EMPLOYMENT AGREEMENT
THIS EMPLOYMENT
AGREEMENT (“Agreement”), effective December 1, 2008
(“Effective Date”), is made and entered into by and
between DOLLAR GENERAL CORPORATION (the
“Company”), and Todd Vasos
(“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, Division President
& Chief Merchandising Officer 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 or 11 hereof. The Term shall be
automatically extended after the third annual anniversary of the
Effective Date from month to month, for up to six (6) months,
unless the Company gives written notice to Employee at least one
month prior to the expiration of the original or any extended Term
that no extension or further extension, as applicable, will occur
or unless the Company replaces this Agreement with a new agreement
or, in writing, extends or renews the Term of this Agreement for a
period that is longer than six months from the expiration of the
original Term. Unless otherwise noted, all references to the
“Term” shall be deemed to refer to the original Term
and any extension or renewal thereof.
3.
Position, Duties
and Administrative Support .
a.
Position
. Employee shall
perform the duties of the position noted in Section 1 above and
shall perform such other duties and responsibilities as
Employee’s supervisor or the Company’s CEO may
reasonably 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
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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 Compensation 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 Five Hundred Ninety-Five Thousand Dollars ($595,000).
The Base Salary shall be paid in accordance with
Company’s normal payroll practices (but no less frequently
than monthly) 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 annual
bonus program for officers at Employee’s grade level, 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 Board, its Compensation Committee and/or the
CEO, as applicable, in accordance with the terms and
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conditions of the annual
bonus program for officers. Any
bonus payments due hereunder shall be payable to the Employee no
later than 2 1/2 months after the end of the Company’s
taxable year or the calendar year, whichever is later, in which
Employee is first vested in such bonus payments for purposes of
Section 409A of the
Internal Revenue Code of 1986, as amended (the “Internal Revenue
Code”) .
c.
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.
d.
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.
In no event will any such reimbursement
be made later than the last day of the calendar year following the
calendar year in which Employee incurs the reimbursable expense
.
e.
Perquisites . Employee shall be entitled
to receive such other executive perquisites, fringe and other
benefits as are provided to officers at the same grade level 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 (including, without limitation, medical, pharmacy,
dental, vision, disability, employee life, accidental death and
travel accident insurance plans and other programs, if any) to the
extent allowed under 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 from time to time during the Term (excluding plans
applicable solely to certain officers of the Company in accordance
with the express terms of such plans). Collectively the plans
and arrangements described in this Section 6, 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 any
other severance plan, program, or policy maintained
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by the Company, if any
exists, and that the only severance benefits Employee is entitled
to are set forth in this Agreement.
7.
Termination for
Cause . This Agreement is not intended
to change the at-will nature of Employee’s employment with
Company, and it 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,
(recognizing, however, that benefits covered by or owed under any
other plan or agreement covering Employee shall be governed by the
terms of such plan or agreement). Any one of the following
conditions or Employee conduct shall constitute
“Cause”:
a.
Any act involving fraud
or dishonesty, or any material act of misconduct relating to
Employee’s performance of his or her duties
hereunder;
b.
Any material breach of
any SEC or other law or regulation or any Company policy governing
trading or dealing with stocks, securities, public debt
instruments, bonds, or investments and the like or with
inappropriate disclosure or “tipping” relating to any
stock, security, public debt instrument, bond or
investment;
c.
Any material violation
of the Company’s Code of Business Conduct and Ethics (or the
equivalent code in place at the time);
d.
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;
e.
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;
f.
Assault or other act of
violence;
g.
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; or
h.
Willful or repeated
refusal or failure substantially to perform Employee’s
material obligations and duties hereunder or those reasonably
directed by Employee’s supervisor, the CEO and/or the Board
(except in connection with a Disability).
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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 ten days 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 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 Section 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 Section
9(b) is intended to nor shall it be deemed to broaden or modify the
definition of “disability” 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
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to Company (and in the
event that Employee is providing notice of termination for Good
Reason, Employee must provide such notice within 30 days after the
event purported to give rise to Employee’s claim for Good
Reason first occurs). In such event, 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, or unless Section 11(a)(iii) applies.
b.
Upon any termination of
employment , Employee
shall be entitled to any earned but unpaid 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.
Notwithstanding anything to the contrary herein, s
uch unpaid Base Salary shall be paid to
Employee as soon as practicable after the effective date of
termination in accordance with the Company’s usual payroll
practices (not less frequently than monthly); provided, however,
that if payment at such time would result in a prohibited
acceleration under Section 409A of the Internal Revenue Code, then
such amount shall be paid at the time the amount would otherwise
have been paid absent such prohibited acceleration.
c.
