EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (" Agreement" ), effective April 1, 2006 (" Effective Date" ), is made and entered into by and between DOLLAR GENERAL CORPORATION (the " Company" ), and Challis Lowe (" Employee" ).
W I T N E S S E T H:
WHEREAS, Company desires to employ Employee upon the terms and subject to the conditions hereinafter set forth, and Employee desires to accept such employment;
NOW, THEREFORE, for and in consideration of the premises, the mutual promises, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
Employment Terms
1.
Employment . Subject to the terms and conditions of this Agreement, the Company agrees to employ Employee as Executive Vice President, Human Resources of Dollar General Corporation.
2.
Term . The term of this Agreement shall be until the third annual anniversary of the Effective Date (" Term" ) , unless otherwise terminated pursuant to Sections 7, 8, 9, 10, 11 or 12 hereof.
3.
Position, Duties and Administrative Support .
a.
Position . Employee shall serve as Executive Vice President, Human Resources and shall perform such duties and responsibilities as Employee' s supervisor or the Company' s CEO may direct.
b.
Full-Time Efforts . Employee shall perform and discharge faithfully and diligently such duties and responsibilities and shall devote Employee' s full-time efforts to the business and affairs of Company. Employee agrees to promote the best interests of the Company and to take no action that is likely to damage the public image or reputation of the Company, its subsidiaries or its affiliates.
c.
Administrative Support . Employee shall be provided with office space and administrative support.
d.
No Interference With Duties . Employee shall not devote time to other activities which would inhibit or otherwise interfere with the proper performance of Employee' s duties and shall not be directly or indirectly concerned or interested in any other business occupation, activity or interest other than by reason of holding a non-controlling interest as a shareholder, securities holder or debenture holder in a corporation quoted on a nationally recognized exchange (subject to any limitations in the Company' s Code of Business Conduct and Ethics). Employee may not serve as a member of a board of directors of a for-profit company, other than the Company or any of its subsidiaries or affiliates, without the express approval of the CEO and the Nominating and Corporate Governance Committee of the Board. Under no circumstances may Employee serve on more than one other board of a for-profit company.
4.
Work Standard . Employee agrees to comply with all terms and conditions set forth in this Agreement, as well as all applicable Company work policies, procedures and rules. Employee also agrees to comply with all federal, state and local statutes, regulations and public ordinances governing Employee' s performance hereunder.
5.
Compensation .
a.
Base Salary . Subject to the terms and conditions set forth in this Agreement, the Company shall pay Employee, and Employee shall accept an annual base salary (" Base Salary" ) of no less than Four Hundred and Ten Thousand Dollars ($410,000). The Base Salary shall be paid in accordance with Company' s normal payroll practices and may be increased from time to time at the sole discretion of the Company.
b.
Incentive Bonus . Employee' s incentive compensation for the Term of this Agreement shall be determined under the Company' s bonus program for officers, as it may be amended from time to time. The actual bonus paid pursuant to this Section 5(b), if any, shall be based on criteria established by the Compensation Committee and/or the CEO, as applicable, in accordance with the terms and conditions of the bonus program for officers.
c.
Stock Based Compensation . Employee shall be eligible for award grants from time to time consistent with the award grants made to similarly-situated officers of the Company as governed by the terms of the 1998 Employee Stock Incentive Plan, as may be amended, or any successor plan thereof (the " Stock Plan" ), as determined in the sole discretion of the Compensation Committee.
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d.
Vacation . Employee shall be entitled to three weeks paid vacation time within the first year of employment. After five years of employment, Employee shall be entitled to four weeks paid vacation. Vacation time is granted on the anniversary of Employee' s hire date each year. Any available but unused vacation as of the annual anniversary of employment date or at Employee' s termination date shall be forfeited.
e.
Business Expenses . Employee shall be reimbursed for all reasonable business expenses incurred in carrying out the work hereunder. Employee shall adhere to the Company' s expense reimbursement policies and procedures.
f.
Perquisites . Employee shall be entitled to receive such other executive perquisites, fringe and other benefits as are provided to similarly-situated officers and their families under any of the Company' s plans and/or programs in effect from time to time.
6.
Benefits . During the Term, Employee (and, where applicable, Employee' s eligible dependents) shall be eligible to participate in those various Company welfare benefit plans, practices and policies in place during the Term, if any, (including, without limitation, medical, prescription, dental, vision, disability, employee life, accidental death and travel accident insurance plans and programs, if any) to the extent and in accordance with the terms of those plans. In addition, Employee shall be eligible to participate, pursuant to their terms, in any other benefit plans offered by the Company to similarly-situated officers or other employees during the Term (excluding plans applicable solely to certain officers of the Company in accordance with the express terms of such plans), including, without limitation, the 401(k) Retiremen t and Savings Plan and CDP/SERP Plan. Collectively the plans and arrangements described in this Section 6 and as they may be amended or modified in accordance with their terms are hereinafter referred to as the " Benefits Plans." Notwithstanding the above, Employee understands and acknowledges that Employee is not eligible for benefits under the Dollar General Corporation Severance Plan and that the only severance benefits Employee is entitled to are set forth in this Agreement.
