EMPLOYMENT AGREEMENT
EXHIBIT
10.1
THIS
EMPLOYMENT AGREEMENT (“Agreement”), effective as of the Effective Date is made
and entered into by and between DOLLAR
GENERAL CORPORATION(the
“Company”), and Xxxxx X. Xxxx (“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. Effective
Date. This
Agreement is effective as of the closing of the transactions contemplated in
that certain Agreement and Plan of Merger by and among Buck Holdings, L.P.,
Buck
Acquisition Corp., and Dollar General Corporation dated March 11, 2007 (the
“Effective Date”).
2. Employment. Subject
to the terms and conditions of this Agreement, the Company agrees to employ
Employee as Interim Chief Executive Officer of Dollar General Corporation during
the Initial Term and any Initial Term Extension and as President and Chief
Operating Officer during the Transition Period and any Subsequent Employment
Term.
3. Term. The
term
of this Agreement shall begin on the Effective Date and shall continue until
December 31, 2007 (“Initial Term”). The
Initial Term may be extended by mutual written agreement of the parties hereto
entered into before the expiration of the Initial Term (“Initial Term
Extension”). In the event a new chief executive officer is hired by the Company
during the Initial Term or an Initial Term Extension, as applicable, the Initial
Term or the Initial Term Extension may be extended at the Company’s option for a
period of three months following the date such new chief executive officer’s
employment with the Company commences or, at the request of the Company, such
longer period as Employee agrees in writing (“Transition Period”). The Company
shall notify Employee in writing of its intent to initiate the Transition
Period and the length of the Transition Period (which may be extended as the
same may be mutually agreed by the parties hereto in writing) no later than
five
(5) business days before the date as of which the new chief executive officer’s
employment with the Company commences. If there occurs a Transition Period,
upon
expiration thereof, any period of time during which Employee remains employed
with the Company shall be deemed the “Subsequent
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4. Position,
Duties and Administrative Support.
a. Position.
During
the Initial Term and any Initial Term Extension, Employee shall serve as Interim
Chief Executive Officer and while so employed will also serve as a member of
the
Board of Directors of the Company during the Initial Term and any Initial Term
Extension. Employee shall report to the Board of Directors and perform such
duties and responsibilities as may be prescribed from time−to−time by the Board
of Directors, which shall be consistent with the responsibilities of similarly
situated executives of comparable companies in similar lines of business. During
the Transition Period and any Subsequent Employment Term, Employee shall serve
as President and Chief Operating Officer of the Company, and shall report to
the
Chief Executive Officer of the Company, and perform such duties and
responsibilities as are consistent with the responsibilities of similarly
situated executives of comparable companies in similar lines of
business.
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 or Alta Resources,
without the express approval of the Board of Directors; provided, however,
that
it shall not be a violation of this Agreement for
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e. 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. Change
in Position to CEO.
a. In
the
event that Employee is selected to be the new Chief Executive Officer of the
Company, such selection shall not be treated as a termination of this Agreement
without Good Reason and Employee will continue to be entitled to earn the FY
2007 Bonus if the selection occurs in FY 2007 and the FY 2008 Bonus if the
selection occurs in FY 2008; provided, however, that the FY 2008 Bonus shall
be
prorated if Employee terminates employment without Good Reason before the end
of
FY 2008. In addition, the Company and Employee will negotiate in good faith
to
enter into new employment arrangements in respect of Employee’s new position,
which will in any event include severance protections that are no less favorable
than the severance protections described in this Agreement.
6. Compensation.
a. Base
Salary.
Subject
to the terms and conditions set forth in this Agreement, so long as Employee
is
employed hereunder, the Company shall pay Employee, and Employee shall accept,
an annual base salary (“Base Salary”) of no less than Seven Hundred Twenty-One
Thousand Dollars ($721,000), which is the base salary being paid to Employee
immediately before the consummation of the transactions contemplated in that
certain Agreement and Plan of Merger by and among Buck Holdings, L.P., Buck
Acquisition Corp., and Dollar General Corporation dated March 11, 2007
(“Transaction”). The Base Salary shall be paid in accordance with Company’s
normal payroll practices and shall be increased from time to time in the
ordinary course of business at the sole discretion of the Company.
b. Incentive
Bonus.
