Dollar General 2007 Annual Report Download - page 127

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Board in good faith determines require adjustment to the EBITDA performance metric we use
for our long-term incentive program. For 2007 performance targets, the Board also is required to
make a good faith determination of adjustments to EBITDA for Project Alpha costs and other
non-recurring expenses after consulting with the CEO and CFO. Adjustments to EBITDA for
purposes of calculating performance targets or our long-term incentive program may not in all
circumstances be identical to adjustments to EBITDA for other purposes, including our
Teamshare targets and the covenants contained in our principal financial agreements.
Accordingly, comparability of such measures is limited.
In March 2008, the Compensation Committee determined that the specified adjusted
EBITDA performance target had been achieved for fiscal 2007 and, as a result, acknowledged
the vesting of 20% of the performance-based options.
Benefits and Perquisites. We provide benefits and limited perquisites to NEOs for
retention and recruiting purposes, to promote tax efficiency for the NEOs, and to replace benefit
opportunities lost due to regulatory limits. We also provide NEOs with benefits and perquisites
as additional forms of compensation that are believed to be consistent and competitive with
benefits and perquisites provided to similar positions in our market comparator group and our
industry. The Compensation Committee believed these benefits and perquisites help to attract
and retain NEOs. Along with certain benefits offered to NEOs on the same terms that are offered
to all of our salaried employees (such as health and welfare benefits and matching contributions
under our 401(k) plan), we provide NEOs with certain additional benefits and perquisites.
We allow NEOs to participate in the Compensation Deferral Plan (the “CDP”) and the
defined contribution Supplemental Executive Retirement Plan (the “SERP”, and together with
the CDP, the “CDP/SERP Plan”). During his tenure with us, Mr. Perdue was eligible to
participate in the CDP but not the SERP due to his participation in an individual defined benefit
supplemental executive retirement plan. Mr. Perdue’ s defined benefit supplemental executive
retirement plan was provided as part of Mr. Perdue’ s inducement package to join Dollar General
in 2003 and was one of the compensation components necessary at that time to attract him to
serve as our CEO. In addition, in January 2006 our Board approved the establishment of a
grantor trust to hold certain assets in connection with Mr. Perdue’ s supplemental executive
retirement plan in the event of a change in control.
We provide each NEO a life insurance benefit equal to 2.5 times his or her base salary to
a maximum of $3 million. We pay the premiums and gross up the NEO’ s income to pay the tax
cost of this benefit. We also provide each NEO a disability insurance benefit that provides
income replacement of 60% of base salary up to a maximum monthly benefit of $20,000
($25,000 for Mr. Perdue). We pay the cost of this benefit and gross up the NEO’ s income to pay
the tax cost of this benefit to the extent necessary to replace benefit level caps in the group plan
applicable to all salaried employees.
Each NEO may choose either a leased automobile or a fixed monthly automobile
allowance. All NEOs except Mr. Beré and Ms. Lowe chose the automobile allowance option in
2007. Mr. Beré and Ms. Lowe chose the lease option under which we provide a company-leased