Dollar General 2006 Annual Report Download - page 129
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Our shareholders have approved our Annual Incentive Plan pursuant to which
performance-based annual cash bonuses can be awarded to NEOs, currently under the
Teamshare plan. The Committee believes cash bonus compensation awarded under the Annual
Incentive Plan under the current structure satisfies the requirements of Section 162(m).
Therefore, compensation expense realized in connection with annual cash bonus compensation
under the Teamshare plan should be deductible.
Our shareholders have also approved our 1998 Stock Incentive Plan, under which equity
compensation such as stock options, restricted stock and RSUs is granted to NEOs. The
Committee believes stock option grants made pursuant to the 1998 Stock Incentive Plan under
the current structure satisfy the requirements of Section 162(m). Therefore, compensation
expense realized in connection with stock options should be deductible. However, restricted
stock or RSUs granted to NEOs that vest over time are not "performance-based" compensation
under Section 162(m), so we are unable to deduct that compensation expense.
In addition, we cannot deduct any salary, signing bonuses or other annual compensation
paid or imputed to the NEO that causes non-performance-based compensation to exceed the $1
million limit.
Conclusion
The Committee has carefully weighed its oversight responsibilities and believes it has
fulfilled its obligation to shareholders as outlined in its philosophy and objectives as discussed
above. The Committee further believes that the compensation, benefit and perquisite programs
outlined above for NEOs, including the CEO, are reasonable, within benchmarking standards for
comparable companies and in the best interest of shareholders.
Compensation Committee Report
Our Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and, based on
such review and discussions, the Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this document.
This report has been furnished by the members of the Compensation Committee:
• Dennis C. Bottorff, Chairman
• Reginald D. Dickson
• E. Gordon Gee
The Compensation Committee Report is deemed furnished, not filed, in this Form 10-K
and will not be deemed to be incorporated by reference into any filing under the Securities Act or
the Exchange Act as a result of furnishing the Compensation Committee Report in this manner.
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