(i) FY
2007 Bonus.
So long
as Employee remains employed through the relevant date required under the Bonus
Plan to receive payment of a bonus thereunder, Employee will be eligible to
earn
an annual cash bonus in respect of the Company’s fiscal year 2007 (“FY 2007”)
pursuant to the Company bonus plan in which Employee
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(ii) FY
2008 Bonus.
If the
Term extends beyond the Initial Term but not beyond the end of fiscal
year 2008 (“FY 2008”),
whether
or not
Employee
remains employed through the relevant date required under the Bonus Plan to
receive payment of a bonus thereunder, Employee will be eligible to earn a
cash
bonus in respect of FY 2008 under the Bonus Plan as in effect for FY 2008 (“FY
2008 Bonus”) equal to (x), (y) or (z), as described below, depending on whether
the applicable performance criteria is satisfied, pro rated for the number
of
months that the Term extends into FY 2008 relative to 12 months, where (x)
equals the Threshold Bonus, (y) equals the Target Bonus and (z) equals the
Maximum Bonus.
(iii) Post
FY 2008.
If the
Term extends beyond FY 2008, Employee shall be eligible for incentive
compensation for the remainder of the Term of this Agreement as determined
under
the Bonus Plan for officers of the Company, based on criteria established by
the
Board of Directors, in accordance with the terms and conditions of the bonus
program for officers of the Company.
c. Stock
Based Compensation.
During
the Term, Employee shall be eligible for award grants from time to time
consistent with the award grants made to similarly-situated officers of the
Company during such time as governed by the terms of the Company’s equity
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d. Vacation.
During
the Term, Employee shall be entitled to four weeks paid vacation. Vacation
time
is granted on the anniversary of Employee’s employment with the Company, which,
for avoidance of doubt, is December 4, (“Start Date”) each year. Any
available but unused vacation as of the annual anniversary of the Start
Date
or at
Employee’s termination date shall be forfeited.
e. Business
Expenses.
During
the Term, 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.
During
the Term, 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.
7. 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) Retirement 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. During the
Initial Term, any Initial Term Extension and the Transition Period, the Company
will continue to lease and pay all rent and other charges being paid by the
Company as of the Effective Date on the apartment at 0000 Xxxxxxxx Xxxxx Xxxx
00, Xxxxxxxxx, Xxxxxxxxx 00000 or a substantially similar apartment in a
substantially similar location.
8. 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)
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a. Any
act
involving fraud or dishonesty;
b. Any
material breach of any securities 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.
9. Termination
upon Death. Notwithstanding
anything herein to the contrary, this Agreement shall terminate immediately
upon
Employee’s death. Employee’s estate shall be entitled to the Base Salary, if
any, accrued but unpaid as of his date of death, FY 2007 Bonus and FY 2008
Bonus
(to the extent not yet paid) and any other bonus, accrued in respect of any
previously completed fiscal year of the Company, but unpaid as of his date
of
death, but 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.
10. 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
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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 “disability” in the
Company’s long-term disability plan.
11. 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 any accrued 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. Employee shall not be entitled
to those payments and benefits listed in Section 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 under
the Bonus Plan; provided,
however,
that
any such reduction in the target
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(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
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;
provided,
however,
that
such reduction in Employee’s title, duties or responsibilities will not
constitute Good Reason hereunder if such change is the result of a change in
the
position of such Executive from Interim Chief Executive Officer of the Company
to President and Chief Operating Officer of the Company;
(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.
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Good
Reason shall not include Employee’s death, Disability or Termination for Cause
or any isolated, insubstantial and inadvertent failure by the Company that
is
not in bad faith and is cured within ten (10) business days after the Employee
gives the Company notice of such event.
12. 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) below 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 Employment Agreement
(other than the provisions in section 6.b.(i) or (ii) of this Agreement with
respect to bonus arrangements for fiscal years after FY 2008) before, at, or
within sixty (60) days after, the end of the Transition Period 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.