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 across-the-board plan changes or terminations
similarly affecting at least 95 percent of all officers of the
Company or 100 percent of officers at the same grade
level;
(iii)
The Company’s
principal executive offices shall be moved to a location outside
the middle-Tennessee area, or Employee is required (absent mutual
agreement) 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
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reduction of the title,
powers and functions associated with, Employee’s position,
title or office 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 rate of Base Salary, annual target bonus
opportunity, and officer level (i.e., 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,
assignment, 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
or Employee’s termination for any reason other than
Good Reason as defined above .
d.
Prior to Employee being
entitled to the payments or benefits described in Sections 11 or 12
below, 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;
(iii)
The Company fails to
offer to renew, extend or replace this Agreement before, at, or
within six (6) months after, the end of its original three-year
Term (or any term provided for in a written renewal or extension of
the
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original 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 retirement or other
termination from the Company other than for Good Reason
notwithstanding the Company’s offer to renew, extend or
replace this Agreement .
b.
In the event of one of
the triggers referenced in Sections 11(a)(i) through (iii) above,
then, on the sixtieth (60th) day after
Employee’s termination of employment, but contingent upon the
execution and effectiveness of the Release attached hereto and made
a part hereof, and subject to Section 22(n) below, Employee shall
be entitled to the following:
(i)
Continuation of
Employee’s Base Salary as of the date immediately preceding
the termination (or, if the termination of employment is for Good
Reason due to the reduction of Employee’s Base Salary, then
such rate of Base Salary as in effect immediately prior to such
reduction) for 24 months, payable in accordance with the
Company’s normal payroll cycle and procedures (but
not less frequently than monthly
) with a lump sum
payment on the sixtieth (60th) day after Employee’s
termination of employment of the amounts Employee would otherwise
have received during the sixty (60) days after Employee’s
termination had the payments begun immediately after
Employee’s termination of employment .
Notwithstanding anything to the contrary in this Agreement, the
amount of any payment or entitlement to payment of the aforesaid
Base Salary continuation shall be reduced, offset and subject to
recovery by the Company in the event and to the extent of any base
salary earned by the Employee as a result of subsequent employment
during the 24 months after Employee’s termination of
employment. In no event shall Employee be obligated to seek
other employment or take any other action by way of mitigation of
such amounts payable to Employee and, except as provided in the
preceding sentence, such amounts shall not be reduced whether or
not the Employee obtains other employment.
(ii)
A lump sum payment of
two times the amount of the average percentage of target bonus paid
or to be paid to employees at the same job grade level of Employee
(if any) under the annual bonus programs for officers in
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respect of the
Company’s two fiscal years immediately preceding the fiscal
year in which the termination date occurs.
(iii)
A lump sum payment in
an amount equal to two times the annual contribution that would
have been made by the Company in respect of the plan year in which
such termination of employment occurs for Employee’s
participation in the Company’s medical, pharmacy, dental and
vision benefits programs.
(iv)
Reasonable outplacement
services, as determined and provided by the Company, for one year
or until other employment is secured, whichever comes
first.
No such payment or
benefit shall be provided to Employee pursuant to this Section 11
if the Release attached hereto is not provided to the Company
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 amounts under this Section 11 shall be
forfeited and Company shall retain any other rights available to it
under law or equity. 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 Employee under this Section
11.
12.
Effect of
280G .
a.
Subject to Section
22(n) and contingent upon Employee’s timely execution and the
effectiveness of the Release attached hereto and made a part hereof
as provided in
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Section 11 hereof, if
any payments and benefits by the Company to or for the benefit of
Employee (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under
this Section 12 (a “Payment”) constitute
“parachute payments” within the meaning of Section 280G
of the Internal Revenue Code (“Code Section 280G”) so
that Employee would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code or any interest or penalties with
respect to such tax (collectively referred to as the “Excise
Tax”), then Employee shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount
such that, after Employee pays all taxes (including any interest or
penalties imposed with respect to such taxes), including, without
limitation, any Excise Tax, income tax or other tax (and any
interest and penalties imposed with respect thereto), Employee
retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing, if
the Net After-tax Benefit to Employee resulting from receiving the
Gross-Up Payment is less than $50,000 greater than the Net
After-tax Benefit to Employee resulting from having the Payments
reduced to the Reduced Amount, then no Gross-Up Payment shall be
made and the Payments shall be reduced to the Reduced Amount.
Unless Employee and the Company shall otherwise agree (provided
such agreement does not cause any payment or benefit hereunder
which is deferred compensation covered by Section 409A of the
Internal Revenue Code to be in non-compliance with Section 409A of
the Internal Revenue Code), in the event the Payments are to be
reduced, the Company shall reduce or eliminate the payments or
benefits to Employee by first reducing or eliminating those
payments or benefits which are not payable in cash and then by
reducing or eliminating cash payments, in each case in reverse
order beginning with payments or benefits which are to be paid the
farthest in time from the date of the “change in ownership or
control” (within the meaning o
