Dollar General 2012 Annual Report Download - page 45

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replacement of 60% of base salary up to a maximum monthly benefit of $20,000. We pay the premiums
and, through December 31, 2012, grossed up each named executive officer’s income to pay the tax costs
associated with the life insurance benefit and through June 30, 2012 for tax costs associated with the
disability benefits (with respect to the disability benefit, only to the extent necessary to provide a
comparable cost for this benefit to the named executive officer as the cost applicable to all salaried
employees). As discussed under ‘‘Executive Overview’’ above, we eliminated the tax gross-up for the
life insurance benefits effective December 31, 2012 in exchange for one-time base salary adjustments
for the named executive officers.
We also provide a relocation assistance program to named executive officers under a policy
applicable to officer-level employees, which policy is similar to that offered to certain other employees.
The significant differences between the relocation assistance available to officers from the relocation
assistance available to non-officers are as follows:
• We provide a pre-move allowance of 5% of the officer’s annual base salary capped at
$10,000 ($5,000 cap for other employees).
• We provide home sale assistance by offering to purchase the officer’s prior home at an
independently determined appraised value if it is not sold to an outside buyer.
• We reimburse officers for all reasonable and customary home purchase closing costs (other
employees are capped at 2% of the purchase price with a maximum of $2,500) except for
loan origination fees which are limited to 1%.
• We provide 90 days of temporary living expenses (30 days for all other employees).
In fiscal 2012, we incurred $27,559 in expenses related to Mr. Sparks’ relocation.
We provide through a third party a personal financial and advisory service benefit to the
named executive officers, including financial planning, estate planning and tax preparation services, in
an annual amount of up to $20,000 per person in addition to the advisor’s related travel expenses and
through December 31, 2012, related tax costs. As discussed under ‘‘Executive Overview’’ above, we
eliminated the tax gross-up for the financial planning benefit effective December 31, 2012 in exchange
for one-time base salary adjustments for the named executive officers. The Committee believes the
financial services program reduces the amount of time and attention that executives must spend on
these matters, furthering their ability to focus on their responsibilities to us, and maximizes the
executive’s net financial reward of compensation received from us.
Mr. Dreiling is entitled to certain additional perquisites as a result of the terms of his
employment agreement with us, including:
• Personal use of our plane for 80 hours per year or a greater number of hours specified by
the Compensation Committee.
• Payment of monthly membership fees and costs related to his membership in professional
clubs selected by him (to date, Mr. Dreiling has not availed himself of this right).
• Payment of the premiums on certain personal long-term disability insurance policies (which
was also required under the prior agreement).
• Reimbursement of reasonable legal fees, up to $15,000, incurred by him in connection with
any legal consultation regarding his amended employment agreement.
Severance Arrangements
As noted above, we have an employment agreement with each of our named executive officers
that, among other things, provides for such executive’s rights upon a termination of employment. We
believe that reasonable severance benefits are appropriate to protect the named executive officer
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