DOLLAR GENERAL CORPORATION PERFORMANCE SHARE UNIT AWARD AGREEMENT
Exhibit 10.43
DOLLAR GENERAL CORPORATION
PERFORMANCE SHARE UNIT AWARD AGREEMENT
THIS AGREEMENT (this “Agreement”), dated as of the date indicated on Schedule A hereto (the “Grant Date”), is made between Dollar General Corporation, a Tennessee corporation (hereinafter, together with all Service Recipients unless the context indicates otherwise, called the “Company”), and the individual whose name is set forth on the signature page hereof, who is a Key Employee of the Company (hereinafter referred to as the “Grantee”). Capitalized terms not otherwise defined herein shall have the same meanings as in the Dollar General Corporation Amended and Restated 2007 Stock Incentive Plan, as amended from time to time (the “Plan”), the terms of which are hereby incorporated by reference and made a part of this Agreement.
WHEREAS, the Company desires to grant the Grantee a performance share unit award as provided for hereunder, ultimately payable in shares of Common Stock of the Company, par value $0.875 per Share (the “Performance Share Unit Award”), pursuant to the terms and conditions of this Agreement and the Plan; and
WHEREAS, the Compensation Committee (or a duly authorized subcommittee thereof) of the Company’s Board appointed to administer the Plan (the “Committee”) has determined that it would be to the advantage and in the best interest of the Company and its shareholders to grant the Performance Share Unit Award provided for herein to the Grantee, and has advised the Company thereof and instructed the undersigned officer to issue said Performance Share Unit Award.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
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(i)“Adjusted EBITDA” shall be computed as income (loss) from continuing operations before cumulative effect of change in accounting principles plus interest and other financing costs, net, provision for income taxes, and depreciation and amortization, but shall exclude the impact of (a) 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 Plan) of the Company or any offering of Company common stock or other security; (b) disaster-related charges; (c) any gains or losses associated with the Company’s LIFO computation; and (d) unless the Committee disallows any such item, (i) any unbudgeted loss which individually exceeds [$1 million] as a result of the resolution of a legal matter or (ii) any unplanned loss or gain which individually exceeds [$1 million] related to the implementation of accounting or tax legislative changes or changes in federal, state or local wage or benefit mandates, or
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(iii) any unplanned loss or gain which individually exceeds [$1 million] of a non-recurring nature, provided that the combined amount of (i), (ii) and (iii) equals or exceeds loss(es) or gains(s) of [$10 million] in the aggregate.
(ii)“Adjusted ROIC” shall mean during each fiscal year within the Performance Period applicable to the Three-Year Goal (a) the result of (x) the sum of (i) the Company’s operating income, plus (ii) depreciation and amortization, plus (iii) single lease cost, minus (y) taxes, divided by (b) the result of (x) the sum of the averages of the five most recently completed fiscal quarters of: (i) total assets, plus (ii) accumulated depreciation and amortization, minus (y) the difference of the averages of the five most recently completed fiscal quarters of: (i) cash, minus (ii) goodwill, minus (iii) accounts payable, minus (iv) other payables, minus (v) accrued liabilities, but shall exclude the impact of (a) 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 Plan) of the Company or any offering of Company common stock or other security; (b) disaster-related charges; (c) any gains or losses associated with the Company’s LIFO computation; and (d) unless the Committee disallows any such item, (i) any unbudgeted loss which individually exceeds [$1 million] as a result of the resolution of a legal matter or (ii) any unplanned loss or gain which individually exceeds [$1 million] related to the implementation of accounting or tax legislative changes or changes in federal, state or local wage or benefit mandates, or (iii) any unplanned loss or gain which individually exceeds [$1 million] of a non-recurring nature, provided that the combined amount of (i), (ii) and (iii) equals or exceeds loss(es) or gain(s) of [$10 million] in the aggregate.
(iii)“Average Adjusted ROIC” shall mean the average of the Adjusted ROIC for the three fiscal years during the Performance Period applicable to the Three-Year Goal.
