Dollar General 2008 Annual Report Download - page 136

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merely created the possibility of a base salary increase. Based on the same Hewitt market data
reviewed for the other named executive officers, the Committee recommended, and the non-
management members of the Board of Directors approved, a 12.1% base salary increase for Mr.
Dreiling, effective April 1, 2009, in order to maintain his base salary within the median range of
the market comparator group.
Short-Term Incentive Plan. Our short-term incentive plan, called Teamshare, serves to
motivate named executive officers to achieve certain pre-established, objective financial goals.
As a threshold matter, unless required by contract, a named executive officer is not eligible to
receive a bonus under the 2008 Teamshare program if that officer receives an “unsatisfactory”
overall subjective individual performance rating, and payment of any bonus is in the
Compensation Committee’ s discretion if the officer receives a “needs improvement” overall
individual performance rating. Accordingly, Teamshare fulfills an important part of our pay for
performance philosophy while aligning the interests of our named executive officers and our
shareholders. Teamshare also helps meet our recruiting and retention objectives by providing
compensation opportunities that are consistent with those prevalent in our market comparator
group.
(a) 2008 Teamshare Structure
. Teamshare provides an opportunity for each named
executive officer to receive a cash bonus payment equal to a certain percentage of base salary
based upon Dollar General’ s achievement of a pre-established financial performance measure.
As it did in 2007, the Compensation Committee selected as the 2008 Teamshare financial
performance measure a measure based upon earnings before interest, taxes, depreciation and
amortization (“EBITDA”), with adjustments similar to those made for the purposes of
calculating performance targets for our long term incentive program, including exclusions for the
impact of:
• any fee paid to KKR, Goldman Sachs & Co. and any affiliates thereof pursuant to the
terms of the Monitoring Fee Letter Agreement dated July 6, 2007;
• all consulting, accounting, legal, valuation, banking, filing, disclosure and similar
costs, fees and expenses directly related to the consideration, negotiation, approval
and consummation of the Merger and related financing and any related litigation or
settlement of any related litigation; and
• any unplanned items of a non-recurring or extraordinary nature as determined in good
faith by the CEO and CFO and approved by the Committee.
The Committee established the target financial performance level for purposes of the
2008 Teamshare program at $815 million, which, consistent with prior practice, was equal to our
annual financial objective. It also was similar to the fiscal 2008 level for vesting of performance-
based options granted on July 6, 2007 to the named executive officers. The Committee
established the threshold financial performance level, below which no bonus may be paid under
the 2008 Teamshare program, at 95% of the target financial performance level. This differed
from prior practice which established the threshold level at 90% of the target level as the