Dollar General 2014 Annual Report Download - page 29

Proxy
The Board approves, upon recommendation of the Compensation Committee, the form and
amount of director compensation. As part of this process, the Committee may consult with or review
information provided by Meridian Compensation Partners (‘‘Meridian’’), its independent consultant,
and may consider the input of our CEO and our Chief People Officer. However, the Committee and
the Board retain and exercise ultimate decision-making authority regarding director compensation. We
do not compensate for Board service any director who also serves as our employee. We will reimburse
directors for certain fees and expenses incurred in connection with continuing education seminars and
for travel and related expenses related to Dollar General business.
For 2014, each non-employee director received payment (prorated as applicable), in quarterly
installments, of the following cash compensation, as applicable:
• $85,000 annual retainer for service as a Board member;
• $25,000 annual retainer for service as the lead director;
• $22,500 annual retainer for service as the Audit Committee Chairman;
• $20,000 annual retainer for service as the Compensation Committee Chairman;
• $15,000 annual retainer for service as the Nominating Committee Chairman; and
• $1,500 for each Board or committee meeting in excess of an aggregate of 16 that a director
attended, as a member, during the fiscal year.
In addition, each non-employee director, including Ms. Price who joined the Board mid-year,
received an annual equity award with an estimated value of $125,000 on the grant date (as determined
by Meridian using economic variables such as the trading price of our common stock, expected
volatility of the stock trading prices of similar companies, and the terms of the award) under our
Amended and Restated 2007 Stock Incentive Plan. Sixty percent of this value was delivered in
non-qualified stock options to purchase shares of our common stock (‘‘Options’’) and 40% was
delivered in restricted stock units payable in shares of our common stock (‘‘RSUs’’). The Options are
scheduled to vest as to 25% of the award and the RSUs are scheduled to vest as to 331⁄3% of the
award on each of the first four and three anniversaries of the grant date, respectively, in each case
subject to the director’s continued service on our Board. Directors may elect to defer receipt of shares
underlying the RSUs.
After reviewing our Board compensation program relative to our market comparator group,
the Compensation Committee has recommended, and the Board has determined based upon the
Committee’s recommendation, that the cash component of the 2015 non-employee director
compensation will remain unchanged, but the following changes will be made to the equity portion:
• The equity award mix on or after January 31, 2015 will change from Options and RSUs to
100% RSUs;
• RSU awards granted on or after January 31, 2015 will fully vest on the first anniversary of
the grant date rather than 33.3%/year over three years; and
• Equity awards granted on or after January 31, 2015 will allow for full acceleration of all
unvested equity upon death, disability (as defined in the applicable award agreement) or
voluntary departure from the Board.
In addition, beginning with calendar year 2015, Dollar General has implemented a
Non-Employee Director Deferred Compensation Plan (the ‘‘Director Deferred Compensation Plan’’) to
allow for deferral by non-employee directors of up to 100% of cash fees earned for Board service in a
fiscal year. For those who choose to participate, benefits are payable upon separation from service in
the form, as elected by the director at the time of deferral, of a lump sum distribution or monthly
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