(i)Performance Share Units Subject to One-Year Goal: To the extent Performance Share Units subject to the One-Year Goal have not previously terminated, been forfeited or become vested and nonforfeitable, and except as otherwise provided in Section 5(j):
(A)in the event the Grantee’s employment is terminated before the last day of the Performance Period because of the Grantee’s Normal Retirement (as defined below) or the Grantee dies or becomes Disabled (as defined below) before the last day of the Performance Period,
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then a Pro-Rata Portion (as defined below) of such Performance Share Units (rounded to the nearest whole share) that would have vested on the first Vesting Date shall become vested and nonforfeitable as of the end of the Performance Period (to the extent earned based upon all applicable performance requirements, and subject to all certification requirements, in Section 4) and all remaining Performance Share Units subject to the One-Year Goal shall be automatically forfeited to the Company and cancelled;
(B)in the event the Grantee’s employment is terminated on or after the last day of the Performance Period but before a subsequent Vesting Date due to the Grantee’s Normal Retirement, then that one-third (33 1/3%) of the Performance Share Units that would have become vested and nonforfeitable on the next Vesting Date if the Grantee had remained employed through such date shall become vested and nonforfeitable as of such Normal Retirement (to the extent earned based on all applicable performance requirements, and subject to all certification requirements, in Section 4) and all remaining Performance Share Units subject to the One-Year Goal shall be automatically forfeited to the Company and cancelled, provided, however, that, if the Grantee terminates due to Normal Retirement on a Vesting Date, no accelerated vesting shall occur but rather the Grantee shall be entitled only to the portion of the Performance Share Units that were scheduled to vest on such Vesting Date and all remaining Performance Share Units subject to the One-Year Goal shall be automatically forfeited to the Company and cancelled;
(C)in the event the Grantee dies or becomes Disabled on or after the last day of the Performance Period but before a subsequent Vesting Date, then all remaining unvested Performance Share Units that would have become vested and nonforfeitable if the Grantee had remained employed through all future Vesting Dates shall become vested and nonforfeitable as of such death or Disability (to the extent earned based upon all applicable performance requirements, and subject to all certification requirements, in Section 4); and
(D)in the event the Grantee’s employment is terminated after the last day of the Performance Period and the termination meets the requirements of an Early Retirement (as defined below), then the unvested Performance Share Units subject to the One-Year Goal shall remain outstanding and unvested for purposes of Section 5 following the Early Retirement and shall become vested on the Vesting Dates provided in Section 5(a) (to the extent earned based on all applicable performance requirements, and subject to all certification requirements, in Section 4), provided, however, that, (y) if during such period and prior to an applicable Vesting Date the Grantee dies or becomes Disabled, then any unvested Performance Share Units subject to the One-Year Goal shall become vested and nonforfeitable as of such death or Disability (to the extent earned based upon all applicable performance requirements, and subject to all certification requirements, in Section 4); or (z) if during such period and prior to an applicable Vesting Date a Change in Control occurs, then any unvested Performance Share Units subject to the One-Year Goal shall become vested and nonforfeitable as of such Change in Control (to the extent earned based upon all applicable performance requirements, and subject to all certification requirements, in Section 4). Notwithstanding the forgoing, if Grantee violates any of the Business Protection Provisions (defined below) following Early Retirement, then any Performance Share Units subject to the One-Year Goal that vested following Early Retirement under this Section 5(b)(i)(D) shall be forfeited and subject to clawback as provided in Section 17 and any unvested Performance Share Units subject to the One-Year Goal shall be automatically forfeited to the Company and cancelled immediately upon the Company becoming aware of such violation.
