company under this Agreement. Notwithstanding the foregoing, if as a result
of such Proceeding Executive is prohibited from continuing his employment with
the Company, the Company shall pay to Executive his Base Salary until the
earliest to occur of (i) the date upon which Executive ceases to be so
prohibited, (ii) the date, if any, upon which Executive becomes employed
by a subsequent employer and (iii) the first anniversary of the effective
date of such prohibition.
(ii)
The Company
shall indemnify and hold Executive harmless for all acts and omissions
occurring during his employment or service as a member of the Board (or both) to
the maximum extent provided under the Companys charter, by-laws and applicable
law. During the Term and for a term of
six years thereafter, the Company, or any successor to the Company shall
purchase and maintain, at its own expense, directors and officers liability
insurance providing coverage for Executive in the same amount as for members of
the Board.
(iii)
Executive shall
provide his reasonable cooperation in connection with any Proceeding (or any
appeal from any Proceeding) referenced above, as well as any Proceeding which
relates to events occurring during Executives employment hereunder.
e.
Unsecured General Creditor
. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company.
f.
No Effect On Other
Arrangements
. It is
expressly understood and agreed that the payments made in accordance with this
Agreement are in addition to any other benefits or compensation to which
Executive may be entitled or for which Executive may be eligible.
12
g.
Tax Withholding
. There shall be deducted from each payment
under this Agreement the amount of any tax required by any governmental
authority to be withheld and paid over by the Company to such governmental
authority for the account of Executive.
h.
Section 280G
.
(i)
If the Company
is not an entity whose stock is readily tradable on an established securities
market (or otherwise) at the time that a change of ownership or effective
control of the Company or of the ownership of a substantial portion of the
assets of the Company under Section 280G of the Code (
280G CiC
),
Executive and the Company shall use their respective reasonable best efforts as
to the more favorable to Executive of (A) reducing payments due to
Executive to avoid the imposition of any excise tax imposed by Section 4999
of the Code on Executive in connection with such an event and (B) retaining
such payments on an after-tax basis upon imposition of such excise tax.
(ii)
If the Company
is an entity whose stock is readily tradable on an established securities
market (or otherwise) at the time that 280G CiC occurs, the provisions of Exhibit I
shall apply and are hereby incorporated herein by reference.
i.
Notices
.
(i)
All notices and all other
communications provided for herein shall be in writing and delivered personally
to the other designated party, or mailed by certified or registered mail,
return receipt requested, or delivered by a recognized national overnight
courier service, as follows:
If to Company to:
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Dollar General Corporation
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Attn: General Counsel
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100 Mission Ridge
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Goodlettsville, TN 37072-2171
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ATTN: General Counsel
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with a copy to:
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Simpson Thacher &
Bartlett LLP
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425 Lexington Avenue
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New York, New York 10017
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Attention: Andrea K. Wahlquist
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If to Executive to:
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(Last
address of Executive on the payroll records of the Company unless otherwise
directed in writing by Executive)
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(ii)
All notices
sent under this Agreement shall be deemed given twenty-four (24) hours after
sent by courier, seventy-two (72) hours after sent by certified or registered
mail and when delivered if by personal delivery.
13
(iii)
Either party
hereto may change the address to which notice is to be sent hereunder by
written notice to the other party in accordance with the provisions of this
Section.
j.
Governing Law
. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee (without giving
effect to conflict of laws).
k.
Arbitration
.
If any contest or dispute
arises between the parties with respect to this Agreement, such contest or
dispute shall be submitted to binding arbitration for resolution in Nashville,
Tennessee in accordance with the rules and procedures of the Employment
Dispute Resolution Rules of the American Arbitration Association then in
effect. The Company and Executive shall
each bear 50% of the costs related to such arbitration. If the arbitrator determines that Executive
is the prevailing party in the dispute, then the Company shall reimburse
Executive for his reasonable legal or other fees and expenses incurred in such
arbitration subject to and within ten days after his request for reimbursement
accompanied by evidence that the fees and expenses were incurred. Any reimbursement hereunder shall be paid to
Executive promptly and in no event later than the end of the year next
following the date the expense was incurred.
The decision of the arbitrator shall be final and binding upon all
parties hereto and shall be rendered pursuant to a written decision, which
contains a detailed recital of the arbitrators reasoning. Notwithstanding the
foregoing, Executive acknowledges and agrees that the Company, its subsidiaries
and any of their respective affiliates shall be entitled to injunctive or other
relief in order to enforce the covenant not to compete, covenant not to solicit
and/or confidentiality covenants as set forth in Sections 12 through 17 of this
Agreement.
l.
