8-KEarnings & ResultsMaterial AgreementsRegulation FD+1

DOLLAR GENERAL CORP 8-K Report, Material Agreement (May 26, 2005)

Filed May 26, 2005For Securities:DG

Summary

This 8-K filing by Dollar General Corporation on May 26, 2005, primarily details changes to its non-employee director compensation structure and the approval of an Annual Incentive Plan for its executive officers. The company revised director fees, introducing annual retainers, additional retainers for committee chairs and presiding directors, and meeting fees, alongside equity grants of Restricted Stock Units (RSUs). These changes aim to align director compensation with their responsibilities and market practices. Furthermore, the filing announces the shareholder approval of the Dollar General Corporation Annual Incentive Plan, designed to motivate executive officers through performance-based cash bonuses. This plan links bonuses to pre-established financial performance measures, with net income being the sole measure for 2005. The structure allows for target bonuses based on achieving specific net income levels, with caps and provisions for deferral and compliance with tax regulations.

Key Highlights

  • 1Revision of non-employee director compensation, including annual retainers, committee chair stipends, and per-meeting fees, effective May 25, 2005.
  • 2Grant of 4,600 Restricted Stock Units (RSUs) to each non-employee director, vesting after one year of service, subject to continued board membership.
  • 3Shareholder approval of the Dollar General Corporation Annual Incentive Plan, aimed at incentivizing executive officers through performance-based cash bonuses.
  • 4The Annual Incentive Plan uses net income as the sole performance measure for 2005, with bonus payouts tiered based on achieving specific net income thresholds (threshold, target, maximum).
  • 5Executive officers' bonuses are capped at $2.5 million annually and contingent on satisfactory individual performance ratings.
  • 6The filing incorporates by reference a news release dated May 26, 2005, concerning the company's first quarter 2005 results and financial condition, along with outlook for the second quarter and full fiscal year 2005.
  • 7Provisions for deferral of compensation by directors and executives are detailed, including investment options for deferred amounts and payment terms upon separation or change in control.

Frequently Asked Questions

Dollar General revised its director compensation effective May 25, 2005. This includes an annual cash retainer of $35,000 for all board members, additional retainers for committee chairs ($20,000 for Audit, $10,000 for others) and presiding directors ($15,000), and per-meeting fees for attendance. Directors also receive an annual grant of 4,600 Restricted Stock Units (RSUs).

The Annual Incentive Plan was approved by shareholders to attract and retain executive officers and motivate them by offering performance-based annual cash bonuses. The bonuses are tied to the company's profitability, specifically measured by net income, to encourage growth and financial performance.

For 2005, bonuses are based solely on the company's net income performance relative to pre-set threshold, target, and maximum levels. The payout percentage of an executive's salary depends on which net income level is achieved. Additionally, executive officers must receive a satisfactory or better individual performance rating to be eligible for a bonus.

Yes, the plan caps the maximum bonus payable to any participant at $2.5 million per fiscal year. The Compensation Committee can also reduce or eliminate any bonus at its discretion, even if performance goals are met, but it cannot increase a bonus for a 'covered employee'.