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(ii)Performance Share Units Subject to Three-Year Goal: To the extent Performance Share Units subject to the Three-Year Goal have not previously terminated, been forfeited or become vested and nonforfeitable, and except as otherwise provided in Section 5(j):
(A) in the event the Grantee’s employment is terminated before the last day of the Performance Period because of the Grantee’s Normal Retirement or the Grantee dies or becomes Disabled before the last day of the Performance Period, then a Pro-Rata Portion of such Performance Share Units (rounded to the nearest whole share) that would have vested on the Vesting Date shall become vested and nonforfeitable as of the end of the Performance Period (to the extent earned based upon all applicable performance requirements, and subject to all certification requirements, in Section 4) and all remaining Performance Share Units subject to the Three-Year Goal shall be automatically forfeited to the Company and cancelled;
(B) in the event the Grantee’s employment is terminated on or after the last day of the Performance Period but before the Vesting Date because of the Grantee’s Normal Retirement or the Grantee dies or becomes Disabled on or after the last day of the Performance Period but before the Vesting Date, then such Performance Share Units that would have vested on the Vesting Date shall become vested and nonforfeitable as of such Normal Retirement, death or Disability (to the extent earned based upon all applicable performance requirements, and subject to all certification requirements, in Section 4); and
(C)in the event the Grantee’s employment is terminated before the Vesting Date and the termination meets the requirements of an Early Retirement (as defined below), then the Performance Share Units subject to the Three-Year Goal shall remain outstanding and unvested for purposes of Section 5 following the Early Retirement and shall become vested on the Vesting Date provided in Section 5(a) (to the extent earned based on all applicable performance requirements, and subject to all certification requirements, in Section 4), provided, however, that, (y) if prior to the Vesting Date the Grantee dies or becomes Disabled, then any unvested Performance Share Units subject to the Three-Year Goal shall become vested and nonforfeitable as of the end of the Performance Period or, if later, the date of such death or becoming Disabled (to the extent earned based upon all applicable performance requirements, and subject to all certification requirements, in Section 4); or (z) if prior to the Vesting Date a Change in Control occurs, then the unvested Performance Share Units subject to the Three-Year Goal shall become vested and nonforfeitable as of such Change in Control (if the Change in Control occurs on or before the end of the Performance Period, at the target number of the Performance Share Units deemed earned, or, if the Change in Control occurs after the end of the Performance Period, to the extent earned based upon all applicable performance requirements, and subject to all certification requirements, in Section 4). Notwithstanding the forgoing, if Grantee violates any of the Business Protection Provisions following Early Retirement, then the unvested Performance Share Units subject to the Three-Year Goal shall be automatically forfeited to the Company and cancelled immediately upon the Company becoming aware of such violation and, if already vested under this Section 5(b)(ii)(C), then the Performance Share Units subject to the Three-Year Goal that vested following Early Retirement shall be forfeited and subject to clawback as provided in Section 17.
(iii)For purposes of Section 5(b), a “Pro-Rata Portion” is determined by a fraction (not to exceed one), the numerator of which is the number of months in the applicable Performance Period during which the Grantee was continuously in the employment of the Company and the denominator of which is the number of months in the applicable Performance Period. The
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Grantee will be deemed to be employed for a month if the Grantee’s Normal Retirement, death or Disability occurs after the fifteenth (15th) day of a month.
(iv)Accelerated vesting under Section 5(b)(i) or (ii) shall not accelerate the time of payment of the Performance Share Units and payment shall be made on the applicable Payment Date as provided in Section 5(d).
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(i)In the event a Change in Control occurs on or before the end of the applicable Performance Period and provided the Grantee is continuously employed until the Change in Control, the target number of the applicable Performance Share Units shall be deemed earned but otherwise continue to be subject to the service and payment provisions, including applicable proration requirements, that apply under Section 5(a), 5(b), 5(c) and 5(d) unless the Grantee experiences a Qualifying Termination or, with regard to the Performance Share Units subject to the Three-Year Goal, a Qualifying Early Retirement. If the Grantee experiences a Qualifying Termination, all of the applicable Performance Share Units deemed earned per the preceding sentence and not previously vested and paid or previously forfeited, shall become immediately vested and nonforfeitable and shall be paid (but only if such accelerated payment timing results in payment before payment on the
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applicable Vesting Date) on the date of such Qualifying Termination, subject to a six-month delay, if applicable, as provided under Section 10(c) of the Plan. If the Grantee experiences a Qualifying Early Retirement, all of the Performance Share Units subject to the Three-Year Goal deemed earned per the first sentence in this subsection (i) and not previously vested and paid or previously forfeited, shall become immediately vested and nonforfeitable and shall be paid (but only if such accelerated payment timing results in payment before payment on the Vesting Date) on the date of such Qualifying Early Retirement, subject to a six-month delay, if applicable, as provided under Section 10(c) of the Plan, provided, however, that if Grantee violates any of the Business Protection Provisions following such Qualifying Early Retirement, then the Performance Share Units subject to the Three-Year Goal that vested following the Qualifying Early Retirement shall be automatically forfeited to the Company, cancelled and subject to clawback under Section 17 immediately upon the Company becoming aware of such violation.