Entire Agreement
. This Agreement contains the full and complete
understanding of the parties hereto with respect to the subject matter
contained herein and, unless specifically provided herein, this Agreement
supersedes and replaces any prior agreement, either oral or written, which
Executive may have with the Company that relates generally to the same subject
matter. In the event of any
inconsistency between this Agreement and any other plan, program, practice of
or agreement with the Company, this Agreement shall control unless such other
plan, program, practice or agreement provides otherwise by specific reference
to this Section 18(l).
m.
Assignment
. This Agreement may not be assigned by
Executive, and any attempted assignment shall be null and void and of no force
or effect.
n.
Severability
. If any one or more of the terms, provisions,
covenants or restrictions of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, then the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect, and to that end the provisions hereof shall be
deemed severable.
o.
Survival
. The provisions of Sections 7, 8, 9, 10, 11,
12, 13, 14, 15, 16, 17, 18, 19 and 20 shall survive any termination of
Executives employment and any termination of this Agreement.
p.
Section Headings
. The Section headings set forth herein
are for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement whatsoever.
14
q.
Voluntary Agreement
. Executive and the Company represent and agree
that each has reviewed all aspects of this Agreement, has carefully read and
fully understands all provisions of this Agreement, and is voluntarily entering
into this Agreement. Each party
represents and agrees that such party has had the opportunity to review any and
all aspects of this Agreement with legal, tax or other adviser(s) of such
partys choice before executing this Agreement.
r.
Nonqualified Deferred
Compensation Omnibus Provision
. It is intended that any payment or benefit
which is provided pursuant to or in connection with this Agreement which is
considered to be a deferral of within the meaning of Section 409A of the
Code shall be paid and provided in a manner, and at such time and in such form,
as complies with the applicable requirements of Section 409A of the Code
to avoid the unfavorable tax consequences provided therein for
non-compliance. In connection with
effecting such compliance with Section 409A of the Code, the following
shall apply:
(i)
Notwithstanding
any other provision of this Agreement, the Company is authorized to amend this
Agreement, to void or amend any election made by Executive under this Agreement
and/or to delay the payment of any monies and/or provision of any benefits in
such manner as may be necessary to comply, or to evidence or further evidence
required compliance, with Section 409A of the Code (including any
transition or grandfather rules thereunder); provided, no such amendment
shall be effective without Executives consent to the extent reducing the
economic value of the Agreement to Executive (as determined on a pre-tax
basis).
(ii)
Neither
Executive nor the Company shall take any action to accelerate or delay the
payment of any monies and/or provision of any benefits in any manner which
would not be in compliance with Section 409A of the Code (including any
transition or grandfather rules thereunder). Notwithstanding the foregoing:
(A)
Payment may be
delayed for a reasonable period in the event the payment is not
administratively practical due to events beyond the recipients control such as
where the recipient is not competent to receive the benefit payment, there is a
dispute as to the amount due or the proper recipient of such benefit payment,
additional time is needed to calculate the amount payable, or the payment would
jeopardize the solvency of the Company; and
(B)
Payments shall
be delayed in the following circumstances:
(1) where the Company reasonably anticipates that the payment will
violate the terms of a loan agreement to which the Company is a party and that
the violation would cause material harm to the Company; or (2) where the
Company reasonably anticipates that the payment will violate federal securities
laws or other applicable laws;
provided
that any payment delayed by
operation of this clause (B) will be made at the earliest date at which
the Company reasonably anticipates that the payment will not be limited or
cause the violations described;
15
Provided,
such delay in payment shall occur only in a manner that satisfies the
requirements of Section 409A of the Code and regulations thereunder.
(iii)
If at the time
of any separation from service Executive is a specified employee at a time in
which the Company (or successor) is a publicly traded corporation, within the
meaning of Section 409A(a)(2)(B)(i) of the Code and regulations
thereunder, to the minimum extent required to satisfy Section 409A(a)(2)(B)(i) of
the Code and regulations thereunder, any payment or provision of benefits to
Executive in connection with his separation from service (as determined for
purposes of Section 409A of the Code) shall be postponed and paid in a
lump sum on the first business day following the date that is six months after
Executives separation from service (the
409A Deferral Period
), and
the remaining payments due to be made in installments or periodically after
409A Deferral Period shall be made as otherwise scheduled. In the event benefits are required to be so
postponed, any such benefit may be provided during the 409A Deferral Period at
Executives expense, with Executive having a right to reimbursement from the
Company promptly after the 409A Deferral Period ends, and the balance of the
benefits shall be provided as otherwise scheduled.
