Dollar General 2006 Annual Report Download - page 109

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designated by the plan upon a director’ s resignation or termination from the Board. However, we
make the payment in a lump sum if the director’ s account balance does not exceed $25,000 or if
the director dies or becomes disabled. In addition, a director may request to receive an
“unforeseeable emergency hardship” in-service lump sum distribution of amounts credited to his
account in accordance with the plan’ s terms. All deferred compensation pursuant to the DDCP is
immediately due and payable upon a change-in-control of Dollar General. For purposes of the
DDCP, a change-in-control generally is deemed to occur in the same circumstances as those
described under “Equity Compensation” above with respect to the 1998 Stock Incentive Plan.
Effective January 1, 2005, account balances deemed to be invested in the Mutual Fund Options
are payable in cash and account balances deemed to be invested in the Common Stock Option
are payable in shares of our common stock and cash in lieu of fractional shares. Prior to
January 1, 2005, all account balances were payable in cash. For more information regarding the
DDCP, please see Note 9 of the consolidated financial statements in Item II, Part 8 above.
(b) Executive Compensation.
Compensation Discussion and Analysis
Who oversees the compensation of Dollar General’s Named Executive Officers?
Throughout this document, we refer to the individuals who served as our Chief Executive
Officer and Chief Financial Officer during 2006, as well as the other individuals included in the
Summary Compensation Table, as our “named executive officers” (or “NEOs”). Our Board of
Directors has a standing Compensation Committee which is responsible for, among other things,
assisting the Board in discharging its responsibilities relating to the compensation of directors
and executive officers (including the NEOs). The Committee operates pursuant to a written
Charter adopted by the Board, a current copy of which is available on the “Investing – Corporate
Governance” portion of our web site located at www.dollargeneral.com and is available in print
to any shareholder who requests it.
The Committee is responsible for recommending to the independent directors of our
Board the compensation of our Chief Executive Officer. The independent directors retain the
sole authority to approve or ratify the CEO’ s compensation. The Committee has the authority to
approve the compensation of all other executive officers (including all NEOs other than the
CEO).
Who are the Committee members and how are they selected?
The Compensation Committee Charter provides that the Committee shall be composed of
at least three directors, all of whom shall be independent directors (as defined in our Corporate
Governance Principles). Our Board of Directors appoints the Committee members considering
the recommendation of the Nominating and Corporate Governance Committee. In addition to
being independent directors, our Corporate Governance Principles require that each Committee
member be a “non-employee director” within the meaning of Rule 16b-3 under the Exchange
Act and an “outside director” within the meaning of Section 162(m)(4)(C) of the Internal
Revenue Code of 1986, as amended.
107