(ii)In the event a Change in Control occurs following the end of the applicable Performance Period and provided the Grantee is continuously employed until the Change in Control, all of the applicable Performance Share Units previously earned based on the Committee’s determination of performance in accordance with Section 4 shall continue to be subject to the service and payment requirements that apply under Section 5(a), 5(b), 5(c) and 5(d) unless the Grantee experiences a Qualifying Termination or a Qualifying Early Retirement. If the Grantee experiences a Qualifying Termination, all of the applicable Performance Share Units previously earned based on the Committee’s determination of performance in accordance with Section 4 and not previously vested and paid or previously forfeited, shall become immediately vested and nonforfeitable and shall be paid (but only if such accelerated payment timing results in payment before payment on the applicable Vesting Date) on the date of such Qualifying Termination, subject to a six-month delay, if applicable, as provided under Section 10(c) of the Plan. If the Grantee experiences a Qualifying Early Retirement, all of the applicable Performance Share Units previously earned based on the Committee’s determination of performance in accordance with Section 4 and not previously vested and paid or previously forfeited, shall become immediately vested and nonforfeitable and shall be paid (but only if such accelerated payment timing results in payment before payment on the applicable Vesting Date) on the date of such Qualifying Early Retirement, subject to a six-month delay, if applicable, as provided under Section 10(c) of the Plan, provided, however, that if Grantee violates any of the Business Protection Provisions following such Qualifying Early Retirement, then any Performance Share Units that vested following the Qualifying Early Retirement shall be automatically forfeited to the Company, cancelled and subject to clawback under Section 17 immediately upon the Company becoming aware of such violation.
(iii)In the event a Change in Control occurs following the end of the applicable Performance Period and after the Grantee has terminated due to an Early Retirement prior to the Change in Control, then Section 5(b)(i)(D) shall apply to the unvested Performance Share Units subject to the One-Year Goal and such Performance Share Units subject to the One-Year Goal shall be paid as provided in Section 5(d). In the event a Change in Control occurs after the Grantee has terminated due to an Early Retirement prior to the Change in Control, then Section 5(b)(ii)(C) shall apply to the unvested Performance Share Units subject to the Three-Year Goal and such Performance Share Units subject to the Three-Year Goal shall be paid as provided in Section 5(d).
(iv)For purposes of this Agreement, a Change in Control (as defined in the Plan) will be deemed to have occurred with respect to the Grantee only if an event relating to the Change in Control constitutes a change in ownership or effective control of the Company or a change
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in the ownership of a substantial portion of the assets of the Company within the meaning of Treas. Reg. Section 1.409A-3(i)(5).
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.
| DOLLAR GENERAL CORPORATION | |
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| By: | |
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| Name: | |
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| Title: | |
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| GRANTEE | |
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| Xxxx X. Xxxxx | |
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Schedule A to Performance Share Unit Award Agreement
Grant Date: | [_______] | ||||||
Target Number of Performance Share Units Awarded: | [_______] | ||||||
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Performance Period: | For One-Year Goal: Begins on [1st day of fiscal year that includes the Grant Date] and ends on [last day of same fiscal year] For Three-Year Goal: Begins on [1st day of fiscal year that includes the Grant Date] and ends on [last day of fiscal year [Grant Date fiscal year + 2] | ||||||
Threshold, Target and Maximum Calculation Chart: | See attached Exhibit 1 | ||||||
Vesting Table:
Vesting Date | PSUs Subject to One-Year Goal/ Percentage Vested | PSUs Subject to Three-Year Goal /Percentage Vested |
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April 1, [Grant Date year + 1 year] | 33 1/3% | N/A |
April 1, [Grant Date year + 2 years] | 33 1/3% | N/A |
April 1, [Grant Date year + 3 years] | 33 1/3% | 100% |
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Exhibit 1 to Schedule A to Performance Share Unit Award Agreement
[ ] Performance Share Unit Matrix – Adjusted EBITDA
EBITDA Based Shares | ||
Performance Level | EBITDA | EBITDA |
Threshold | [ ] | [ ] |
Target | [ ] | [ ] |
Maximum | [ ] | [ ] |
Note: Interpolate between all EBITDA results and award levels
| ||
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[ ] Performance Share Unit Matrix – Adjusted ROIC
ROIC Based Shares Earned [ ] | ||
Performance Level | ROIC | ROIC |
Threshold | [ ] | [ ] |
Target | [ ] | [ ] |
Maximum | [ ] | [ ] |
Note: Interpolate between all ROIC results and award levels | ||
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