7.
Termination for Cause . This Agreement may be terminated at any time by either party, with or without cause. If this Agreement is terminated by Company for " Cause" (Termination for Cause) as that term is defined below, it will be without any liability owing to Employee or Employee' s dependents and beneficiaries under this Agreement, except for those benefits owed under any other plan or agreement covering Employee which shall be governed by the terms of such
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plan or agreement. Any one of the following conditions or Employee conduct shall constitute " Cause" :
a.
Any act involving fraud or dishonesty;
b.
Any material breach of any SEC or other law or regulation or any Company policy governing trading or dealing with stocks, securities, investments and the like or with inappropriate disclosure or " tipping" relating to any stock, security or investment;
c.
Other than as required by law, the carrying out of any activity or the making of any public statement which prejudices or reduces the good name and standing of Company or any of its affiliates or would bring any one of these into public contempt or ridicule;
d.
Attendance at work in a state of intoxication or being found with any drug or substance possession of which would amount to a criminal offense;
e.
Assault or other act of violence; or
f.
Conviction of or plea of guilty or nolo contendre to any felony whatsoever or any misdemeanor that would preclude employment under the Company' s hiring policy.
A termination for Cause shall be effective when the Company has given Employee written notice of its intention to terminate for Cause, describing those acts or omissions that are believed to constitute Cause, and has given Employee an opportunity to respond.
8.
Termination upon Death . Notwithstanding anything herein to the contrary, this Agreement shall terminate immediately upon Employee' s death, and the Company shall have no further liability to Employee or Employee' s dependents and beneficiaries under this Agreement, except for those benefits owed under any other plan or agreement covering Employee which shall be governed by the terms of such plan or agreement.
9.
Disability . If a Disability (as defined below) of Employee occurs during the Term, unless otherwise prohibited by law, the Company may notify Employee of the Company' s intention to terminate Employee' s employment. In that event, employment shall terminate effective on the termination date provided in such notice of termination (the " Disability Effective Date" ), and this Agreement shall terminate without further liability to Employee, Employee' s dependents and beneficiaries, except for those benefits owed under any other plan or agreement covering Employee
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which shall be governed by the terms of such plan or agreement. In this Agreement, " Disability" means:
a.
A long-term disability, as defined in the Company' s applicable long-term disability plan as then in effect, if any; or
b.
Employee' s inability to perform the duties under this Agreement in accordance with the Company' s expectations because of a medically determinable physical or mental impairment that (i) can reasonably be expected to result in death or (ii) has lasted or can reasonably be expected to last longer than ninety (90) consecutive days. Under this provision 9(b), unless otherwise required by law, the existence of a Disability shall be determined by the Company, only upon receipt of a written medical opinion from a qualified physician selected by or acceptable to the Company. In this circumstance, to the extent permitted by law, Employee shall, if reasonably requested by the Company, submit to a physical examination by that qualified physician. Nothing in this subsection (b) is intended to nor shall it be deemed to broaden or modify the definition of " disa bility" in the Company' s long-term disability plan.
10.
Employee' s Termination of Employment .
a.
Notwithstanding anything herein to the contrary, Employee may terminate employment and this Agreement at any time, for no reason, with thirty (30) days written notice to Company. Upon such termination, Employee shall be entitled to prorata Base Salary through the date of termination and such other vested benefits under any other plan or agreement covering Employee which shall be governed by the terms of such plan or agreement. Employee shall not be entitled to those payments and benefits listed in Sections 11 or 12 below, unless Employee terminates employment for Good Reason, as defined below.
b.
Good Reason shall mean any of the following actions taken by the Company:
(i)
A reduction by the Company in Employee' s Base Salary or target bonus level;
(ii)
The Company shall fail to continue in effect any significant Company-sponsored compensation plan or benefit (without replacing it with a similar plan or with a compensation equivalent), unless such action is in connection with
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across-the-board plan changes or terminations similarly affecting at least ninety-five percent (95%) of all executive employees of the Company;
(iii)
The Company' s principal executive offices shall be moved to a location outside the middle-Tennessee area, or Employee is required to be based anywhere other than the Company' s principal executive offices;
(iv)
Without Employee' s written consent, the assignment to Employee by the Company of duties inconsistent with, or the significant reduction of the title, powers and functions associated with, Employee' s position, titles or offices as described in Section 3 above, unless such action is the result of a restructuring or realignment of duties and responsibilities by the Company, for business reasons, that leaves Employee at the same compensation and officer level (i.e., Vice President, Senior Vice President, or Executive Vice President, etc.) and with a similar level of responsibility, or unless such action is the result of Employee' s failure to meet pre-established and objective performance criteria;
(v)
Any material breach by the Company of this Agreement; or
(vi)
The failure of any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
Good Reason shall not include Employee' s death, Disability or Termination for Cause. The Company shall have the opportunity to cure any claimed event of Good Reason within thirty (30) days after receiving written notice from Employee specifying the same.