(iv)
If a 280G CiC
occurs which does not constitute a change in ownership of the Company or in the
ownership of a substantial portion of the assets of the Company as provided in Section 409A(a)(2)(A)(v) of
the Code, then payment of any amount or provision of any benefit payable
pursuant to such 280G CiC under this Agreement which is considered to be a
deferral of compensation subject to Section 409A of the Code shall be
postponed until another permissible payment event contained in Section 409A
of the Code occurs (e.g., death, disability, separation from service from the
Company and its affiliated companies as defined for purposes of Section 409A
of the Code), including any deferral of payment or provision of benefits for
the 409A Deferral Period as provided above.
(v)
References
under this Agreement to Executives termination of employment shall be deemed
to refer to the date upon which Executive has experienced a separation from
service within the meaning of Section 409A of the Code. All payments made under this Agreement shall
constitute separate payments for purposes of Section 409A of the
Code. To the extent any reimbursements
or in-kind benefits due to Executive under this Agreement constitute deferred
compensation under Section 409A of the Code, any such reimbursements or
in-kind benefits shall be paid to Executive in a manner consistent with Treas.
Reg. Section 1.409A-3(i)(1)(iv).
[Signature Page Follows This Page]
16
IN WITNESS WHEREOF, the
parties hereto have executed, or caused their duly authorized representatives
to execute this Agreement to be effective as of the first date set forth above.
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COMPANY
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DOLLAR GENERAL CORPORATION
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By:
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/s/
Bob Ravener
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Its:
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EVP,
Chief People Officer
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EXECUTIVE
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/s/
Richard Dreiling
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RICHARD
DREILING
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17
Exhibit I
The
provisions in this Exhibit I shall apply in respect of any 280G CiC that
occurs while the Company is an entity whose stock is readily tradable on an
established securities market (or otherwise).
Paragraph 1.
In the event it shall be determined that any
payment, benefit or distribution (or combination thereof) by the Company, any
of its affiliates, or one or more trusts established by the Company for the
benefit of its employees, to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement, or otherwise) (a
Payment
) is subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, hereinafter collectively
referred to as the
Excise Tax
), Executive shall be entitled to receive
an additional payment (a
Gross-Up Payment
) in an amount such that
after payment by Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any
federal, state and local income and employment taxes (and any interest and
penalties imposed with respect thereto) and the Excise Tax imposed upon the
Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payment.
Paragraph 2.
All determinations required to be made under
this Exhibit I, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Deloitte &
Touche LLP or such other nationally recognized certified public accounting
firm as may be designated by the Company (the
Accounting Firm
) which
shall provide detailed supporting calculations both to the Company and
Executive within ten business days of the receipt of notice from Executive that
there has been a Payment, or such earlier time as is reasonably requested by
the Company;
provided
that for purposes of determining the amount of any
Gross-Up Payment, Executive shall be deemed to pay federal income tax at the
highest marginal rates applicable to individuals in the calendar year in which
any such Gross-Up Payment is to be made and deemed to pay state and local
income taxes at the highest effective rates applicable to individuals in the
state or locality of Executives residence or place of employment in the
calendar year in which any such Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes that can be obtained from deduction
of such state and local taxes, taking into account limitations applicable to
individuals subject to federal income tax at the highest marginal rates. All fees and expenses of the Accounting Firm
shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Exhibit I,
shall be paid by the Company to Executive (or to the appropriate taxing
authority on Executives behalf) when due but in no event later than the end of
Executives taxable year next following Executives taxable year in which
Executive remitted the related taxes. If
the Accounting Firm determines that no Excise Tax is payable by Executive, it
shall so indicate to Executive in writing.
Any determination by the Accounting Firm shall be binding upon the
Company and Executive (subject to the following provisions of this
Paragraph 2 and of Paragraph 3). As
a result of the uncertainty in the application of Section 4999 of the
Code, it is possible that the amount of the Gross-Up Payment determined by the
Accounting Firm to be due to (or on behalf of) Executive was lower than the
amount actually due (
Underpayment
).
In the event that the Company exhausts its remedies
18
pursuant
to Paragraph 3 of Exhibit I and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of Executive (no later than the
calendar year following the calendar year in which such tax was payable). For the avoidance of doubt, in the event of
any such Underpayment, the Company shall reimburse Executive for any interests
and penalties he may incur as a result thereof.
