UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 24, 2005
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Dollar General Corporation
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(Exact Name of Registrant as Specified in Charter)
Tennessee 001-11421 61-0502302
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
100 Mission Ridge
Goodlettsville, Tennessee 37072
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (615) 855-4000
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
(a) Director Fees. On May 24, 2005, the Board of Directors of Dollar
General Corporation (the "Company") approved the following schedule of fees for
the directors of the Company who are not otherwise officers or employees of the
Company or any of its subsidiaries or affiliates (the "Non-Employee Directors"),
to be effective for meetings held on or after May 25, 2005:
Annual Cash Retainer (payable in quarterly installments):
All Board Members: $35,000
Additional Cash Retainer (payable in quarterly installments):
Audit Committee Chair: $20,000
Other Committee Chair: $10,000
Presiding Director: $15,000
Board and Committee Meeting Fees:
Attended in Person:
Audit Committee $1,500/meeting
Other Committees $1,250/meeting
Telephonic: $625/meeting
Equity Grants:
4,600 Restricted Stock Units/year (under the terms of the Company's 1998
Stock Incentive Plan)
Directors also receive reimbursement for fees and expenses incurred in
connection with continuing education seminars and travel expenses related to
meeting attendance or Company-requested appearances.
Non-Employee Directors may defer all or a part of any fees normally paid by
the Company to them pursuant to a voluntary nonqualified compensation deferral
plan. The compensation eligible for deferral includes the annual retainer,
meeting and other fees, as well as any per diem compensation for special
assignments, earned by a director for service to the Board or one of its
committees. The compensation deferred is credited to a liability account, which
is then invested at the option of the director in either an account that mirrors
the performance of a fund selected by the Compensation Committee or its delegate
(the "Mutual Fund Options") or in a phantom stock account which mirrors the
performance of our common stock (the "Common Stock Option"). In accordance with
a director's election, the deferred compensation will be paid in a lump sum or
in monthly installments over a 5, 10 or 15-year period, or a combination of
both, at the time designated by the plan upon a director's resignation or
termination from the Board. However, 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 terms of the deferral plan. All
deferred compensation will be immediately due and payable upon a "change in
control" (as defined in the compensation deferral plan) of the Company.
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 the Company's common stock and
cash in lieu of fractional shares. Prior to January 1, 2005, all account
balances were payable in cash.
(b) Equity Grants to Non-Employee Directors. On May 24, 2005, each of the
Non-Employee Directors of the Company (i.e., David Bere, Dennis Bottorff,
Barbara Bowles, James Clayton, Reginald Dickson, E. Gordon Gee, Barbara
Knuckles, J. Neal Purcell, James Robbins, and David Wilds) received an automatic
grant of 4,600 restricted stock units ("RSUs") pursuant to the terms of the
Company's 1998 Stock Incentive Plan. Each RSU represents the right to receive
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one share of the Company's common stock for each RSU. The RSUs generally vest on
the first anniversary of the grant date, if the director is still serving as a
director on that date, subject to accelerated vesting provisions as provided in
the 1998 Stock Incentive Plan; however, no common stock may be distributed, nor
any amount paid, to any director in respect of RSUs until the director has
ceased to be a member of the Board. Dividend equivalents on the RSUs are
credited to the director's RSU account in accordance with the terms of the 1998
Stock Incentive Plan.
(c) Annual Incentive Plan. On May 24, 2005, the Company's shareholders
approved the Dollar General Corporation Annual Incentive Plan. The Annual
Incentive Plan is designed to attract and retain executives and to motivate
those executives to promote the profitability and growth of the Company by means
of performance-based annual cash bonuses.
The Compensation Committee of the Company's Board of Directors determines
who is eligible to participate in the Annual Incentive Plan. Any of the
Company's executive officers or the executive officers of any of its
subsidiaries may be selected by the Compensation Committee to participate in the
plan. The Company currently has 9 executive officers, all of whom are eligible
to participate in the plan in 2005.