b. In
the
event of one of the triggers referenced in subsections 12(a)(i) through (iii)
above, then, upon the execution and effective date of the Release (which shall
be deemed to occur on the eighth day following such execution without
revocation) attached hereto and made a part hereof, and in lieu of and not
in
addition to the payments referenced in Section 13 below, Employee shall be
entitled to the following:
(i) If
such
triggering event occurs prior to the payment of the FY 2007 bonus, a lump sum
payment equal to the FY 2007 Bonus, determined as if Employee had remained
employed through the date necessary to receive payment of the FY 2007 Bonus;
and
if the Term extends into FY 2008 and such triggering event occurs prior to
the
payment of the FY 2008 Bonus, a lump sum payment equal to the FY 2008 Bonus
that
would have been paid to Employee if Employee had remained employed through
the
date necessary to receive payment of the FY 2008 Bonus, but prorated based
on
the number of months during FY 2008 (relative to 12 months) during which
Employee was employed by the Company;
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(ii) A
lump
sum payment equal to two times Employee’s Base Salary in effect immediately
prior to the Effective Date, plus
two
times the amount of Employee’s annual target bonus amount Employee was eligible
to earn under the Bonus Plan as in effect immediately prior to the Effective
Date;
(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 12 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
amounts under this Section 12 shall be forfeited. Any payments or reimbursements
under this Section 12 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 12 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.
d. Anything
in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined as provided below that any payment or
distribution 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 (a “Payment”) would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code or any interest or penalties are incurred
by
Employee with respect to such excise tax (collectively
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(i) All
determinations required to be made under this Section 12.c., including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be used in arriving at such determination, shall be
made
by the tax department of an independent public accounting firm (the “Accounting
Firm”) which shall be engaged by the Company prior to the time of the first
Payment to Employee. The Accounting Firm selected shall not be serving as
accountant or auditor for the individual, entity or group effecting the Change
in Control. The Accounting Firm shall prepare and provide detailed supporting
calculations both to the Company and Employee within fifteen (15) business
days
of the later of (i) the Accounting Firm’s engagement to make the required
calculations or (ii) the date the Accounting Firm obtains all information
needed to make the required calculation. Any determination by the Accounting
Firm shall be binding upon the Company and Employee. All fees and expenses
of
the Accounting Firm shall be borne solely by the Company.
(ii) Any
Gross-Up Payment, as determined pursuant to this Section 12.c., shall be paid
by
the Company to Employee within five (5) days of the receipt of the Accounting
Firm’s determination if the Payment is then required to satisfy an assessment or
other current demand for payment made of Employee by federal or state taxing
authorities. Gross-Up Payments due at a later date shall be paid to Employee
no
later than fourteen (14) days prior to the date that Employee’s federal or state
payment is due. If required by law, the Company shall treat all or any portion
of the Gross-Up Payment as being subject to income tax withholding for federal
or state tax purposes. Notwithstanding the foregoing, all Gross-Up Payments
shall in any event be made no later than the calendar year following the
calendar year in which Employee remits the Excise Tax. Amounts determined by
the
Company to be subject to federal or state tax withholding will not be paid
directly to Employee but shall be timely paid to the respective taxing
authority.
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(iii) As
a
result of the uncertainty in the application of Section 4999 of the Internal
Revenue Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that Employee hereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company (or any successor or assign)
to or for the benefit of Employee and in no event later than the end of the
calendar year next following the taxable year in which Employee remits the
Excise Tax. Conversely, if it is later determined that the actual required
Gross-Up Payment was less than the amount paid to Employee, Employee shall
refund the excess portion to the Company but only to the extent that Employee
has not yet paid the excess amount to the taxing authorities or is able to
obtain a refund from the respective taxing authorities of amounts previously
paid. The Company may pursue at its own expense the refund on behalf of
Employee, and, if requested by the Company, Employee shall reasonably cooperate
in such refund effort.
13. Publicity;
No Disparaging Statement. Except
as
otherwise provided in Section 14 hereof, Employee and the Company covenant
and
agree that they shall not engage in any communi-cations to persons outside
the
Company which shall disparage one another or interfere with their existing
or
prospective business relationships.
14. Confidentiality
and Legal Process. Employee
agrees to keep the proprietary terms, of this Agreement confidential and to
refrain from disclosing any information concerning this Agreement to any one
other than Employee’s immediate family and personal agents or advisors.
Notwithstanding the foregoing, nothing in this Agreement is intended to prohibit
Employee or the Company from performing any duty or obligation that shall arise
as a matter of law. Specifically, Employee and the Company shall continue to
be
under a duty to truthfully respond to any legal and valid subpoena or other
legal process. This Agreement is not intended in any way to proscribe Employee’s
or the Company’s right and ability to provide information to any federal, state
or local agency in response or adherence to the lawful exercise of such agency’s
authority.