Paragraph 3.
Executive shall notify the Company in writing
of any claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of any Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Executive is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to
the expiration of the thirty day period following the date on which it gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall (i) give the Company any information reasonably requested
by the Company relating to such claim, (ii) take such action in connection
with contesting such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
the Company, (iii) cooperate with the Company in good faith in order to
effectively contest such claim and (iv) permit the Company to participate
in any proceedings relating to such claim;
provided
,
however
,
that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the
foregoing provisions of this Paragraph 3, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine;
provided
,
further
, that if the Company
directs Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to Executive, on an interest-free basis, and
shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance;
provided
,
further
, that if Executive is
required to extend the statute of limitations to enable the Company to contest
such claim, Executive may limit this extension solely to such contested
amount. The Companys control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
Paragraph 4.
If, after the receipt by Executive of an
amount paid or advanced by the Company
19
pursuant
to this Exhibit I, Executive becomes entitled to receive any refund with
respect to a Gross-Up Payment, Executive shall (subject to the Companys
complying with the requirements of Paragraph 3 of this Exhibit I) promptly
pay to the Company the amount of such refund received (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an
amount advanced by the Company pursuant to Paragraph 3 of this Exhibit I,
a determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such denial of refund prior to the expiration of thirty
days after such determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance shall offset, to
the extent thereof, the amount of the Gross-Up Payment required to be paid.
20
Addendum to
Amended and Restated
Employment
Agreement with Richard Dreiling
RELEASE AGREEMENT
THIS RELEASE
(Release) is
made and entered into by and between Richard
Dreiling (Executive) and
DOLLAR
GENERAL CORPORATION
, and its successor or assigns (Company).
WHEREAS
, Executive and
Company have agreed that Executives employment with Dollar General Corporation
shall terminate on
;
WHEREAS
, Executive and
the Company have previously entered into that certain Amended and Restated
Employment Agreement, effective
(Agreement), in which the form of this Release is incorporated by reference;
WHEREAS
, Executive and
Company desire to delineate their respective rights, duties and obligations
attendant to such termination and desire to reach an accord and satisfaction of
all claims arising from Executives employment, and termination of employment,
with appropriate releases, in accordance with the Agreement;
WHEREAS
, the Company
desires to compensate Executive in accordance with the Agreement for service
Executive has provided and/or will provide for the Company;
NOW, THEREFORE
, in
consideration of the premises and the agreements of the parties set forth in
this Release, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby covenant and agree as follows:
21.
Claims Released Under This Agreement
.
In exchange for receiving the benefits described in Section 9
of the Agreement (other than Accrued Obligations and Other Benefits), Executive
hereby voluntarily and irrevocably waives, releases, dismisses with prejudice,
and withdraws all claims, complaints, suits or demands of any kind whatsoever
(whether known or unknown) which Executive ever had, may have, or now has
against Company and other current or former subsidiaries or affiliates of the
Company and their past, present and future officers, directors, Executives,
agents, insurers and attorneys (collectively, the Releasees), arising from or
relating to (directly or indirectly) Executives employment or the termination
of employment or other events that have occurred as of the date of execution of
this Agreement, including but not limited to:
a.
claims for violations of
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Fair Labor Standards Act, the Civil Rights Act of 1991, the Americans
With Disabilities Act, the Equal Pay Act, the Family and Medical Leave Act, 42
U.S.C. § 1981, the National Labor Relations Act, the Labor Management
Relations Act, Executive Order 11246, Executive Order 11141, the Rehabilitation
Act of 1973, or the Executive Retirement Income Security Act;
b.
claims for violations of any
other federal or state statute or regulation or local ordinance;
21
c.
claims for lost or unpaid
wages, compensation, or benefits, defamation, intentional or negligent
infliction of emotional distress, assault, battery, wrongful or constructive
discharge, negligent hiring, retention or supervision, fraud,
misrepresentation, conversion, tortious interference, breach of contract, or
breach of fiduciary duty;
d.
claims to benefits under any
bonus, severance, workforce reduction, early retirement, outplacement, or any
other similar type plan sponsored by the Company (except for those benefits
owed under any other plan or agreement covering Executive which shall be
governed by the terms of such plan or agreement); or
e.
any other claims under state
law arising in tort or contract.
22.
Claims Not
Released Under This Agreement
.
