Dollar General 2007 Annual Report Download - page 130

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date). The restricted stock is scheduled to vest upon the earlier to occur of the last day
of fiscal 2011, a change in control, an initial public offering, termination without
cause or due to death or disability, or resignation with good reason. Half of the
options are time-vested and the other half are performance-vested. These options vest
upon the same terms as the other options that have been granted under the 2007 Plan.
• Payment of the premiums on his personal long-term disability insurance policy.
• Use of our plane for Mr. Dreiling and his spouse up to nine trips per year between our
headquarters and his permanent residence in California.
• Reimbursement and gross-up for taxes of all closing costs and expenses, including
broker’ s fees, loan origination and/or loan discount fees (not to exceed 2 points in
total), and attorney fees incurred to purchase a residence in the Nashville, Tennessee
area and for up to 2 months’ lease cancellation on his apartment in the New York
metropolitan area. Reimbursement and/or payment of and gross-up for taxes of
temporary living expenses for 120 days as well as 2 house hunting trips not to exceed
7 nights/8 days. Relocation also includes the payment of packing, loading,
transporting, storing and delivering his household goods including the movement of 1
car and a miscellaneous expense allowance equal to $50,000 less applicable taxes.
• Reimbursement of legal fees up to $35,000, grossed-up for taxes, incurred in
negotiating and preparing the employment agreement and documents associated with
Mr. Dreiling’ s equity grants.
• Payment of monthly membership fees and costs related to his membership in
professional clubs selected by him, grossed-up for any taxes.
Mr. Dreiling was chosen for the CEO position after a lengthy and careful search. The
Board firmly believes he is the right leader for the Company as we move forward. The terms of
his employment agreement summarized above were settled after negotiation with Mr. Dreiling,
and the Board believes that they are fair and appropriate given CEO compensation and benefits
at comparable companies and given Mr. Dreiling’ s experience and leadership ability. These
arrangements were also necessary to entice Mr. Dreiling to resign from his previous employer
and to give him the opportunity to offset the potential financial gain he would be foregoing by
leaving that employer.
Severance and Change-in-Control Agreements
As noted above, we have employment agreements with our NEOs that among other
things provide for each NEO’ s rights upon a termination of employment. We believe that
reasonable severance and change-in-control benefits are appropriate to protect the NEO against
circumstances over which he or she does not have control and as consideration for the promises
of non-competition, non-solicitation and non-interference that we require in our employment
agreements. Furthermore, we believe change-in-control severance payments align NEO and
shareholder interests by enabling NEOs to evaluate a transaction in the best interests of our
shareholders and our other constituents without undue concern over whether the transaction may
jeopardize the NEO’ s own employment.
All of our change-in-control provisions operate under a double trigger, requiring both a
change-in-control and a termination event, except for the provisions related to long-term equity