15. Business
Protection Provision Definitions.
a. Preamble.
As a
material inducement to the Company to enter into this Agreement, and in
recognition of the valuable experience, knowledge and proprietary information
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b. Definitions.
For
purposes of Sections 15, 16, 17, 18, 19 and 20 herein:
(i) “Competitive
Position” shall mean any employment, consulting, advisory, directorship, agency,
promotional or independent contractor arrangement between Employee and (x)
any
person or Entity engaged wholly or in material part in the business in which
the
Company is engaged (i.e., the deep discount consumable basics retail business),
including but not limited to such other similar businesses as Wal-Mart, Target,
K-Mart, Walgreen’s, Rite-Aid, CVS, Family Dollar Stores, Fred’s, the 99 Cents
Stores, Dollar Tree Stores, Costco,
BJ’s Wholesale Club, Longs Drug Stores, Xxxxx’x General Stores Inc, and Pantry
Inc.
or (y)
any person or Entity then attempting or planning to enter the deep discount
consumable basics retail business, whereby Employee is required to perform
services on behalf of or for the benefit of such person or Entity which are
substantially similar to the services Employee provided or directed at any
time
while employed by the Company or any of its affiliates.
(ii) “Confidential
Information” shall mean the proprietary or confidential data, information,
documents or materials (whether oral, written, electronic or otherwise)
belonging to or pertaining to the Company, other than “Trade Secrets” (as
defined below), which is of tangible or intangible value to the Company and
the
details of which are not generally known to the competitors of the Company.
Confidential Information shall also include any items marked “CONFIDENTIAL” or
some similar designation or which are otherwise identified as being
confidential.
(iii) “Entity”
or “Entities” shall mean any business, individual, partnership, joint venture,
agency, governmental agency, body or subdivision, association, firm,
corporation, limited liability company or other entity of any kind.
(iv) “Restricted
Period” shall mean two (2) years following Employee’s termination
date.
(v) “Territory”
shall include those states in which the Company maintains stores at Employee’s
termination date or those states in which the Company has specific and
demonstrable plans to open stores within six months of Employee’s termination
date.
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(vi) “Trade
Secrets” shall mean information or data of or about the Company, including, but
not limited to, technical or non-technical data, formulas, patterns,
compilations, programs, devices, methods, techniques, drawings, processes,
financial data, financial plans, product plans or lists of actual or potential
customers or suppliers that: (A) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use; (B) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy; and (C) any other information which is defined as
a
“trade secret” under applicable law.
(vii) “Work
Product” shall mean all tangible work product, property, data, documentation,
“know-how,” concepts or plans, inventions, improvements, techniques and
processes relating to the Company that were conceived, discovered, created,
written, revised or developed by Employee while employed by the
Company.
16. Nondisclosure:
Ownership of Proprietary Property.
a. In
recognition of the Company’s need to protect its legitimate business interests,
Employee hereby covenants and agrees that, for the Term and thereafter (as
described below), Employee shall regard and treat Trade Secrets and Confidential
Information as strictly confidential and wholly-owned by the Company and shall
not, for any reason, in any fashion, either directly or indirectly, use, sell,
lend, lease, distribute, license, give, transfer, assign, show, disclose,
disseminate, reproduce, copy, misappropriate or otherwise communicate any Trade
Secrets or Confidential Information to any person or Entity for any purpose
other than in accordance with Employee’s duties under this Agreement or as
required by applicable law. This provision shall apply to each item
constituting a Trade Secret at all times it remains a “trade secret” under
applicable law and shall apply to any Confidential Information, during
employment and for the Restricted Period thereafter.
b. Employee
shall exercise best efforts to ensure the continued confidentiality of all
Trade
Secrets and Confidential Information and shall immediately notify the Company
of
any unauthorized disclosure or use of any Trade Secrets or Confidential
Information of which Employee becomes aware. Employee shall assist the Company,
to the extent reasonably requested, in the protection or procurement of any
intellectual property protection or other rights in any of the Trade Secrets
or
Confidential Information.