In signing this Release, Executive is not releasing
any claims that may arise under Section 9 or 10, as applies, Section 20(d) or
Section 20(h) of the Agreement or the terms of this Release or which
may arise out of events occurring after the date Executive executes this
Release. Executive also is not releasing
claims to benefits that Executive is already entitled to receive under any
other plan or agreement covering Executive which shall be governed by the terms
of such plan or agreement. However,
Executive understands and acknowledges that nothing herein is intended to or
shall be construed to require the Company to institute or continue in effect
any particular plan or benefit sponsored by the Company, and the Company hereby
reserves the right to amend or terminate any of its benefit programs at any
time in accordance with the procedures set forth in such plans.
Nothing in this Release shall prohibit Executive
from engaging in activities required or protected under applicable law or from
communicating, either voluntarily or otherwise, with any governmental agency
concerning any potential violation of the law.
23.
No
Assignment of Claim
.
Executive represents that Executive has not
assigned or transferred, or purported to assign or transfer, any claims or any
portion thereof or interest therein to any party prior to the date of this Release.
24.
Compensation
.
In accordance with the
Agreement, the Company agrees to pay Executive or, if Executive becomes
eligible for payments under Section 5 and Section 9 but dies before
receipt thereof, Executives spouse or estate, as the case may be, the amount
provided in Section 5 and Section 9 of the Agreement.
25.
Publicity;
No Disparaging Statement
.
Except as otherwise provided in Section 11
of the Agreement, Section 2 of this Release, and as privileged by law,
Executive and the Company covenant and agree that they shall not engage in any
communications with persons outside the Company which shall disparage one
another or interfere with their existing or prospective business relationships.
26.
No
Admission Of Liability
.
This Release shall not in any way be
construed as an admission by the Company or Executive of any improper actions
or liability whatsoever as to one another, and each specifically disclaims any
liability to or improper actions against the other or any other person.
22
27.
Voluntary
Execution
.
Executive warrants, represents and agrees
that Executive has been encouraged in writing to seek advice regarding this
Release from an attorney and tax advisor prior to signing it; that this Release
represents written notice to do so; that Executive has been given the
opportunity and sufficient time to seek such advice; and that Executive fully
understands the meaning and contents of this Release. Executive further
represents and warrants that Executive was not coerced, threatened or otherwise
forced to sign this Release, and that Executives signature appearing
hereinafter is voluntary and genuine.
EXECUTIVE UNDERSTANDS THAT EXECUTIVE MAY TAKE UP
TO TWENTY-ONE (21) DAYS TO CONSIDER WHETHER TO ENTER INTO THIS RELEASE.
28.
Ability to
Revoke Agreement
.
EXECUTIVE UNDERSTANDS THAT THIS RELEASE MAY BE
REVOKED BY EXECUTIVE BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION
WITHIN SEVEN (7) DAYS OF EXECUTIVES EXECUTION OF THIS RELEASE AND THAT
THIS RELEASE IS NOT EFFECTIVE UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAY
PERIOD. EXECUTIVE UNDERSTANDS THAT UPON
THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS RELEASE WILL BE BINDING
UPON EXECUTIVE AND EXECUTIVES HEIRS, ADMINISTRATORS, REPRESENTATIVES,
EXECUTORS, SUCCESSORS AND ASSIGNS AND WILL BE IRREVOCABLE.
23
Acknowledged and Agreed To:
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COMPANY
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DOLLAR GENERAL CORPORATION
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By:
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Its:
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I UNDERSTAND THAT BY SIGNING THIS
RELEASE, I AM GIVING UP RIGHTS I MAY HAVE.
I UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.
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EXECUTIVE
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Date
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WITNESSED BY:
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Date
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24
Exhibit 99.2
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of the date indicated on
Schedule A
hereto (the
Grant
Date
), is made by and between Dollar General Corporation, a Tennessee
corporation (hereinafter referred to as the
Company
), and the individual
whose name is set forth on the signature page hereof, who is
an employee of the Company or a Subsidiary
or Affiliate of the Company, hereinafter referred to as the
Optionee
. Any capitalized terms herein not otherwise
defined in Article I shall have the meaning set forth in the Amended and
Restated 2007 Stock Incentive Plan for Key Employees of Dollar General
Corporation and its Affiliates, as such Plan may be amended from time to time
(the
Plan
).
WHEREAS, the Company wishes to carry out the Plan,
the terms of which are hereby incorporated by reference and made a part of this
Agreement; and
WHEREAS, the 162(m) Subcommittee of the
Compensation Committee of the Board of the Company has determined that it would
be to the advantage and best interest of the Company and its shareholders to
grant the Option provided for herein to the Optionee, and has advised the
Company thereof and instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual
covenants herein contained and other good and valuable consideration, receipt
of which is hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this
Agreement, they shall have the meaning specified below unless the context
clearly indicates to the contrary.
