Dollar General 2010 Annual Report Download - page 41

Proxy
• Other than the options awarded to Mr. Dreiling in April 2010 discussed below, half of all
option awards are time-based and vest over a four or five-year period, provided that the
executive continues to be employed by us. The other half are intended to be performance-
based and generally require that Dollar General achieve specified financial targets before
those options will vest, provided that the executive continues to be employed by us over the
applicable performance periods. These terms are further discussed below.
Equity awards are made under our Amended and Restated 2007 Stock Incentive Plan for Key
Employees of Dollar General Corporation and its Affiliates (the ‘‘2007 Stock Incentive Plan’’) and are
always granted with a per share exercise price equal to the fair market value of one share of our
common stock on the date of the grant.
The 2007 Stock Incentive Plan generally provides the Committee the authority to grant equity-
based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units,
and other equity-based awards (including dividend equivalent rights), to any of our employees,
non-employee members of our Board of Directors, any consultant or other person having a service
relationship with our company. The 2007 Stock Incentive Plan is administered by the Committee, which
has the power to amend any awards outstanding under the 2007 Stock Incentive Plan in any manner
(unless de minimis) that is not adverse to the holder of such award. Upon any stock split, spin-off,
share combination, reclassification, recapitalization, liquidation, dissolution, reorganization, merger,
change in control of our company (as defined in the 2007 Stock Incentive Plan), payment of a dividend
(other than a cash dividend paid as part of a regular dividend program) or other similar transaction or
occurrence that affects the equity securities of Dollar General or the value thereof, the Committee
must adjust awards then outstanding under the 2007 Stock Incentive Plan (including the number and
kind of securities subject to the award and, if applicable, the exercise price), in each case as it deems
reasonably necessary to address, on an equitable basis, the effect of the applicable corporate event on
the 2007 Stock Incentive Plan and any outstanding awards. In the event of a change in control of
Dollar General (as defined in the 2007 Stock Incentive Plan), the Committee may accelerate the
vesting of any outstanding awards, cancel for fair value (as determined in its sole discretion)
outstanding awards, substitute new awards that will substantially preserve the otherwise applicable
terms and value of the awards being substituted, or provide for a period of at least 10 business days
prior to the change in control that any stock option or stock appreciation right will be fully exercisable,
and then shall terminate upon the change in control. The Board has the power to amend or terminate
the 2007 Stock Incentive Plan, except that shareholder approval is required to increase the aggregate
number of shares available for awards, to decrease the exercise price of outstanding stock options or
stock appreciation rights, to change the requirements relating to the Committee, or to extend the term
of the 2007 Stock Incentive Plan. The 2007 Stock Incentive Plan currently expires July 6, 2017,
although awards made on or before its expiration may extend beyond the expiration date. As of
March 16, 2011, there were 31,142,858 shares authorized for issuance under the 2007 Stock Incentive
Plan (no more than 4,500,000 of which may be granted in the form of stock options and stock
appreciation rights, and no more than 1,500,000 of which may be granted in the form of other stock-
based awards, in each case to any one participant in a given fiscal year), approximately 17,869,260 of
which remained available for future grants.
Since our 2007 merger, a personal financial investment in Dollar General stock generally has
been a prerequisite to eligibility to receive an option grant under the 2007 Stock Incentive Plan. All
named executive officers (other than Mr. Dreiling) met that personal investment at the time of our
merger in 2007 or upon their hire or promotion date in one or more of the following three forms:
(a) cash; (b) rollover of stock issued prior to our 2007 merger; and/or (c) rollover of in-the-money
options issued prior to our 2007 merger. Accordingly, each such named executive officer received an
option grant under the 2007 Stock Incentive Plan at the time he or she met the personal investment
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