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c. All
Work
Product shall be owned exclusively by the Company. To the greatest extent
possible, any Work Product shall be deemed to be “work made for hire” (as
defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended), and
Employee hereby unconditionally and irrevocably transfers and assigns to the
Company all right, title and interest Employee currently has or may have by
operation of law or otherwise in or to any Work Product, including, without
limitation, all patents, copyrights, trademarks (and the goodwill associated
therewith), trade secrets, service marks (and the goodwill associated therewith)
and other intellectual property rights. Employee agrees to execute and deliver
to the Company any transfers, assignments, documents or other instruments which
the Company may deem necessary or appropriate, from time to time, to protect
the
rights granted herein or to vest complete title and ownership of any and all
Work Product, and all associated intellectual property and other rights therein,
exclusively in the Company.
17. Non-Interference
with Employees. Through
employment and thereafter through the Restricted Period, Employee will not,
either directly or indirectly, alone or in conjunction with any other person
or
Entity: actively recruit, solicit, attempt to solicit, induce or attempt to
induce any person who is an exempt employee of the Company or any of its
subsidiaries or affiliates to leave or cease such employment for any reason
whatsoever;
18. Non-Interference
with Business Relationships.
a. Employee
acknowledges that, in the course of employment, Employee will learn about
Company’s business, services, materials, programs and products and the manner in
which they are developed, marketed, serviced and provided. Employee knows and
acknowledges that the Company has invested considerable time and money in
developing its product sales and real estate development programs and
relationships, vendor and other service provider relationships and agreements,
store layouts and fixtures, and marketing techniques and that those things
are
unique and original. Employee further acknowledges that the Company has a strong
business reason to keep secret information relating to Company’s business
concepts, ideas, programs, plans and processes, so as not to aid Company’s
competitors. Accordingly, Employee acknowledges and agrees that the protection
outlined in (b) below is necessary and reasonable.
b. During
the Restricted Period, Employee will not, on Employee’s own behalf or on behalf
of any other person or Entity, solicit, contact, call upon, or communicate
with
any person or entity or any representative of any person or entity who has
a
business relationship with Company and with whom Employee had contact while
employed, if such contact or
15
19. Agreement
Not to Work in Competitive Position. Employee
covenants and agrees not to accept, obtain or work in a Competitive Position
within the Territory for the Restricted Period.
20. Acknowledgements
Regarding Sections 15 - 19.
a. Employee
and Company expressly covenant and agree that the scope, territorial, time
and
other restrictions contained in Sections 15 through 19 of this Agreement
constitute the most reasonable and equitable restrictions possible to protect
the business interests of the Company given: (i) the business of the Company;
(ii) the competitive nature of the Company’s industry; and (iii) that Employee’s
skills are such that Employee could easily find alternative, commensurate
employment or consulting work in Employee’s field which would not violate any of
the provisions of this Agreement.
b. Employee
acknowledges that the compensation and benefits described in Sections 6 and
12
are also in consideration of his/her covenants and agreements contained in
Sections 15 through 19 hereof.
c. Employee
acknowledges and agrees that a breach by Employee of the obligations set forth
in Sections 15 through 19 will likely cause Company irreparable injury and
that,
in such event, the Company shall be entitled to injunctive relief in addition
to
such other and further relief as may be proper.
d. The
parties agree that if, at any time, a court of competent jurisdiction determines
that any of the provisions of Section 15 through 19 are unreasonable under
Tennessee law as to time or area or both, the Company shall be entitled to
enforce this Agreement for such period of time or within such area as may be
determined reasonable by such court.
21. Return
of Materials. Upon
Employee’s termination, Employee shall return to the Company all written,
electronic, recorded or graphic materials of any kind belonging or relating
to
the Company or its affiliates, including any originals, copies and abstracts
in
Employee’s possession or control.
22. General
Provisions.
a. Amendment.
This
Agreement may be amended or modified only by a writing signed by both of the
parties hereto.
16
b. Binding
Agreement.
This
Agreement shall inure to the benefit of and be binding upon Employee, his/her
heirs and personal representatives, and the Company and its successors and
assigns.
c. Waiver
Of Breach; Specific Performance.
The
waiver of a breach of any provision of this Agreement shall not operate or
be
construed as a waiver of any other breach. Each of the parties to this Agreement
will be entitled to enforce this Agreement, specifically, to recover damages
by
reason of any breach of this Agreement, and to exercise all other rights
existing in that party’s favor. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions
of
this Agreement and that any party may apply to any court of law or equity of
competent jurisdiction for specific performance or injunctive relief to enforce
or prevent any violations of the provisions of this Agreement.
d. Unsecured
General Creditor.