Section 1.1.
Cause
Cause shall mean Cause as such term is defined in the Optionees
Employment Agreement.
Section 1.2.
Disability
Disability shall mean Disability as such term is
defined in the Optionees Employment Agreement.
Section 1.3.
Employment Agreement
Employment Agreement shall mean that certain
amended and restated employment agreement between the Optionee and the Company,
as amended from time to time with the consent of the Optionee and the Company.
Section 1.4.
Good Reason
Good Reason shall mean Good Reason as such term
is defined in the Optionees Employment Agreement.
1
Section 1.5.
Management Stockholders Agreement
Management Stockholders Agreement shall mean that
certain Management Stockholders Agreement between the Optionee and the
Company.
Section 1.6.
Option
Option shall mean the Option granted under Section 2.1
of this Agreement.
Section 1.7.
Secretary
Secretary shall mean the Secretary of the Company.
ARTICLE II
GRANT OF OPTIONS
Section 2.1.
Grant of Options
For good and valuable consideration, on and as of
the Grant Date the Company irrevocably grants to the Optionee the Option on the
terms and conditions set forth in this Agreement.
Section 2.2.
Exercise Price
Subject to Section 2.4, the exercise price of
the shares of Common Stock covered by the Option (the Exercise Price) shall
be as set forth on
Schedule A
hereof, which shall be the Fair Market Value on the Grant Date.
Section 2.3.
No Guarantee of Employment
Nothing in this Agreement or in the Plan shall
confer upon the Optionee any right to continue in the employ of the Company or
any Subsidiary or Affiliate or shall interfere with or restrict in any way the
rights of the Company and its Subsidiaries or Affiliates, which are hereby
expressly reserved, to terminate the employment of the Optionee at any time for
any reason whatsoever, with or without cause, subject to the applicable
provisions of, if any, the Optionees employment agreement with the Company or
offer letter provided by the Company to the Optionee.
Section 2.4.
Adjustments to Option
The Option shall be subject to the adjustment
provisions of Sections 8 and 9 of the Plan,
provided
,
however
,
that in the event of the payment of an extraordinary dividend by the Company to
its stockholders, then: the Exercise Price of the Option shall be reduced by
the amount of the dividend paid, but only to the extent the Committee
determines it to be permitted under applicable tax laws and not have adverse
tax consequences to the Optionee under Section 409A of the Code; and, if
such reduction cannot be fully effected due to such tax laws and it will not
have adverse tax consequences to the Optionee, then the Company shall pay to
the Optionee a cash payment, on a per Share basis, equal to the balance of the
amount of the dividend not permitted to be applied to reduce the Exercise Price
of the applicable Option as follows: (a) for each Share subject to a
vested Option, immediately upon the date of such dividend
2
payment; and (b), for each
Share subject to an unvested Option, on the date on which such Option becomes
vested and exercisable with respect to such Share.
ARTICLE III
PERIOD OF
EXERCISABILITY
Section 3.1.
Commencement of Exercisability
(a) So long as the Optionee continues to be employed by the
Company or any other Service Recipients, the Option shall become vested and
exercisable with respect to 100% of the Shares subject to such Option on the
first anniversary of the Grant Date.
(b) Notwithstanding Section 3.1(a) above, upon the
earliest occurrence of (i) a Change in Control, (ii) the Optionees
death or (iii) the Optionees Disability, the Option shall become
immediately exercisable as to 100% of the shares of Common Stock subject to
such unvested Option immediately prior to such event (but only to the extent
such Option has not otherwise terminated or become exercisable).
(c) Notwithstanding the foregoing, no Option shall become
exercisable as to any additional shares of Common Stock following the
termination of employment of the Optionee for any reason and any Option, which
is unexercisable as of the Optionees termination of employment, shall
immediately expire without payment therefor.
Section 3.2.
