Exhibit 10.1

 



 

2016 Teamshare Incentive Program

 

I.                              Definitions

 

As used in this document:

 

“AIP” shall mean the Amended and Restated Dollar General Corporation Annual Incentive Plan, as amended from time to time.

 

“Applicable Base Pay” shall mean the eligible employee’s annual salary (or hours, where applicable) plus shift differential, subject to adjustment based on all other eligibility requirements and administrative rules.

 

“Committee” shall mean the Compensation Committee of the Board of Directors (or any successor committee with oversight of executive compensation) or any subcommittee thereof which meets the requirements of Section 162(m).

 

“Covered Employees” shall mean those officers who could, in respect of the Company’s 2016 fiscal year, be “covered employees” under Section 162(m).

 

“Dollar General” or the “Company” means Dollar General Corporation.

 

“Eligible Employee” shall mean those employees meeting all of the criteria set forth in (a) through (c) of Section IV below.

 

“Executive Officers” refers to employees designated as such by the Board of Directors.

 

“Merit Effective Date” shall mean April 1 of the applicable performance period or, if later, the applicable date of the annual merit increase (e.g., for the 2016 Teamshare program, the Merit Effective Date for salaried employees is April 1, 2016).

 

“Performance Period” refers to the 2016 fiscal year from January 30, 2016 to February 3, 2017.

 

“Section 162(m)” refers to Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended, and the regulations and guidance issued thereunder from time to time.

 

“Senior Officers” shall include all officers at or above the level of Senior Vice President.

 

“Teamshare” shall mean the 2016 Teamshare Incentive Program as authorized by the Committee.

 

 

	
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II.                         Teamshare Overview

 

The Committee has established the terms of Teamshare, which provides each Eligible Employee an opportunity to receive a cash bonus payment equal to a certain percentage of his or her Applicable Base Pay based upon Dollar General’s achievement of one or more pre-established financial performance measures for a specified Performance Period.  When more than one financial performance measure is selected, the Committee determines the applicable weight to be assigned to each of the selected measures.

 

Threshold, target and maximum performance levels are established by the Committee for the selected performance measure. No Teamshare payout may be made unless the threshold performance level is achieved. The amount payable to each Eligible Employee if the Company reaches the target performance level(s) is equal to a specified percentage of the Eligible Employee’s Applicable Base Pay, subject to adjustment for performance as discussed under Section IV below.  Teamshare payments for financial performance below or above the applicable target levels are prorated on a graduated scale, subject to the threshold and the maximum limits.

 

III.                    2016 Teamshare Program

 

For the 2016 Teamshare program, the Committee selected earnings before interest and taxes, as adjusted for certain items (“Adjusted EBIT”), as the financial performance measure.  In determining the level of performance the Company has achieved for this performance measure at year end, certain categories of items previously identified by the Committee may be excluded from the calculation.  Threshold and maximum performance results for Adjusted EBIT coincide with potential Teamshare payout levels equal to 50% and 300% of individual payout targets, respectively (as a percentage of the Eligible Employee’s Applicable Base Pay).

 

For purposes of the 2016 Teamshare program, the Adjusted EBIT performance target shall be the Company’s Operating Profit as calculated in accordance with United States general accepted accounting principles, but shall exclude:

 

(a)                         the impact of (i) any costs, fees and expenses directly related to the consideration, negotiation, preparation, or consummation of any asset sale, merger or other transaction that results in a Change in Control (within the meaning of the Amended and Restated 2007 Dollar General Corporation Stock Incentive Plan) of the Company or any offering of Company common stock or other security; (ii) any gain or loss recognized as a result of derivative instrument transactions or other hedging activities; (iii) any gains or losses associated with the early retirement of debt obligations; (iv) charges resulting from significant natural disasters; and (v) any significant gains or losses associated with the Company’s LIFO computation; and

 

(b)                           unless the Committee disallows any such item, (i) non-cash asset impairments; (ii) any significant loss as a result of an individual litigation, judgment or lawsuit settlement (including a collective or class action lawsuit and security holder lawsuit, among others); (iii) charges for business restructurings; (iv) losses due to new or

 

 

	
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modified tax or other legislation or accounting changes enacted after the beginning of the 2016 fiscal year; (v) significant tax settlements; and (vi) any significant unplanned items of a non-recurring nature.

 

IV. Determination of Bonuses

 

(a)     Eligibility to Participate in Teamshare:

 

	
i.
    	
Active regular, full-time or part-time store   support center (SSC), Dollar General Global Sourcing (DGGS) or distribution   center (DC) employee during the Performance Period.
    
	
 
    	
 
    
	
ii.
    	
Hired by January 15 of 2017.
    
	
 
    	
 
    
	
iii.
    	
Employed with the Company through   February 3, 2017 and, unless otherwise required by law, on the date on   which the Teamshare payment is made.
    
	
 
    	
 
    
	
iv.
    	
Bonuses for the estates of Eligible   Employees will be eligible to receive the Teamshare payment if the employee’s   death occurs on or after February 3, 2017.
    