The plan authorizes the payment of cash bonuses based on the Company's
actual performance measured against established business and/or financial
performance measures. Within 90 days of the start of each fiscal year, the
Compensation Committee of the Company's Board of Directors determines the
executives who will be participants in the plan and approves the performance
measure or measures upon which performance goals will be based, the performance
goal or goals applicable to each chosen performance measure, the relative weight
of each performance measure if more than one is selected, and each participant's
target bonus percentage. No participant can receive a bonus under the plan in
excess of $2.5 million in any fiscal year. The Compensation Committee can base
performance goals on one or more of the following performance measures:
o Net earnings or net income (before o Earnings before or after taxes,
or after taxes) interest, depreciation, and/or
o Net sales or revenue growth amortization
o Return measures (including, but o Gross or net operating profit
not limited to, return on assets, o Cash flow (including, but not
capital, invested capital, equity, limited to, operating cash
sales or revenue) flow, free cash flow, and cash
o Earnings per share flow return on capital)
o Productivity ratios o Gross or operating margins
o Expense targets o Share price (including, but not
o Operating efficiency limited to, growth measures and
o Working capital targets total shareholder return)
o Volume o Margins
o Market share o Customer satisfaction
o Regulatory ratings o Economic value added
o Net worth o Capital expenditures
o Safety o Costs
o Asset quality
No bonus can be paid under the plan unless and until the Compensation
Committee certifies in writing that the previously established performance goal
or goals have been satisfied. The Compensation Committee may reduce or eliminate
any bonus in its discretion despite achievement of the performance goal or
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goals, but the Committee may not increase the amount of bonus payable to a
"covered employee" (i.e., the Company's Chief Executive Officer and other four
most highly-compensated executive officers). The plan allows a participant to
elect in writing to defer the payment of his or her award in accordance with the
terms of the Company's CDP/SERP Plan as it exists from time to time. The plan
does not limit the Company's ability to make payments or awards to employees
(including executive officers) under any other plan or arrangement.
In recent years, the Compensation Committee has selected net income as the
sole performance measure upon which to base the performance goals in connection
with the annual bonus program. The Compensation Committee has again selected net
income as the sole performance measure for 2005. Net income for this purpose
shall be computed in accordance with generally accepted accounting principles,
but shall exclude the impact of any items related to the Company's restatement
of audited financial results for 1998 and 1999 and unaudited results for 2000
along with any unplanned items of a non-recurring or extraordinary nature. In
addition, the Compensation Committee has determined that no executive officer is
eligible to receive a bonus under the plan in 2005 unless that officer receives
a satisfactory or better performance rating when evaluated against his or her
individual performance goals. The bonus to be paid under the Annual Incentive
Plan to each executive officer named in the Company's 2005 Proxy Statement if
the Company reaches the threshold, target or maximum net income levels
established by the Compensation Committee is equal to the applicable percentage,
as set forth in the chart below, of such officer's salary. If the net income
level falls between the threshold and target net income levels or between the
target and maximum net income levels, then each such officer shall receive a
payment on a graduated scale commensurate with net income levels.
---------------- ---------------- ---------------- ----------------
Name Threshold Target Maximum
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Mr. Perdue 50% 80% 160%
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Mr. Tehle, Ms. 25% 65% 100%
Guion, Ms.
Lanigan, Mr.
O'Briant
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Payments made under the plan will be taxable to the recipients when paid.
If a participant properly elects to defer a portion of the bonus award to the
Company's CDP/SERP Plan, or any successor plan, the participant will generally
be entitled to defer the recognition of income. The Company intends for payments
under the plan to qualify as "performance-based" compensation under Section
162(m) of the Internal Revenue Code. As a result, the Company will generally be
entitled to a Federal income tax deduction corresponding to the amount of income
recognized by the participant. Effective generally January 1, 2005, plans that
are not tax-qualified under which compensation may be deferred must comply with
Section 409A of the Internal Revenue Code (as added by The American Jobs
Creation Act of 2004). Section 409A provides specific rules for deferral
elections, distributions and funding mechanisms under non-qualified deferred
compensation plans. Failure to comply would result in significant penalties and
interest for the individual but would not impact our tax deduction for deferred
compensation.
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 26, 2005, Dollar General Corporation (the "Company") issued a news
release regarding results of operations and financial condition for the first
quarter ended April 29, 2005. The news release is attached hereto as Exhibit 99
and incorporated by reference as if fully set forth herein.
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ITEM 7.01. REGULATION FD DISCLOSURE
The information set forth in Item 2.02 above is incorporated herein by
reference. The press release also sets forth information regarding the planned
conference call and webcast to discuss first quarter earnings, the outlook for
the fiscal 2005 second quarter and full year, and other matters.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of businesses acquired. N/A
(b) Pro Forma Financial Information. N/A
(c) Exhibits. See Exhibit Index immediately following the signature
page hereto.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 26, 2005 DOLLAR GENERAL CORPORATION
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By: /s/ Susan S. Lanigan
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Susan S. Lanigan
Executive Vice President and
General Counsel
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EXHIBIT INDEX
Exhibit No. Description
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99 News release dated May 26, 2005.
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