Expiration of Option
The Optionee may not exercise the Option to any
extent after the first to occur of the following events:
(a) The tenth anniversary of the Grant Date so long as the
Optionee remains employed with the Company or any Service Recipient through
such date;
(b) The first anniversary of the date of the Optionees
termination of employment with the Company and all Service Recipients, if the
Optionees employment is terminated by reason of death or Disability (unless
earlier terminated as provided in Section 3.2(g) below);
(c) Immediately upon the date of the Optionees termination of
employment by the Company and all Service Recipients for Cause;
(d) Immediately upon the date of the Optionees termination of
employment by the Company and all Service Recipients by the Optionee without
Good Reason (except due to death or Disability);
(e) One hundred and eighty (180) days after the date of an Optionees
termination of employment by the Company and all Service Recipients without
Cause (for any reason other than as set forth in Section 3.2(b));
(f) One hundred and eighty (180) days after the date of an
Optionees termination of employment with the Company and all Service
Recipients by the Optionee for Good Reason;
3
(g) At the discretion of the Company, if the Committee so
determines pursuant to Section 9 of the Plan.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1.
Person Eligible to Exercise
During the lifetime of the Optionee, only the
Optionee (or his or her duly authorized legal representative) may exercise an
Option or any portion thereof. After the
death of the Optionee, any exercisable portion of an Option may, prior to the
time when an Option becomes unexercisable under Section 3.2, be exercised
by his personal representative or by any person empowered to do so under the
Optionees will or under the then applicable laws of descent and distribution.
Section 4.2.
Partial Exercise
Any exercisable portion of an Option or the entire
Option, if then wholly exercisable, may be exercised in whole or in part at any
time prior to the time when the Option or portion thereof becomes unexercisable
under Section 3.2;
provided
,
however
, that any partial
exercise shall be for whole shares of Common Stock only.
Section 4.3.
Manner of Exercise
An Option, or any exercisable portion thereof, may
be exercised solely by delivering to the Secretary or his or her office or
designee all of the following prior to the time when the Option or such portion
becomes unexercisable under Section 3.2:
(a) Notice in writing signed by the Optionee or the other
person then entitled to exercise the Option or portion thereof, stating that
the Option or portion thereof is thereby exercised, such notice complying with
all applicable rules established by the Committee;
(b) (i) Full payment (in cash or by check or by a
combination thereof) for the shares with respect to which such Option or
portion thereof is exercised or (ii) indication that the Optionee elects
to have the number of Shares that would otherwise be issued to the Optionee
reduced by a number of Shares having an equivalent Fair Market Value to the
payment that would otherwise be made by Optionee to the Company pursuant to
clause (i) of this subsection (b);
(c) (i) Full payment (in cash or by check or by a
combination thereof) to satisfy the minimum withholding tax obligation with
respect to which such Option or portion thereof is exercised; or (ii) solely
in the event that the Optionees employment terminates under circumstances
identified in Section 3.2(b), (e) or (f) above, notice in
writing that the Optionee elects to have the number of Shares that would
otherwise be issued to the Optionee reduced by a number of Shares having an
equivalent Fair Market Value to the payment that would otherwise be made by
Optionee to the Company pursuant to clause (i) of this subsection (c);
(d) A bona fide written representation and agreement, in a
form satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that the shares of
Common Stock are being acquired for his own account, for investment and without
any present intention of distributing or reselling said shares or any of them
except as may be permitted under the Securities Act of 1933, as amended (the
Act
),
and then applicable rules and
4
regulations thereunder, and that the
Optionee or other person then entitled to exercise such Option or portion
thereof will indemnify the Company against and hold it free and harmless from
any loss, damage, expense or liability resulting to the Company if any sale or
distribution of the shares by such person is contrary to the representation and
agreement referred to above;
provided
,
however
, that the
Committee may, in its reasonable discretion, take whatever additional actions
it deems reasonably necessary to ensure the observance and performance of such
representation and agreement and to effect compliance with the Act and any
other federal or state securities laws or regulations; and
(e) In the event the Option or portion thereof shall be
exercised pursuant to Section 4.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to exercise
the option.
Without limiting the
generality of the foregoing, the Committee may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of shares acquired
on exercise of an Option does not violate the Act, and may issue stop-transfer
orders covering such shares. Share
certificates evidencing stock issued on exercise of this Option shall bear an
appropriate legend referring to the provisions of subsection (d) above and
the agreements herein. The written representation and agreement referred to in
subsection (d) above shall, however, not be required if the shares to be
issued pursuant to such exercise have been registered under the Act, and such
registration is then effective in respect of such shares.
Section 4.4.
Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of
an Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares, which have then been reacquired by the
Company. Such shares shall be fully paid
and nonassessable. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
stock purchased (if certificated, or if not certificated, register the issuance
of such shares on its books and records) upon the exercise of an Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The obtaining of approval or other clearance from any
state or federal governmental agency which the Committee shall, in its
reasonable and good faith discretion, determine to be necessary or advisable;
(b) The execution by the Optionee of the Management Stockholders
Agreement; and
(c) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience or as may otherwise be required by
applicable law.
