Dollar General 2008 Annual Report Download - page 162

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meaning of Section 409A(a)(2)(A)(v) of the Code, the termination will be treated in the same
manner as a voluntary termination with good reason as described under “Voluntary Termination
with Good Reason or after Failure to Renew the Employment Agreement” above.
For Messrs. Dreiling and Bere, an involuntary termination without cause or a resignation
for good reason 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 “golden parachute” excise tax under federal income tax rules, we will pay an additional
amount to the named executive officer to cover the excise tax and any other excise and income
taxes resulting from this payment. However, if after receiving this payment the named executive
officer’ s after-tax benefit would not be at least $25,000 more than it would be without this
payment, then this payment will not be made and the severance and other benefits due to the
named executive officer will be reduced so that the golden parachute excise tax is not incurred.
For purposes of the CDP/SERP Plan and the named executive officers’ (other than
Messrs. Dreiling and Bere) employment agreements, a change-in-control generally is deemed to
occur (as more fully described in those documents):
• if any person (other than Dollar General or any of our employee benefit plans)
acquires 35% or more of our voting securities (other than as a result of our issuance
of securities in the ordinary course of business);
• for purposes of our CDP/SERP Plan, if a majority of our Board members at the
beginning of any consecutive 2-year period are replaced within that period without
the approval of at least 2/3 of our Board members who served as directors at the
beginning of the period;
• for purposes of the specified employment agreements, if a majority of our Board
members as of the effective date of the applicable employment agreement are
replaced without the approval of at least 75% of our Board members who served as
directors on that effective date or are replaced, even with this 75% approval, by
persons who initially assumed office as a result of an actual or threatened election
contest or other actual or threatened proxy solicitation other than by our Board; or
• upon the consummation of a merger, other business combination or sale of assets of,
or cash tender or exchange offer or contested election with respect to, Dollar General
if less than 65% (less than a majority, for purposes of our CDP/SERP Plan) of our
voting securities are held after the transaction in the aggregate by holders of our
securities immediately prior to the transaction.
For purposes of the treatment of equity discussed above, a change-in-control generally
means (as more fully described in the Management Stockholder’ s Agreement between us and the
named executive officers) one or a series of related transactions described below which results in