The
Company shall neither reserve nor speci-fically set aside funds for the payment
of its obligations under this Agreement, and such obligations shall be paid
solely from the general assets of the Company.
e. No
Effect On Other Arrangements.
It is
expressly understood and agreed that the payments made in accordance with this
Agreement are in addition to any other benefits or compensation to which
Employee may be entitled or for which Employee may be eligible.
f. Tax
Withholding.
There
shall be deducted from each payment under this Agreement the amount of any
tax
required by any govern-mental authority to be withheld and paid over by the
Company to such governmental authority for the account of Employee.
g. Notices.
(i) All
notices and all other communications provided for herein shall be in writing
and
delivered personally to the other designated party, or mailed by certified
or
registered mail, return receipt requested, or delivered by a recognized national
overnight courier service, or sent by facsimile, as follows:
If
to
Company to: Dollar
General Corporation
Attn:
General Counsel
000
Xxxxxxx Xxxxx
Xxxxxxxxxxxxxx,
XX 00000-0000
Facsimile:
(000)000-0000
If
to
Employee to: (Last
address of Employee
known
to
Company unless
otherwise
directed in writing by Employee)
17
(ii) All
notices sent under this Agreement shall be deemed given twenty-four (24) hours
after sent by facsimile or courier, seventy-two (72) hours after sent by
certified or registered mail and when delivered if by personal
delivery.
(iii) Either
party hereto may change the address to which notice is to be sent hereunder
by
written notice to the other party in accordance with the provisions of this
Section.
h. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Tennessee (without giving effect to conflict of laws).
i. Entire
Agreement.
This
Agreement contains the full and complete understanding of the parties hereto
with respect to the subject matter contained herein and, unless specifically
provided herein, this Agreement supersedes and replaces any prior agreement,
either oral or written, which Employee may have with Company that relates
generally to the same subject matter.
j. Assignment.
This
Agreement may not be assigned by Employee, and any attempted assignment shall
be
null and void and of no force or effect.
k. Severability.
If any
one or more of the terms, provisions, covenants or restrictions of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect, and to that end the provisions hereof shall be deemed
severable.
l. Section
Headings.
The
Section headings set forth herein are for convenience of reference only and
shall not affect the meaning or interpretation of this Agreement
whatsoever.
m. Voluntary
Agreement.
Employee and Company represent and agree that each has reviewed all aspects
of
this Agreement, has carefully read and fully understands all provisions of
this
Agreement, and is voluntarily entering into this Agreement. Each party
represents and agrees that such party has had the opportunity to review any
and
all aspects of this Agreement with legal, tax or other adviser(s) of such
party’s choice before executing this Agreement.
n. Nonqualified
Deferred Compensation Omnibus Provision.
It is
intended that any payment or benefit which is provided pursuant to or in
connection with this Agreement which is considered to be nonqualified deferred
compensation subject to Section 409A of the Internal
18
(i) Notwithstanding
any other provision of this Agreement, the Company is authorized to amend this
Agreement, to void or amend any election made by Employee under this Agreement
and/or to delay the payment of any monies and/or provision of any benefits
in
such manner as may be determined by it to be necessary or appropriate to comply,
or to evidence or further evidence required compliance, with Section 409A of
the
Internal Revenue Code (including any transition or grandfather rules
thereunder).
(ii) Neither
Employee nor the Company shall take any action to accelerate or delay the
payment of any monies and/or provision of any benefits in any manner which
would
not be in compliance with Section 409A of the Internal Revenue Code (including
any transition or grandfather rules thereunder). Notwithstanding the
foregoing:
(A) Payment
may be delayed for a reasonable period in the event the payment is not
administratively practical due to events beyond the recipient’s control such as
where the recipient is not competent to receive the benefit payment, there
is a
dispute as to amount due or the proper recipient of such benefit payment,
additional time is needed to calculate the amount payable, or the payment would
jeopardize the solvency of the Company.