11.
Termination without Cause or by Employee for Good Reason .
a.
The continuation of Base Salary and other payments and benefits described in section 11(b) shall be triggered only upon one or more of the following circumstances:
(i)
The Company terminates Employee (as it may do at any time) without Cause; it being understood that termination by death or Disability does not constitute termination without Cause;
(ii)
Employee terminates for Good Reason;
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(iii)
The Company fails to offer to renew, extend or replace this Employment Agreement before, at, or within sixty (60) days after, the end of its Term and Employee resigns from employment with the Company within sixty (60) days after such failure, unless such failure is accompanied by a mutually agreeable severance arrangement between the Company and Employee or is the result of Employee' s voluntary retirement or termination from the Company.
b.
In the event of one of the triggers referenced in subsections 11(a)(i) through (iii) above, then, upon the execution and effective date of the Release attached hereto and made a part hereof and in lieu of and not in addition to the payments referenced in Section 12 below, Employee shall be entitled to the following:
(i)
Continuation of Employee' s Base Salary as of the date immediately preceding the termination for 24 months, payable in accordance with the Company' s normal payroll cycle and procedures.
(ii)
Lump sum payment of two times Employee' s target incentive bonus then in effect;
(iii)
A lump sum payment in an amount equal to two times the annual contribution made by the Company for Employee' s participation in the Company' s medical, dental and vision benefits program.
(iv)
Outplacement services, provided by the Company, for one year or until other employment is secured, whichever comes first.
Unless otherwise permitted by Section 409A of the Internal Revenue Code of 1986, as amended (the " Internal Revenue Code" ), with regard to any payment or benefit under this Section 11 which is nonqualified deferred compensation covered by Section 409A of the Internal Revenue Code, no such payment or benefit shall be provided to Employee pursuant to this Section if the Release attached hereto is not provided to the Company, without revocation thereof, no later than forty-five (45) days after Employee' s termination date; and no payment or benefit hereunder shall be provided to Employee prior to the Company' s receipt of the Release and the expiration of the period of revocation provided in the Release.
c.
In the event that there is a material breach by Employee of any continuing obligations under this Agreement or the Release after termination of employment, any unpaid
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amounts under this Section 11 shall be forfeited. Any payments or reimbursements under this Section 11 shall not be deemed the continuation of Employee' s employment for any purpose. Except as specifically enumerated in the Release, the Company' s payment obligations under this Section 11 will not negate or reduce (i) any amounts otherwise due but not yet paid to Employee by the Company, or (ii) any other amounts payable to Employee outside this Agreement, or (iii) those benefits owed under any other plan or agreement covering Employee which shall be governed by the terms of such plan or agreement. Subject to any applicable prohibition on acceleration of payment under Section 409A of the Internal Revenue Code, the Company may, at any time and in its sole discretion, make a lump-sum payment of all amounts, or all remaining amounts, due to E mployee under this Section 11.
12.
Effect of Change in Control .
a.
If within two (2) years following a Change in Control (as hereinafter defined), the Company (or any successor to the Company) terminates Employee' s employment without Cause or Employee terminates for Good Reason, then upon the execution and the effectiveness of the Release attached hereto and made a part hereof, the Company shall pay to Employee (in lieu of the payments referenced in Section 11 above and not in addition to):
(i)
A lump sum payment equal to two times Employee' s Base Salary in effect immediately prior to the Change in Control plus two times the amount of Employee' s target incentive bonus payment in effect immediately prior to the Change in Control;
(ii)
A lump sum payment in an amount equal to two times the annual contribution made by Company for Employee' s participation in the Company' s medical, dental and vision benefits program;
(iii)
Outplacement services, provided by the Company, for one year or until other employment is secured, whichever comes first; and
(iv)
If such Change in Control also constitutes a change in control under the Stock Plan, Employee' s awards, if any, granted pursuant to that plan shall fully vest and shall remain exercisable in accordance with the terms of that plan.
Unless otherwise permitted by Section 409A of the Internal Revenue Code for any payment or benefit hereunder which is nonqualified deferred compensation covered by Section 409A
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of the Internal Revenue Code, no such payment or benefit shall be provided to Employee pursuant to this Section if the Release attached hereto is not provided to the Company, without revocation thereof, no later than forty-five (45) days after Employee' s termination date; and no payment or benefit hereunder shall be provided to Employee prior to the Company' s receipt of the Release and the expiration of the period of revocation therefore.
b.
Anything in this Agreement to the contrary notwithstanding and except as set ...
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