 

(b)     Eligibility to Receive Bonus Payout:

 

If the Company achieves at least the threshold financial performance level, each employee who participates in Teamshare will become eligible to receive a bonus payout; provided, however, that any employee who fails to comply with the Code of Business Conduct and Ethics during the fiscal year may not be deemed eligible to receive a bonus payout regardless of his or her performance rating.

 

(c)      Adjustments to Bonus Payouts to Eligible Employees:

 

If an employee is determined to be eligible to receive a bonus payout in accordance with the eligibility rules outlined immediately above, adjustments to the bonus payout may be made only as follows:

 

	
i.
    	
Bonuses for   eligible hourly employees shall be calculated based on Company financial   performance but shall be adjusted downward to a level from 0%-80%, as   determined by management, if rated “Below Expectations”.
    
	
ii.
    	
Bonuses for   Executive Officers (i.e. Section 16 filers) shall be calculated based on   Company financial performance but may be adjusted downward in the sole   discretion of the Committee to a level from 80%-100% if rated “Meets   Expectations” or to a level from 0-80% if rated “Below Expectations”.
    
	
iii.
    	
Bonuses for   all other Eligible Employees shall be calculated based on Company financial   performance, but shall be adjusted upward or downward to a level from   100%-120% if rated “Exceeds Expectations,” to a level from 80%-100% if rated   “Meets Expectations” and to a level from 0%-80% if rated “Below Expectations”   (see below for a limitation on this authority for Covered Employees). Such   upward or downward adjustment must be approved by the Committee in the case   of any Senior Officer or certain others identified in the
    


 

 

	
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resolution   adopting Teamshare; otherwise, such adjustment shall be approved by   management.
    
	
iv.
    	
Payouts to   Covered Employees shall follow the rules set forth above depending upon   whether the Covered Employee is an Executive Officer or is not an Executive   Officer; provided, however, that in no event may any bonus paid to a Covered   Employee be adjusted upward nor may any individual payout to a Covered   Employee exceed $10.0 million.
    
	
v.
    	
In no event   may the aggregate amount paid under Teamshare, taking into account all   allowable adjustments, exceed the earned bonus pool.
    


 

(d)     CEO Discretion to Distribute Unallocated Funds:

 

Bonuses that are not allocated out of the earned bonus pool are subject to distribution at the discretion of the Chief Executive Officer of the Company, except that no such unallocated bonus amounts may be allocated to any Covered Employee, Senior Officer or certain others identified in the resolution adopting Teamshare.

 

V.                      Administrative Rules

 

	
(a)
    	
Each Eligible Employee’s Teamshare payout is   computed as a percentage of the Applicable Base Pay plus any shift   differential.
    
	
 
    	
 
    
	
(b)
    	
Teamshare payouts will be prorated for   changes to an Eligible Employee’s position, pay, individual target, shift   differential or status that occur during the Performance Period based on the   number of days the applicable element applies. The Applicable Base Pay used   for Teamshare from the beginning of the Performance Period to the Merit   Effective Date will be the Eligible Employee’s base pay as of the Merit   Effective Date.
    
	
 
    	
 
    
	
(c)
    	
Teamshare payouts are prorated to exclude   leaves of absence during the Performance Period (unless otherwise required by   law).
    
	
 
    	
 
    
	
(d)
    	
Teamshare payouts will be made no later than   April 15 of the year following the fiscal year in which financial   performance is measured (e.g., the 2016 Teamshare program payouts, if any,   will be made no later than April 15, 2017).
    
	
 
    	
 
    
	
(e)
    	
Teamshare information is proprietary and   confidential. Employees are reminded that they may not disclose Teamshare   information relating to the Company’s financial goals or performance. Such   disclosure may result in disciplinary action, up to and including   termination. The Company reserves the right to adjust, amend or suspend   Teamshare at any time for any reason, including, but not limited to,   unforeseen events.
    
	
 
    	
 
    
	
(f)
    	
Notwithstanding anything in this Teamshare   document to the contrary, the determination of the Adjusted EBIT performance   measure and all other relevant provisions and actions applicable to the   determination of bonus payout amounts to Covered Employees under Teamshare   shall be pursuant to and subject to the terms
    


 

 

	
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of the AIP and in the event of any conflict   between the provisions of Teamshare and the AIP, the terms of the AIP shall   govern.
    


 

VI.                 Tax and Other Withholding Information

 

The Internal Revenue Service (the “IRS”) considers incentive payments as supplemental wages.  In accordance with IRS guidelines, Dollar General will withhold federal income taxes at the supplemental rate (currently established at 25%).  In addition, this payment will be subject to applicable social security, Medicare, state and local taxes. Voluntary deductions (e.g. health insurance, 401k, etc.) will not be deducted from this amount.  Where required by law, specific garnishments (e.g., child support) may be deducted, as appropriate, from this amount.  Certain state laws require incentive payments be held for up to 30 days after the check date pending review of applicable child support garnishments.  After the Company receives notification from the state child support agencies regarding whether part or all of the impacted employee’s incentive payment should be paid toward child support, the Company will pay any remaining incentive funds with the next regular payroll.

 

 

	
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