(B) Payments
shall be delayed in the following circumstances: (1) where the Company
reasonably anticipates that the payment will violate the terms of a loan
agreement to which the Company is a party and that the violation would cause
material harm to the Company; or (2) where the Company reasonably
anticipates that the payment will violate Federal securities laws or other
applicable laws; provided that any payment delayed by operation of this clause
(B) will be made at the earliest date at which the Company reasonably
anticipates that the payment will not be limited or cause the violations
described.
(iii) If
Employee is a specified employee of a publicly traded corporation
as
required by Section 409A(a)(2)(B)(i) of the
Internal Revenue Code,
any
payment or provision of benefits in connection with a separation from service
payment event (as
19
(iv) If
a
Change in Control occurs but the Change in Control does not constitute a change
in ownership of the Company or in the ownership of a substantial portion of
the
assets of the Company as provided in Section 409A(a)(2)(A)(v) of the Internal
Revenue Code, then payment of any amount or provision of any benefit under
this
Agreement which is considered to be nonqualified deferred compensation subject
to Section 409A of the Internal Revenue Code shall be deferred until another
permissible payment event contained in Section 409A of the Internal Revenue
Code
occurs (e.g., death, disability, separation from service from the Company and
its affiliated companies as defined for purposes of Section 409A of the Internal
Revenue Code), including any deferral of payment or provision of benefits for
the 409A
Deferral Period
as
provided above.
20
IN
WITNESS WHEREOF, the parties hereto have executed, or caused their duly
authorized representative to execute this Agreement to be effective as of the
Effective Date.
DOLLAR
GENERAL
CORPORATION
By:
Date:_______________
Its:
“EMPLOYEE”
Xxxxx
X.
Xxxx
Date:________________
Witnessed
By:
21
Addendum
to Employment
Agreement
with Xxxxx X. Xxxx
RELEASE
AGREEMENT
THIS
RELEASE (“Release”) is made and entered into by and between _________________
(“Employee”) and DOLLAR
GENERAL CORPORATION,
and its
successor or assigns (“Company”).
WHEREAS,
Employee and Company have agreed that Employee’s employment with Dollar General
Corporation shall terminate on ___________________;
WHEREAS,
Employee and the Company have previously entered into that certain Employment
Agreement, effective _____________________ (“Agreement”), in which the form of
this Release is incorporated by reference;
WHEREAS,
Employee and Company desire to delineate their respective rights, duties and
obligations attendant to such termination and desire to reach an accord and
satisfaction of all claims arising from Employee’s employment, and termination
of employment, with appropriate releases, in accordance with the
Agreement;
WHEREAS,
the Company desires to compensate Employee in accordance with the Agreement
for
service Employee has provided and/or will provide for the Company;
NOW,
THEREFORE, in consideration of the premises and the agreements of the parties
set forth in this Release, and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby covenant and agree as follows:
1. Claims
Released Under This Agreement.
In
exchange for receiving the benefits described in Section 6 and Section 12 of
the
Agreement, Employee hereby voluntarily and irrevocably waives, releases,
dismisses with prejudice, and withdraws all claims, complaints, suits or demands
of any kind whatsoever (whether known or unknown) which Employee ever had,
may
have, or now has against Company and other current or former subsidiaries or
affiliates of the Company and their past, present and future officers,
directors, employees, agents, insurers and attorneys (collectively, the
“Releasees”), arising from or relating to (directly or indirectly) Employee’s
employment or the termination of employment or other events that have occurred
as of the date of execution of this Agreement, including but not limited
to:
22
a. claims
for violations of Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Fair Labor Standards Act, the Civil Rights
Act of 1991, the Americans With Disabilities Act, the Equal Pay Act, the Family
and Medical Leave Act, 42 U.S.C. § 1981, the Sarbanes Oxley Act of 2002,
the National Labor Relations Act, the Labor Management Relations Act, Executive
Order 11246, Executive Order 11141, the Rehabilitation Act of 1973, or the
Employee Retirement Income Security Act;
b. claims
for violations of any other federal or state statute or regulation or local
ordinance;
c. claims
for lost or unpaid wages, compensation, or benefits, defamation, intentional
or
negligent infliction of emotional distress, assault, battery, wrongful or
constructive discharge, negligent hiring, retention or supervision, fraud,
misrepresentation, conversion, tortious interference, breach of contract, or
breach of fiduciary duty;
d. claims
to
benefits under any bonus, severance, workforce reduction, early retirement,
outplacement, or any other similar type plan sponsored by the Company (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); or
e. any
other
claims under state law arising in tort or contract.