Section 4.5.
Rights as Stockholder
Except as otherwise provided in Section 2.4 of
this Agreement, the holder of an Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of the Option or any portion thereof unless and
until certificates representing such shares shall have been issued by the
Company to such holder or the Shares have otherwise been recorded in the
records of the Company as owned by such holder.
5
ARTICLE V
MISCELLANEOUS
Section 5.1.
Administration
The Committee shall have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Optionee, the Company and all other
interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. In its absolute discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the
Committee under the Plan and this Agreement.
Section 5.2.
Option Not Transferable
Neither the Option nor any interest or right therein
or part thereof shall be liable for the debts, contracts or engagements of the
Optionee or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
Section 5.3.
Notices
Any notice to be given under the terms of this
Agreement to the Company shall be addressed to the Company in care of its
Secretary, and any notice to be given to the Optionee shall be addressed to him
at the address given beneath his signature hereto. By a notice given pursuant to this Section 5.3,
either party may hereafter designate a different address for notices to be
given to him. Any notice, which is
required to be given to the Optionee, shall, if the Optionee is then deceased,
be given to the Optionees personal representative if such representative has
previously informed the Company of his status and address by written notice
under this Section 5.3. Any notice
shall have been deemed duly given when (i) delivered in person, (ii) enclosed
in a properly sealed envelope or wrapper addressed as aforesaid, deposited
(with postage prepaid) in a post office or branch post office regularly
maintained by the United States Postal Service, or (iii) enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, deposited (with
fees prepaid) in an office regularly maintained by FedEx, UPS, or comparable
non-public mail carrier.
Section 5.4.
Titles; Pronouns
Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of this
Agreement. The masculine pronoun shall
include the feminine and neuter, and the singular the plural, where the context
so indicates.
Section 5.5.
Applicability
of Plan and Management Stockholders Agreement
The Option and the shares of Common Stock issued to
the Optionee upon exercise of the Option shall be subject to all of the terms
and provisions of the Plan and the Management Stockholders Agreement, to the
extent applicable to the Option and such Shares. Notwithstanding the foregoing, the
6
Option and the shares of
Common Stock issued to the Optionee upon exercise of the Option shall not be
subject to the transfer restrictions of Section 3 of the Management
Stockholders Agreement nor the terms and provisions of Sections 5 and 6 of the
Management Stockholders Agreement.
Section 5.6.
Amendment
Subject to Section 10 of the Plan, this Agreement
may be amended only by a writing executed by the parties hereto, which
specifically states that it is amending this Agreement.
Section 5.7.
Governing Law
The laws of the State of
Delaware shall govern the interpretation, validity and performance of the terms
of this Agreement regardless of the law that might be applied under principles
of conflicts of laws.
Section 5.8.
Arbitration
In
the event of any controversy among the parties hereto arising out of, or
relating to, this Agreement which cannot be settled amicably by the parties,
such controversy shall be finally, exclusively and conclusively settled by
mandatory arbitration conducted expeditiously in accordance with the American
Arbitration Association rules, by a single independent arbitrator. Such arbitration process shall take place
within the Nashville, Tennessee metropolitan area. The decision of the arbitrator shall be final
and binding upon all parties hereto and shall be rendered pursuant to a written
decision, which contains a detailed recital of the arbitrators reasoning. Judgment upon the award rendered may be
entered in any court having jurisdiction thereof. Each party shall bear its own legal fees and
expenses, unless otherwise determined by the arbitrator.
[
Signatures on next pages
.]
7
IN WITNESS WHEREOF, this Agreement has been executed
and delivered by the parties hereto.
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DOLLAR
GENERAL CORPORATION
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By:
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/s/
Robert Ravener
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Name:
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Robert
Ravener
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Title:
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EVP,
Chief People Officer
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ADDRESS:
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Dollar
General Corporation
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100
Mission Ridge
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Goodlettsville,
TN 37072
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[Signature Page of
Stock Option Agreement]
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OPTIONEE:
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/s/
Richard Dreiling
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Richard
Dreiling
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ADDRESS:
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100
Mission Ridge
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Goodlettsville,
TN 37072
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[Signature
Page of Stock Option Agreement]
9
Schedule A to Stock Option
Agreement
Grant Date
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April 23,
2010
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Exercise Price of Options
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$29.38
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Option Grant
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Aggregate number of shares of Common Stock
for which the
Option granted hereunder is
exercisable:
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100,000
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A-1