| ITEM 5.02 | DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. |
On April 19, 2023, the Board of Directors
(the “Board”) of Dollar General Corporation (the “Company”) approved the promotion of Kelly M. Dilts, 54, to
Executive Vice President and Chief Financial Officer effective May 1, 2023. As the Company previously disclosed in a Current Report
on Form 8-K dated January 26, 2023, filed with the United States Securities and Exchange Commission (the “SEC”)
on January 30, 2023, John W. Garratt, the Company’s President and Chief Financial Officer, announced his plans to retire from
employment with the Company effective June 2, 2023. On April 19, 2023, Mr. Garratt agreed to relinquish his position and
title of Chief Financial Officer of the Company effective May 1, 2023, to aid in the Company’s transition of the Chief Financial
Officer role prior to his retirement date.
Ms. Dilts has served as the Company’s
Senior Vice President of Finance since July 2019, overseeing financial planning and analysis; procurement; margin planning and analytics;
decision science and analytics; and investor relations. Prior to joining the Company, Ms. Dilts served as Executive Vice President
and Chief Financial Officer at Francesca’s Holdings Corporation, a specialty retailer operating a nationwide chain of boutiques,
from April 2016 until July 2019. Between February 1998 and April 2016, she held various positions of increasing responsibility
in finance and investor relations with Tailored Brands, Inc., including Senior Vice President, Finance and Investor Relations (June 2014
to April 2016); Senior Vice President and Chief Accounting Officer (July 2012 to June 2014); Vice President, Finance (April 2003
to July 2012); Associate Vice President, Finance (April 2002 to April 2003); Financial Planning and Analysis Manager (March 2000
to April 2002); and Assistant Controller (February 1998 to March 2000). She also served as the Controller for Olympia
Enterprises from April 1993 to February 1998, after beginning her career with Deloitte & Touche in January 1990.
On April 19, 2023, in connection with the
approval of Ms. Dilts’s promotion, the Compensation Committee of the Board approved, in each case effective May 1, 2023:
| ● | an increase in Ms. Dilts’s annual base salary from
$676,794 to $750,000; and |
| ● | an increase in Ms. Dilts’s targeted annual incentive
opportunity from 50% to 75% of her base salary (with the annual incentive target and any
actual incentive payout to be prorated to reflect the portion of the year in each of her
Senior Vice President and Executive Vice President positions), with respect to the current
fiscal year and based on the achievement of the adjusted EBIT performance target previously
established by the Compensation Committee in accordance with the terms of the Company’s
annual incentive plan. |
The Compensation Committee also determined that
a one-time long-term incentive having an approximate value of $878,297 will be awarded to Ms. Dilts in connection with her promotion
to Executive Vice President and Chief Financial Officer. This long-term incentive will be delivered in non-qualified stock options (the
“Option”) to purchase shares of the Company’s common stock at a per share exercise price equal to the closing price
of the Company’s common stock on the grant date of the Option, which date shall be determined in accordance with the Company’s
normal course quarterly equity award practices for newly hired or promoted employees. The Option will be scheduled to vest ratably in
installments of 25% on each of the first four anniversaries of the grant date, subject to Ms. Dilts’s continued employment
with the Company, and will terminate no later than ten years from the grant date.
In addition, in connection with such promotion,
on April 19, 2023, the Company entered into an employment agreement with Ms. Dilts (the “Employment Agreement”),
effective May 1, 2023 (the
“Effective Date”), in the form of Executive Vice President
Employment Agreement previously filed by the Company on a Current Report on Form 8-K dated April 5, 2021, and filed with the
SEC on April 8, 2021, which will supersede and replace her existing employment agreement on the Effective Date pursuant to the terms
and conditions of the Employment Agreement. The initial term of the Employment Agreement extends until March 31, 2024, unless earlier
terminated in accordance with the provisions of the Employment Agreement, subject to automatic month to month extensions for up to six
months unless the Company gives written notice within the time frame set forth in the Employment Agreement that no extension or further
extension, as applicable, will occur or unless certain other conditions specified in the Employment Agreement occur. The Employment Agreement
provides for various customary business protection provisions, including non-competition, non-solicitation, non-interference, non-disparagement,
and confidentiality and non-disclosure provisions, facilitates the implementation of the Company’s clawback policy, and provides:
| ● | for a minimum annual base salary, which may be increased from
time to time in the sole discretion of the Company; |
| ● | that incentive compensation shall be determined and paid under
the Company’s annual bonus program for officers, as it may be amended from time to
time, at Ms. Dilts’s applicable grade level; and |
| ● | that Ms. Dilts shall be entitled to receive 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 and shall be eligible
to participate in those various Company welfare benefit plans, practices and policies in
place during the term of the Employment Agreement to the extent allowed under and in accordance
with the terms of those plans, as well as in any other benefit plans the Company offers to
similarly-situated officers or other employees from time to time during the term of the Employment
Agreement. |
In addition, pursuant to the Employment Agreement,
and subject to limited conditions set forth therein, if Ms. Dilts is terminated by the Company without cause (as defined in the
Employment Agreement) or if she resigns from the Company for good reason (as defined in the Employment Agreement), or if she resigns
within 60 days after the Company’s failure to offer to renew, extend or replace the Employment Agreement before, at or within six
months after the end of its original term or any term provided for in a written renewal or extension of the original term (with limited
exceptions outlined in the Employment Agreement), she shall be entitled to (1) continued base salary payments for 24 months (subject
to timing and form of payment provisions set forth in the Employment Agreement); (2) a lump sum payment of two times the amount
of the average percentage of target bonus paid to her under the Company’s annual bonus program with respect to the Company’s
two most recently completed fiscal years preceding the fiscal year in which the termination date occurs multiplied by her target bonus
level and base salary applicable immediately preceding the termination (subject to certain additional calculation provisions set forth
in the Employment Agreement); (3) a lump sum payment equal to two times the annual contribution that would have been made by the
Company in respect of the plan year in which the termination occurs for her participation in the Company’s medical, pharmacy, dental
and vision benefits programs; and (4) reasonable outplacement services, as determined and provided by the Company, for one year
or until other employment is secured, whichever comes first.
The foregoing description of the Employment Agreement
is a summary only, does not purport to be complete, and is qualified in its entirety by reference to Exhibits 99.1 and 99.2 filed herewith
and incorporated by reference as to Ms. Dilts’s Employment Agreement terms as if fully set forth herein.
There are no arrangements or understandings between
Ms. Dilts and any other persons pursuant to which she was selected to become Executive Vice President and Chief Financial Officer,
nor are there any family relationships between Ms. Dilts and any of the Company’s directors or other executive officers. Neither
Ms. Dilts nor any related person of Ms. Dilts has a direct or indirect material interest in any existing or currently proposed
transaction to which the Company is or may become a party that would require disclosure under Item 404(a) of Regulation S-K promulgated
under the Securities Exchange Act of 1934, as amended.