2. Claims
Not Released Under This Agreement.
In
signing this Release, Employee is not releasing any claims that may arise under
the terms of this Release or which may arise out of events occurring after
the
date Employee executes this Release.
Employee
also is not releasing claims to benefits that Employee is already entitled
to
receive under any other plan or agreement covering Employee which shall be
governed by the terms of such plan or agreement. However, Employee understands
and acknowledges that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan
or
benefit sponsored by the Company, and the Company hereby reserves the right
to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.
Nothing
in this Release shall prohibit Employee from engaging in activities required
or
protected under applicable law or from communicating, either voluntarily or
otherwise, with any governmental agency concerning any potential violation
of
the law.
23
3. No
Assignment of Claim. Employee
represents that Employee has not assigned or transferred, or purported to assign
or transfer, any claims or any portion thereof or interest therein to any party
prior to the date of this Release.
4. Compensation. In
accordance with the Agreement, the Company agrees to pay Employee or, if
Employee becomes eligible for payments under Section 6 and Section 12 but dies
before receipt thereof, Employee’s spouse or estate, as the case may be, the
amount provided in Section 6 and Section 12 of the Agreement.
5. Publicity;
No Disparaging Statement. Except
as
otherwise provided in Section 14 of the Agreement, Section 2 of this Release,
and as privileged by law, Employee and the Company covenant and agree that
they
shall not engage in any communi-cations with persons outside the Company which
shall disparage one another or interfere with their existing or prospective
business relationships.
6. No
Admission Of Liability. This
Release shall not in any way be construed as an admission by the Company or
Employee of any improper actions or liability whatsoever as to one another,
and
each specifically disclaims any liability to or improper actions against the
other or any other person.
7. Voluntary
Execution. Employee
warrants, represents and agrees that Employee has been encouraged in writing
to
seek advice regarding this Release from an attorney and tax advisor prior to
signing it; that this Release represents written notice to do so; that Employee
has been given the opportunity and sufficient time to seek such advice; and
that
Employee fully understands the meaning and contents of this Release. Employee
further represents and warrants that Employee was not coerced, threatened or
otherwise forced to sign this Release, and that Employee’s signature appearing
hereinafter is voluntary and genuine. EMPLOYEE UNDERSTANDS THAT EMPLOYEE MAY
TAKE UP TO TWENTY-ONE (21) DAYS TO CONSIDER WHETHER TO ENTER INTO THIS
RELEASE.
8. Ability
to Revoke Agreement. EMPLOYEE
UNDERSTANDS THAT THIS RELEASE MAY BE REVOKED BY EMPLOYEE BY NOTIFYING THE
COMPANY IN WRITING OF SUCH REVOCATION WITHIN SEVEN (7) DAYS OF EMPLOYEE’S
EXECUTION OF THIS RELEASE AND THAT THIS RELEASE IS NOT EFFECTIVE UNTIL THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. EMPLOYEE UNDERSTANDS THAT UPON THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS RELEASE WILL BE BINDING UPON
EMPLOYEE AND EMPLOYEE’S HEIRS, ADMINISTRATORS,
24
Acknowledged
and Agreed To:
“COMPANY”
DOLLAR
GENERAL
CORPORATION
By: /s/
Xxxxx Xxxxxxx
Its: EVP-HR
I
UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE.
I
UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.
“EMPLOYEE”
/s/
Xxxxx X. Xxxx
Xxxxx
X.
Xxxx
WITNESSED
BY:
/s/
X.X.
Xxxxx
X.X.
Xxxxx
Date
July
5, 2007
25
Appendix
A
|
If
Adjusted EBITDA1
for fiscal year is:
|
Then
Executive will be entitled to receive:
|
|
Equal
to or greater than $630 million, but less than $700
million
|
Threshold
Bonus
|
|
Equal
to or greater than $700 million, but less than $770
million
|
Target
Bonus
|
|
Equal
to or greater than $770 million
|
Maximum
Bonus
|
1 Adjusted
EBITDA
will be reduced by expense of all bonus payments to be paid in respect
of such
fiscal year to all employees. In addition, the Board of
Directors
will make a good faith determination of the adjustments to the EBITDA targets
for Alpha costs and other one time expenses after consulting with the
CEO
and
CFO.
A-1
