Dollar General 2007 Annual Report Download - page 149

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For purposes of determining treatment of an NEO’ s Rollover Options, “cause” means, to
the extent that our Compensation Committee determines that it is directly and materially harmful
to our business or reputation:
• A felony conviction or the failure to contest prosecution of a felony; or
• Willful misconduct or dishonesty.
Involuntary Termination for Cause. If the NEO is involuntarily terminated for cause, he
or she will forfeit all unvested equity grants, as well as all vested but unexercised options.
However, we may repurchase all Rollover Options at a per share price equal to the lesser of (x)
base price over the exercise price and (y) fair market value over the exercise price.
Involuntary Termination without Cause. If the NEO is involuntarily terminated without
cause, the NEO's equity grants will be treated as described under "Voluntary Termination with
Good Reason or After Failure to Renew the Employment Agreement" above. In addition, each
NEO will receive the applicable payments and benefits listed under "Voluntary Termination with
Good Reason or After Failure to Renew the Employment Agreement" above.
Payments After a Change-in-Control
Upon a change-in-control, regardless of whether the NEO’ s employment terminates:
• All unvested time-based options will become fully vested and exercisable, and all
unvested performance-based options will become fully vested and exercisable subject
to KKR’ s achievement of certain return-based performance targets.
• All CDP/SERP Plan benefits will become fully vested.
If the NEO, other than Messrs. Perdue, Dreiling or Beré, is involuntarily terminated
without cause or resigns for good reason within 2 years of a change-in-control, he or she will
receive, upon execution of a release of certain claims against us and our affiliates in the form
attached to the NEO's employment agreement, a lump sum payment equal to 2 times the NEO's
annual base salary plus 2 times the NEO's target incentive bonus, each as in effect immediately
prior to the change-in-control, plus 2 times our annual contribution for the NEO's participation in
our medical, dental and vision benefits program. The NEO also will receive outplacement
services, at our expense, for 1 year or, if earlier, until other employment is secured.
For Messrs. Dreiling and Beré, an involuntary termination following a change-in-control
event will be treated in the same manner as a “Voluntary Termination with Good Reason or
After Failure to Renew the Employment Agreement” as described above.
If any payments or benefits in connection with a change-in-control would be subject to
the excise tax under federal income tax rules, we will pay an additional amount to the NEO to
cover the excise tax and any resulting taxes. However, if after receiving this payment the NEO's
after-tax benefit is not at least $25,000 more than it would be without this payment, then it will